What changed in this filing

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Item 1. Financial Statements

2021-11-18 compared with 2021-08-23 · 930 added, 740 removed, 926 unchanged (64% of the section changed)

1 - FINANCIAL STATEMENTS

SECURITY SYSTEMS, INC.

AND SUBSIDIARIES

Balance Sheets

June 30, 2021

September 30, 2021

December 31, 2020

1 unchanged sentence

Cash and cash equivalents

Restricted cash

Accounts receivable, net

Assets held for sale - discontinued operations

Current portion of notes receivable, net

Current portion of notes receivable

Prepaid expenses and other current assets

1 unchanged sentence

Property, plant and equipment, net

Investment, real estate

Investment in real estate, net

Other investments

4 unchanged sentences

Right-of-use assets

Deferred tax asset, net

Other intangible assets, net

16 unchanged sentences

Stockholders’ equity

Preferred stock, $ .02

47,000 shares authorized,

shares issued and outstanding ( 43,000

on December 31, 2020);

Liquidation value $ 1,000

per share, $ - aggregate ($ 43,000,000 on December 31, 2020).

Common stock, $ .02

200,000,000 shares authorized,

67,590,000 shares issued and outstanding

Preferred stock, $ .02 par

47,000 shares authorized, shares issued and

outstanding ( 43,000 on December 31, 2020);

value $ 1,000 per share, $- aggregate.

$ 43,000,000 on December 31, 2020).

Common stock, $ .02 par value;

200,000,000 shares authorized, 79,745,886 shares issued and outstanding ( 5,836,000 on December 31, 2020)

Additional paid-in capital

7 unchanged sentences

accompanying notes to the condensed consolidated financial statements.

SECURITY SYSTEMS, INC.

AND SUBSIDIARIES

1 unchanged sentence

For the Three Months Ended

For the Six Months Ended

September 30,

For the Nine Months Ended

September 30,

Printed products

Rental income

Direct marketing

18 unchanged sentences

Loss on equity method investment

Loss from continuing operations before income taxes

( 1,645,000 )

( 2,556,000 )

Amortization of deferred financing costs and debt discount

(Loss) income from continuing operations before income taxes

( 25,777,000 )

Income tax benefit

Loss from continuing operations ( 10,725,000 )

( 14,787,000 )

(Loss) income from continuing operations

( 21,462,000 )

1 unchanged sentence

( 1,442,000 )

( 8,646,000 )

Net (loss) income

( 6,675,000 )

1 unchanged sentence

Loss from continuing operations attributed to noncontrolling interest

Net loss attributable to common stockholders

( 8,418,000 )

Net (loss) income attributable to common stockholders

( 6,598,000 )

( 18,997,000 )

Loss per common share - continuing operations:

Earnings/ (loss) per common share - discontinued operations:

Shares used in computing earnings (loss) per common share:

(Loss) earnings per common share – continuing operations:

(Loss) earnings per common share - discontinued operations:

Shares used in computing loss (earnings) per common share:

accompanying notes to the condensed consolidated financial statements.

SECURITY SYSTEMS, INC.

AND SUBSIDIARIES

Statements of Cash Flows

the Six Months Ended June 30,

the Nine Months Ended September 30,

Cash flows from operating activities:

Net loss from continuing operations

$ ( 14,787,000 )

Net (loss) income from continuing operations

$ ( 21,462,000 )

Adjustments to reconcile net loss from continuing operations to net cash

used by operating activities:

Adjustments to reconcile net (loss) income from continuing operations

to net cash used by operating activities:

Depreciation and amortization

2 unchanged sentences

Loss (gain) on investments

( 8,365,000 )

Gain on extinguishment of debt

3 unchanged sentences

Decrease (increase) in assets:

Accounts receivable, net

Accounts receivable

( 1,580,000 )

( 1,147,000 )

Prepaid expenses and other current assets

1 unchanged sentence

Accounts payable

Accrued expenses and deferred revenue

Accrued expenses

Other liabilities

( 1,054,000 )

Net cash used by operating activities

5 unchanged sentences

Purchase of real estate

Purchase of investments

( 6,565,000 )

Purchase of investment

( 19,026,000 )

2 unchanged sentences

( 6,581,000 )

Acquisition of American Pacific Bancorp, Inc.

