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Item 1. Business

2021-03-31 compared with 2020-03-31 · 1009 added, 376 removed, 105 unchanged (93% of the section changed)

7 unchanged sentences

or the “Company”)

was formed in New York in 1984 and, in 2002, chose to strategically focus on becoming a developer and marketer of secure document

and product technologies.

We specialize in creating dynamic solutions that protect against fraud and ensure the well-being of

consumers worldwide.

Our mission is to make and deliver world-class authentication, counterfeit prevention and consumer engagement

technology attainable and integrated into every product we offer.

The Company holds numerous patents for optical deterrent and

authentication technologies that provide protection of printed information from unauthorized alterations, scanning and copying.

We operate two production facilities, consisting of a combined security printing and packaging facility and a plastic card facility,

where we produce secure and non-secure products for our customers.

We also license our anti-counterfeiting technologies to printers

and brand-owners.

In addition, through our digital division, we provide cloud computing services for our customers, including

disaster recovery, back-up and data security services.

to 2006, our primary revenue source in our document security division was derived from the licensing of our technology.

we began a series of acquisitions designed to expand our ability to produce products for end-user customers.

In 2006, we acquired

Plastic Printing Professionals, Inc., a privately held plastic cards manufacturer located in the San Francisco, California, area

(referred to herein as the “DSS Plastics Group”).

In 2008, we acquired DPI of Rochester, LLC, a privately held commercial

printer located in Rochester, New York.

In 2010, we acquired Premier Packaging Corporation, a privately held packaging company

located in Victor, New York (referred to herein as the “DSS Packaging and Printing Group”).

In May 2011, we acquired

ExtraDev, Inc., a privately held information technology and cloud computing company located in Rochester, New York.

In 2016, ExtraDev,

changed its name to DSS Digital Inc.

DSS Digital Inc.

is also referred to herein as the “DSS Digital Group.”

July 2013, the Company expanded its business focus by acquiring Lexington Technology Group, Inc.

(“Lexington”), a

private intellectual property monetization company.

Lexington’s business was primarily to acquire intellectual property

assets for the purpose or monetizing these assets through a variety of value-enhancing initiatives, including, but not limited

to, investments in the development and commercialization of patented technologies, licensing, strategic partnerships and litigation.

DSS Technology Management, Inc., which is also referred to herein as “DSS Technology Management,”

was established

as a DSS subsidiary to house, account for and further develop this line of business.

While similar to Lexington’s business

model, DSS Technology Management focuses on extracting the economic benefits of intellectual property assets through acquiring

or internally developing patents or other intellectual property assets (or interests therein) and then monetizing such assets

through a variety of value enhancing initiatives.

However, the Company, as we elaborate below, has determined that it is in the

best interests of the Company and its stockholders to wind down our intellectual property monetization business and refocus our

efforts on our other existing businesses as well as explore potential new business lines

January 2018, we commenced international operations for our DSS Digital Group with our wholly owned subsidiary, DSS Asia Limited,

in our office in Hong Kong.

In December 2018, this division acquired Guangzhou Hotapps Technology Ltd, a Chinese company with

a valuable license enabling us to do business in China.

do business in four operating segments as follows:

Packaging and Printing Group -Operating under the name Premier Packaging Corporation (a New York corporation), the DSS

Packaging and Printing Group produces custom packaging serving clients in the pharmaceutical, nutraceutical, beverage, specialty

foods, 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 along with technical support for our technology licensees.

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

The division also provides resources and production equipment for our ongoing research and development of security printing

and related technologies.

Plastics Group - Manufactures laminated and surface printed cards, which can include magnetic stripes, bar codes, holograms,

signature panels, invisible ink, micro fine printing, guilloche patterns, biometrics, radio frequency identification (RFID) and

watermarks for printed plastic documents such as ID cards, event badges and driver’s licenses.

DSS Plastics Group is headquartered

in Brisbane, California and operates under the name of Plastic Printing Professionals, Inc., a New York corporation.

Digital Group - This division researches, develops, markets and sells worldwide the Company’s digital products,

including and primarily our AuthentiGuard®

product, which is a brand authentication application that integrates the Company’s

currently operates nine distinct business lines which primarily operate and are located in North America and Asia.

The nine divisions

Marketing/Online Sales Group,

and Fintech Group,

of these business lines are in different stages of development, growth, and income generation.

Because of these varying degrees

of business cycle growth, including the size of the revenues and assets acquired, the Company currently financially reports only

on four of these operating segments.

Marketing/Online Sales Group,

the other divisions grow and start generating significant income, those operating segments will be added to our financial segmental

divisions, their business lines, subsidiaries and operating territories:

Marketing/Online Sales Group:

(“Direct”

or “DM”) Led by the holding corporation, Decentralize

Sharing Systems, Inc.

(“Decentralized”, this group provides services to assist companies in the emerging growth

gig business model of peer-to-peer decentralized sharing marketplaces.

Direct 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.

Over the past 12 months, Direct has made substantial investments

in acquiring marketing software, product opportunities, and operational capabilities in this marketplace.

Additionally, it

has acquired and developed an independent contractor sales force.

It has also made substantial investments into

other direct marketing companies, including its investment and partnership with Sharing Services Global Corporation (OTCQB:

SHRG) (“Sharing Services”

or “SHRG”), which at the end of 2020, Decentralized owned approximately 32%

of the outstanding shares of Sharing Services.

Currently, Direct and SHRG operate offices in USA, Canada, Hong Kong,

Singapore, S.

Korea, Australia, New Zealand, Malaysia, and Singapore, with additional offices or presence being added

Decentralized sharing systems’

mission is to become the leading direct sales platform, training, developing

and empowering leaders on a global scale to achieve maximum human and economic potential.

(“Premier”) The Company’s packaging and security printing group is coordinated by the wholly

owned subsidiary, Premier Packaging Corporation, a New York corporation.

Premier operates in the paper board folding carton, smart

packaging, and document security printing markets.

It markets, manufactures, and sells mailers, photo sleeves, sophisticated custom

folding cartons, and complex 3-dimensional direct mail solutions.

These products are designed to provide functionality and marketability

while also providing counterfeit protection.

Premier is currently located in Victor, NY and serves the US market.

(“Digital”) Digital researches, develops, markets, and sells the Company’s digital products worldwide.

As an industry leader in brand authentication services, our solutions leverage functional anti-counterfeiting features and

cutting-edge technologies to satisfy commercial and consumer product needs for branding, intelligent packaging, and marketing.

Digital’s primary product is AuthentiGuard®, which is a brand authentication application that integrates the Company’s

counterfeit deterrent technologies with proprietary digital data security-based solutions.

Digital Group is headquartered

in Rochester, NY, but it also has offices and staff in Hong Kong.

Technology Management:

(“IP”

or “DSS TM”) DSS TM manages, licenses, and acquires intellectual

property assets for the purpose of monetizing these assets through a variety of value-enhancing initiatives, including, but

not limited to, investments in the development and commercialization of patented technologies, licensing, strategic partnerships,

and commercial litigation.

DSS TM is currently headquartered in Houston, Texas.

(“BioHealth”) The BioHealth Group is our business line 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 developing open-air defense initiatives,

which curb transmission of air-borne infectious diseases, such as tuberculosis and influenza.

The BioHealth Group is also targeting

unmet, urgent medical needs.

Assets of this group are organized under the holding company, DSS BioHealth Security, Inc.

Its subsidiaries

are currently headquartered in Rochester, NY.

The group also has a research facility in Winter Haven, Florida.

and Fintech Group:

(“Securities”) Securities was established to develop and/or acquire assets and investments

in the securities trading and/or funds management arena.

Further, Securities, in partnership with recognized global leaders

in alternative trading systems, intends to own and operate in the US a single or multiple vertical digital asset exchanges

for securities, tokenized assets, utility tokens, stablecoins and cryptocurrency via a digital asset trading platform using

blockchain technology.

The scope of services within this section is planned to include asset issuance and allocation (securities

and cryptocurrency), FPO, IPO, ITO, PPO, STO and UTO listings on a primary market(s), asset digitization/tokenization (securities,

currency and cryptocurrency), and the listing and trading of digital assets (securities and cryptocurrency) on a secondary

This group is led by its holding company, DSS Securities, Inc., (“DSS Securities”) and the group is

currently headquartered in Houston, Texas.

(“Alset Energy”) This group has been established to help lead the Company’s clean energy future

with a focus on environmental responsibility and sustainability measures.

Alset Energy, Inc, the holding company for this

group, recently organized, Alset Solar, Inc., a wholly owned subsidiary, to pursue utility-scale solar farms to serve US regional

power grids and to provide underutilized properties with small microgrids for independent energy.

But in addition to solar

farms and large-scale solar battery banks, Alset Energy will also look at other alternative energy opportunities for investment

and development.

Our goal is to be a powerful force in the mitigation of the negative effects of climate change by reducing

air pollution and expanding access to clean energy for all, while contributing to global economic well-being.

is currently headquartered in Houston, Texas and seeking market opportunities in the US sunbelt areas, but specifically in

Texas, Arizona, New Mexico and Florida.

(“Secure Living”), Secure Living has developed a plan for fully sustainable, secure, and healthy

living communities with homes incorporating advanced technology, energy efficiency, and quality of life living environments

both for new construction and renovations for single and multi-family residential housing.

Secure Living is currently working

with several land development partners to develop entire fully sustainable, healthy living single-family subdivisions.

Living is currently headquartered in Houston, Texas.

(“Blockchain”) Blockchain specializes in the development of blockchain security technologies for

tracking and tracing solutions for supply chain logistics and cyber securities across global markets.

DSS Blockchain

leverages DSS’s early-to-market anticounterfeiting history in AuthentiChain©, which secures assets across

industries to benefit product developers, manufacturers, investors, and consumers.

