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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
ACT OF 1934
For
the quarterly period ended
ACT OF 1934
Commission file number
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| (Exact name of registrant as specified in its charter) |
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(State or other Jurisdiction of incorporation- or Organization) |
(IRS Employer Identification No.) |
(Address of principal executive offices)
(Registrant’s telephone number, including area code)
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
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Smaller
reporting company
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Emerging
growth company
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Ticker symbol(s) | Name of each exchange on which registered | ||
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The
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As of November 4, 2025 there were shares of the registrant’s common stock, $ par value, outstanding.
DSS, INC.
FORM 10-Q
TABLE OF CONTENTS
| 2 |
PART I – FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
DSS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
| September 30, 2025 | December 31, 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ |
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$ |
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| Restricted cash |
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| Accounts receivable, net |
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| Inventory, net |
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| Marketable securities, current |
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| Assets held for sale |
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| Current portion of notes receivable, net |
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| Current portion of notes receivable - related party |
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| Prepaid expenses and other current assets |
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| Total current assets |
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| Property, plant and equipment, net |
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| Investment in real estate, net |
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| Other investments |
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| Investment, equity method |
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| Marketable securities, noncurrent |
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| Notes receivable, net |
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| Notes receivable - related party, net |
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| Other assets |
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| Right-of-use assets |
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| Goodwill |
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| Other intangible assets, net |
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| Total assets | $ |
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$ |
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||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ |
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$ |
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| Accrued expenses and deferred revenue |
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| Other current liabilities |
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| Current portion of lease liability |
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| Current portion of long-term debt, net |
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| Current portion of long-term debt on assets held-for-sale, net |
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Convertible promissory note - related party |
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| Current portion of long-term debt - related party, net |
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| Total current liabilities |
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| Long-term debt, net |
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| Long term lease liability |
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| Total liabilities |
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||||||
| Commitments and contingencies (Note 12) | ||||||||
| Stockholders’ equity | ||||||||
|
Preferred stock, $
par value;
shares authorized,
shares issued and outstanding (
on December 31, 2024); Liquidation value $
|
||||||||
| Common stock, $ par value; shares authorized, shares issued and outstanding ( on December 31, 2024) |
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||||||
| Treasury stock | ||||||||
| Additional paid-in capital |
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||||||
| Accumulated deficit |
(
|
) |
(
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) | ||||
| Total stockholders’ equity of the Company |
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||||||
| Non-controlling interest in subsidiaries |
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||||||
| Total stockholders’ equity |
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||||||
| Total liabilities and stockholders’ equity | $ |
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$ |
|
||||
See accompanying notes to the condensed consolidated financial statements.
| 3 |
DSS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
|
For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
|||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue: | ||||||||||||||||
| Printed products revenue | $ |
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$ |
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$ |
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$ |
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||||||||
| Rental revenue |
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| Net investment revenue |
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| Commission revenue |
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| Biotechnology retail revenue |
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| Total revenue |
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| Costs and expenses: | ||||||||||||||||
| Cost of revenue |
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| Selling, general and administrative (including stock based compensation) |
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||||||||||||
| Total costs and expenses |
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||||||||||||
| Operating loss |
(
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) |
(
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) |
(
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) |
(
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) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income |
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||||||||||||
| Dividend income |
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||||||||||||||
| Other income (expense) |
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|||||||||||||
| Interest expense |
(
|
) |
(
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) |
(
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) |
(
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) | ||||||||
| Foreign Currency Translation Adjustment |
(
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) |
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(
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) |
(
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) | |||||||||
| Gain on extinguishment of debt |
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||||||||||||||
| (Loss)/gain on equity method investment |
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(
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) |
(
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) |
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||||||||||
| Gain (loss) on investments |
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(
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) |
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(
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) | ||||||||||
| Impairment of intangible assets |
(
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) | ||||||||||||||
| Provision for loan losses |
(
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) |
(
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) | ||||||||||||
| (Loss)/gain on sale |
(
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) |
(
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) |
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|||||||||||
| Loss from operations before income taxes |
(
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) |
(
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) |
(
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) |
(
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) | ||||||||
| Income tax benefit |
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| Net loss | $ |
(
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) | $ |
(
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) | $ |
(
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) | $ |
(
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) | ||||
| Income (loss) from operations attributed to noncontrolling interest |
(
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) |
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|||||||||||
| Net loss attributable to DSS common stockholders | $ |
(
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) | $ |
(
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) | $ |
(
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) | $ |
(
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) | ||||
| Loss per common share attributable to common stockholders | ||||||||||||||||
| Basic | $ |
(
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) | $ |
(
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) | $ |
(
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) | $ |
(
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) | ||||
| Diluted | $ |
(
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) | $ |
(
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) | $ |
(
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) | $ |
(
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) | ||||
| Shares used in computing loss per common share: | ||||||||||||||||
| Basic |
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| Diluted |
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See accompanying notes to the condensed consolidated financial statements.
| 4 |
DSS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended September 30,
(unaudited)
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ |
(
|
) | $ |
(
|
) | ||
| Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||
| Depreciation and amortization |
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| Issuance of common stock for bonus |
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|||||||
| Stock based payments for professional services rendered |
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| Stock based payments for employees and directors |
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| (Loss)/gain on equity method investment |
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(
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) | |||||
| Loss (gain) on investments |
(
|
) |
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|||||
| Change in ROU assets |
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||||||
| Change in inventory obsolescence |
(
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) | ||||||
| Accrued interest on notes payable |
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|
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| Loss on sale of assets |
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(
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) | |||||
| Impairment of intangibles |
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|||||||
| Impairment of accounts receivable |
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| Provision for loan losses |
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||||||
| Gain on extinguishment of debt |
(
|
) |
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|||||
| Decrease (increase) in assets: | ||||||||
| Accounts receivable |
(
|
) |
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|||||
| Inventory |
(
|
) |
(
|
) | ||||
| Assets held for sale |
(
|
) | ||||||
| Prepaid expenses and other current assets |
|
(
|
) | |||||
| Other assets |
(
|
) |
(
|
) | ||||
| Increase (decrease) in liabilities: | ||||||||
| Accounts payable |
|
(
|
) | |||||
| Accrued expenses |
|
(
|
) | |||||
| ROU liabilities |
(
|
) |
(
|
) | ||||
| Other liabilities |
|
|||||||
| Net cash used by operating activities |
(
|
) |
(
|
) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property, plant and equipment |
(
|
) |
(
|
) | ||||
| Sale of real estate |
|
|||||||
| Purchase of marketable securities |
(
|
) | ||||||
| Purchase of investment |
(
|
) | ||||||
| Disposal of property, plant and equipment |
|
|||||||
| Sale of investment, related party |
|
|||||||
| Sale of marketable securities |
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|
||||||
|
Issuance of new notes receivable, net origination fees |
(
|
) | ||||||
| Payments received on notes receivable |
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|
||||||
| Net cash provided by investing activities |
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|
||||||
| Cash flows from financing activities: | ||||||||
| Payments of long-term debt |
(
|
) |
(
|
) | ||||
| Borrowings of long-term debt, net |
|
|
||||||
| Debt issuance costs |
(
|
) | ||||||
|
Borrowings of convertible note payable - related party |
|
|||||||
| Payments on margin loan |
(
|
) | ||||||
| Issuances of common stock, net of issuance costs |
|
|
||||||
| Net cash provided (used) by financing activities |
(
|
) |
|
|||||
| Net increase (decrease) in cash |
(
|
) |
|
|||||
| Cash and cash equivalents at beginning of period |
|
|
||||||
| Cash and cash equivalents and restricted cash at end of period | $ |
|
$ |
|
||||
| Cash and cash equivalents | $ |
|
$ |
|
||||
| Restricted cash |
|
|||||||
| Cash and cash equivalents and restricted cash at end of period | $ |
|
$ |
|
||||
See accompanying notes to the condensed consolidated financial statements.
| 5 |
DSS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited)
| Common Stock | Preferred Stock | Additional Paid-in | Accumulated |
Total DSS
|
Non- controlling Interest in | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Equity | Subsidiary | Total | ||||||||||||||||||||||||||||
| Balance, December 31, 2023 |
|
$ |
|
$ | $ |
|
$ |
(
|
) | $ |
|
$ |
|
$ |
|
|||||||||||||||||||||
| Initial public offering of Impact BioMedical | - |
|
- |
|
|
|
|
|||||||||||||||||||||||||||||
| Net loss | - | - |
(
|
) |
(
|
) |
(
|
) |
(
|
) | ||||||||||||||||||||||||||
| Balance, September 30, 2024 |
|
$ |
|
$ | $ |
|
$ |
(
|
) | $ |
|
$ |
|
$ |
|
|||||||||||||||||||||
| Balance, December 31, 2024 |
|
$ |
|
$ | $ |
|
$ |
(
|
) | $ |
|
$ |
|
$ |
|
|||||||||||||||||||||
| Issuance of common stock, net of expenses - Impact BioMedical, Inc. | - |
|
- |
|
|
|
|
|||||||||||||||||||||||||||||
| Issuance of common stock for bonus |
|
|
- |
|
|
|
||||||||||||||||||||||||||||||
| Stock based payments for professional services rendered for Impact Bio | - |
|
|
|
||||||||||||||||||||||||||||||||
| Stock based payments | - | - |
|
|
|
|||||||||||||||||||||||||||||||
| Net loss | - | - |
(
|
) |
(
|
) |
(
|
) |
(
|
) | ||||||||||||||||||||||||||
| Balance, September 30, 2025 |
|
$ |
|
$ | $ |
|
$ |
(
|
) | $ |
|
$ |
|
$ |
|
|||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
| 6 |
DSS, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2025
(Unaudited)
1. Nature of Operations
The Company, incorporated in the state of New York in May 1984 has conducted business in the name of DSS, Inc. On September 16, 2021, the board of directors approved an agreement and plan of merger with a wholly owned subsidiary, DSS, Inc. (a New York corporation, incorporated in August 2020), for the sole purpose of effecting a name change from Document Security Systems, Inc. to DSS, Inc. This change became effective on September 30, 2021. DSS, Inc. maintained the same trading symbol “DSS”.
DSS, Inc. (together with its consolidated subsidiaries, referred to herein as “DSS,” “we,” “us,” “our” or the “Company”) currently operates five (5) distinct business lines with operations and locations around the globe. These business lines are: (1) Product Packaging, (2) Biotechnology, (3) Commercial Lending, (4) Securities and Investment Management, (5) Direct Marketing.