Purchase of equity investment

( 1,276,000 )

Sale of marketable securities

Purchase of intangible assets

Note receivable investment

( 24,048,000 )

Purchase of intangible assets

( 1,115,000 )

Net cash used by investing activities

3 unchanged sentences

Payments of long-term debt

( 1,893,000 )

Borrowings of long-term debt

Borrowings from revolving lines of credit, net

Payments of revolving lines of credit, net

Deferred financing fees

2 unchanged sentences

Cash flows from discontinued operations:

Cash provided by discontinued operations

Cash provided (used) by investing activities

Cash provided (used) by discontinued operations

Cash provided by investing activities

Cash used by financing activities

Net cash provided by discontinued operations

Net cash provided (used) by discontinued operations

Net increase in cash

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Cash, cash equivalents, and restricted cash at beginning of period

Cash, cash equivalents, and restricted cash

at end of period

accompanying notes to the condensed consolidated financial statements.

SECURITY SYSTEMS, INC.

AND SUBSIDIARIES

Statements of Changes in Stockholders’ Equity

Preferred Stock

Additional Paid-in

Non- controlling Interest in

Balance, December 31, 2020

in Subsidiary

December 31, 2020

$ 174,380,000

$ ( 101,382,000 )

Issuance of common stock, net

Stock based payments, net of tax effect

Stock based payments, net of tax effect, shares

Conversion of preferred stock

of common stock, net

based payments, net of tax effect

of preferred stock

of American Pacific Bancorp

of American Pacific Bancorp, shares

of preferred stock, net

Issuance of preferred stock, net, shares

of preferred stock

Conversion of preferred stock, shares

1 unchanged sentence

( 4,012,000 )

Balance, March 31, 2021

March 31, 2021

$ 235,027,000

1 unchanged sentence

$ 133,616,000

Issuance of common stock, net

Stock based payments, net of tax effect

Conversion of preferred stock

of common stock, net

based payments, net of tax effect

of preferred stock

( 8,418,000 )

( 8,646,000 )

Balance, June 30, 2021

June 30, 2021

$ 279,947,000

$ ( 113,781,000 )

Balance, December 31, 2019

$ 170,688,000

of common stock, net

based payments, net of tax effect

of American Pacific Bancorp

( 6,598,000 )

Issuance of common stock, net

Stock based payments, net of tax effect

( 6,675,000 )

September 30, 2021

$ 294,682,000

Balance, March 31, 2020

$ ( 120,379,000 )

$ 199,292,000

Issuance of common stock, net

Stock based payments, net of tax effect

Balance, June 30, 2020

December 31, 2019

$ 115,560,000

$ ( 103,281,000 )

of common stock, net

based payments, net of tax effect

( 1,900,000 )

( 1,967,000 )

March 31, 2020

$ 119,624,000

$ ( 105,181,000 )

of common stock, net

based payments, net of tax effect

June 30, 2020

$ 126,058,000

$ ( 181,000 )

$ ( 105,973,000 )

of common stock, net

of preferred stock, net

based payments, net of tax effect

(loss) income

September 30, 2020

$ 174,423,000

$ ( 307,000 )

$ ( 100,905,000 )

accompanying notes to the condensed consolidated financial statements.

SECURITY SYSTEMS, INC.

AND SUBSIDIARIES

1 unchanged sentence

Basis of Presentation and Significant Accounting Policies

Security Systems, Inc.

(the “Company of DSS”) operates seven (7) business lines through seven (7) DSS subsidiaries located

around the globe.

the seven subsidiaries, two of those have historically been the core subsidiaries of the Company:

Company, incorporated in the state of New York in May 1984 has conducted business in the name of Document Security Systems, Inc.

16, 2021, the board of directors approved an agreement and plan of merger with a wholly-owned subsidiary, DSS, Inc.

(a New York corporation,

incorporated in August 2020), for the sole purpose of effecting a name change from Document Security Systems, Inc.

change became effective on September 30, 2021.

maintained the same trading symbol “DSS” and updated its CUSIP number

to 26253C 102.

(together with its

consolidated subsidiaries, referred to herein as “DSS,” “we,” “us,” “our” or the “Company”)

currently operates nine (9) distinct business lines with operations and locations around the globe.

These business lines are:

Packaging, (2) IP Monetization, (3) Direct Marketing/Online Sales Group, (4) Blockchain Technology, (5) Securities and Fintech Group,

(6) BioHealth Group, (7) Secure Living, (8) Energy Group, and (9) Investment Banking.

Each of these business lines are in different

stages of development, growth, and income generation.