AuthentiChain©, can be applied to

decentralize ledgers, help stabilize the token economy, and protect cryptocurrency from counterfeiting, and secure negotiable

legal documents and security exchanges.

is a summary of several DSS reported transactions and investments since January 2020 that confirm the active advancements and

investments in these business lines:

March 3, 2020, the Company, via its subsidiary DSS Securities Inc., entered into a share subscription agreement and loan arrangement

with LiquidValue Asset Management Pte Ltd., AMRE Asset Management, Inc., and American Medical REIT Inc.

under which it acquired

a 52.5% controlling ownership interest in AMRE Asset Management, Inc.

(“AAMI”) which currently has a 93% equity interest

in American Medical REIT Inc.

(“AMRE”) (see Note 4).

is a real estate investment trust (“REIT”) management company that sets the strategic vision and formulates investment

strategy for AMRE.

It manages the REIT’s assets and liabilities and provides recommendations to AMRE on acquisition and

divestments in accordance with the investment strategies.

American Medical REIT, Inc.

is a Maryland corporation, 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.

AMRE was formed

to originate, acquire, and lease a credit-centric portfolio of licensed medical real estate.

AMRE is planned to qualify as a Real

Estate Investment Trust for federal income tax purposes, which will provide AMRE’s investors the opportunity for direct

ownership of Class A licensed medical real estate.

As of December 31, 2020, no revenue has been generated.

August 21, 2020, the Company, completed its acquisition of Impact BioMedical, Inc.

(“Impact BioMedical”), pursuant

to a Share Exchange Agreement by and among the Company, DSS BioHealth Security, Inc., Alset International Limited (formally Singapore

eDevelopment Ltd.), and Global Biomedical Pte Ltd.

(“GBM”), which was previously approved by the Company’s shareholders

(the “Share Exchange”).

Under the terms of the Share Exchange, the Company issued 483,334 shares of the Company’s

common stock, par value $0.02 per share, nominally valued at $6.48 per share, and 46,868 newly issued shares of the Company’s

Series A Convertible Preferred Stock (“Series A Preferred Stock”).

As a result of the Share Exchange, Impact BioMedical

is now a wholly owned subsidiary of DSS BioHealth, (see Note 4).

BioMedical strives to leverage its scientific know-how and intellectual property rights to provide solutions to issues that have

been plaguing the biomedical field for decades.

By tapping into the scientific expertise of its partners, Impact BioMedical has

undertaken a concerted effort in the research and development (R&D), drug discovery and development for the prevention, inhibition,

and treatment of neurological, oncological and immune related diseases.

August 2020, DSS Securities entered into a corporate venture to form and operate a real estate title agency, under the name and

flagging of Alset Title Company, Inc., a Texas corporation (“ATC”).

DSS Securities owns 70% of this venture with the

other two shareholders being attorneys necessary to the state application and permitting process.

October 7, 2020, DSS Securities took part in an initial public offering of Presidio Property Trust, Inc., a Maryland corporation,

that invests primarily in commercial properties, such as office, industrial and retail properties, as well as in residential across

the United States.

As part of this offering, we purchased 200,000 shares of Presidio’s Series A Common Stock at $5.00 per

share for a total purchase price of $1,000,000.

December 9, 2020, Impact BioMedical entered into an exclusive distribution agreement with BioMed Technologies Asia Pacific Holdings

Limited (“BioMed”), which is focused on manufacturing natural probiotics.

Under the terms of this distribution agreement,

h Impact BioMedical will directly market, advertise, promote, distribute and sell certain BioMed products to resellers.

to be distributed by Impact BioMedical include BioMed’s PGut Premium ProbioticsTM, PGut Allergy ProbioticsTM, PGut SupremeSlim

ProbioticsTM, PGut Kids ProbioticsTM, and PGut Baby ProbioticsTM.

Under the terms of the ten-year distribution agreement, Impact

BioMedical 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.

February 8, 2021, DSS Securities announced that it entered into a joint venture (“JV”) with Coinstreet Partners (“Coinstreet”),

a global decentralized digital investment banking group and digital asset financial service firm, and GSX Group (“GSX”),

a global digital exchange ecosystem for the issuance, trading, and settlement of tokenized securities, using its proprietary blockchain

The JV leverages the operational strengths and assets of three key leaders in their field, combining traditional capital

market experience, Fintech innovations, and business networks from three continents, North America, Europe, and Asia, to capitalize

on unique digital asset opportunities.

The JV reported that it intended to first pursue a digital securities exchange license

Moving forward, this JV will be the key operational company building and operating a digital securities exchange that

utilizes the GSX STACS blockchain technology, serving corporate issuers and investors in the sector.

February 25, 2021, DSS Securities announced its acquisition of an equity interest in WestPark Capital, Inc.(“WestPark”)

and an investment in BMI Capital International LLC (“BMICI”).

DSS Securities executed two separate transactions that

were designed to grow the Securities division by signing a binding note and stock exchange letter of intent to own 7.5% of the

issued and outstanding shares of WestPark and acquiring 24.9% of BMICI through a purchase agreement.

WestPark is a full-service

investment banking and securities brokerage firm which serves the needs of both private and public companies worldwide, as well

as individual and institutional investors.

BMI 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, BMICI services companies in the US, Hong Kong,

Singapore, Taiwan, Japan, Canada, and Australia.

March 1, 2021, Decentralized Sharing Systems, Inc.

announced that it increased its investment in Sharing Services Global Corporation,

a publicly traded company dedicated to maximizing shareholder value through the acquisition and development of innovative companies,

products, and technologies in the direct selling industry, through a $30 million convertible promissory note.

Decentralized’s

financing was made as an investment that would help accelerate Sharing Services sales and growth, as well as international expansion,

with the expectation that such capital reserves would help make Sharing Services a dominant player in the global marketplace over

the next two years.

It was reported that the new $30 million investment would have the potential to exponentially increase Sharing

Services sales channels and substantially expand its product portfolio, and to position Sharing Services to capitalize on consolidation

and roll up opportunities of other direct selling companies.

In the joint announcement, Sharing Services reported that the additional

funding would now allow it to accelerate its global expansion with a direct focus on the Asian markets, and specifically in countries

such as South Korea, Japan, Hong Kong, China, Singapore, Taiwan, Thailand, Malaysia, and the Philippines.

The announcement also

noted that prior to this convertible promissory note investment, DSS owned 37% of the outstanding shares of Sharing Services,

and that Sharing Services generated $98.4 million in revenue and $5.6 million net income in the trailing 12-month period ended

September 30, 2020.

March 15, 2021, the Company, through one of its subsidiaries, DSS BioMedical International, Inc.

entered into a Stock Purchase

Agreement (the “Agreement”) with Vivacitas Oncology Inc.

(“Vivacitas”), to purchase 500,000 shares of

its common stock at the per share price of $1.00, with an option to purchase 1,500,000 additional shares a the per share price

In addition, under the terms of the Agreement, the Company will be allocated two seats on the board of Vivacitas.

March 18, 2021, the Company entered into an agreement to with Alset EHome International, Inc.

(“Seller”) indirectly

the Seller’s wholly owned subsidiary Impact Oncology PTE Ltd.

to effectively purchase ownership of 2,480,000 shares of common

stock of Vivacitas for a purchase price $2,480,000.

This agreement includes an option to purchase an additional 250,000 shares

of common stock.

As a result of these two transactions, which were closed on March 21, 2021 and March 29, 2021, respectively,

the Company owns approximate 10.2% equity position in Vivacitas.

Operationing Segments:

we have reported above, we financially report business operating results on only four operating segments, which we believe will

certainly increase and transition as the newer lines of business develop.

However, the four business lines that we are reporting

on in 2020 are as follows:

Packaging - Operating under the name Premier Packaging Corporation (a New York corporation), produces custom consumer packaging

serving clients in the pharmaceutical, nutraceutical, beverage, specialty foods, 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

along with technical support for our technology licensees.

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 and related technologies.

Group - This division researches, develops, markets, and sells worldwide the Company’s digital products, including and

primarily our AuthentiGuard®

product, which is a brand authentication application and consumer engagement product that integrates

the Company’s counterfeit deterrent technologies with proprietary digital data security-based solutions.

The AuthentiGuard®

product allows

our customers to implement a security mark utilizing conventional printing methods that is copy- and counterfeit-resistant and

that can be read and recorded utilizing smartphones and other digital image capture devices, which can be utilized by that customer’s

suppliers, field personnel and customers throughout its global product supply and distribution chains.

Technology Management - Since its acquisition in 2013, DSS Technology Management’s primary mission has been to monetize

its various patent portfolios through commercial litigation and licensing.

product allows our customers to implement a security mark utilizing conventional printing methods that is copy- and counterfeit-resistant

and that can be read and recorded utilizing smartphones and other digital image capture devices, which can be utilized by that

customer’s suppliers, field personnel and customers throughout its global product supply and distribution chains.

Technology - Since its acquisition in 2013, DSS Technology Management Inc.’s primary mission has been to monetize its

various patent portfolios through commercial litigation and licensing.

Except for investment in its social networking related

patents, we have historically partnered with various third-party funding groups in connection with patent monetization programs.

It is our intent to de-emphasize and ultimately wind down this business line.

While Management will continue to assert and defend

the existing patents and purse potential infringements as they are identified, we do not intend to seek out new patent portfolios.

Business Plan

November 2019, we announced the Company’s new strategic business plan, which focuses on strengthening our organization,

investing in our core lines of business, improving top line revenues and net margins, controlling costs and creating new long-term

As management announced in its 2019 shareholder meeting, management intended to de-emphasize and ultimately wind down this business

Management reported that while it would continue to assert and defend the existing patents and purse potential infringements

as they are identified, it did not intend to seek out new patent portfolios.

As the 2020 financial reporting confirms, management

implemented that business plan IP is currently focused on managing two remaining patent portfolios.

Marketing/Online Sales Group - Direct marketing or network marketing is designed to sell products or services directly

to the public through independent distributors, rather than selling through the traditional retail channels.

We believe this business

has significant growth potential in the now popular “gig economy”.