Our divisions, their business lines, subsidiaries, and operating territories: (1) Our Product Packaging line is led by Premier Packaging Corporation, Inc. (“Premier”), a New York corporation. Premier operates in the paper board and fiber based folding carton, consumer product packaging, and document security printing markets. It markets, manufactures, and sells sophisticated custom folding cartons, mailers, photo sleeves and complex 3-dimensional direct mail solutions. Premier is currently located in its new facility in Rochester, NY, and primarily serves the US market. (2) The Biotechnology business line was created to invest in or acquire companies in the BioHealth and BioMedical fields, including businesses focused on the advancement of drug discovery and prevention, inhibition, and treatment of neurological, oncological, and immune related diseases. This division is also targeting unmet, urgent medical needs, and is developing open-air defense initiatives, which curb transmission of air-borne infectious diseases, such as tuberculosis and influenza. (3) Our Commercial Lending business division, driven by American Pacific Financial (“APF”), is organized for the purposes of being a financial network holding company, focused on acquiring equity positions in (i) undervalued commercial bank(s), bank holding companies and nonbanking licensed financial companies operating in the United States, South East Asia, Taiwan, Japan and South Korea, and (ii) companies engaged in—nonbanking activities closely related to banking, including loan syndication services, mortgage banking, trust and escrow services, banking technology, loan servicing, equipment leasing, problem asset management, SPAC (special purpose acquisition company) consulting services, and advisory capital raising services. (4) Securities and Investment Management was established to develop and/or acquire assets in the securities trading or management arena, and to pursue, among other product and service lines, broker dealers, and mutual funds management. Also in this segment is the Company’s real estate investment trusts (“REIT”), organized for the purposes of acquiring hospitals and other acute or post-acute care centers from leading clinical operators with dominant market share in secondary and tertiary markets, and leasing each property to a single operator under a triple-net lease. the REIT was formed to originate, acquire, and lease a credit-centric portfolio of licensed medical real estate. (5) Direct Marketing, led by the holding corporation, Decentralized Sharing Systems, Inc. (“Decentralized”) provides services to assist companies in the emerging growth “Gig” business model of peer-to-peer decentralized sharing marketplaces. Direct Marketing’s products include, among other things, nutritional and personal care products sold throughout North America, Asia Pacific, Middle East, and Eastern Europe.
On June 21, 2025, Impact BioMedical Inc. (“Impact”), Dr Ashleys Limited, a Cayman Islands exempted company limited by shares (“PubCo”), Dr Ashleys Nevada Sub, Inc., a Nevada corporation and wholly-owned subsidiary of PubCo (“Merger Sub”), Dr Ashleys Bio Labs Limited, a Cayman Islands exempted company limited by shares (“Dr Ashleys Cayman”), and Kanans Visvanats (a.k.a. Kannan Vishwanatth), a Latvian national, solely in his capacity as the sole shareholder of Dr Ashleys (“Dr Ashleys Shareholder”) entered into a Merger and Share Exchange Agreement (the “Merger Agreement”). Pursuant to the Merger Agreement and subject to the terms and conditions set forth therein, (i) Merger Sub shall be merged with and into Impact with Impact being the surviving entity (the “Merger”), and (ii) simultaneous with or immediately following the Merger, PubCo shall acquire all of the issued and outstanding ordinary shares of Dr Ashleys Cayman from the Dr Ashleys Shareholder (the “Share Exchange”). The closing date of the transaction is uncertain as of November 14, 2025, due to the pending approval from regulatory authorities. Management will continue evaluating the status of this deal at year end.
| 7 |
2. Basis of Presentation and Significant Accounting Policies
Basis of Presentation - The accompanying condensed unaudited consolidated financial statements contain all adjustments (consisting of normal recurring adjustments, unless otherwise indicated) necessary to present fairly our consolidated financial position as of September 30, 2025 and December 31, 2024, and the results of our consolidated operations for the interim periods presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), the instructions to Form 10-Q and Article 10 of Regulation S-X. We follow the same accounting policies when preparing quarterly financial data as we use for preparing annual data. These statements should be read in conjunction with the consolidated financial statements and the notes included in our latest annual report on Form 10-K, for the fiscal year ended December 31, 2024 (“Form 10-K”), and our other reports on file with the Securities and Exchange Commission (the “SEC”).
Principles of Consolidation - The consolidated financial statements include the accounts of DSS, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires the Company to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, the Company evaluates its estimates, including those related to the accounts receivable, convertible notes receivable, inventory, fair values of investments, intangible assets and goodwill, useful lives of intangible assets and property and equipment, fair values of options and warrants to purchase the Company’s common stock, preferred stock, deferred revenue and income taxes, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
Reclassifications
-
Cost associated with Professional fees approximating $
Cash Equivalents – All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents. Amounts included in cash equivalents in the accompanying consolidated balance sheets are money market funds whose adjusted costs approximate fair value.
Accounts Receivable - The Company extends credit to its customers in the normal course of business. The Company performs ongoing credit evaluations and generally does not require collateral. Payment terms are generally 30 days but up to net 120 for certain customers. The Company carries its trade accounts receivable at invoice amounts and its rent receivables at contract amounts, less an allowance for credit losses. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for credit losses based upon management’s estimates that include a review of the history of past write-offs and collections and an analysis of current credit conditions. In estimating expected losses in the accounts receivable portfolio, customer-specific financial data and macro-economic assumptions are utilized to project losses over a reasonable and supportable forecast period. Assumptions and judgment are applied to measure amounts and timing of expected future cash flows, collateral values and other factors used to determine the customers’ abilities to pay.
At
September 30, 2025, December 31, 2024, the Company established a reserve for credit losses of approximately $
| 8 |
Concentration
of Credit Risk
- The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured
limits. The Company believes it is not exposed to any significant credit risk because of any non-performance by the financial
institutions. As of September 30, 2025, one customer accounted for approximately
As
of December 31, 2024, two customers accounted for approximately
Notes receivable, unearned interest, and related recognition - The Company records all future payments of principal and interest on notes as notes receivable, which are then offset by the amount of any related unearned interest income. For financial statement purposes, the Company reports the net investment in the notes receivable on the consolidated balance sheet as current or long-term based on the maturity date of the underlying notes. Such net investment is comprised of the amount advanced on the loans, adjusting for net deferred loan fees or costs incurred at origination, amounts allocated to warrants received upon origination, and any payments received in advance. The unearned interest is recognized over the term of the notes and the income portion of each note payment is calculated so as to generate a constant rate of return on the net balance outstanding. Net deferred loan fees or costs, together with discounts recognized in connection with warrants acquired at origination, are accreted as an adjustment to yield over the term of the loan.
Allowance
For Loans Losses
- ASC Topic 326 which requires an allowance for credit losses to be deducted from the amortized cost basis
of financial assets to present the net carrying value at the amount that is expected to be collected over the contractual term of
the asset considering relevant information about past events, current conditions, and reasonable and supportable forecasts that
affect the collectability of the reported amount. In estimating expected losses in the loan portfolio, borrower-specific financial
data and macro-economic assumptions are utilized to project losses over a reasonable and supportable forecast period. Assumptions
and judgment are applied to measure amounts and timing of expected future cash flows, collateral values and other factors used to
determine the borrowers’ abilities to repay obligations. After the forecast period, the Company utilizes longer-term
historical loss experience to estimate losses over the remaining contractual life of the loans. At September 30, 2025, December 31,
2024, the Company established a reserve for credit losses of approximately $
Investments – Investments in equity securities with a readily determinable fair value, not accounted for under the equity method, are recorded at fair value with unrealized gains and losses included in earnings. For equity securities without a readily determinable fair value, the investment is recorded at cost, less any impairment, plus or minus adjustments related to observable transactions for the same or similar securities, with unrealized gains and losses included in earnings. For equity method investments, the Company regularly reviews its investments to determine whether there is a decline in fair value below book value. If there is a decline that is other-than-temporary, the investment is written down to fair value. See Note 9 for further discussion on investments.
Fair Value of Financial Instruments - Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Fair Value Measurement Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets.
● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
| 9 |
The carrying amounts reported in the consolidated balance sheet of cash and cash equivalents, accounts receivable, prepaids, accounts payable and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. Marketable securities classify as a Level 1 fair value financial instrument. The fair value of notes receivable approximates their carrying value as the stated or discounted rates of the notes do not reflect recent market conditions. The fair value of revolving credit lines notes payable and long-term debt approximates their carrying value as the stated or discounted rates of the debt reflect recent market conditions. The fair value of investments where the fair value is not considered readily determinable, are carried at cost.
Inventory
– Inventories consist primarily of paper, pre-printed security paper, paperboard, fully prepared packaging, air filtration
systems, and health and beauty products which and are stated at the lower of cost or net realizable value on the first-in, first-out
(“FIFO”) method. Packaging work-in-process and finished goods included the cost of materials, direct labor and overhead.
At the closing of each reporting period, the Company evaluates its inventory in order to adjust the inventory balance for obsolete and
slow-moving items. An allowance for obsolescence of approximately $
Investments in real estate, net – Acquisition of assets are recorded at their relative fair value based on total accumulated costs of the acquisition. Direct acquisition-related costs are capitalized as a component of the acquired assets. This includes all costs related to finding, analyzing and negotiating a transaction. The allocation of the purchase price is an area that requires judgment and significant estimates. Tangible and intangible assets include land, building and improvements, furniture, fixtures and equipment, acquired above market and below market leases, in-place lease value (if applicable). Acquisition date fair values of assets and assumed liabilities are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent appraisers and that use appropriate discount and/or capitalization rates and available market information. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. Depreciation, amortization, cost to maintain and secure the buildings as well as interest incurred on the loans to procure the real estate are included in Cost of revenue on the accompanying Condensed consolidated statement of operations. During 2023, the land and buildings related to AMRE LifeCare and AMRE Winter Haven were reclassified to Assets held for sale. During 2024, the land and buildings related to AMRE Shelton were reclassified to Assets held for sale. As of September 30, 2025, circumstances around the sale of these properties have changed and the Company does not believe the sale of these properties will be finalized within the 12 months from the filing of these quarterly financial statements and have reclassified these assets to Investment in real estate, net and will begin to depreciate these assets prospectively.
Intangible Assets - The estimated fair values of acquired intangibles are generally determined based upon future economic benefits such as earnings and cash flows. Acquired identifiable intangible assets are recorded at fair value and are amortized over their estimated useful lives. Acquired intangible assets with an indefinite life are not amortized but are reviewed for impairment at least annually or more frequently whenever events or changes in circumstances indicate that the carrying amounts of those assets are below their estimated fair values. Impairment is tested under ASC 350. No circumstances or events have occurred since the most recent analysis that would indicate the need for an impairment is needed for the nine months ended September 30, 2025.
| 10 |
Goodwill
– Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities
assumed in a business combination. Goodwill is subject to impairment testing at least annually and will be tested for impairment between
annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. FASB ASC Topic 350 provides
an entity with the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to
a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after completing
the assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value,
the Company will proceed to a quantitative test. The Company may also elect to perform a quantitative test instead of a qualitative test
for any or all of our reporting units. The test compares the fair value of an entity’s reporting units to the carrying value of
those reporting units. This quantitative test requires various judgments and estimates. The Company estimates the fair value of the reporting
unit using a market approach in combination with a discounted operating cash flow approach. Impairment of goodwill is measured as the
excess of the carrying amount of goodwill over the fair values of recognized and unrecognized assets and liabilities of the reporting
unit. The Company performed its annual goodwill impairment test as of December 31, 2024, and no impairment was deemed necessary for the
goodwill associated with Premier Packaging Company of approximately $
Impairment
of Long-Lived Assets and Goodwill
- The Company monitors the carrying value of long-lived assets for potential impairment and
tests the recoverability of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.