Of the nine business

lines, two of the those have historically been the led by core subsidiaries of the Company:

(1) Premier Packaging Corporation

(“Premier Packaging”), and (2) DSS Technology Management, Inc.

(“IP Technology”).

Premier Packaging 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 designed to provide functionality,

marketability, and sustainability to product packaging while providing counterfeit protection and consumer engagement platform.

IP Technology

Management Inc., 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.

(“IP Monetization”).

Premier Packaging

operates in the paper board folding carton, smart packaging, and document security printing markets.

It markets, manufactures, and

sells sophisticated custom folding cartons, mailers, photo sleeves, and complex 3-dimensional

direct mail solutions designed to provide functionality, marketability, and sustainability to product packaging while providing

counterfeit protection and consumer engagement platform.

DSS Technology Management Inc., 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.

The activities surrounding our IP Technology Management segment have significantly

In 2020, under its (3) Decentralize Sharing Systems, Inc.

(“Decentralized”)

subsidiary, created a third business segment, Direct Marketing/Online Sales Group (“Direct”).

This group provides services

to assist companies in the growing gig economic business model of peer-to-peer direct marketing.

Direct specializes in marketing and

distributing its products and services through its subsidiaries, partner networks, and online marketplaces.

Products include health and

wellness for personal use, healthy living and lifestyle, and travel.

Direct will also help to support the direct selling industry by

offering services to its piers that streamline operations, enhance financing, and provide back-end business continuity.

addition to the three subsidiaries listed above DSS has created four new, wholly owned subsidiaries.

(4) DSS Blockchain Security, Inc

(“DSS Blockchain”)., a Nevada corporation, specializes in the development of blockchain security technologies for tracking

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

(5) DSS Securities, Inc.

(“DSS Securities”),

a Nevada corporation, was established to develop and/or acquire assets and investments in the securities trading and/or funds management

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, stable coins 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

Also in this segment is the Company’s real estate investment trust (“REIT”), organized for the purposes

of acquiring hospitals and other acute or post-acute care centers from leading clinical operators with dominant market share in secondary

and tertiary markets, and leasing each property to a single operator under a triple-net lease.

the REIT was formed to originate, acquire,

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

(6) DSS BioHealth Security, Inc.

(“DSS BioHealth”),

a Nevada corporation, is our business line which we will intend to invest in or to acquire companies related to the bio-health and biomedical

field, including businesses focused on the research to advance drug discovery and development for the prevention, inhibition, and treatment

of neurological, oncology and immuno-related diseases.

This new division will place special focus on open-air defense initiatives, which

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

(7) DSS Secure Living, Inc.

Secure Living”), a Nevada Corporation, develops top of the line advanced technology, energy efficiency, quality of life living

environments and home security for everyone for new construction and renovations of residential single and multifamily living facilities.

The activity in DSS Blockchain and DSS Secure Living has been minimal or in various start-up or organizational phases.

(“Decentralized”) subsidiary, the Company created a

third business segment, Direct Marketing/Online Sales Group (“Direct”).

This group provides services to assist companies

in the growing gig economic business model of peer-to-peer direct marketing.

Direct specializes in marketing and distributing its

products and services through its subsidiaries, partner networks, and online marketplaces.

Products include health and wellness for

personal care, healthy living and lifestyle, and travel.

Direct will also help to support the direct selling industry by offering

services to its piers that streamline operations, enhance financing, and provide back-end business continuity.

In addition to the three business

lines and subsidiaries listed above, in 2020 and 2021, DSS has created four new business lines, and wholly owned

subsidiaries.

(4) Blockchain Technology, led by DSS Blockchain Security, Inc (“DSS Blockchain”)., a Nevada

corporation, specializes in the development of blockchain security technologies for tracking and tracing solutions for supply chain

logistics and cyber securities across global markets.

(5) Securities and Fintech, led by DSS Securities, Inc.

Securities”), a Nevada corporation, 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, stable coins 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 market(s).

Also in this segment is the Company’s real

estate investment trust (“REIT”), organized for the purposes of acquiring hospitals and other acute or post-acute care

centers from leading clinical operators with dominant market share in secondary and tertiary markets, and leasing each property to a

single operator under a triple-net lease.

the REIT was formed to originate, acquire, and lease a credit-centric portfolio of

licensed medical real estate.

(6) BioHealth Group, led by DSS BioHealth Security, Inc.