Consistent with the Company’s strategic business

plan and vision, we have entered into the direct marketing or network marketing industry and plan to take advantage of the opportunities

that exist in the industry.

We are engaging in partnerships with existing direct marketing companies to access U.S., Canadian,

Asian, and Pacific Rim markets.

In addition, we have, and/or are acquiring various domestic and international operating licenses

to further the growth of this division.

But in addition, we have developed or procured product licenses, formulas, sales networks,

patents, web sites, and other resources to help us accelerate our sales and revenue generation initiatives for this line, and

we have launched our HWHGIG and HWH Marketplace direct selling platforms.

Strategic Business Plan, and its 2021 Progression:

November 2019, management announced that the Company’s 2019-2020 strategic business plan was to revitalize the company by

focusing on strengthening the organization by (i) exiting unprofitable business lines, (ii) investing in and reviving the Company’s

core businesses, (iii) improving top line revenues and net margins, (iv) controlling costs and (v) creating new long-term scalable,

recurring revenue streams.

This strategic business plan has the following core elements, which are discussed in further detail

the Company’s core businesses;

cost structure and reduce cash burn;

To realize those goals, management announced that it would execute the strategic plan by:

Unprofitable Business Lines :

diversification.

the Company’s Core Businesses –

We are upgrading equipment and products to enhance cross-selling opportunities

with existing customers and intend to rejuvenate research and development on digital anti-counterfeit technology products.

Substantially

Reducing Corporate Overhead and Cash Burn –

Since the spring of 2019, we have reduced the Company’s monthly cash

burn by more than $160,000, by eliminating non-essential layers of management and redundant operating expenses, as well as by

renegotiating vendor contracts.

We plan to continue to reduce overhead operating costs, redundancy and cash burn through a series

of new management initiatives.

Unprofitable Business Lines –

To preserve capital and stop further cash drain, we intend, as we have noted above, to

de-emphasize and ultimately wind down our intellectual property monetization business line.

entering the intellectual property (“IP”) monetization business in July 2013, we have invested substantial capital

and resources into purchasing, maintaining and enforcing our patents.

We have also invested substantial resources in the research

and development of internally generated IP for our own use and/or for potential profitable licensing opportunities.

the costs of funding a patent pool, including patent maintenance fees, litigation (costs for legal counsel, discovery, consultants,

expert witnesses and travel), and overhead costs associated with the IP business line, has placed a significant financial strain

upon the Company.

In 2019, our corporate cash burn reached approximately $255,000 per month primarily related to recurring costs

2019, the Company had 4 business lines:

Premier Packaging, Digital Group, the IP Technology, and DSS Plastics Printing.

time, only the Premier Packaging division was generating reoccurring revenue and positive cash flow with annual revenues of $13.5

million and a net EBIDA of approximately $742,000.

Conversely, the other 3 business units lost approximately $1,348,000, with

the IP Technology group accounting for $475,000, and DSS Plastic Printing accounting for an additional $294,000.

To preserve capital

and stop further cash drain, the decision was made to exit both business lines, whether by sale, wind down, closure, or by no

longer pursuing business opportunities in this area.

Down IP Monetization Program :

entering the intellectual property monetization business in July 2013, we have invested substantial capital and resources into

purchasing, maintaining, and enforcing our patents.

We have also invested substantial resources in the research and development

of internally generated intellectual property for our own use, and/or for potential profitable licensing opportunities.

However, the costs

of funding a patent pool, including patent maintenance fees, litigation (costs for legal counsel, discovery, consultants, expert

witnesses, and travel), and overhead costs associated with the IP business line, had placed a significant financial strain upon

During 2019, our corporate cash burn exceeded approximately $200,000 per month, primarily due to recurring costs

related to the IP monetization line of business, which reduced resources for our other lines of business, as well as our own patent

research and development.

research and development projects.

Further, because the related IP legal costs are expensed in the year incurred with no corresponding

2 unchanged sentences

and sustain IP litigation against potential major infringers of DSS patents.

addition, as a result of several court decisions and statutory changes, the patent laws in the United States have changed significantly

as a result of several court decisions and statutory changes, the patent laws in the United States have changed significantly

since our entry into this business.

Consequently, the enforcement of patents has become more costly and more difficult for DSS

and other patent holders, and the likelihood of successful litigation has decreased.

Further, depending upon the type of IP involved

and the parties who are the alleged patent infringers, the legal enforcement and recovery process can take five or more years

before the matter goes to trial.

For instance, the Apple litigation, which we have previously disclosed and which is described

in more detail herein, was initiated in September 2013 and was scheduled to go to trial in late February 2020;

a period of approximately

a result of the significant financial, working capital and resource allocation to the IP monetization program, we made a critical

review of the program.

We reviewed all elements and factors related to the operations of this business line, including what we

hold in inventory of patents, the potential of that patent portfolio, the timetables involved to monetize those patents, the cost

of capital to maintain the patents to monetization, and the probability of successful monetization.

As a result of that extensive

review, we determined that it was in the best interest of DSS and its stockholders to de-emphasize and ultimately exit the IP

monetization line of business.

process of exiting this line of business will not be immediate.

DSS has outstanding contracts with third parties, including attorneys,

lenders and former patent holders, which must be addressed.

We have determined that the cost to stop all litigation and recovery

actions at this time would be too high.

As a result, we have elected to not immediately terminate and exit this line of business,

but to wind it down in an organized fashion.

We will honor our existing contracts and complete the existing IP monetization programs

without adding any new costs.

We do not intend to make any further investments in acquiring patents that do not directly support

our existing and targeted product lines.

We estimate that the timetable necessary to exit this business line will be approximately

18 to 24 months.

Business Diversification Initiatives –

We plan to both internally develop and to acquire profitable new businesses,

which will in some cases be complimentary to our core businesses and addressable markets.

In other instances, we intend to explore

opportunities for expansion into new business lines in which we believe we can successfully compete, which are scalable, and

which generate sustainable reoccurring revenue.

Management has already taken steps toward this diversification by performing

initial research and cost analysis into specific new business lines, and in 2019 we formed the following four new subsidiaries,

in an effort to grow and expand our technologies and market reach.

These four potential new business lines are in various stages

of development and have not yet generated any significant revenues.

BioHealth Security, Inc .

(a Nevada corporation).

This business will be principally involved in the bio-medical sector, including investing in companies that hold bio-medical

intellectual property and/or have, or are securing, strategic alliances, partnerships and distribution rights for bio-medical

and security products, technologies or enterprises.

This new division will focus on open-air defense initiatives that seek

to curb transmission of airborne infectious diseases such as tuberculosis and influenza, among others, in open areas.

with that growth initiative, on March 12, 2020, the Company announced that it had entered into a binding term sheet to acquire

Impact Biomedical, Inc.

(“Impact”), a company engaged in the development and marketing of biohealth security technologies,

in a proposed share exchange transaction with a purchase price capped at $50 million, subject to completion of due diligence

and an independent valuation.

According to the terms of the term sheet between the parties, DSS will issue up to 14.5 M shares

of common stock and a perpetual convertible preferred stock to which DSS will have certain customary rights and requirements,

including appointing members of the Board of Directors of Impact.

The preferred stock will be convertible at $0.216 per share

and have a 19.9% blocker.

Subject to a favorable due diligence and recommendation, the acquisition is subject to final DSS

Board, DSS shareholder, and NYSE approval, of which there can be no guarantee.

See Note 16 for further disclosure on this

Sharing Systems, Inc .

(a Nevada corporation)

(“Decentralized”).

Decentralized intends to develop and operate its own marketing network.

We intend to offer

product financing to small and mid-sized network marketing companies in the U.S.

to assist them with growth opportunities.

Direct marketing or network marketing is designed to sell products or services directly to the public through independent

distributors, rather than selling through the traditional retail market.

We believe this business has significant growth potential

in the now popular “gig economy”.

Consistent with the Company’s strategic business plan and vision, we plan to

enter the direct marketing or network marketing industry and take advantage of the opportunities that exist.

We have entered

into partnerships with existing direct marketing companies to access U.S., Canadian, Asian and Pacific Rim markets.

addition, we have acquired various domestic and international operating licenses from those companies.

Through the acquisitions

we have secured product licenses, formulas, existing sales networks, patents, web sites, and other resources to initiate sales

and revenue generation for this line.

We are currently planning different options on how to take advantage of this opportunities

in the direct selling market and help DSS in its global branding.

Blockchain Security, Inc .

corporation).

This corporate business line will specialize in the development of blockchain security technologies for tracking

and tracing solutions for supply chain logistics and cyber security across global markets.

Securities, Inc., (a Nevada corporation)

(“DSS Securities”).

This line of business will seek to establish or acquire investments in long-term growth and

sustainable reoccurring revenue generating activities;

not in the trading of securities under an investment format.

This Securities group, while not limited to the following investment opportunities, will primarily seek out investment opportunities

in the biomedical, health services, and blockchain-based technologies industries.

The blockchain-based technologies are anticipated

to include digital asset exchanges in multiple jurisdictions, including:

(i) security token exchanges, focused on digitized

assets from different vertical industries, and (ii) utility token exchanges, focusing on “blue-chip”

utility tokens

from solid businesses.

with that development plan, on March 3, 2020, DSS Securities entered into a binding term sheet with LiquidValue Asset Management

Pte Ltd (“LVAM”), AMRE Asset Management Inc.

(“AAMI”) and American Medical REIT Inc.

(“AMRE”),

regarding a share subscription and loan arrangement.

The terms of the proposed joint venture, which has now been consummated,

intends to create a medical real estate investment trust in the United States.

AMRE has been formed to originate, acquire,

and lease a credit-centric portfolio of licensed medical real estate.

AMRE shall provide investors the opportunity for direct

ownership of Class A licensed medical real estate.

AMRE intends to acquire purpose-built healthcare facilities and lease them

to leading clinical operators with strong market share under secure triple net leases.