If a change in circumstance occurs, the Company performs a test of recoverability by comparing the carrying value of the asset or asset
group to its undiscounted expected future cash flows. If cash flows cannot be separately and independently identified for a single asset,
the Company will determine whether impairment has occurred for the group of assets for which the Company can identify the projected cash
flows. If the carrying values are in excess of undiscounted expected future cash flows, the Company measures any impairment by comparing
the fair value of the asset or asset group to its carrying value. At June 30, 2025, the Company determined to resign its position as
the registered investment advisor (“RIA”) of the American First Mutual Funds and impaired the related asset acquired at the
time the Company became the RIA in September 2021 in the amount of $
Convertible Promissory Note -The Company accounts for convertible promissory notes in accordance with ASU 2020-06, and evaluates embedded features under ASC 815, Derivatives and Hedging . Upon issuance, convertible notes are recorded at their principal amount, net of any original issue discount (“OID”) and debt issuance costs. OID and issuance costs are presented as a direct deduction from the carrying amount of the debt and are amortized to interest expense using the effective interest method over the contractual term (ASC 835-30). The Company assesses all terms and features of its convertible notes, including conversion options, redemption provisions, make-whole or down-round adjustments, and default put/call rights, to determine whether any embedded features shall be bifurcated and accounted for as derivatives at fair value with changes in fair value recognized in earnings (ASC 815 and ASC 820), or whether the convertible note instrument could be qualified for simplified accounting per ASU 2020-06 and recorded at amortized cost as liability. Convertible notes are classified as current or noncurrent liabilities based on contractual maturity and the Company’s intent and ability to settle the obligation within twelve months of the balance sheet date. Accrued interest and amortization of discounts and issuance costs are included in interest and amortization expense, respectively. For diluted earnings per share, the Company applies the if-converted method to its convertible instruments in accordance with ASU 2020-06 (ASC 260).
Business Combinations - Business combinations and non-controlling interests are recorded in accordance with FASB ASC 805 Business Combinations. Under the guidance, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition and all acquisition costs are expensed as incurred. The excess of the purchase price over the estimated fair values is recorded as goodwill. If the fair value of the assets acquired exceeds the purchase price and the liabilities assumed, then a gain on acquisition is recorded. The application of business combination accounting requires the use of significant estimates and assumptions.
| 11 |
Income Taxes - The Company recognizes estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income items is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized. We recognize penalties and accrued interest related to unrecognized tax benefits in income tax expense.
The Company adopted Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Accounting for Income Taxes, effective for the fiscal year beginning January 1, 2025. The Company applied the updated guidance during the interim period for the quarter ended March 31, 2025, in accordance with the modified retrospective approach. ASU 2023-09 enhances guidance on income tax accounting, with a focus on tax law changes, the allocation of tax credits, and the treatment of uncertain tax positions. Due to the Company’s ongoing operating losses and significant net operating loss (NOL) carry forwards, the Company does not perform quarterly tax provisions. As a result, the adoption of ASU 2023-09 did not result in any immediate material impact on the Company’s consolidated financial statements. The Company has continued to evaluate its deferred tax asset position, with the full utilization of its NOL carryforwards remaining dependent on the availability of future taxable income. Since no taxable income has been generated, and in light of the continued operating losses, there was no adjustment recorded to retained earnings upon the adoption of ASU 2023-09. The Company will continue to monitor its tax positions and NOL utilization, making adjustments to its deferred tax asset valuation allowance as needed in future periods.
Going
Concern
– The accompanying consolidated financial statements have been prepared assuming that the Company will continue
as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal
course of business. These consolidated financial statements do not include any adjustments to the specific amounts and classifications
of assets and liabilities, which might be necessary should we be unable to continue as a going concern. While the Company has approximately
$
Aside
from its $
Related Party Transactions - Transactions with affiliates and other parties that meet the definition of a related party under ASC 850, Related Party Disclosures are reflected in the accompanying condensed consolidated financial statements. All related-party balances are recorded at the exchange amounts established and agreed to by the parties. All material transaction not in the normal course of business operations are approved by the Audit Committee of the Board of Directors.
Recently Issued Accounting Pronouncements — The Financial Accounting Standards Board (FASB) issues various Accounting Standards Updates relating to the treatment and recording of certain accounting transactions. There are several new accounting pronouncements issued by FASB which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company.
The Company adopted ASC Topic 280, Segment Reporting , as part of the updates to the segment reporting requirements under GAAP. The new guidance requires the identification of operating segments and their aggregation based on similar economic characteristics, and for those segments to be reported consistent with the internal management reporting structure used by the chief operating decision maker (CODM). As a result of this adoption, the Company has assessed its operating segments and has realigned its segment reporting to more accurately reflect how its management team evaluates performance and makes strategic decisions. The adoption of Topic 280 did not result in a change to the Company’s segment structure or to the method used to allocate resources among segments.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The amendment in the ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The ASU 2023-09’s amendments are effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact that adoption of ASU 2023-09 will have on its financial statements.
In November 2024, the FASB issued ASU No. 2024-03 (“ASU 2024-03”), Disaggregation of Income Statement Expenses (“DISE”) . ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. As revised by ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, the provisions of ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. With the exception of expanding disclosures to include more granular income statement expense categories, we do not expect the adoption of ASU 2024-03 to have a material effect on our consolidated financial statements taken as a whole.
| 12 |
3. Revenue
The Company recognizes its revenue based on when the title passes to the customer or when the service is completed and accepted by the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for shipped product or service provided. Sales and other taxes billed and collected from customers are excluded from revenue. The Company recognizes rental income associated with its REIT, net of amortization of favorable/unfavorable lease terms relative to market and includes rental abatements and contractual fixed increases attributable to operating leases, where collection has been considered probable, on a straight-line basis over the term of the related lease. The Company recognizes net investment income from its investment banking line of business as interest and management fees related to loans managed for third parties owed to the Company occurs. The Company generates revenue from its direct marketing line of business primarily through internet sales and recognizes revenue as items are shipped.
As of September 30, 2025, the Company had no unsatisfied performance obligations for contracts with an original expected duration of greater than one year. Pursuant to Topic 606, the Company has applied the practical expedient with respect to disclosure of the deferral and future expected timing of revenue recognition for transaction price allocated to remaining performance obligations. The Company elected the practical expedient allowing it to not recognize as a contract asset the commission paid to its salesforce on the sale of its products as an incremental cost of obtaining a contract with a customer but rather recognize such commission as expense when incurred as the amortization period of the asset that the Company would have otherwise recognized is one year or less.
Costs of revenue
Costs of revenue includes all direct cost of the Company’s packaging, commercial and security printing sales, primarily, paper, inks, dies, and other consumables, and direct labor, transportation, amortization, deprecation, and manufacturing facility costs. In addition, this category includes all direct costs associated with the manufacturing and procurement of the products sold in the Company’s Direct Marketing line of business as well as with the Company’s technology sales, services and licensing including hardware and software that is resold, third-party fees, and fees paid to inventors or others as a result of technology licenses or settlements, if any. Cost of revenue for our REIT line of business includes all direct cost associated with the maintenance and upkeep of the related facilities, depreciation, amortization and the costs to acquire the facilities. Our Commercial Lending operating segment has costs of revenue associated with the impairment of notes receivable for those amounts at risk of collection. Costs of revenue do not include expenses related to product development, integration, and support. These costs are included in research and development, which is a component of selling, general and administrative expenses on the consolidated statement of operations. Legal costs are included in selling, general and administrative.
Sales Commissions
Sales
commissions are expensed as incurred for contracts with an expected duration of one year or less. There were
Shipping and Handling Costs
Costs incurred by the Company related to shipping and handling are included in cost of products sold. Amounts charged to customers relating to these costs are reflected as revenue.
See Note 15 for disaggregated revenue information.
| 13 |
4. Inventory
Inventory consisted of the following as of:
| September 30, 2025 | December 31, 2024 | |||||||
| Finished Goods | $ |
|
$ |
|
||||
| Work in Process |
|
$ |
|
|||||
| Raw Materials |
|
$ |
|
|||||
| $ |
|
$ |
|
|||||
| Less allowance for obsolescence |
(
|
) | $ |
(
|
) | |||
| $ |
|
$ |
|
|||||
5. Notes Receivable
Note 1
On
May 14, 2021, DSS Pure Air, Inc. a subsidiary of the Company entered a convertible promissory note (“Note 1”) with Puradigm,
Inc. (“Puradigm”), a company registered in the state of Texas. Note 1 has an aggregate principal balance up to $
Note 2
On
October 25, 2021, APF entered into a loan agreement (“Note 2”) with Asili, LLC. (“Asili”), a company registered
in the state of Utah. Note 3 has an initial aggregate principal balance up to $
| 14 |
Note 3
On
January 24, 2022, APF and an individual entered into a promissory note (“Note 3”) in the principal sum of $
Note 4
On
March 2, 2022, APF and WUURII Commerce, Inc. (“WUURII”), a corporation organized under the laws of the Republic of Korea
entered into a promissory note (“Note 4”). Under the terms of Note 4, APF at its discretion, may lend up to the principal
sum of $
Note 5
On
May 9, 2022, DSS PureAir and Puradigm entered into a promissory note (“Note 5”) in the principal sum of $
Note 6, related party
On
August 29, 2022, DSS Financial Management Inc and BMI Capital, Inc. (“BMIC”), a related party, entered into a promissory
note (“Note 6”) in the principal sum of $
Note 7, related party
On
May 8, 2023, DSS Financial Management Inc and BMIC entered into a promissory note (“Note 7”) in the principal sum of $
Note 8, related party
On
July 26, 2022, APF and VEII, Inc. (“VEII”) entered into a promissory note (“Note 8”) in the principal sum of
$
| 15 |
Note 9
On
February 19, 2021, Impact BioMedical, Inc, entered into a promissory note with an individual. The Company loaned the principal sum of
$
Note 10
On
September 27, 2023, Decentralized Sharing Systems, Inc. and Stemtech Corporation (“Stemtech”) entered into a convertible
promissory note (“Note 10”) in the principal sum of $
Note 11
On
March 31, 2023, DSS Biohealth Security, Inc and an individual entered into a promissory note (“Note 11”) in the
principal sum of $
Note 12
On
August 29, 2024, APF entered into a promissory note (“Note 12”) with WestPark. Note 14 has a principal balance of $
| 16 |
6. Financial Instruments
Cash, Cash Equivalents, Restricted Cash and Marketable Securities
The following tables show the Company’s cash, cash equivalents, restricted cash, and marketable securities by significant investment category as of:
| September 30, 2025 | ||||||||||||||||||||||||
| cost |
Unrealized Gain/(Loss) |
Fair Value |
Cash and Cash Equivalents |
Marketable Securities |
Investments | |||||||||||||||||||
| Cash | $ |
|
$ | $ |
|
$ |
|
$ | $ | |||||||||||||||
| Restricted Cash |
|
|
|
|||||||||||||||||||||
| Level 1 | ||||||||||||||||||||||||
| Money Market Funds |
|
|
|
|||||||||||||||||||||
| Marketable Securities |
|
(
|
) | $ |
|
|
||||||||||||||||||
| Total | $ |
|
$ |
(
|
) | $ |
|
$ |
|
$ |
|
$ | ||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||
|
Adjusted Cost |
Unrealized Gain/(Loss) |
Fair Value |
Cash and Cash Equivalents |
Marketable Securities |
Investments | |||||||||||||||||||
| Cash | $ |
|
$ | $ |
|
$ |
|
$ | $ | |||||||||||||||
| Level 1 | $ | - | ||||||||||||||||||||||
| Money Market Funds | $ |
|
$ |
|
|
|||||||||||||||||||
| Marketable Securities | $ |
|
(
|
) | $ |
|
|
|||||||||||||||||
| Total | $ |
|
$ |
(
|
) | $ |
|
$ |
|
$ |
|
$ | ||||||||||||
The Company typically invests with the primary objective of minimizing the potential risk of principal loss. The Company’s investment policy generally requires securities to be investment grade and limits the amount of credit exposure to any one issuer. Fair values were determined for each individual security in the investment portfolio.
| 17 |
7. Provision for Credit Losses
ASC Topic 326 for the measurement of credit losses on financial instruments and other financial assets. That guidance requires an allowance for credit losses to be deducted from the amortized cost basis of financial assets to present the net carrying value that is expected to be collected over the contractual term of the assets considering relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The guidance replaced the previous incurred loss model for determining the allowance for credit losses.