(“DSS BioHealth”), a

Nevada corporation, is our business line which we will intend to invest in or to acquire companies related to the bio-health and

biomedical field, including businesses focused on the research to advance drug discovery and development for the prevention,

inhibition, and treatment of neurological, oncology and immuno-related diseases.

This new division will place special focus on

open-air defense initiatives, which curb transmission of air-borne infectious diseases such as tuberculosis and influenza, among

(7) Secure Living, led by DSS Secure Living, Inc.

(“DSS Secure Living”), a Nevada Corporation, will

develop top of the line advanced technology, energy efficiency, quality of life living environments and home security for everyone

for new construction and renovations of residential single and multifamily living facilities.

The activity in DSS Blockchain and DSS

Secure Living has been minimal or in various start-up or organizational phases.

(8) Energy Group, organized under the

Company’s subsidiary Alset Energy, Inc., a Texas corporation, has

been established to help lead the Company’s clean energy future with a focus on environmental responsibility and

sustainability measures.

(9) Investment Banking, created in September 2021 as part of the Company’s acquisition of American

Pacific Bancorp.

Inc., a Texas corporation, is organized for the purposes of being a financial network holding company, focused on

providing commercial loans and acquiring equity positions in (i) undervalued commercial bank(s), bank holding companies and

nonbanking licensed financial companies operating in the United States, South East Asia, Taiwan, Japan and South Korea, and (ii)

companies engaged in—nonbanking activities closely related to banking, including loan syndication services, mortgage banking,

trust and escrow services, banking technology, loan servicing, equipment leasing, problem asset management, SPAC (special purpose

acquisition company) consulting, and advisory capital raising services.

From this financial platform, the Company shall provide an

integrated suite of financial services for businesses that shall include commercial business lines of credit, land development

financing, inventory financing, third party loan servicing, and services that address the financial needs of the world Gig

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

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oncological, and immune related diseases.

September 9, 2021, the Company finalized a stock purchase agreement (the “SPA”) with American Pacific Bancorp, Inc.

(“APB”), which provided for an investment of $ 40,000,200

by the Company into APB for an aggregate of 6,666,700

shares of the APB’s Class A Common Stock,

par value $ 0.01

Subject to the terms and conditions

contained in the SPA, the shares issued at a purchase price of $ 6.00

As a result of this transaction, DSS

became the majority owner of APB.

(see Note 5).

September 13, 2021, the Company finalized a shareholder agreement and joint venture between its subsidiary, DSS Financial Management,

(“DFMI”) and HR1 Holdings Limited (“HR1”), a company incorporated in the British Virgin Islands, for the

purpose to operate a vehicle for private and institutional investors seeking a highly liquid investment fund with attractive risk adjusted

returns relative to market unpredictability and volatility.

Under the terms of this agreement, 4000 shares or 40% of the Company’s

subsidiary Liquid Asset Limited Management Limited (“LVAM”), a Hong Kong company was transferred to HR1 whereas at the conclusion

of the transaction DFMI would own 60% of LVAM and HR1 would own 40%.

LVAM executes within reliable platforms and broad market access

and uses proprietary systems and algorithms to trade liquid exchange-traded funds (ETFs), stocks, futures or crypto.

Aimed at providing

consistent returns while offering the unique ability to liquidate the portfolio within 5 to 10 minutes under normal market conditions,

LVAM provides an array of advanced tools and products enabling customers to explore multiple opportunities, strengthen and diversify

their portfolios, and meet their individual investing goals.

LVAM had minimal activity at September 30, 2021, which have been consolidated into the accompanying financial statements.

accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted

14 unchanged sentences

All significant intercompany balances and transactions have been eliminated in consolidation.

of Estimates - The

preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires

the Company to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying

of Estimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted

in the United States requires the Company to make estimates and assumptions that affect the amounts reported and disclosed in the financial

statements and the accompanying notes.

Actual results could differ materially from these estimates.

On an ongoing basis, the Company evaluates its estimates, including

those related to the accounts receivable, convertible notes receivable, inventory, fair values of investments, intangible assets

and goodwill, useful lives of intangible assets and property and equipment, fair values of options and warrants to purchase the Company’s

common stock, preferred stock, deferred revenue and income taxes, among others.

The Company bases its estimates on historical experience

and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the

carrying values of assets and liabilities.