AMRE targets hospitals (both Critical

Access and Specialty Surgical), Physician Group Practices, Ambulatory Surgical Centers, and other licensed medical treatment

AAMI is a real estate investment trust (“REIT”) management company that sets the strategic vision

and formulates the investment strategy for AMRE.

It shall manage the REIT’s assets and liabilities and provide recommendations

to AMRE on acquisition and divestments in accordance with the investment strategies.

to the term sheet, the DSS Securities will hold 52.5% of the outstanding shares of AAMI, with LVAM and AMRE Tennessee, LLC,

holding 35% and 12.5% of the remaining outstanding shares of AAMI, respectively.

Further, pursuant to and in connection with

the term sheet, on March 3, 2020, the Company entered into a Promissory Note with AMRE, pursuant to which AMRE will issue

the Company a promissory note for the principal amount of $800,000 (the “Note”).

The Note matures on March 3,

2022 and accrues interest at the rate of 8.0% per annum, and shall be payable in accordance with the terms set forth in the

Under the Note, AMRE may prepay or repay all or any portion of the Note at any time, without a premium or penalty.

not sooner prepaid, the entire unpaid principal balance of the Note including accrued interest will be due and payable in

full on March 3, 2022.

AMRE’s failure to pay any amount due on the Note within five days of when payment is due constitutes

an event of default under the Note, pursuant to which the Company can declare the Note due and payable.

The Note also provides

the Company an option to provide AMRE an additional $800,000 on the same terms and conditions as the Note, including the issuance

of warrants, See Note 16 for further disclosure on this transaction.

and other patent holders, and the likelihood of successful litigation has significantly decreased.

In addition, depending upon

the type of IP involved and the parties who are the alleged patent infringers, the legal enforcement and recovery process can

take five or more years before the matter goes to trial.

For instance, the Apple litigation, which we have previously disclosed,

and which is described in more detail herein, was initiated in September 2013 and was scheduled to go to trial in late February

a period of approximately 6 ½

a result of the considerable financial, working capital, and resource allocation to the IP monetization program, we executed a

critical review of the program.

We examined all elements and factors related to the operations of this business line, including

what we hold in inventory of patents, the potential of that patent portfolio, the timetables involved to monetize those patents,

the cost of capital to maintain the patents to monetization, and the probability of successful monetization.

As a result of that

extensive review, we determined that it was in the best interest of DSS and its stockholders to de-emphasize and ultimately exit

the IP monetization line of business.

2020, management discontinued making any further patent acquisitions in this business line, and, more importantly, was able to

renegotiate all of its previous contracts with its lenders, attorneys, and other professionals to eliminate most, if not all,

of the historical losses and cash burn from this division.

We will continue to manage the existing patent portfolio and work to

maximize those assets.

After the conclusion of these pending matters, we intend to close this business line.

DSS PLASTICS :

2020, we also made the decision to divest the DSS Plastics Group.

The DSS Plastics Group manufactured laminated and surface printed

cards which included magnetic stripes, bar codes, holograms, signature panels, invisible ink, micro fine printing, biometric,

radio frequency identification (RFID), and watermarks for printed plastic documents such as ID cards, event badges, and driver’s

As a result of continued historical downward trends of the plastic printing business, mostly due to deteriorating margins

due to international competition primarily from China, and increasing operating costs of this San Francisco based company, long

term major restructure changes and retooling had been planned to return the company to profitability.

But the impact of COVID-19

pandemic and resulting economic shut-down had a major impact on revenues.

The impact of Covid, coupled with the negative long-term

trend of the plastic card industry being replaced by facial recognition, digital licenses, and identification by individual cell

phones, forced us to expedite and ultimately divest the business in 2020

August 2020, the Company sold the primary assets of DSS Plastics Group to a subsidiary of Bristol Graphics for $683,000 at closing,

and a contingency payment (earnout) of $517,000 that may be earned over the following 12-month period, $390,000 of which was recognized in 2020.

The remaining asset and

liability of this division is its lease space located in Brisbane, California.

We are in the process of subleasing that facility

and expect to consummate a transaction in the 2 nd quarter which we expect will release the Company from that trailing

lease liability, and thereafter expected final closure.

the Company’s Core Businesses :

2018, the Premier Packaging and the Digital Group collectively accounted for 78% of the Company’s operating revenues.

while, the two business lines accounted for the lion’s share of the Company’s operating revenue, they were doing so

on minimal marketing and operating budgets, and in the case of Premier Packaging, with aged and obsolete equipment with limited

remaining life.

Management reviewed the business lines of both Premier Packaging and the Digital Group and believed that the core

business of each was sound, that DSS held a market niche and/or growth opportunity in each, and that long-term profitability could

be achieved with additional investments and changes.

In 2020, management made substantial adjustments to revive and improve the

productivity and operating revenue of these two divisions.

In 2018, Premier Packaging

and Digital collectively reported $14,500,000 in operating revenue, $12,957,000 and $1,543,000 respectively, or approximately

78% of the company’s operating revenue that year.

In 2019, after initial revitalization efforts, operating revenues grew

a combined 5%, and in 2020, after a reduction in sales to each of their two largest customers by 26%, the two divisions reported

$15.3 million in revenues, during a harsh pandemic impacted economic period.

Substantially

Reducing Corporate Overhead and Cash Burn :

the spring of 2019, we have reduced the Company’s monthly cash burn by eliminating non-essential layers of management and

redundant operating expenses, as well as by renegotiating vendor contracts.

The goal was, and is, to continue to reduce overhead

operating costs, redundancy, improve operating efficiencies, and reduce cash burn through a continuing series of new management

Business Diversification Initiatives :

of the most important initiatives of the 2019 strategic business plan was the goal, and commitment, to diversify the Company’s

operating revenue.

Management believed it imperative to transition the Company’s revenue into new business lines which generated

scalable and reoccurring revenue, preferably in exponential and emerging growth business opportunities.

To achieve this goal,

management sought to acquire, to invest in, or to start-up new business lines that met this criterion.

We also planned to add

additional products to existing business lines so that existing operations could further transition more toward scalable reoccurring

revenue streams.

that initiative, in 2019 and continuing through 2020 the Company either acquired, invested in, or started-up new businesses in

the biohealth, direct marketing, blockchain, and securities trading fields.

In 2020, the Company made substantial investments

in the following new business lines:

DSS BIOHEALTH SECURITY, INC.

This business line was intended to be principally involved in the bio-medical sector, including

investing in companies that hold bio-medical intellectual property and/or have, or are securing, strategic alliances, partnerships,

and distribution rights for bio-medical and security products, technologies, or enterprises.

This new division was also organized

to seek out investment and growth opportunities in on open-air defense initiatives that seek to curb transmission of airborne

infectious diseases such as tuberculosis and influenza, among others, in open areas, and to seek investments in the oncological

cures for various forms of cancer.

2019, the Company made a substantial commitment to this division by acquiring Impact BioMedical, Inc.

in an approximate $50 million

all stock acquisition.

The Impact Bio acquisition, which was rich with assets, has a foundation of products with international

market opportunities and demand, and which can be structured into long- term scalable, reoccurring license revenue.

By leveraging

technology and new science with strategic partnerships, Impact BioMedical drives mission-oriented research, development, and commercialization

of solutions for medical advances in human wellness and healthcare.

Direct Marketing/Online Sales Group, The Direct Marketing / Online Sales

industry was a market that we believed would help us diversify and meet our scalable reoccurring revenue target in an exponential

growth industry with high profit margins.

The direct marketing, network marketing, or online sales is designed to sell products

or services directly to the public through independent distributors, rather than selling through the traditional retail market.

We believed that with the transition of a significant sector of retail sales now converting to the now popular “gig economy”,

an investment in this business model would meet our strategic business plan objective and vision.

We believed that we could profitably

serve this market through lending opportunities, acquisition opportunities, and global partnership ventures.

this objective, we made substantial investments in loans and investments into several direct marketing companies in 2019 and

Notable in this area was our $8+ million investment into Sharing Services Global Corporation, located in Dallas, Texas,

and the Company’s start-up of HWH World, Inc.

and its national and international sales network.

Further, on March 1,

2021, Decentralized announced that a binding letter of intent had been executed in which it increased its investment in

Sharing Services through a $30 million convertible promissory note.

The $30 million is planned to exponentially increase

Sharing Services sales channels, substantially expand its product portfolio, and to position Sharing Services to capitalize

on consolidation and roll up opportunities.

BLOCKCHAIN TECHNOLOGY, This corporate business line was organized in 2019 to specialize in the development of blockchain

security technologies for tracking and tracing solutions for supply chain logistics and cyber security across global markets.

While no significant acquisitions were made over the past 18 months, this business line is still deemed to be an important business

line for our long-term diversification goals.

SECURITIES AND FINTECH GROUP The Securities business line was be organized as part of the 2019 strategic business plan

to establish or acquire investments in long-term growth and sustainable scalable reoccurring management fee income.

The businesses

that were to be targeted in this business plan included investments in alternative trading systems and related platforms, REITs,

brokerage and other trading fund management platforms that would create recurring fee income.

business goal for 2021 is continue many of the 2019-2020 Strategic Goals, including to continue to grow the company with sound

acquisitions, to develop and to grow Premier Packaging with major capital investments, and to place a heavy emphasis improving

top line revenue and top line revenue diversification and profitability.

But special attention, effort, and resources will be

made to further the following 2021 business initiatives:

Continue to revitalize and grow Premier Packaging.

Make further investments in the Direct Securities and BioHealth groups in the form of growth and investments.

Focused effort to double top line revenue and bottom- line profitability.

Core Products:

and Counterfeit Prevention and Brand Services

Digital Group’s core business is counterfeit prevention, brand protection, consumer engagement and validation of authentic

print media, including government-issued documents, packaging, ID cards and licenses.

We believe we are a leader in the research

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.