Accounts receivable are stated at the amount owed by the customer. The Company maintains an allowance for credit losses for accounts receivable and unbilled receivables, based on expected credit losses resulting from the inability of our customers to make required payments. The allowance for credit losses is estimated based on historical experience, current economic conditions and the creditworthiness of customers. Receivables are charged to the allowance when determined to be no longer collectible. The Company regularly monitors and assesses its risk of not collecting amounts owed by customers and records its allowance for credit losses based on the results of this analysis.
As of September 30, 2025 and December 31, 2024, we have reviewed the entire loan portfolio as well as all financial assets of the Company for the purpose of evaluating the loan portfolio and the loan balances, including a review of individual and collective portfolio loan quality, loan(s) performance, including past due status and covenant defaults, assessment of the ability of the borrower to repay the loan on the loan terms, whether any loans should be placed on nonaccrual or returned to accrual, any concentrations in any single borrower and/or industry that we might need to further manage, and if any specific or general loan loss reserve should be established for the entire loan portfolio or for any specific loan.
We
analyzed the loan loss reserve from three basis: general loan portfolio reserves; industry portfolio reserves, and specific loan loss
reserves. For the nine months ended September 30, 2025, September 30, 2024 and year ended December 31, 2024, the Company recorded a Loan
loss reserve of approximately $
General
Loan Portfolio Reserve -
Based upon the review of our loan portfolio, we do not believe that a substantial general loan portfolio
reserve is due at this time. However, we do recognize that some inherent risks are in all loan portfolios, thus we recorded a general
contingent portfolio reserve of $
Industry Portfolio Reserves - Given the relatively young loan portfolio and a diversification of the portfolio over several different loan products, the risk is reduced. Accordingly, we have not recorded a discretionary reserve as of September 30, 2025 and December 31, 2024.
Specific
Loan Reserves
- Previously, we had identified credit weaknesses and borrower repayment weakness with Asili, which has a current principal
and interest balance of $
8. Disposal of assets
On
March 27, 2025, the Company finalized the sale of its Plano, Tx. Facility for a gross sales price of $
| 18 |
9. Investments
Alset International Limited , related party
The
Company owns
shares or approximately
% of the outstanding shares of Alset International Limited (“Alset Intl”),
a company incorporated in Singapore and publicly listed on the Singapore Exchange Limited. This investment is classified as a marketable
security and is classified as long-term assets on the consolidated balance sheets as the Company has the intent and ability to hold the
investments for a period of at least one year. The Chairman of the Company, Mr. Heng Fai Ambrose Chan, is the Executive Director and
Chief Executive Officer of Alset Intl. Mr. Chan is also the majority shareholder of Alset Intl as well as the largest shareholder of
the Company. The fair value of the marketable security as of September 30, 2025 and December 31, 2024, was approximately $
True Partners Capital Holding Limited
The
Company owns
shares of True Partners Capital Holding Limited (“True Partners”), a publicly listed company on the
Hong Kong Stock Exchange. On February 28, 2022, the Company entered into a Stock Purchase Agreement with Alset EHome International Inc.
(“AEI”), pursuant to which AEI has agreed to sell a subsidiary holding
shares of stock of True Partner Capital
Holding Limited exchange for
shares of common stock of the Company (the “DSS Shares”). The Company’s Executive
Chairman and a significant stockholder, Heng Fai Ambrose Chan is the Chairman, Chief Executive Officer and largest shareholder of AEI.
Further, on February 20, 2025, the Company acquired an additional
shares of True Partners. The fair value of the marketable
security as of September 30, 2025 and December 31, 2024, was approximately $
WestPark Capital Group, LLC.
On
December 30, 2020, the Company signed a binding letter of intent with WestPark Capital Group, LLC. (“WestPark”) and
Century TBD, Inc. (“TBD”) where the parties agreed to prepare a note and stock exchange agreement whereby DSS will
assign the TBD Note to WestPark and WestPark shall issue to DSS a stock certificate reflecting
BMI Capital International LLC, related party
On
September 10, 2020, the Company’s wholly owned subsidiary DSS Securities, Inc. entered into membership interest purchase agreement
with BMI Financial Group, Inc. a Delaware corporation (“BMIF”) and BMI Capital International LLC, a Texas limited liability
company (“BMIC”) whereas DSS Securities, Inc. purchased
BMIC is a broker-dealer registered with the Securities and Exchange Commission, is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”), and is a member of the Securities Investor Protection Corporation (“SIPC”). The Company’s chairman of the board and another independent board member of the Company also have ownership interest in BMIC.
BioMed Technologies Asia Pacific Holdings Limited
On
December 19, 2020, Impact BioMedical, a wholly owned subsidiary of the Company, entered into a subscription agreement (the “Subscription
Agreement”) with BioMed Technologies Asia Pacific Holdings Limited (“BioMed”), a limited liability company incorporated
in the British Virgin Islands, pursuant to which the Company agreed to purchase
ordinary shares or
| 19 |
Under the terms of the Distribution Agreement, the Company will have exclusive rights to distribute the products within the United States, Canada, Singapore, Malaysia, and South Korea and non-exclusive distribution rights in all other countries. In exchange, the Company agreed to certain obligations, including mutual marketing obligations to promote sales of the products. This agreement is for ten years with a one year auto-renewal feature.
10. Short-Term and Long-Term Debt
Promissory
Notes -
On May 20, 2021, Premier Packaging entered into master loan and security agreement (“BOA Note”) with
Bank of America, N.A. (“BOA”) to secure financing approximating $
On
August 1, 2021, AMRE Shelton, LLC., (“AMRE Shelton”) a subsidiary of AMRE, entered into a loan agreement (“Shelton
Agreement”) with Patriot Bank, N.A. (“Patriot Bank”) in an amount up to $
On
October 13, 2021, Liquid Value Asset Management Limited (“LVAM”), a majority owned subsidiary of the Company, entered
into loan agreement with BMIC (“BMIC Loan”), a related party, whereas LVAM borrowed the principal amount of $
On
October 13, 2021, LVAM entered into a loan agreement with Lee Wilson Tsz Kin (“Wilson Loan”), a related party, whereas LVAM
borrowed the principal amount of $
On
November 2, 2021, AMRE LifeCare entered into a loan agreement (“LifeCare Agreement”) with Pinnacle Bank,
(“Pinnacle Bank”) in the amount of $
| 20 |
On
March 17, 2022, AMRE Winter Haven, LLC (“AMRE Winter Haven”) and Pinnacle Bank (“Pinnacle”) entered into a term
loan (“Pinnacle Loan”) whereas Pinnacle lent to AMRE Winter Haven the principal sum of $
On
March 30, 2023, Premier Packaging, a subsidiary of the Company entered into a loan and security agreement with Union Bank &
Trust Company for the principal amount of $
In
August of 2025, DSS issued a $
A summary of scheduled principal payments of long-term debt, not including revolving lines of credit, subsequent to September 30, 2025, are as follows:
| Year | Notes payable | Notes payable - related party |
Convertible promissory note - related party |
Total | |||||||||||
| 2025 | $ |
|
$ |
|
$ |
|
$ |
|
|||||||
| 2026 |
|
|
|||||||||||||
| 2027 |
|
|
|
||||||||||||
| 2028 |
|
|
|
||||||||||||
| 2029 |
|
|
|
||||||||||||
| Thereafter |
|
|
|
||||||||||||
| $ |
|
$ |
|
$ |
|
$ |
|
||||||||
11. Lease Liability
The
Company has operating leases predominantly for operating facilities. As of September 30, 2025, the remaining lease terms on our
operating leases range from less than one
to
| 21 |
Future minimum lease payments as of September 30, 2025 are as follows:
Maturity of Lease Liability:
| Totals | ||||
| 2025 | $ |
|
||
| 2026 |
|
|||
| 2027 |
|
|||
| 2028 |
|
|||
| 2029 |
|
|||
| Thereafter |
|
|||
| Total lease payments |
|
|||
| Less: Imputed Interest |
(
|
) | ||
| Present value of remaining lease payments | $ |
|
||
| Current | $ |
|
||
| Noncurrent | $ |
|
||
| Weighted-average remaining lease term (years) |
|
|||
| Weighted-average discount rate |
|
% | ||
Total
cash paid for leases during the nine months ended September 30, 2025 and 2024 approximated $
12. Commitments and Contingencies
License
Agreement
–
On March 19, 2022, Impact BioMedical entered into a License Agreement (“Equivir License”) with
a third-party (“Licensee”) where the Licensor is granted the right, amongst other things, to develop, commercialize, and
sell the Company’s Equivir technology.
Royalty Agreement - On August 15, 2018, the Impact BioMedical entered into Royalty Agreement with Chemia Corporation (“Chemia”) pursuant to which Chemia transferred to the Company all of its right to 3F (Functional Fragrance Formulation). This agreement has a 20-year term and auto renews for a period of 1 year unless mutually agreed upon by both parties. 3F consists of 3F Mosquito Repellant and 3F Anti-Viral formulations. Based on the Royalty Agreement, the Company should cover all the costs to prepare and finalize necessary patent application and other intellectual property related to 3F. Chemia agreed to support the Company in efforts leading to development of 3F intellectual property and it is licensing. Based on Royalty Agreement any payments received from development, sales, licensing or transfer of 3F technology will be paid 50% to the Company and 50% to Chemia. On November 27, 2018, Company and Chemia signed an Addendum to Royalty Agreement (“Addendum”), according to which the Company granted Chemia a royalty-based limited license for purposes of making and selling fragrances embodying the 3F technology. Based on the Addendum, Chemia should pay the Company 5% of net sales in royalty. On November 8, 2019, both companies entered into Amendment no.1 to Royalty Agreement, based on which certain expenses borne by the Company towards patent application and licensing should be reimbursed to the Company before any royalty payments are made. For the nine months ended September 30, 2025 and 2024, there were no reimbursements or royalties paid to the Company and the Company cannot be assured that Chemia’s efforts will end up in any future sales of the technology.
| 22 |
13. Stockholders’ Equity
DSS, Inc.