On an ongoing basis, the Company

evaluates its estimates, including those related to the accounts receivable, convertible notes receivable, inventory, fair values of

investments, intangible assets and goodwill, useful lives of intangible assets and property and equipment, fair values of options and

warrants to purchase the Company’s common stock, preferred stock, deferred revenue and income taxes, among others.

bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which

form the basis for making judgments about the carrying values of assets and liabilities.

Reclassifications

1 unchanged sentence

balance sheets for the year ended December 31, 2020, have been reclassified to conform to current period presentation.

Restricted cash

– Amounts included in restricted cash at September 30, 2021, represents customer deposits placed in escrow with a subsidiary

of the Company, Alset Title, Inc., in connection with potential real estate acquisitions.

receivable, unearned interest, and related recognition - The

Company records all future payments of principal and interest on notes as notes receivable, which are then offset by the

amount of any related unearned interest income.

For financial statement purposes, the Company reports the net investment in the

notes receivable on the consolidated balance sheet as current or long-term based on the maturity date of the underlying notes.

Such net investment is comprised of the amount advanced on the loans, adjusting

for net deferred loan fees or costs incurred at origination, amounts allocated to warrants received upon origination, and any

payments received in advance.

The unearned interest is recognized over the term of the notes and the income portion of each

note payment is calculated so as to generate a constant rate of return on the net balance outstanding.

Net deferred loan fees or

costs, together with discounts recognized in connection with warrants acquired at origination, are accreted as an adjustment to

yield over the term of the loan.

– Investments in equity securities with a readily determinable fair value, not accounted for under the equity method, are

3 unchanged sentences

same or similar securities, with unrealized gains and losses included in earnings.

The Company considers debt instruments as available-for-sale securities, and accordingly, all unrealized gains and losses incurred on the short-term investment securities (the adjustment to fair value) are recorded in other comprehensive income or loss on the Company’s Consolidated Statements of Operations.

equity method investments, the Company regularly reviews its investments to determine whether there is a decline in fair value below

22 unchanged sentences

or discounted rates of the notes do reflect recent market conditions.

The fair value of revolving credit lines notes payable and

long-term debt approximates their carrying value as the stated or discounted rates of the debt reflect recent market conditions.

fair value of investments where the fair value is not considered readily determinable, are carried at cost.

of Long-Lived Assets and Goodwill - The Company

monitors the carrying value of long-lived assets for potential impairment and tests the recoverability of such assets whenever events

or changes in circumstances indicate that the carrying amounts may not be recoverable.

If a change in circumstance occurs, the Company

performs a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash

If cash flows cannot be separately and independently identified for a single asset, the Company will determine whether impairment

has occurred for the group of assets for which the Company can identify the projected cash flows.

If the carrying values are in excess

of undiscounted expected future cash flows, the Company measures any impairment by comparing the fair value of the asset or asset group

to its carrying value.

Party Liabilities – On April 1, 2020

the Company’s HWH World, Inc subsidiary has a service agreement with HWH Korea, a subsidiary of Alset International Limited

(“Alset Intl.”) (formally Singapore eDevelopment Limited).

The fair value of revolving credit lines notes payable and long-term

debt approximates their carrying value as the stated or discounted rates of the debt reflect recent market conditions.

The fair value

of investments where the fair value is not considered readily determinable, are carried at cost.

of Long-Lived Assets and Goodwill - The Company monitors the carrying value of long-lived assets for potential impairment and

tests the recoverability of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.

If a change in circumstance occurs, the Company performs a test of recoverability by comparing the carrying value of the asset or asset

group to its undiscounted expected future cash flows.

If cash flows cannot be separately and independently identified for a single asset,

the Company will determine whether impairment has occurred for the group of assets for which the Company can identify the projected cash

If the carrying values are in excess of undiscounted expected future cash flows, the Company measures any impairment by comparing

the fair value of the asset or asset group to its carrying value.

Party Liabilities – On April 1, 2020 the

Company’s HWH World, Inc subsidiary has a service agreement with HWH Korea, a subsidiary of Alset International Limited (“Alset

Intl.”) (formally Singapore eDevelopment Limited).

The Chairman of the Company, Mr.

Heng Fai Ambrose Chan, is the

Executive Director and Chief Executive Officer of Alset Intl.

Chan is also the majority shareholder of Alset Intl as well as the

largest shareholder of the Company.

Heng Fai Ambrose Chan, is the Executive Director

and Chief Executive Officer of Alset Intl.