Counterfeit Prevention and Brand Services

Digital Group specializes in counterfeit prevention, brand protection, consumer engagement technology development.

offer platforms for authentication and validation of authentic print media, consumer goods and negotiable instruments, including

government-issued documents, retail and consumer packaging, labelling, and identification systems.

We are a leader in the research

and development of optical deterrent technologies and have commercialized these technologies with a suite of products that offer

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products, pharmaceutical packaging and school transcripts.

deterrent features such as ours have traditionally been utilized mainly by large security printers for the protection of important

printed documents, such as vital records and identification documents.

Many of these competitive features were developed pre-1980

and were designed to be effective on the imaging devices of the day, which were mainly photography mechanisms.

With the advent

of modern-day scanners, digital copiers, digital cameras, smartphones and easy-to-use imaging software such as Adobe Photoshop,

many of the pre-1980 optical deterrents such as micro-printing are much less effective in the prevention of counterfeiting.

some of our competitors, our technologies are built to defeat modern scanners and digital copiers, and we believe that our products

are the most effective in doing so in the market today.

primary anti-counterfeiting products and technologies have evolved from a traditional analog product to a highly advanced digital

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solution that permits efficient and cost-effective counterfeit deterrence, authentication and consumer engagement.

embeds customizable, covert AuthentiGuard®

Prism technology that resists counterfeiting or alteration on product packaging,

labeling, documents and credentials.

Product verification using the smartphone application creates real-time, accurate authentication

results for brand owners, government officials and supply chain personnel that can be integrated into existing information systems.

Since 2012, the AuthentiGuard ®

product has grown to annual sales of approximately $1.5 million, and we project that over the next three years annual sales

of AuthentiGuard ®

Our solutions

leverage functional anti-counterfeiting features and cutting-edge technology to satisfy commercial and consumer product needs

for branding, intelligent packaging, and marketing.

2012, the AuthentiGuard®

product has grown to annual sales of approximately $1.5 million, and we project that over the next

three years annual sales of AuthentiGuard®

will increase by an annualized growth rate of approximately 17%.

Today, our mission is to make

world-class authentication, counterfeit prevention and consumer engagement technology that is assessable and scalable to an

expanding customer base.

We intend to bring our technology-laden plastic and packaging solutions to a broader range of clients

including small businesses, develop long-term relationships with those who use them and grow our business organically.

& Packaging Business

Packaging Corporation provides custom packaging services and serves clients in the pharmaceutical, nutraceutical, beverage, specialty

foods, 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 and related technologies.

Patent Monetization Business

its acquisition in 2013, DSS Technology Management’s primary mission has been the attempted monetization of its various

patent portfolios through commercial litigation.

for its investment in its social networking related patents, DSS Technology Management and the Company have partnered with various

third-party funding groups in connection with patent monetization programs.

In connection with this business line, the Company

has purchased patents in a variety of fields, including social networking, mobile communications, semi-conductors, Bluetooth and

LED, and has initiated patent infringement litigation against a wide range of domestic and global Companies.

In connection with

these litigation matters, the Company engages with legal firms that typically work under fee caps and contingency fee arrangements.

To date, the Company has been or is currently in litigation with, among others, Apple, Samsung, Taiwan Semiconductor Manufacturing

Company, Intel, NEC, Lenovo, Seoul Semiconductor, Everlight Electronics, Cree, Nichia and Osram, GMBH.

During the course of these

litigation matters, the Company typically incurs a variety of legal challenges from defendants, including defendants seeking to

have the patents in question adjudicated to be invalid by the United States Patent Office through the Inter Partes Review

process (“

IPR ”).

As a result of these various legal challenges issued by defendants, the Company has experienced

varying levels of success in its efforts to monetize its patent investments.

In addition, to date, most of settlements or payments

received from defendants have been remitted to the Company’s third-party funders in accordance with the terms of those respective

funding agreements.

status of pending patent infringement lawsuits which have been filed by DSS Technology Management and the Company are more particularly

described in Part 1, Item 3 of this Report.

Today, our mission

is to make world-class authentication, counterfeit prevention and consumer engagement technology that is assessable and scalable

to an expanding customer base.

We intend to bring our technology-laden packaging, labelling, and document solutions to a broader

range of clients including small businesses, develop long-term relationships with those who use them and grow our business organically.

Decentralized

Sharing Systems, Inc.

and its subsidiaries and partners, including Sharing Services Global Corporation provide an array of products

and services, through an independent contractor network.

example, Decentralized’s wholly owned subsidiary, HWH World, Inc.

promotes products and services that fulfill its corporate

position of health, wealth, and happiness.

The HWH Marketplace through its brands desires to help its customers become the healthiest,

happiest versions of themselves.

For the health component , the company offers herbal alternatives of nutraceutical, consumables

and topicals, dietary supplements, beauty and skin care products, personal care, gut health products, aloe vera based supplements,

and other wellness products.

As to the wealth component , the company is developing educational tools to its users to better

manage individual finances and savings programs to help its consumers find each consumer’s individual financial goal.

to the happiness component , the company is working with other partners to either acquire or partner in products and/or

services to allow its consumers to enjoy and healthy living, including a global travel membership network.

Sharing Services, through its subsidiary Elevacity, markets and distributes health and wellness products under the “Elevate”

brand, primarily in the United States and Canada.

Sharing Services markets its products and services through its independent contractor

distribution system and using its proprietary website:

www.elevacity.com.

In February 2021, the Company launched its new business

brand, “The Happy Co.,”

at its Elevacity division.

Elevacity has several well-known and signature products, including

its top product lines of “Happy Coffees”

and “Nootropic Beverages”.

Elevacity also sells a “healthy

shake”, a “Keto Coffee Booster”, “Energy Caps”, “XanthoMax©

Happy Caps”,“Wellness

Vitamin Patches”, various beauty and skin care products, and other wellness products.

through its subsidiary Impact Bio Medical, Inc.

targets unmet, urgent medical needs and expands the borders of medical and pharmaceutical

Impact 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, Impact Bio 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.

and Impact Medical have several important and valuable products, technology or compounds that are in continuing development and/or

licensing stages:

A polyphenol compound that is believed to be successful in neurological and inflammatory disorders.

LineBacker is a platform

of small molecule X-bonded polyphenols.

X-bonding is a molecular tuning technique that modifies a natural compound to induce

potency, efficacy, bioavailability, and trans-membrane permeability while maintaining safety, toxicity, and tolerability.

Natural polyphenols have demonstrated strong potential in treating and preventing a range of diseases by inhibiting TNF-α

and indication specific causes ( e.g.

neurology, anti-inflammatory, oncology).

Two novel discrete LineBacker molecules

have been synthesized and characterized including in vitro efficacy testing, pharmacokinetics, and maximum tolerated dose

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.

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.

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.

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.

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.

be utilized as a stand-alone repellent or as an additive in detergents, lotions, shampoo, and other substances to provide

mosquito protection.

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.

BioHealth has a license for cannaniboid technology for neurological pain, sleep apnoea disorders with RX/OTC potential.

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.

business model of BioHelath and Impact BioMedical revolves around two methodologies –

Licensing and Sales Distribution.

Impact develops valuable and unique patented technologies which will be licensed to pharmaceutical, large consumer package goods

companies and venture capitalists in exchange for usage licensing and royalties.

Impact utilizes the DSS ecosystem to leverage its sister companies that have in place distribution networks on a global scale.

Impact will engage in branded and private labelling of its products for sales generation through these channels.

This global distribution

model will give direct access to end users of Impact’s nutraceutical and health related products.

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, digital asset exchanges, security and utility tokens and other forms of crypto

This business sector has already started or made the following business lines and associated products and services:

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.

Estate Title Services :

Alset Title Company, Inc.

provides buyers, sellers, and brokers alike confidence during big real

estate transactions, not just in a transaction, but in the property itself.

Through bundled services, Alset Title Company,

provides it all from title searches and insurance to escrow agent assistance.

Trading Systems :

Currently in development to operate in the US vertical digital asset exchanges for securities, tokenized

assets, utility tokens, stablecoins and cryptocurrency via a digital asset trading platform using blockchain technology.

ability to compete effectively depends largely upon our ability to maintain the proprietary nature of our technology, products

and manufacturing processes.

We principally rely upon patent, trademark, trade secrets and contract law to establish and protect

our proprietary rights.

During our development, we have expended significant resources on research and development in an effort

to become a market leader with the ability to provide our customers effective solutions against an ever-changing array of counterfeit

Our position in the security print market is based on our technologies and products.

We dedicate two staff members to research

and development of print technologies, digital graphic files, and printing techniques to allow us to expand our ability to combat

a wide variety of counterfeiting and brand protection issues.

The Company recognized a credit in 2019 of approximately $12,000

primarily due to receipt of a refund on development costs for the development of proprietary blockchain solutions for the Company’s

AuthentiGuard product line.

In comparison, the Company spent approximately $146,000 on research and development during 2018, primarily

toward the development of the Company’s AuthentiGuard product line.

Across the DSS ecosystem of companies, we principally rely upon patent, trademark, trade secrets

and contract law to establish and protect our proprietary rights.

it applies to our digital division’s product line development,

we have expended significant resources on research and development in an effort to become a market leader with the ability to

provide our customers effective solutions against an ever-changing array of counterfeit risks.

Our position in the security print

market is based on our technologies and products.

The Company recognized a credit in 2019 of approximately $12,000 primarily due

to receipt of a refund on development costs for the development of proprietary blockchain solutions for the Company’s AuthentiGuard

product line.

In comparison, the Company spent approximately $146,000 on research and development during 2018, primarily toward

the development of the Company’s AuthentiGuard product line.

to out Impact BioMedical Division we have key patents that we will use as the foundation for foster product development and licensing.

We have 5 patents for some of our key products including Linebacker, Equivir/Nemovir, Laetose and 3F.

Our intellectual property

will enable us to be protected as we further these technologies and pave the road to commercialization.

own patents covering semiconductor, light emitting diode, anti-counterfeiting and document authentication, and wireless peripheral

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remaining durations ranging from 1 to 16 years.

have registered our “AuthentiGuard®”

mark, as well as our “Survivor 21®”

electronic check icon

and “VeriGlow®”

several trademarks related to our Digital Group business.