Equity
transactions
- On January 4, 2024 the Company effected a reverse stock split of
On
December 10, 2024, DSS entered into a securities purchase agreement with Alset Inc., a related party, pursuant to which the Company agreed
to sell and issue in a private placement an aggregate of
shares of the Company’s common stock for approximately $
On
December 10, 2024, DSS entered into a securities purchase agreement with Heng Fai Ambrose Chan, the Chaiman of the Board of Directors
and a related party, pursuant to which the Company agreed to sell and issue in a private placement an aggregate of
shares of
the Company’s common stock for approximately $
On
February 6, 2025, as a bonus for compensation awarded to Heng Fai Holdings Limited (“HFHL”), a Hong Kong Company, which
is beneficially owned by Mr. Heng Fai Ambrose Chan, Director of DSS, Inc., and pursuant to DSS, Inc’s. 2020 Employee, Director
and Consultant Equity Incentive Plan (the “Plan”), HFHL was awarded
shares of the Company’s common stock, approximating $
On
March 21, 2025, DSS, the parent company of Impact Biomedical, Inc. completed the sale of
shares of Impact Biomedical common stock.
These shares were acquired by DSS during Impact’s initial public offering on September 16, 2024. The sale of these shares, which
were previously held by DSS as part of its ownership interest in Impact, was completed for a total value of $
On
April 4, 2025, DSS, the parent company of Impact Biomedical, Inc. completed the sale of
shares of Impact Biomedical common stock.
. The sale of these shares, which
were previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $
On
May 22, 2025, DSS, the parent company of Impact Biomedical, Inc. completed the sale of
shares of Impact Biomedical common stock. The sale of these shares, which were previously held by DSS as part of its ownership
interest in Impact, was completed for a total approximate value of $
On May 23, 2025, DSS, the parent company of Impact Biomedical, Inc. completed the sale of
shares of Impact
Biomedical common stock. The sale of these shares, which were previously held by DSS as part of its ownership interest in Impact, was
completed for a total approximate value of $
Stock-Based Compensation - The Company records stock-based payment expense related to options and warrants based on the grant date fair value in accordance with FASB ASC 718. Stock-based compensation includes expense charges for all stock-based awards to employees, directors, and consultants. Such awards include option grants, warrant grants, and restricted stock awards. During the nine months ended September 30, 2025 and 2024, there were .
| 23 |
Impact BioMedical, Inc.
Equity
Transactions
- On May 10, 2023, the IBO’s Board of Directors approved an amendment to the Articles of Incorporation
for IBO to increase the total number of shares of Common Stock to
shares with a par value of $
.
Each share of Common Stock when issued, shall have one (1) vote on all matters presented to the stockholders. Its Amended and
Restated Articles of Incorporation also authorized
shares of preferred stock, par value $
per share. On May 11, 2023, IBO effected a forward split. As a result, there were
shares of its Common Stock and
shares of preferred stock issued and outstanding. Prior to the split, there were
shares of its Common Stock and
shares of preferred stock issued and outstanding. On October 31, 2023, IBO effected a
On
October 31, 2023, IBO effected a
On
September 16, 2024, Impact Biomedical Inc., entered into an underwriting agreement (the “Underwriting Agreement”) with Revere
Securities, LLC., as representative (the “Representative”) of the underwriters named therein (the “Underwriters”),
pursuant to which IBO agreed to sell to the Underwriters in a firm commitment initial public offering (the “Offering”)
an aggregate of
of IBO’s shares of common stock, par value $
per share at a public offering price of $
per share. On September 17, 2024, IBO closed the Offering, and as of September 30, 2024 there were
shares of common
stock issued and outstanding. The total net proceeds to IBO from the Offering, after deducting discounts, expenses allowance
and expenses, was approximately $
| 24 |
On
February 26, 2025, IBO issued
shares of the Company’s common stock as payment of legal fees incurred associated with IBO’s IPO, registration
of shares associated with its equity incentive plan as well as other related services. The legal fees received were valued at approximately $
On
June 23, 2025, IBO issued
shares of IBO’s common stock as payment of legal fees incurred
associated with IBO’s merger and share exchange agreement with Dr. Ashleys Limited. The legal fees received were valued at approximately $
Stock-Based
Compensation –
IBO records stock-based payment expense related to options and warrants based on the grant date
fair value in accordance with FASB ASC 718. Stock-based compensation includes expense charges for all stock-based awards to
employees, directors and consultants. Such awards include option grants, warrant grants, and restricted stock awards. On October 1,
2024,
option grants with a purchase price of $
per share were awarded to certain officers, directors and consultants of
IBO. These options have various vesting periods, and all expire on October 31, 2031. Potential proceeds of these grants is
$
14. Supplemental Cash Flow Information
The following table summarizes supplemental cash flows for the nine months ended September 30, 2025 and 2024:
| 2025 | 2024 | |||||||
| Cash paid for interest | $ |
|
$ |
|
||||
| Non-cash investing and financing activities: | ||||||||
| Shares issued in lieu of bonus cash | $ |
|
$ | |||||
| Shares issued in lieu of cash as payment for legal services | $ |
|
$ | |||||
| Extinguishment of debt | $ |
|
$ |
|
||||
| Stock based compensation | $ |
|
$ | |||||
| 25 |
15. Segment Information
The
Company’s businesses lines are organized, managed, and internally reported as
Approximate information concerning the Company’s operations by reportable segment for the three and nine months ended September 30, 2025 and 2024 is as follows. The Company relies on intersegment cooperation and management does not represent that these segments, if operated independently, would report the results contained herein:
| Three Months Ended September 30, 2025 | Product Packaging | Commercial Lending | Direct Marketing | Biotechnology | Securities | Corporate | Total | |||||||||||||||||||||
| Revenue | $ |
|
$ |
|
$ | $ |
|
$ |
|
$ | $ |
|
||||||||||||||||
| Cost of revenue |
|
(
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) |
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| Gross profit (loss) |
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(
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) |
(
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| Operating expense |
|
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(
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) |
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(
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| Operating income (loss) |
(
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(
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(
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(
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) | |||||||||||||||||
| Other income (expense) |
(
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) |
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(
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) |
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|||||||||||||||||||
| Net income (loss) from operations before taxes |
(
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(
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) |
|
(
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) |
(
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) | |||||||||||||||||
| Three Months Ended September 30, 2024 | Product Packaging | Commercial Lending | Direct Marketing | Biotechnology | Securities | Corporate | Total | |||||||||||||||||||||
| Revenue | $ |
|
$ |
|
$ | $ |
|
$ |
|
$ | $ |
|
||||||||||||||||
| Cost of revenue |
|
|
(
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) |
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|||||||||||||||||||||
| Gross profit (loss) |
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(
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) |
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(
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(
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) | ||||||||||||||||||
| Operating expense |
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| Operating income (loss) |
(
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) |
(
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) |
(
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) |
(
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) |
(
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) |
(
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) |
(
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) | ||||||||||||||
| Other income (expense) |
(
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) |
|
(
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) |
(
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) |
|
(
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) |
(
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) | ||||||||||||||||
| Net income (loss) from operations before taxes |
(
|
) |
(
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) |
(
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) |
(
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) |
(
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) |
(
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) |
(
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) | ||||||||||||||
| 26 |
| Nine Months Ended September 30, 2025 | Product Packaging | Commercial Lending | Direct Marketing | Biotechnology | Securities | Corporate | Total | |||||||||||||||||||||
| Revenue | $ |
|
$ |
|
$ | $ |
|
$ |
|
$ | $ |
|
||||||||||||||||
| Cost of Revenue |
|
|
(
|
) |
|
|
|
|||||||||||||||||||||
| Gross profit (loss) |
|
|
|
(
|
) |
(
|
) |
(
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) | |||||||||||||||||||
| Operating expense |
|
|
(
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) |
|
(
|
) |
|
|
|||||||||||||||||||
| Operating income (loss) |
(
|
) |
(
|
) |
|
(
|
) |
(
|
) |
(
|
) |
(
|
) | |||||||||||||||
| Other income (expense) |
(
|
) |
(
|
) |
(
|
) |
|
(
|
) |
|
|
|||||||||||||||||
| Net income (loss) from operations |
(
|
) |
(
|
) |
|
(
|
) |
(
|
) |
(
|
) |
(
|
) | |||||||||||||||
| Nine Months Ended September 30,2024 | Product Packaging | Commercial Lending | Direct Marketing | Biotechnology | Securities | Corporate | Total | |||||||||||||||||||||
| Revenue | $ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ | $ |
|
|||||||||||||||
| Cost of revenue |
|
|
(
|
) |
|
|
|
|||||||||||||||||||||
| Gross profit (loss) |
|
(
|
) |
|
(
|
) |
(
|
) |
(
|
) | ||||||||||||||||||
| Operating expense |
|
|
|
|
|
|
|
|||||||||||||||||||||
| Operating income (loss) |
(
|
) |
(
|
) |
(
|
) |
(
|
) |
(
|
) |
(
|
) |
(
|
) | ||||||||||||||
| Other income (expense) |
(
|
) |
(
|
) |
|
(
|
) |
|
(
|
) |
(
|
) | ||||||||||||||||
| Net loss from operations |
(
|
) |
(
|
) |
(
|
) |
(
|
) |
(
|
) |
(
|
) |
(
|
) | ||||||||||||||
| 27 |
The following tables disaggregate our business segment revenues by major source:
Printed Products Revenue Information:
| Three months ended September 30, 2025 | ||||
| Packaging Printing and Fabrication | $ |
|
||
| Commercial and Security Printing |
|
|||
| Real Property Rental Income |
|
|||
| Total Printed Products Revenue | $ |
|
||
| Three months ended September 30, 2024 | ||||
| Packaging Printing and Fabrication | $ |
|
||
| Commercial and Security Printing |
|
|||
| Real Property Rental Income |
|
|||
| Total Printed Products Revenue | $ |
|
||
| Nine months ended September 30, 2025 | ||||
| Packaging Printing and Fabrication | $ |
|
||
| Commercial and Security Printing |
|
|||
| Real Property Rental Income |
|
|||
| Total Printed Products Revenue | $ |