Chan is also the majority shareholder of Alset Intl as well as the largest shareholder

of the Company.

The Company also owns approximately 127,179,000

4 unchanged sentences

of amounts collected.

As of June 30, 2021, the Company has collected approximately $ 286,000

As of September 30, 2021, the Company had collected approximately $ 0

as compared to $ 1,100,000

as of December 31, 2020, on behalf of HWH Korea,

The amount of $ 253,000

was remitted to HWH Korea, net of fees and other

expenses, in August of 2021.

The related party liability of approximately $ 315,000

is included in “Other current liabilities”

on the accompanying consolidated balance sheets.

There were no amounts outstanding to this related party at June 30, 2020.

January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2017-01,

which is included in Accrued expenses and deferred revenue on the consolidated balance sheet.

There were no amounts outstanding to

this related party at September 30, 2021.

- In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”)

2017-01, Business Combinations (“Topic 805”):

Clarifying the Definition of a Business (“ASU 2017-01”).

The guidance is intended

to assist entities with evaluating whether a set of transferred assets and activities is a business.

Under this guidance, an entity first

determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or

a group of similar identifiable assets.

is intended to assist entities with evaluating whether a set of transferred assets and activities is a business.

Under this guidance,

an entity first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable

asset or a group of similar identifiable assets.

If this threshold is met, the set is not a business.

If the threshold is not met, the entity

then evaluates whether the set meets the requirement that a business include, at a minimum, an input and a substantive process that together

significantly contribute to the ability to create outputs.

If the threshold is not met, the

entity then evaluates whether the set meets the requirement that a business include, at a minimum, an input and a substantive process

that together significantly contribute to the ability to create outputs.

See Note 5 regarding the acquisitions.

Business combinations and non-controlling interests are recorded in accordance with FASB ASC 805 Business Combinations.

Under the guidance, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition

and all acquisition costs are expensed as incurred.

combinations and non-controlling interests are recorded in accordance with FASB ASC 805 Business Combinations.

Under the guidance, the

assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition and all acquisition costs

are expensed as incurred.

The excess of the purchase price over the estimated fair values is recorded as goodwill.

If the fair value of the assets acquired exceeds the purchase price and the liabilities assumed, then a gain on acquisition is recorded.

The application of business combination accounting requires the use of significant estimates and assumptions.

If the fair value

of the assets acquired exceeds the purchase price and the liabilities assumed, then a gain on acquisition is recorded.

The application

of business combination accounting requires the use of significant estimates and assumptions.

of assets are recorded at their relative fair value based on total accumulated costs of the acquisition.

4 unchanged sentences

Tangible and intangible assets include

land, building and improvements, furniture, fixtures and equipment, acquired above market and below market leases, in-place

lease value (if applicable).

Acquisition-date

fair values of assets and assumed liabilities are determined based on replacement costs, appraised values, and estimated fair values

using methods similar to those used by independent appraisers and that use appropriate discount and/or capitalization rates and available

market information.

land, building and improvements, furniture, fixtures and equipment, acquired above market and below market leases, in-place lease value

(if applicable).

Acquisition-date fair values of assets and assumed liabilities are determined based on replacement costs, appraised

values, and estimated fair values using methods similar to those used by independent appraisers and that use appropriate discount and/or

capitalization rates and available market information.

Operations – On April 20, 2020, the Company executed a nonbinding letter of intent with a perspective buyer for the sale

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Standards Codification 210-05—Discontinued Operations.

Per Common Share - The Company presents basic and diluted earnings per share.

Basic earnings per share reflect the actual weighted

average of shares issued and outstanding during the period.

Diluted earnings per share are computed including the number of additional

shares from outstanding warrants, stock options and preferred stock that would have been outstanding if dilutive potential shares had

been issued and is calculated utilizing the treasury stock method.

In a loss period, the calculation for basic and diluted earnings per

share is the same, as the impact of potential common shares is anti-dilutive.

Earnings Per Common Share

- The Company presents basic and diluted (loss) earnings per share.

Basic (loss) earnings per share reflect the actual

weighted average of shares issued and outstanding during the period.

Diluted (loss) earnings per share are computed including

the number of additional shares from outstanding warrants, stock options and preferred stock that would have been outstanding if dilutive

potential shares had been issued and is calculated utilizing the treasury stock method.

In a loss period, the calculation for basic and

diluted (loss) earnings per share is the same, as the impact of potential common shares is anti-dilutive.