We have registered our “AuthentiGuard®”

as well as our “Survivor 21®”

electronic check icon and “VeriGlow®”

with the U.S.

Patent and Trademark Office.

Patent and Trademark

A trademark application is pending in Canada for “AuthentiGuard.”

AuthentiGuard®

is registered in several European countries including the United Kingdom.

We have also applied to register

AuthentiSite TM, AuthentiShare TM, AuthentiSuiteTM, AuthentiBlockTM, and AuthentiChainTM in the U.S.

primary website we maintain is www.dsssecure.com, which describes our Company, our history, our patented document security solutions,

our major product offerings, and our targeted vertical markets.

In addition to the active websites, the Company owns several other

domain names reserved for future use or for strategic competitive reasons.

Information on our websites or any other website does

not constitute a part of this annual report.

is registered in several

European countries including the United Kingdom.

We have also applied to register AuthentiSite TM, AuthentiShare TM, AuthentiSuiteTM,

AuthentiBlockTM, and AuthentiChainTM in the U.S.

primary corporate website we maintain is www.dsssecure.com , which describes our Company, our history, our patented document

security solutions, our major product offerings, and our targeted vertical markets across all of our business segments.

we operate www.hwhmarketplace.com which is an online retail site that is centreed around our health and wellness nutraceutical

products, www.impbio.com which is the primary site for our product information on that company.

In addition to the active

websites, the Company owns several other domain names reserved for future use or for strategic competitive reasons.

on our websites or any other website does not constitute a part of this annual report.

and Competition

security print market is comprised of a few very large companies and an increasing number of small companies with specific technology

The expansion of this market is primarily due to the significant expansion of counterfeiting as advancing technologies

in digital duplication and scanning combined with increasingly sophisticated design software has enabled easier reproduction of

original documents, vital records and IDs, packaging, and labels.

Our competitors include Standard Register Company, which specializes

in printing security technologies for the check and forms and medical industries;

and De La Rue Plc, that specializes in printing

secure currency, tickets, labels, lottery tickets and vital records for governments and Fortune 500 companies.

Large office equipment

manufacturers, called OEMs, such as Sharp, Xerox Canon, Ricoh, Hewlett Packard and Eastman Kodak are developing “smart copier”

technology that recognizes particular graphical images and produces warning words or distorted copies.

Some of the OEMs are also

developing user assigned and variable pantograph “hidden word”

technologies in which users can assign a particular

hidden word in copy, such as “void”

to the security printing business, the security print market

is comprised of a few very large companies and an increasing number of small companies with specific technology niches.

The expansion

of this market is primarily due to the significant expansion of counterfeiting as advancing technologies in digital duplication

and scanning combined with increasingly sophisticated design software has enabled easier reproduction of original documents, vital

records and IDs, packaging, and labels.

Our competitors include Standard Register Company, which specializes in printing security

technologies for the check and forms and medical industries;

and De La Rue Plc, that specializes in printing secure currency,

tickets, labels, lottery tickets and vital records for governments and Fortune 500 companies.

Large office equipment manufacturers,

called OEMs, such as Sharp, Xerox Canon, Ricoh, Hewlett Packard and Eastman Kodak are developing “smart copier”

that recognizes particular graphical images and produces warning words or distorted copies.

Some of the OEMs are also developing

user assigned and variable pantograph “hidden word”

technologies in which users can assign a particular hidden word

in copy, such as “void”

that is displayed when a copy of such document is made.

In addition, other competing

hidden word technologies are being marketed by competitors such as NoCopi Technologies which sells and markets secure paper products,

In addition, other competing hidden

word technologies are being marketed by competitors such as NoCopi Technologies which sells and markets secure paper products,

and Graphic Security Systems Corporation, which markets Scrambled Indicia.

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The largest competitors in this market are primarily focused on the long-run print order market.

large integrated paper companies such as Rock-Tenn Company, Caraustar Industries, Inc., Graphic Packaging Holding Company and

Mead Westvaco.

Our printing division competes primarily with locally-based printing companies in the Rochester and Western New

York markets.

large integrated paper companies such as West Rock Company, Caraustar Industries, Inc., Graphic Packaging Holding Company

and Mead Westvaco.

Our printing division competes primarily with locally-based printing companies in the Rochester and Western

New York markets.

Most of our competitors in these markets are privately-held, single location operations.

plastics division competes with several companies including Bristol ID, AbNote (formerly Arthur Blanks), LaserCard Corporation

and L-1 Identity Solutions.

The plastics division primarily delivers its products through a dealer network, but also provides

products to end-user customers.

Competition in the plastic card industry is primarily based on production capabilities based on

specialized equipment, geographic location, quality and service.

In addition, competition is increasingly influenced by proprietary

or niche offerings provided by competitors, such as RFID, biometric, read-write, and security features built-into the plastic

technology division also faces competition in the area of patent acquisitions and enforcement.

Entities such as Acacia, RPX, AST,

Intellectual Ventures, Wi-LAN, MOSAID, Round Rock Research LLC, IPvalue Management Inc., Vringo Inc.

and Pendrell Corporation

compete in acquiring rights to patents.

to our Digital Group, our technology division also faces competition in the area of patent acquisitions and enforcement.

such as Acacia, RPX, AST, Intellectual Ventures, Wi-LAN, MOSAID, Round Rock Research LLC, IPvalue Management Inc., Vringo Inc.

and Pendrell Corporation compete in acquiring rights to patents and product authentication from companies like Authentix, Opsec,

and Alpvision that have similar technology to help protect against fraud and authenticate consumer packaged goods.

to the Direct Marketing Group, the network marketing or direct marketing industry is a very competitive marketplace.

directly competing with HWH and SHRG, the following companies are significant players in the global network marketing business

and as a result an indirect competitor of HWH and SHRG:

Amay, Avon, Herbalife, Natura, Vorwerk, Mary Kay, Infinitus, Perfect,

Forever Living, Nu Skin, Young Living, and New Era, among others.

2020, two customers accounted for 38% of our consolidated revenue.

As of December 31, 2020, these two customers accounted

for 60% of our consolidated trade accounts receivable balance.

As of December 31, 2019, these two customers accounted for 45%

49% of our consolidated trade accounts receivable balance.

As of December 31, 2018, these two customers accounted for 44% of our

consolidated revenue and 38% of the Company’s consolidated trade accounts receivable balance.

primary raw materials the Company uses in its businesses are paper, corrugated paperboard, plastic sheets, and ink.

negotiates with leading suppliers to maximize its purchasing efficiencies and uses a wide variety of paper grades, formats, ink

formulations and colors.

Paper and paperboard prices continued to increase in 2019, and we believe increases in future years are

Except for certain packaging customers where the Company enters into annual contracts, for which changes in paperboard

pricing is absorbed by the Company, the Company has historically passed substantially all increases and decreases to its customers,

although there can be no assurances that the Company will continue to do so in the future.

of our consolidated revenue and 48% of the Company’s consolidated trade accounts receivable balance.

This customer

diversification improvement was driven by addition of several new customers to our overall customer base.

to the packaging business, the primary raw materials the Company

uses in its businesses are paper, paperboard, corrugated board and ink.

The Company negotiates with leading suppliers to

maximize its purchasing efficiencies and uses a wide variety of paper grades, formats, ink formulations and colors.

paperboard prices continued to increase in 2020, and we believe increases in future years are expected.

Except for certain packaging

customers where the Company enters into annual contracts, for which changes in paperboard pricing is absorbed by the Company,

the Company has historically passed substantially all increases and decreases to its customers, although there can be no assurances

that the Company will continue to do so in the future.

Environmental

34 unchanged sentences

Company was incorporated in 1984 and changed its name to Document Security Systems, Inc.

Since then, the Company has

acquired a plastics card manufacturer, a printing company, a packaging company, an IT services company, and an intellectual property

monetization company.

See, the “Overview”

7 unchanged sentences

Information on our website is not incorporated herein by reference.

We make available

free of charge through our website our press releases, Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports

on Form 8-K and all amendments to those reports as soon as reasonably practicable after electronically filed with or furnished

available free of charge through our website our press releases, Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current

Reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after electronically filed with or furnished

to the Securities and Exchange Commission.

Company is a smaller reporting company, as such term is defined in Item 10(f)(1) of Regulation S-K, and is therefore not required

to provide the information required under this item.

in our common stock involves risk.

Before deciding whether to invest in our common stock, you should consider carefully the risks

and uncertainties described below.

There may be other unknown or unpredictable economic, business, competitive, regulatory or

other factors that could have material adverse effects on our future results.

If any of these risks actually occur, our business,

business prospects, financial condition or results of operations could be seriously harmed.

This could cause the trading price

of our common stock to decline, resulting in a loss of all or part of your investment.

Please also read carefully the section

contained in Part II, Item 7, below, entitled “Cautionary Statement Regarding Forward-Looking Statements.”

have identified the following risks and uncertainties that may have a material adverse effect on our business, financial condition

or results of operations in the future.

Additional risks not presently known to us or that we currently believe are immaterial

may also significantly impair our business operations.

If any of these risks occur, our business, results of operations or financial

condition could suffer, the market price of our common stock could decline, and you could lose all or part of your investment

in our common stock.

Impact of COVID-19 Pandemic.

COVID-19 pandemic has created global economic turmoil and has potentially permanently impacted how many businesses operate and

how individuals will socialize and shop in the future.

The Company continues to feel the effect of the COVID-19 business shutdowns

and consumer stay-at-home protections.

But the effect of the economic shutdown has impacted our business lines differently, some

more severely than others.

In most cases we believe the negative economic trends and reduced sales will recover over time.

management determined that one of its business lines, DSS Plastics, had been more severely impacted by the pandemic than

our other divisions and we did not believe this was a short-term phenomenon.