|
||
| Nine months ended September 30, 2024 | ||||
| Packaging Printing and Fabrication | $ |
|
||
| Commercial and Security Printing |
|
|||
| Real Property Rental Income |
|
|||
| Total Printed Products Revenue | $ |
|
||
| Commercial Lending Revenue Information: |
| Three months ended September 30, 2025 | ||||
| Net Investment Income | $ |
|
||
| Total Commercial Lending Revenue | $ |
|
||
| Three months ended September 30, 2024 | ||||
| Net Investment Income | $ |
|
||
| Total Commercial Lending Revenue | $ |
|
||
| Nine months ended September 30, 2025 | ||||
| Net investment income | $ |
|
||
| Total Commercial Lending Revenue | $ |
|
||
| Nine months ended September 30, 2024 | ||||
| Net Investment Income | $ |
|
||
| Total Commercial Lending Revenue | $ |
|
||
| Nine months ended September 30, 2024 | ||||
| Retail sales | $ |
|
||
| Total Direct Marketing Revenue | $ |
|
||
| Biotechnology Revenue Information: | ||||
| Three months ended September 30, 2025 | ||||
| Retail internet sales | $ |
|
||
| Total Biotechnology Revenue | $ |
|
||
| Three months ended September 30, 2024 | ||||
| Retail internet sales | $ |
|
||
| Total Biotechnology Revenue | $ |
|
||
| Nine months ended September 30, 2025 | ||||
| Retail internet sales | $ |
|
||
| Total Biotechnology Revenue | $ |
|
||
| Nine months ended September 30, 2024 | ||||
| Retail internet sales | $ |
|
||
| Total Biotechnology Revenue | $ |
|
||
| Securities Revenue Information: |
| Three months ended September 30, 2025 | ||||
| Rental income | $ |
|
||
| Commission income | $ |
|
||
| Total Securities Revenue | $ |
|
||
| Three months ended September 30, 2024 | ||||
| Rental income | $ |
|
||
| Commission income | $ |
|
||
| Total Securities Revenue | $ |
|
||
| Nine months ended September 30, 2025 | ||||
| Rental income | $ |
|
||
| Commission income | $ |
|
||
| Total Securities Revenue | $ |
|
||
| Nine months ended September 30, 2024 | ||||
| Rental income | $ |
|
||
| Commission income | $ |
|
||
| Total Securities Revenue | $ |
|
||
| 28 |
16. Related Party Transactions
The
Company owns
shares or approximately
% of the outstanding shares of Alset International Limited (“Alset Intl”),
a company incorporated in Singapore and publicly listed on the Singapore Exchange Limited. This investment is classified as a marketable
security and is classified as long-term assets on the consolidated balance sheets as the Company has the intent and ability to hold the
investments for a period of at least one year. The Chairman of the Company, Mr. Heng Fai Ambrose Chan, is the Executive Director and
Chief Executive Officer of Alset Intl. Mr. Chan is also the majority shareholder of Alset Intl as well as the largest shareholder of
the Company. The fair value of the marketable security as of September 30, 2025 and December 31, 2024, was approximately $
On
September 10, 2020, the Company’s wholly owned subsidiary DSS Securities, Inc. entered into membership interest purchase
agreement with BMI Financial Group, Inc. a Delaware corporation (“BMIF”) and BMI Capital International LLC, a Texas
limited liability company (“BMIC”) whereas DSS Securities, Inc. purchased
On
February 28, 2022, the Company entered into a Stock Purchase Agreement with Alset EHome International Inc. (“AEI”), pursuant
to which AEI has agreed to sell a subsidiary holding
shares of stock of True Partner Capital Holding Limited exchange for
shares of common stock of the Company (the “DSS Shares”). The Company’s Executive Chairman and a significant
stockholder, Heng Fai Ambrose Chan is the Chairman, Chief Executive Officer and largest shareholder of AEI. Further, on February 20,
2025, the Company acquired an additional
shares of True Partners. The fair value of the marketable security as of September
30, 2025 and December 31, 2024, was approximately $
On
August 29, 2022, DSS Financial Management Inc and BMI Capital, Inc. (“BMIC”), a related party, entered into a promissory
note (“Note 8”) in the principal sum of $
On
May 8, 2023, DSS Financial Management Inc and BMIC entered into a promissory note (“Note 9”) in the principal sum of $
| 29 |
On
July 26, 2022, APF and VEII, Inc. (“VEII”) entered into a promissory note (“Note 10”) in the principal sum of
$
On
October 13, 2021, LVAM entered into loan agreement with BMIC (“BMIC Loan”), a related party, whereas LVAM borrowed the principal
amount of $
On
October 13, 2021, LVAM entered into a loan agreement with Lee Wilson Tsz Kin (“Wilson Loan”), a related party, whereas LVAM
borrowed the principal amount of $
On February 6, 2025, as a bonus for compensation awarded to Heng Fai Holdings Limited (“HFHL”), a Hong Kong Company, which is beneficially owned by Mr. Heng Fai Ambrose Chan, Director of DSS, Inc., and pursuant to DSS, Inc’s. 2020 Employee, Director and Consultant Equity Incentive Plan (the “Plan”), HFHL was awarded shares of the Company’s common stock under the Plan, for services rendered. The issuance was approved by the board of directors on January 31, 2025.
In August of 2025, DSS
issued a $
17. Subsequent Events
The Company has evaluated all subsequent events and transactions through November 14, 2025 the date that the condensed consolidated financial statements were available to be issued and noted no subsequent events requiring financial statement recognition or disclosure other than noted below:
In October of 2025, AMRE
received notice from one if its tenants that it will not be continuing its lease at our Pittsburgh facility due to the
tenant’s inability to obtain certain medical practice licenses in the state of Pennsylvania. As of September 30, 2025, the Company has recorded within other assets, a rent receivable of approximately $
| 30 |
ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Certain statements contained herein this report constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “1995 Reform Act”). Except for the historical information contained herein, this report contains forward-looking statements (identified by words such as “estimate”, “project”, “anticipate”, “plan”, “expect”, “intend”, “believe”, “hope”, “strategy” and similar expressions), which are based on our current expectations and speak only as of the date made. These forward-looking statements are subject to various risks, uncertainties and factors that could cause actual results to differ materially from the results anticipated in the forward-looking statements.
Overview
The Company, incorporated in the state of New York in May 1984 has conducted business in the name of DSS, Inc. On September 16, 2021, the board of directors approved an agreement and plan of merger with a wholly owned subsidiary, DSS, Inc. (a New York corporation, incorporated in August 2020), for the sole purpose of effecting a name change from Document Security Systems, Inc. to DSS, Inc. This change became effective on September 30, 2021. DSS, Inc. maintained the same trading symbol “DSS”.
DSS, Inc. (together with its consolidated subsidiaries, referred to herein as “DSS,” “we,” “us,” “our” or the “Company”) currently operates nine (9) distinct business lines with operations and locations around the globe. These business lines are: (1) Product Packaging, (2) Biotechnology, (3) Commercial Lending, (4) Securities and Investment Management, (5) Direct Marketing.
Our divisions, their business lines, subsidiaries, and operating territories: (1) Our Product Packaging line is led by Premier Packaging Corporation, Inc. (“Premier”), a New York corporation. Premier operates in the paper board and fiber based folding carton, consumer product packaging, and document security printing markets. It markets, manufactures, and sells sophisticated custom folding cartons, mailers, photo sleeves and complex 3-dimensional direct mail solutions. Premier is currently located in its new facility in Rochester, NY, and primarily serves the US market. (2) The Biotechnology business line was created to invest in or acquire companies in the BioHealth and BioMedical fields, including businesses focused on the advancement of drug discovery and prevention, inhibition, and treatment of neurological, oncological, and immune related diseases. This division is also targeting unmet, urgent medical needs, and is developing open-air defense initiatives, which curb transmission of air-borne infectious diseases, such as tuberculosis and influenza. (3) Our Commercial Lending business division, driven by American Pacific Financial (“APF”), is organized for the purposes of being a financial network holding company, focused on acquiring equity positions in (i) undervalued commercial bank(s), bank holding companies and nonbanking licensed financial companies operating in the United States, South East Asia, Taiwan, Japan and South Korea, and (ii) companies engaged in—nonbanking activities closely related to banking, including loan syndication services, mortgage banking, trust and escrow services, banking technology, loan servicing, equipment leasing, problem asset management, SPAC (special purpose acquisition company) consulting services, and advisory capital raising services. (4) Securities and Investment Management was established to develop and/or acquire assets in the securities trading or management arena, and to pursue, among other product and service lines, broker dealers, and mutual funds management. Also in this segment is the Company’s real estate investment trusts (“REIT”), organized for the purposes of acquiring hospitals and other acute or post-acute care centers from leading clinical operators with dominant market share in secondary and tertiary markets, and leasing each property to a single operator under a triple-net lease. the REIT was formed to originate, acquire, and lease a credit-centric portfolio of licensed medical real estate. (5) Direct Marketing, led by the holding corporation, Decentralized Sharing Systems, Inc. (“Decentralized”) provides services to assist companies in the emerging growth “Gig” business model of peer-to-peer decentralized sharing marketplaces. Direct Marketing’s products include, among other things, nutritional and personal care products sold throughout North America, Asia Pacific, Middle East, and Eastern Europe.
The five reporting segments are as follows:
Premier Packaging: (“Premier”) Premier Packaging Corporation provides custom packaging services and serves clients in the pharmaceutical, nutraceutical, consumer goods, beverage, specialty foods, confections, photo packaging and direct marketing industries, among others. The group also provides active and intelligent packaging and document security printing services for end-user customers. In addition, the division produces a wide array of printed materials, such as folding cartons and paperboard packaging, security paper, vital records, prescription paper, birth certificates, receipts, identification materials, entertainment tickets, secure coupons and parts tracking forms. The division also provides resources and production equipment for our ongoing research and development of security printing, brand protection, consumer engagement and related technologies.
Commercial Lending: (“Commercial Lending”) through its operating company, American Pacific Financial, Inc. (“APF”) represents our banking and financing business line. is organized for the purposes of being a financial network holding company, focused providing commercial loans and on acquiring equity positions in (i) undervalued commercial bank(s), bank holding companies and nonbanking licensed financial companies operating in the United States, South East Asia, Taiwan, Japan and South Korea, and (ii) companies engaged in—nonbanking activities closely related to banking, including loan syndication services, mortgage banking, trust and escrow services, banking technology, loan servicing, equipment leasing, problem asset management, SPAC (special purpose acquisition company) consulting, and advisory capital raising services. From this financial platform, the Company shall provide an integrated suite of financial services for businesses that shall include commercial business lines of credit, land development financing, inventory financing, third party loan servicing, and services that address the financial needs of the world Gig Economy.