Concentration

1 unchanged sentence

The Company believes it is not exposed to any significant credit risk as a result of any non-performance by the financial institutions.

the six months ended June 30, 2021, two customers accounted for 45 %

the nine months ended September 30, 2021, two customers accounted for 43 %

of our consolidated revenue.

As of June 30, 2021, these two customers accounted for 75 %

As of September 30, 2021, these two customers

accounted for 73 %

of our consolidated trade accounts receivable balance.

As of June 30, 2020, these two customers accounted for 45 %

nine-months ended September 30, 2020, these two customers accounted for 37 %

of our consolidated revenue and 48 %

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The Company is currently assessing the impact that adopting this new accounting standard will have on our consolidated financial statements.

of COVID-19 Outbreak - The 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.

We continue to feel the effect of the COVID-19 business shutdowns and consumer stay-at-home protections.

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.

Additionally, it is reasonably possible that estimates made in

the financial statements have been, or will be, materially and adversely impacted in the near term as a result of these conditions, including

losses on inventory;

impairment losses related to goodwill and other long-lived assets and current obligations.

of COVID-19 Outbreak - The 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.

We continue 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.

Additionally,

it is reasonably possible that estimates made in the financial statements have been, or will be, materially and adversely impacted in

the near term as a result of these conditions, including losses on inventory;

impairment losses related to goodwill and other long-lived

assets and current obligations.

Company recognizes its products and services revenue based on when the title passes to the customer or when the service is completed

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Sales and other taxes billed and collected from customers are excluded from revenue.

The Company also derives

revenue from royalties from third parties which are typically based on licensees’ net sales of products that utilize the Company’s

technology, or on a per item usage of the technology on the customers’ printed products.

The Company recognizes license revenue

at the time it is reported by the licensee.

From time to time, the Company generates license revenues through litigation settlements.

For these, the Company recognizes revenue upon the execution of the agreement, when collectability is reasonably assured, or upon receipt

of the minimum upfront fee for term agreement renewals, and when all other revenue recognition criteria have been met.

The Company recognizes

rental income associated with its REIT, including rental abatements and contractual fixed increases attributable to operating leases,

where collection has been considered probable, on a straight-line basis over the term of the related lease.

The Company generates

revenue from its direct marketing line of business primarily through internet sales and recognizes revenue as items are shipped.

of June 30, 2021, the Company had no unsatisfied performance obligations for contracts with an original expected duration of greater

of September 30, 2021, the Company had no unsatisfied performance obligations for contracts with an original expected duration of greater

than one year.

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of past write-offs and collections and an analysis of current credit conditions.

At June 30, 2021, the Company established a reserve

At September 30, 2021, the Company established a reserve

for doubtful accounts of approximately $ 84,000 ($ 25,000 – December 31, 2020).

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There were no sales commissions capitalized

as of June 30, 2021.

as of September 30, 2021.

and Handling Costs

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TBD Holdings, LLC

October 10, 2019, the Company entered into a convertible promissory note (“TBD Note”) with Century TBD Holdings, LLC

(“TBD”), a Florida limited liability company.

October 10, 2019, the Company entered into a convertible promissory note (“TBD Note”) with Century TBD Holdings, LLC (“TBD”),

a Florida limited liability company.

The Company loaned the principal sum of $ 500,000 ,

of which up to $ 500,000 and

all accrued interest can be paid by an “Optional Conversion” of such amount up to 19.8 %

of which up to $ 500,000

and all accrued interest can be paid by an “Optional

Conversion” of such amount up to 19.8 %

(non-dilutable) of all outstanding membership interest in TBD.

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and matures on October

As of June 30, 2021 and December

As of September 30, 2021, and December

31, 2020, this TBD Note had outstanding principal and interest of approximately $ 537,000.

and is classified as a Current Asset on the Consolidated Balance Sheets at June 30, 2021.

December 30, 2020, the Company signed a binding letter of intent with West Park Capital, Inc (“West Park”).

where the parties agreed to prepare a note and stock exchange agreement whereby DSS will assign the TBD Note to West Park and West

Park shall issue to DSS a stock certificate reflecting 7.5 %

This asset was classified as Current portion of notes receivable on the consolidated balance sheet as September 30, 2021, and as Notes

receivable on the consolidated balance sheet as of December 31, 2020.