As a result, management decided to

fully impair its goodwill related to DSS Plastics.

The impact to DSS’s 2020 first quarter earnings of this impairment

was approximately $685,000.

value of our intangible assets and investments may not be equal to their carrying values .

of December 31, 2020, we had approximately $23.4 million of net intangible assets.

Approximately $22.3 million is associated with

the acquisition of Impact Biomedical, Inc.

The Company has completed valuations for certain developed technology assets

acquired in the transaction as well the non-controlling interest portion of Impact BioMedical, Inc.

and its subsidiaries.

Approximately $267,000 of this amount are intangible assets which derive their value from patents or patent rights.

efforts and litigation are not successful, the values of these assets could be reduced.

We are required to evaluate the carrying

value of such intangibles and goodwill and the fair value of investments whenever events or changes in circumstances indicate

that the carrying value of an intangible asset, including goodwill, and investment may not be recoverable.

If any of our intangible

assets, goodwill or investments are deemed to be impaired then it will result in a significant reduction of the operating results

in such period.

As noted above, management has determined that the goodwill of DSS Plastics has been permanently and materially

impaired due to the global pandemic and other market factors.

have secured indebtedness, and a potential risk exists that we may be unable to satisfy our obligations to pay interest and principal

thereon when due or negotiate acceptable extensions or settlements.

have outstanding indebtedness (described below), most of which is secured by assets of various DSS subsidiaries and guaranteed

by the Company.

Given our history of operating losses and our cash position, there is a risk that we may not be able to repay

indebtedness when due.

If we were to default on any of our other indebtedness that require payments of cash to settle such default

and we do not receive an extension or a waiver from the creditor and the creditor were to foreclose on the secured assets, it

could have a material adverse effect on our business, financial condition and operating results.

of December 31, 2020, we had the following significant amounts of outstanding indebtedness:

due under a promissory note with Citizens Bank used to purchase our packaging division facility.

We are required to pay monthly

instalments of $7,000 with interest fixed at 4.22% until June 2029, at which time a balloon payment of the remaining principal

balance will be due.

The promissory note is secured by a first mortgage on our packaging division facility.

in a term note non-revolving line of credit with Citizens Bank used by Premier Packaging Corporation to purchase equipment.

Effective on the Conversion Date, the interest shall be adjusted to a fixed rate equal to 2% above the bank’s cost

of funds, as determined by Citizens.

The note had no borrowings against it as of December 31, 2020.

in a term note non-revolving line of credit with Citizens Bank used by Premier Packaging Corporation to purchase equipment.

The note is amortized over a 48-month period and payable in monthly instalments of $13,000.

Interest accrues at 1 Month LIBOR

revolving credit line with Citizens Bank by Premier Packaging payable in monthly instalments of interest only.

The revolving

credit line bears interest at 1 Month LIBOR plus 2.0% and had no borrowings against it at as of December 31, 2020.

unsecured promissory note between AMRE and LiquidValue Asset Management Pte Ltd.

The note calls for interest to be paid annually

on March 2 with interest fixed at 8.0% and matures on March 2, 2022.

The holder is a related party owned by the Chairman of

the Company’s board of directors.

under the Paycheck Protection Program, which was established as part of CARES Act, and provides for loans to qualifying businesses

for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business.

As of December 31, 2020, pursuant

to the terms of the SBA PPP program, the Company submitted an application for AAMI for a requested 100% loan forgiveness.

In January 2021, AAMI received notification that the loan was forgiven under the guidelines of the CARES Act.

Citizens credit facilities for the Company’s subsidiary, Premier Packaging, contain various covenants including fixed charge

coverage ratio, tangible net worth and current ratio covenants which are tested annually as of December 31.

ended December 31, 2020, Premier Packaging was in compliance with the annual covenants.

significant amount of our revenue is derived by two customers.

2020, two customers accounted for approximately 38% of our consolidated revenue.

As of December 31, 2020, these two customers

accounted for 60% of our trade accounts receivable balance.

During 2019, these two customers accounted for approximately 45% of

our consolidated revenue.

As of December 31, 2019, these two customers accounted for 49% of our trade accounts receivable balance.

If we were to lose these customers or if the amount of business we do with these two customers declines significantly, our business

would be adversely affected.

may face intellectual property infringement or other claims against us, our customers or our intellectual property that could

be costly to defend and result in our loss of significant rights.

we have received patents with respect to certain of our core business technologies, there can be no assurance that these patents

will afford us any meaningful protection.

Although we believe that our use of the technology and products we have developed, and

other trade secrets used in our operations do not infringe upon the rights of others, our use of the technology and trade secrets

we developed may infringe upon the patents or intellectual property rights of others.

In the event of infringement, we could,

under certain circumstances, be required to obtain a license or modify aspects of the technology and trade secrets we developed

or refrain from using the same.

We may not be able to successfully terminate any infringement in a timely manner, upon acceptable

terms and conditions or at all.

Failure to do any of the foregoing could have a material adverse effect on our operations and

our financial condition.

Moreover, if the patents, technology or trade secrets we developed or use in our business are deemed

to infringe upon the rights of others, we could, under certain circumstances, become liable for damages, which could have a material

adverse effect on our operations and our financial condition.

As we continue to market our products, we could encounter patent

barriers that are not known today.

A patent search may not disclose all related applications that are currently pending in the

United States Patent Office, and there may be one or more such pending applications that would take precedence over any or all

of our applications.

third parties may assert that our intellectual property rights are invalid, which could result in significant expenditures by

us to refute such assertions.

If we become involved in litigation, we could lose our proprietary rights, be subject to damages

and incur substantial unexpected operating expenses.

Intellectual property litigation is expensive and time-consuming, even if

the claims are subsequently proven unfounded, and could divert management’s attention from our business.

If there is a successful

claim of infringement, we may not be able to develop non-infringing technology or enter into royalty or license agreements on

acceptable terms, if at all.

If we are unsuccessful in defending claims that our intellectual property rights are invalid, we

may not be able to enter into royalty or license agreements on acceptable terms, if at all.

Moreover, if we are unsuccessful in

our pending patent infringement litigation, we could lose certain patents that have been collateralized by third party funding

This could prohibit us from providing our products and services to customers, which could have a material adverse effect

on our operations and our financial condition.

of our recently developed products are not yet commercially accepted and there can be no assurance that those products will be

accepted, which would adversely affect our financial results.

the past several years, we have spent significant funds and time to create or acquire new products by applying our technologies

onto media other than paper, including plastic and cardboard packaging, and delivery of our technologies digitally.

also acquired several patents in the bio-health field through our acquisition if Impact Biomedical, Inc.

Our business plan includes

plans to incur significant marketing, intellectual property development and sales costs for these newer products, particularly

the bio-health related products.

If we are not able to develop and sell these new products, our financial results will be adversely

results of our research and development efforts are uncertain and there can be no assurance of the commercial success of our products.

believe that we will need to continue to incur research and development expenditures to remain competitive.

The products we are

currently developing or may develop in the future may not be technologically successful.

In addition, the length of our product

development cycle may be greater than we originally expected, and we may experience delays in future product development.

resulting products are not technologically successful, they may not achieve market acceptance or compete effectively with our

competitors’

in document security technology and standards could render our applications and services obsolete.

market for document security products, applications, and services is fast moving and evolving.

Identification and authentication

technology is constantly changing as we and our competitors introduce new products, applications, and services, and retire old

ones as customer requirements quickly develop and change.

In addition, the standards for document security are continuing to evolve.

If any segments of our market adopt technologies or standards that are inconsistent with our applications and technology, sales

to that market segments could decline, which could have a material adverse effect on our operations and our financial condition.

markets in which we operate is highly competitive, and we may not be able to compete effectively, especially against established

industry competitors with greater market presence and financial resources.

markets are highly competitive and characterized by rapid technological change and product innovations.

Our competitors may have

advantages over us because of their longer operating histories, more established products, greater name recognition, larger customer

bases, and greater financial, technical and marketing resources.

As a result, they may be able to adapt more quickly to new or

emerging technologies and changes in customer requirements and devote greater resources to the promotion and sale of their products.

Competition may also force us to decrease the price of our products and services.

We cannot assure you that we will be successful

in developing and introducing new technology on a timely basis, new products with enhanced features, or that these products, if

introduced, will enable us to establish selling prices and gross margins at profitable levels.

we are unable to respond to regulatory or industry standards effectively, our growth and development could be delayed or limited.

future success will depend in part on our ability to enhance and improve the functionality and features of our products and services

in accordance with regulatory or industry standards.

Our ability to compete effectively will depend in part on our ability to

influence and respond to emerging industry governmental standards in a timely and cost-effective manner.

If we are unable to influence

these or other standards or respond to these or other standards effectively, our growth and development of various products and

services could be delayed or limited.

in security, whether cyber or physical, and other disruptions and/or our inability to prevent or respond to such breeches, could

diminish our ability to generate revenues or contain costs, compromise our assets, and negatively impact our business in other

face certain security threats, including threats to our information technology infrastructure, attempts to gain access to our

proprietary or classified information, and threats to physical and cyber security.

Our information technology networks and related

systems are critical to the operation of our business and essential to our ability to successfully perform day-to-day operations.

The risks of a security breach, cyber-attack, cyber intrusion, or disruption, particularly through actions taken by computer hackers,

foreign governments and cyber terrorists, have increased as the number, intensity and sophistication of attempted attacks and

intrusions from around the world have increased.