Biotechnology: (“Biotech”) targets unmet, urgent medical needs and expands the borders of medical and pharmaceutical science. Biotech drives mission-oriented research, development, and commercialization of solutions for medical advances in human wellness and healthcare. By leveraging technology and new science with strategic partnerships, Biotech provides advances in drug discovery for the prevention, inhibition, and treatment of neurological, oncology and immuno-related diseases. Other exciting technologies include a breakthrough alternative sugar aimed to combat diabetes and functional fragrance formulations aimed at the industrial and medical industry.
| 31 |
Biotech has several important and valuable products, technology or compounds that are in continuing development and/or licensing stages:
| ● | LineBacker: Multi-faceted therapeutic platform for metabolic, neurologic, cancer, and infectious diseases. | |
| ● | Equivir: A polyphenol compound that is believed to be successful in antiviral infection treatments. Equivir/Nemovir technology is a novel blend of FDA Generally Recognized as Safe (“GRAS”) eligible polyphenols ( e.g., Myricetin, Hesperetin, Piperine) which have demonstrated antiviral effects with additional potential application as health supplements or medication. Polyphenols are sourced from fruits, vegetables, and other natural substances. Myricetin is a member of the flavonoid class of polyphenolic compounds with antioxidant properties. Hesperitin is a flavanone and Piperine is an alkaloid, commonly found in black pepper. | |
| ● | Procombin: Applications as food additive, and natural preservative for beauty and person care products as well as natural food preservative. | |
| ● | VanXin: Food preservative booster made up of polyphenols that extend the shelf life. | |
| ● | Bioplastics: Advanced bio-compatible plastics that mitigate accumulation of plastics in oceans and landfills and provide UVA and UVB protection for many types of material for including containers, hard surfaces, and fibers for clothing. The technology is presently in development and testing antimicrobial plastics for consumer products that control the spread of active pathogens such as SARS-CoV-2, Influenza, E. coli, Staph, and Rhinovirus, by exploiting key strategies found in the biological realm. These new plastics are specifically focused on solutions for common products such as cups, plates, utensils, plastic bags, and countertops. The first prototypes are currently undergoing antimicrobial resistance testing. | |
| ● | Laetose: Laetose technology is derived from a unique combination of sugar and inositol, which demonstrates the ability to inhibit the inflammatory and metabolic response of sugar alone. A sugar alternative which is believed to lower human glycemic indexes and is believed to be a breakthrough alternative sugar aimed to combat diabetes. The use of Laetose in a daily diet, compared to sugar, could result in 30% lower sugar consumption and lower glycemic index/load. | |
| ● | 3F: A botanical compound believed to serve as an insect repellent and anti-microbial agent. 3F is a unique formulation of specialized ingredients ( e.g. terpenes) from botanical sources with demonstrated effect as an insect repellent and an antimicrobial. | |
| ● | 3F Mosquito Repellent: 3F repellent contains botanical ingredients that mosquitos avoid. These ingredients are scientifically proven1 to affect the mosquito’s receptors, essentially making the insect blind to a human’s presence. This can be utilized as a stand-alone repellent or as an additive in detergents, lotions, shampoo, and other substances to provide mosquito protection. | |
| ● | 3F Antimicrobial: 3F antimicrobial contains botanical ingredients known to kill viruses. These ingredients are scientifically proven to inhibit viral replication. This can be utilized as a stand-alone antimicrobial or as an additive in detergents, lotions, shampoo, fabrics, and other substances. | |
| ● | Quantum: The solution to the Patent Cliff accomplished by creating a new class of medicinal chemistry that uses advanced methods to increase effectiveness and persistence of natural compounds and existing drugs. The safety attributes of the original molecules are maintained. Typically, drug discovery processes modify functional groups. Quantum’s new techniques alter behavior of molecules at the sub-molecular level. It is estimated that 65% of the World Health Organization Essential Medicines List can be improved and re-patented using Quantum and these methods can be used to enhance and patent natural compounds including many substances used in traditional medicines around the world. | |
| ● | Bio Med (license): A probiotic gut health product that helps to regulate many physiological functions, ranging from energy regulation and cognitive processes to toxin neutralization and immunity against pathogens. |
Securities and Investment Management: (“Securities”) Securities was established to develop and/or acquire assets in the securities trading or management arena, and to pursue, among other product and service lines, real estate investment funds, broker dealers, and mutual funds management. This business sector has already established the following business lines/investments and associated products and services:
| ● | REIT Management Fund: In March 2020, DSS Securities formed AMRE (“American Medical REIT”) and its management company AAMI (“AMRE Asset Management, Inc.) Through AAMI/AMRE, a medical real estate investment trust, fulfills community needs for quality healthcare facilities while enabling care providers to allocate their capital to growth and investment in their contemporary clinical and critical care businesses. Urban and suburban communities are in need of modern healthcare facilities that provide a range of medical outpatient services. The funds ultimate product is an investor opportunity in a managed medical real estate investment trust. | |
| ● | Sentinel: Sentinel Brokers Company, Inc. (“Sentinel”) began business on January 1, 1996. It’s primarily engaged in acting as an intermediary facilitating the trading of Municipal Bonds and Preferred Stocks between institutions. Sentinel has no retail customer base. Sentinel is a broker-dealer registered with the Financial Industry Regulatory Authority (FINRA) and the Securities Exchange Commission. Sentinel, as a non-clearing broker, does not handle customers’ funds or securities. In April of 2025, Sentinel received approval from FINRA to perform underwriting licenses. | |
| ● | BMIC: BMIC is a private investment bank specializing in corporate finance advising, raising equity, and venture services, providing a global “one-stop” corporate consultancy to listed companies. From corporate finance to professional valuation, corporate communications to event management, BMIC services companies in the US, Hong Kong, Singapore, Taiwan, Japan, Canada, and Australia. | |
| ● | DSS Wealth Management: AmericaFirst is a suite of mutual funds managed by DSS Wealth Management. AmericaFirst expects to expand into numerous investment platforms including additional mutual funds and exchange-traded funds. AmericaFirst currently consists of four mutual funds that seek to outperform their respective benchmark indices by applying top-down, fundamental research, quantitative and technical analysis to stock selection and portfolio management. |
Direct Marketing Segment : provides services to assist companies in the emerging growth gig business model of peer-to-peer decentralized sharing marketplaces. It specializes in marketing and distributing its products and services through its subsidiary and partner network, using the popular gig economic marketing strategy as a form of direct marketing. Direct marketing products include, among other things, nutritional and personal care products sold throughout North America, Asia Pacific and Eastern Europe.
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Results of operations for the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024.
This discussion should be read in conjunction with the financial statements and footnotes contained in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2024.
Revenue
| Three months ended September 30, 2025 | Three months ended September 30, 2024 | % Change | Nine months ended September 30, 2025 | Nine months ended September 30, 2024 | % Change | |||||||||||||||||||
| Printed products | $ | 4,994,000 | $ | 4,828,000 | 3 | % | $ | 13,249,000 | $ | 11,429,000 | 16 | % | ||||||||||||
| Rental income | 718,000 | 496,000 | 45 | % | 2,147,000 | 1,334,000 | 61 | % | ||||||||||||||||
| Net investment income | 7,000 | 45,000 | -84 | % | 36,000 | 181,000 | -80 | % | ||||||||||||||||
| Commission revenue | 662,000 | 230,000 | 188 | % | 1,166,000 | 737,000 | 58 | % | ||||||||||||||||
| Biotechnology retail sales | 11,000 | - | N/A | 32,000 | - | N/A | ||||||||||||||||||
| Total Revenue | $ | 6,392,000 | $ | 5,599,000 | 14 | % | $ | 16,630,000 | $ | 13,681,000 | 22 | % | ||||||||||||
For the nine months ended September 30 2025, total revenue increased 22% as compared to the nine months ended September 30, 2024. The increase in Printed Product revenue of approximately 16% is driven by new customer orders as well as existing customer orders exceeding their forecasts. The increases in Securities revenue of approximately 61% is driven by an increase in rental income by new tenants at AMRE LifeCare Pittsburgh facility beginning to making rental payments in the second half of 2024. The decreases in Net investment income approximating 80% is due to a number of loans made going on non-accrual as borrowers have struggled to make expect payments. Biotechnology revenue is driven by sales of the Company’s air purification Celios brand.
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Costs and Expenses
| Three months ended September 30, 2025 | Three months ended September 30, 2024 | % Change | Nine months ended September 30, 2025 | Nine months ended September 30,2024 | % Change | |||||||||||||||||||
| Cost of revenue | ||||||||||||||||||||||||
| Printed products | $ | 4,380,000 | $ | 4,350,000 | 1 | % | $ | 12,274,000 | $ | 10,715,000 | 15 | % | ||||||||||||
| Securities | 1,868,000 | 1,993,000 | -6 | % | 4,430,000 | 5,804,000 | -24 | % | ||||||||||||||||
| Biotechnology | 12,000 | 10,000 | 20 | % | 36,000 | 30,000 | 20 | % | ||||||||||||||||
| Commercial lending | (192,000 | ) | 252,000 | -176 | % | 20,000 | 719,000 | -97 | % | |||||||||||||||
| Direct marketing | - | (2,000 | ) | -100 | % | (7,000 | ) | (2,000 | ) | 250 | % | |||||||||||||
| Sales, general and administrative compensation | 1,219,000 | 1,197,000 | 2 | % | 4,386,000 | 3,639,000 | 21 | % | ||||||||||||||||
| Professional fees | 750,000 | 565,000 | 33 | % | 1,881,000 | 1,870,000 | 1 | % | ||||||||||||||||
| Stock based compensation | 2,000 | - | N/A | 5,000 | - | N/A | ||||||||||||||||||
| Sales and marketing | 631,000 | 907,000 | -30 | % | 1,455,000 | 1,849,000 | -21 | % | ||||||||||||||||
| Rent and utilities | 136,000 | 133,000 | 2 | % | 395,000 | 560,000 | -29 | % | ||||||||||||||||
| Research and development | 52,000 | 82,000 | -37 | % | 230,000 | 386,000 | -40 | % | ||||||||||||||||
| Other operating expenses | 768,000 | 783,000 | -2 | % | 1,909,000 | 2,398,000 | -20 | % | ||||||||||||||||
| Total costs and expenses | $ | 9,626,000 | $ | 10,270,000 | -6 | % | $ | 27,014,000 | $ | 27,968,000 | -3 | % | ||||||||||||
Costs of revenue includes all direct costs of the Company’s printed products, including its packaging and printing sales and its direct marketing sales, materials, direct labor, transportation, and manufacturing facility costs. In addition, this category includes all direct costs associated with the Company’s technology sales, services and licensing including hardware and software that are resold, third-party fees, and fees paid to inventors or others because of technology licenses or settlements, if any. Cost of revenue for our REIT line of business includes all direct cost associated with the maintenance and upkeep of the related facilities, depreciation, amortization and the costs to acquire the facilities. Our Commercial Lending operating segment has costs of revenue associated with the impairment of notes receivable for those amounts at risk of collection. Total costs of revenue decreased for the nine months ended September 30, 2025 as compared to September 30, 2024 by approximately 3%. Cost of revenue increased at our Printed products business line driven by an increase in revenue which was offset by decrease in cost of revenue within our REIT business driven by the sale of the Plano, Tx facility as well as new tenants at our Pittsburgh, PA facility paying related cost previously paid for by the Company as well as decreases in our Commercial lending business unit driven by decreases on loans reserved for year over year.
Sales, general and administrative compensation costs, excluding stock-based compensation, increased 21% for nine months ended September 30, 2025 as compared to 2024 is primarily due to bonus awarded to Heng Fai Holdings Limited (“HFHL”), a Hong Kong Company, which is beneficially owned by Mr. Heng Fai Ambrose Chan, Director of DSS, Inc., for services rendered. The issuance was approved by the board of directors on January 31, 2025.