Although we have acquired and developed systems and processes designed to protect

our proprietary and/or classified information, they may not be sufficient and the failure to prevent these types of events could

disrupt our operations, require significant management attention and resources, and could negatively impact our reputation among

our customers and the public, which could have a negative impact on our financial condition, and weaken our results of operations

and liquidity.

operations in Asia are subject to unique risks and uncertainties, including tariffs and trade restrictions.

operating facility in Asia, in addition to our investment in Alset International Limited, presents risks including, but

not limited to, changes in share price of investments, changes in local regulatory requirements, changes in labor laws, local

wage laws, environmental regulations, taxes and operating licenses, compliance with U.S.

regulatory requirements, including the

Foreign Corrupt Practices Act, uncertainties as to application and interpretation of local laws and enforcement of contract and

intellectual property rights, currency restrictions, currency exchange controls, fluctuations of currency, and currency revaluations,

eminent domain claims, civil unrest, power outages, water shortages, labor shortages, labor disputes, increase in labor costs,

rapid changes in government, economic and political policies, political or civil unrest, acts of terrorism, or the threat of boycotts,

other civil disturbances and the possible impact of the imposition of tariffs as a result of the tariff dispute between the U.S.

and China as well as any retaliating trade policies or restrictions.

Any such disruptions could depress our earnings and have

other material adverse effects on our business, financial condition and results of operations.

growth in our business could make it difficult to manage our resources.

business expansion could place a significant strain on our management, administrative and financial resources.

Significant growth

in our business may require us to implement additional operating, product development and financial controls, improve coordination

among marketing, product development and finance functions, increase capital expenditures and hire additional personnel.

can be no assurance that we will be able to successfully manage any substantial expansion of our business, including attracting

and retaining qualified personnel.

Any failure to properly manage our future growth could negatively impact our business and operating

we fail to retain certain of our key personnel and attract and retain additional qualified personnel, we might not be able to

remain competitive, continue to expand our technology or pursue growth.

future success depends upon the continued service of certain of our executive officers and other key sales and research personnel

who possess longstanding industry relationships and technical knowledge of our products and operations.

Although we believe that

our relationship with these individuals is positive, there can be no assurance that the services of these individuals will continue

to be available to us in the future.

There can be no assurance that these persons will agree to continue to be employed by us

after the expiration dates of their current contracts.

have identified weaknesses in our internal control over financial reporting structure;

any material weaknesses may cause errors

in our financial statements that could require restatements of our financial statements and investors may lose confidence in our

reported financial information, which could lead to a decline in our stock price.

404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate the effectiveness of our internal control over financial reporting

as of the end of each year, and to include a management report assessing the effectiveness of our internal control over financial

reporting in each Annual Report on Form 10-K.

We have had previously identified weaknesses in our internal control over financial

reporting following management’s annual assessment of internal controls over financial reporting and, as a result of that

assessment, management had concluded our controls associated 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.

do not intend to pay cash dividends.

do not intend to declare or pay cash dividends on our common stock in the foreseeable future.

We anticipate that we will retain

any earnings and other cash resources for investment in our business.

The payment of dividends on our common stock is subject

to the discretion of our board of directors and will depend on our operations, financial position, financial requirements, general

business conditions, restrictions imposed by financing arrangements, if any, legal restrictions on the payment of dividends and

other factors that our board of directors deems relevant.

may seek to develop additional new inventions and intellectual property, which would take time and would be costly.

the failure to obtain or maintain intellectual property rights for such inventions would lead to the loss of our investments in

such activities.

of our business may include the development of new inventions and intellectual property that we would seek to monetize.

this aspect of our business would likely require significant capital and would take time to achieve.

Such activities could also

distract our management team from our present business initiatives, which could have a material and adverse effect on our business.

There is also the risk that these initiatives would not yield any viable new inventions or technology, which would lead to a loss

our investments in time and resources in such activities.

addition, even if we are able to develop new inventions, in order for those inventions to be viable and to compete effectively,

we would need to develop and maintain, and we would heavily rely on, a proprietary position with respect to such inventions and

intellectual property.

However, there are significant risks associated with any such intellectual property we may develop principally

including the following:

applications we may file may not result in issued patents or may take longer than we expect to result in issued patents;

may be subject to interference proceedings;

may be subject to opposition proceedings in the U.S.

or foreign countries;

patents that are issued to us may not provide meaningful protection;

may not be able to develop additional proprietary technologies that are patentable;

companies may challenge patents issued to us;

companies may design around technologies we have developed;

of our patents may be complex, uncertain and very expensive.

cannot be certain that patents will be issued as a result of any future applications, or that any of our patents, once issued,

will provide us with adequate protection from competing products.

For example, issued patents may be circumvented or challenged,

declared invalid or unenforceable, or narrowed in scope.

In addition, since publication of discoveries in scientific or patent

literature often lags behind actual discoveries, we cannot be certain that it will be the first to make our additional new inventions

or to file patent applications covering those inventions.

It is also possible that others may have or may obtain issued patents

that could prevent us from commercializing our products or require us to obtain licenses requiring the payment of significant

fees or royalties in order to enable us to conduct our business.

As to those patents that we may license or otherwise monetize,

our rights will depend on maintaining our obligations to the licensor under the applicable license agreement, and we may be unable

Our failure to obtain or maintain intellectual property rights for our inventions would lead to the loss of our investments

in such activities, which would have a material and adverse effect on our business.

patent application delays could cause delays in recognizing revenue from our internally generated patents and could cause us to

miss opportunities to license patents before other competing technologies are developed or introduced into the market.

in the laws and regulations to which we are subject may increase our costs.

are subject to numerous laws and regulations, including, but not limited to, environmental and health and welfare benefit regulations,

as well as those associated with being a public company.

These rules and regulations may be changed by local, state, provincial,

national or foreign governments or agencies.

Such changes may result in significant increases in our compliance costs.

with changes in rules and regulations could require increases to our workforce, and could result in increased costs for services,

compensation and benefits, and investment in new or upgraded equipment.

in general economic conditions or acts of war and terrorism may adversely impact our business.

for printing services is typically correlated with general economic conditions.

The prolonged decline in United States economic

conditions associated with the great recession adversely impacted our business and results of operations and may do so again.

The overall business climate of our industry may also be impacted by domestic and foreign wars or acts of terrorism, which events

may have sudden and unpredictable adverse impacts on demand for our products and services.

we fail to comply with the continued listing standards of the NYSE American LLC Exchange, it may result in a delisting of our

common stock from the exchange.

common stock is currently listed for trading on the NYSE American LLC Exchange (“NYSE American”), and the continued

listing of our common stock on the NYSE American is subject to our compliance with a number of listing standards.

our common stock were no longer listed on the NYSE American, investors might only be able to trade our shares on the OTC Bulletin

or in the Pink Sheets ®

(a quotation medium operated by Pink Sheets LLC).

This would impair the liquidity of our

common stock not only in the number of shares that could be bought and sold at a given price, which might be depressed by the

relative illiquidity, but also through delays in the timing of transactions and reduction in media coverage.

we are delisted from the NYSE American, your ability to sell your shares of our common stock may be limited by the penny stock

restrictions, which could further limit the marketability of your shares.

our common stock is delisted from the NYSE American, it could come within the definition of a “penny stock”

in the Exchange Act and could be covered by Rule 15g-9 of the Exchange Act.

That rule imposes additional sales practice requirements

on broker-dealers who sell securities to persons other than established customers and accredited investors.

For transactions covered

by Rule 15g-9, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser’s

written agreement to the transaction prior to the sale.

Consequently, Rule 15g-9, if it were to become applicable, would affect

the ability or willingness of broker-dealers to sell our securities, and accordingly would affect the ability of stockholders

to sell their securities in the public market.

These additional procedures could also limit our ability to raise additional capital

in the future.

our common stock is not listed on a national securities exchange, compliance with applicable state securities laws may be required

for certain offers, transfers and sales of the shares of our common stock.

our common stock is listed on the NYSE American, we are not required to register or qualify in any state the offer, transfer or

sale of the common stock.

If our common stock is delisted from the NYSE American and is not eligible to be listed on another national

securities exchange, sales of stock pursuant to the exercise of warrants and transfers of the shares of our common stock sold

by us in private placements to U.S.

holders may not be exempt from state securities laws.

In such event, it will be the responsibility

of us in the case of warrant exercises or the holder of privately placed shares to register or qualify the shares for any offer,

transfer or sale in the United States or to determine that any such offer, transfer or sale is exempt under applicable state securities

securities or industry analysts do not publish research or reports about our business, or if they change their recommendations

regarding our stock adversely, our stock price and trading volume could decline.

trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish

about us or our business.

Our research coverage by industry and financial analysts is currently limited.

Even if our analyst coverage

increases, if one or more of the analysts who cover us downgrade our stock, our stock price would likely decline.

If one or more

of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial

markets, which in turn could cause our stock price or trading volume to decline.

certain of our stockholders control a significant number of shares of our common stock, they may have effective control over actions

requiring stockholder approval.

of March 16, 2021, our directors, executive officers and principal stockholders (those beneficially owning in excess of

5%), and their respective affiliates, beneficially own approximately 32.2% of our outstanding shares of common stock.

a result, these stockholders, acting together, could have the ability to control the outcome of matters submitted to our stockholders

for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets.

As such, these stockholders, acting together, could have the ability to exert influence over the management and affairs of our

Accordingly, this concentration of ownership might harm the market price of our common stock by:

delaying, deferring

or preventing a change in corporate control;

impeding a merger, consolidation, takeover or other business combination involving

discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.

financing or future equity issuances may result in future dilution to our shareholders.

expect that we will need to raise additional funds in the future to finance our internal growth, our merger and acquisition plans,

investment activities, continued research and product development, and for other reasons.

Any required additional financing may

not be available on terms acceptable to us, or at all.

If we raise additional funds by issuing equity securities, you may experience

significant dilution of your ownership interest and the newly issued securities may have rights senior to those of the holders

of our common stock.

The price per share at which we sell additional securities in future transactions may be higher or lower

than the price per share in this offering.

Alternatively, if we raise additional funds by obtaining loans from third parties,

the terms of those financing arrangements may include negative covenants or other restrictions on our business that could impair

our operational flexibility and would also require us to fund additional interest expense.

If adequate additional financing is

not available when required or is not available on acceptable terms, we may be unable to successfully execute our business plan.

UNRESOLVED STAFF COMMENTS

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business