Professional fees increased for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 due to cost incurred associated with the resignation of the Company’s position as the registered investment advisor for the AmericanFirst Funds as well as recruiting costs incurred to expand the sales force at Premier Packaging. Professional fees increased for the nine months ended September 30, 2025 as compared to 2024 due primarily to efforts taken to control these costs as the Company continues to drive savings in non-essential areas.
Stock based compensation includes expense charges for all stock-based awards to employees, directors, and consultants of Impact Bio. Such awards can include option grants, warrant grants, and restricted and unrestricted stock awards. These types of awards were not used prior to the Company’s IPO in September 2024.
Sales and marketing which include internet and trade publication advertising, travel and entertainment costs, sales-broker commissions, and trade show participation expenses. Sales and marketing decreased 21% during the nine months ended September 30, 2025 as compared to 2024 due to decreases in marketing, and travel costs within our Printed Products division.
Rent and utilities decreased 29% during the nine months ended September 30, 2025 as compared to 2024 primarily due to end of the lease in office space in California for the Company’s DSS Wealth Management subsidiary.
Research and development costs represent costs consisting primarily of independent, third-party testing of the various properties of each technology the Company owns possesses as well as research on new technologies. These costs increased for the three and nine months ended September 30, 2025 as compared to September 30, 2024, due cost incurred to file, perfect or update existing and potential patents on technologies owned by Impact BioMedical.
Other operating expenses consist primarily of equipment maintenance and repairs, office supplies, IT support, and insurance costs. These costs decreased approximately 20% during the nine months ended September 30, 2025 as compared to September 30, 2024, primarily due to collections of previously written-off of accounts receivable associated with our AMRE LifeCare facilities of approximately $600,000.
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Other Income (Expense)
| Three months ended September 30, 2025 | Three months ended September 30, 2024 | % Change | Nine months ended September 30, 2025 | Nine months ended September 30, 2024 | % Change | |||||||||||||||||||
| Interest Income | $ | 9,000 | $ | 28,000 | -68 | % | $ | 42,000 | $ | 331,000 | -87 | % | ||||||||||||
| Dividend Income | 4,000 | - | N/A | 4,000 | - | N/A | ||||||||||||||||||
| Other Income (expense) | - | 2,000 | -100 | % | 10,000 | 39,000 | -74 | % | ||||||||||||||||
| Interest Expense | (38,000 | ) | (53,000 | ) | -28 | % | (194,000 | ) | (242,000 | ) | -20 | % | ||||||||||||
| Foreign Currency Translation Adjustment | (1,000 | ) | 8,000 | -113 | % | (1,000 | ) | (5,000 | ) | -80 | % | |||||||||||||
| Gain/(Loss) on extinguishment of debt | 595,000 | - | N/A | 595,000 | - | N/A | ||||||||||||||||||
| (Loss)/gain on equity method investment | 2,000 | (4,000 | ) | -150 | % | (4,000 | ) | 3,000 | -233 | % | ||||||||||||||
| Gain (loss) on investments | 477,000 | (449,000 | ) | -206 | % | 1,105,000 | (1,021,000 | ) | -208 | % | ||||||||||||||
| Impairment of intangible assets | - | - | N/A | (600,000 | ) | - | N/A | |||||||||||||||||
| Provision for loan losses | - | (562,000 | ) | -100 | % | - | (908,000 | ) | -100 | % | ||||||||||||||
| (Loss)/gain on sale | (43,000 | ) | - | N/A | (727,000 | ) | 165,000 | -541 | % | |||||||||||||||
| Total other income | $ | 1,005,000 | $ | (1,030,000 | ) | 198 | % | $ | 230,000 | $ | (1,638,000 | ) | 114 | % | ||||||||||
Interest income is recognized on the Company’s money markets, and a portion of notes receivable, identified in Note 4. The decrease in interest income is driven by several notes being put on non-accrual as the related borrowers have shown an inability to pay timely.
Other income for the nine months ended September 30, 2025 as compared to 2024 decreased 74% due primarily to income incurred in 2024 regarding the Company’s distribution agreement with BioMed Technologies that did not reoccur in 2025.
Interest expenses decreased 20% during the nine months ended September 30, 2025, as compared to the same period in 2024, due to decreasing debt balances driven by the sale of the Company’s Plano, Texas facility.
Loss on equity method investment is the Company’s prorated portion of earnings on its investments treated under the equity method of account for the nine months ended September 30, 2025 as compared to 2024.
Gain (loss)on investments consists of net realized losses on marketable securities which are recognized as the difference between the purchase price and sale price of the common stock investment, and net unrealized losses on marketable securities which are recognized on the change in fair market value on our common stock investment. The decrease in loss on investment for the nine months ended September 30, 2025 as compared to 2024 is driven by the performance of our stock portfolio.
Impairment of intangible assets is a result of the Company resigning its position as the registered investment advisor (“RIA”) of the American First Mutual Funds. The related asset was acquired at the time the Company became the RIA in September 2021.
Provision for loan losses represents a reserve put against certain notes receivable deemed uncollectible. During the nine months ended September 30, 2025, the Company reviewed the entire loan portfolio and determined no additional provisions for loan losses was necessary.
Loss on sale of real estate is driven by the sale of the Company’s Plano, Texas facility.
Net Loss
| Three months ended September 30, 2025 | Three months ended September 30, 2024 | % Change | Nine months ended September 30, 2025 | Nine months ended September 30, 2024 | % Change | |||||||||||||||||||
| Net loss | $ | (2,229,000 | ) | $ | (5,701,000 | ) | 61 | % | $ | (10,087,000 | ) | $ | (15,762,000 | ) | 36 | % | ||||||||
For the nine months ended September 30, 2025 the Company recorded net losses of $10,088,000 as compared to net losses of $15,762,000 for the same period in 2024. The decrease in net loss is driven increases in revenue at our Printed products and Securities divisions of approximately $1,820,000 and $1,242,000 respectively. The Company also saw a gain in our investments of approximately $2,126,000 during this time frame. This is offset by the bonus paid to Heng Fai Holdings Limited of approximately $871,000 during the first quarter of 2025 as well as an approximate loss of $727,000 on the sale of the Company’s Plano, Tx facility.
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LIQUIDITY AND CAPITAL RESOURCES
The Company has historically met its liquidity and capital requirements primarily through the sale of its equity securities and debt financing. As of September 30, 2025 the Company had cash of approximately $9.5 million. As of September 30, 2025, the Company believes that it will have access to sources of capital from the sale of its equity securities and debt financing, and thus believes that it has sufficient cash to meet its cash requirements for at least the next 12 months from the filing date of this Quarterly Report.
Cash Flow from Operating Activities
Net cash used by operating activities was $7,576,000 for the nine months ended September 30, 2025 as compared to cash used of $5,889,000 for nine months ended September 30, 2024. This fluctuation is driven by decreases in net loss, after reconciling items, approximating $2,808,000, offset by increases in accounts receivable by approximately $3,227,000
Cash Flow from Investing Activities
Net cash provided by investing activities was $12,080,000 for the nine months ended September 30, 2025 as compared to net cash provided by investing activities of $9,916,000 for the nine months ended September 30, 2024. This fluctuation is driven by the sale of real estate approximating $9,023,000, the sale of marketable securities of approximately $3,438,000, and the sale of related party investments of approximately $2,414,000, offset by the purchase of marketable securities of approximately $2,794,000 during 2025 versus a sale of marketable securities of $0 during 2024. This is offset by receipts on Notes receivable of $4,039,000 in 2024 versus $225,000 in 2025.
Cash Flow from Financing Activities
Net cash used by financing activities was $8,816,000 for the nine months ended September 30, 2025 as compared to net cash provided by financing activities of $989,000 for the nine months ended September 30, 2024. This variance is driven by payments toward long term debt of $11,492,000, payments on margin loans of $943,000 offset by borrowings of long-term debt of $3,250,00 in 2025 versus payments toward long term debt of $1,492,000 in 2024, no payments on margin loans during 2024, offset by issuance of common stock of a subsidiary of $2,227,000.
Off-Balance Sheet Arrangements
We do not have any material off-balance sheet arrangements that have, or are reasonably likely to have, an effect on our financial condition, financial statements, revenues, or expenses.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in our financial statements and accompanying notes. The financial statements as of December 31, 2024, describe the significant accounting policies and methods used in the preparation of the financial statements. There have been no material changes to such critical accounting policies as of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2025.
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ITEM 4 - CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures for the quarter ended September 30, 2025, pursuant to Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation and on the material weaknesses disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024 which remained as of September 30, 2025, our principal executive officer and principal financial officer concluded that as of September 30, 2025, our disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is being recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that our disclosure controls are not effectively designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is being accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Plan for Remediation of Material Weaknesses
As discussed in our Annual Report on Form 10-K for the year ended December 31, 2024, the Company has a remediation plan and is committed to maintaining a strong internal control environment and believes that these remediation efforts will represent significant improvements in our controls. The Company has started to implement these steps, however, some of these steps will take time to be fully integrated and confirmed to be effective and sustainable. Additional controls may also be required over time. Until the remediation steps set forth above are fully implemented and tested, the material weaknesses described above will continue to exist.
Changes in Internal Control over Financial Reporting
While changes in the Company’s internal control over financial reporting occurred during the quarter ended September 30, 2025 as the Company began implementation of the remediation steps described above, we believe that there were no changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II
OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
See commentary in Note 11 Commitments and Contingencies.
ITEM 1A - RISK FACTORS
There have been no material changes to the discussion of risk factors previously disclosed in our most recently filed Annual Report on Form 10-K for the year ended December 31, 2024.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On January 25, 2022, the Company entered into a stock purchase agreement with Alset EHome International, Inc. (the “January 25, 2022 SPA”), pursuant to which the Company agreed to issue to Alset EHome International, Inc. (“AEI”) up to 44,619,423 shares of the Company’s common stock (the “Shares”) for a purchase price of $0.3810 per share. On February 28, 2022, the Company entered into an Amendment to Stock Purchase Agreement, pursuant to which the Company and AEI agreed to amend certain terms of the January 25, 2022 SPA. Pursuant to the Amendment, the number of shares of the common stock of the Company that the AEI will purchase has been reduced from 44,619,423 to 3,986,877 shares for an aggregate purchase price of $1,519,000.
On January 18, 2022, the Company entered into a stock purchase agreement with AEI, pursuant to which AEI sold to the Company 100% of the shares of common stock of its wholly owned subsidiary True Partner International Limited (HK) (“TP”), and all of TP’s 62,122,908 ordinary shares of True Partner Capital Holding Limited, for a purchase price of 11,397,080 newly issued shares of the Company’s common stock. This agreement was terminated on February 25, 2022. On February 28, 2022, the Company entered into a Stock Purchase Agreement with Alset EHome International Inc. (the “True Partner Revised Stock Purchase Agreement”), pursuant to which AEI has agreed to sell a subsidiary holding 62,122,908 shares of stock of True Partner Capital Holding Limited in exchange for 17,570,948 shares of common stock of the Company.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 - MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS
*Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| DSS, INC. | ||
| November 14, 2025 | By: | /s/ Jason Grady |
| Jason Grady | ||
| Interim Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| November 14, 2025 | By: | /s/ Todd D. Macko |
| Todd D. Macko | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
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