On December 30, 2020, the Company signed a

binding letter of intent with West Park Capital, Inc (“West Park”) and TBD where the parties agreed to prepare a note and

stock exchange agreement whereby DSS will assign the TBD Note to West Park and West Park shall issue to DSS a stock certificate reflecting

of the issued and outstanding shares of West Park.

This note and stock exchange agreement is expected to be finalized sometime

during the third quarter of 2021.

This note and stock exchange agreement is expected to be finalized sometime during

the fourth quarter of 2021.

Group Limited

February 8, 2021, the Company entered into a convertible promissory note (“GSX Note”) with GSX Group Limited

(“GSX”), a company registered in Gibraltar.

February 8, 2021, the Company entered into a convertible promissory note (“GSX Note”) with GSX Group Limited (“GSX”),

a company registered in Gibraltar.

The Company loaned the principal sum of $ 800,000 ,

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due in one year from date of issuance.

The outstanding principal and interest as of June 30, 2021, approximated $ 813,000 ,

and is classified as a Current Asset on the Consolidated Balance Sheets at June 30, 2021.

GSX Note shall be converted, at the Company’s option, into shares of GSX at the conversion price of $ 1.05 per

On February 3, 2021,

USX Holdings Company, Inc., a subsidiary of the Company entered into a binding joint venture term sheet (“GSX JV”) for

the creation of a USA based joint venture alternative trading system or exchange (“JV Exchange”).

If definitive terms of

a joint venture agreement cannot be reached within 12 months from the date of the GSX JV, if mutually agreed upon, the parties shall

continue to form JV Exchange based on terms of the GSX JV, or agree to terminate the GSX JV.

The outstanding principal and interest as of September 30, 2021, approximated $ 821,000 ,

and is classified as a Current Asset on the Consolidated Balance Sheets

at September 30, 2021.

The GSX Note shall be converted, at the Company’s option, into shares of GSX at the conversion price of

February 3, 2021, USX Holdings Company, Inc., a subsidiary of the Company entered into a binding joint venture term sheet (“GSX

JV”) for the creation of a USA based joint venture alternative trading system or exchange (“JV Exchange”).

the nine-months ended September 30, 2021, the Company and GSX finalized the terms of the JV Exchange.

February 21, 2021, Impact BioMedical, Inc.

a subsidiary of the Company, entered into a promissory note (“Crum

Note”) with Dustin Crum (“Crum”).

a subsidiary of the Company, entered into a promissory note (“Crum Note”)

with Dustin Crum (“ Mr.

The Company loaned the principal sum of $ 206,000 ,

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the entire remaining principal shall be due and payable in full.

This note is secured by certain real property situated in

Collier County, Florida.

The outstanding principal and interest as of June 30, 2021, approximated $ 201,000

and is classified in long-term notes receivable on the accompanying consolidated balance sheets.

This note is secured by certain real property situated in Collier

County, Florida.

The outstanding principal and interest as of September 30, 2021, approximated $ 197,000 and

is classified in current notes receivable on the accompanying consolidated balance sheets.

Services Global Corporation

April 5, 2021, Decentralized Sharing Systems, Inc., a subsidiary of the Company entered into a convertible promissory note

(“SHRG Note”) with Sharing Services Global Corporation (“SHRG”), a company registered in the state of

The Company loaned the principal sum of $ 30,000,000 ,

with interest at a rate of 8 %,

and shall be due and payable in full on demand by the Company, or if the demand is not sooner made, April

The interest shall be prepaid

annually in cash or Class A Common Shares.

At any time during the term of the SHRG Note, at the sole discretion of the Company, the

outstanding principal can be converted in whole or in part into whole shares of SHRG Class A Common Stock at a conversion rate of

The Company received a $ 3,000,000 loan

origination fee associated with this note which has been recorded as an offset to the SHRG Note and will be amortized monthly in the

amount of approximately $ 83,000 through

the term of the SHRG Note.

Accordingly, in April 2021, the SHRG issued to the Company 27,000,000 shares

of its Class A Common Stock, including 15,000,000 shares

in payment of the loan origination fee and 12,000,000 shares

in prepayment of interest for the first year In addition, the

Company received 150,000,000 warrants

both issued and vested on April 5, 2021.

These warrants have an exercise price of $ 0.22 and

expire April 5, 2026.

Under ASC 815 (“Topic 815”), the warrants received with the SHRG Note do not meet the

definition of a derivative but do require treatment as an equity investment (See Note 6).

Accordingly, the value of the note was allocated

between current portion of notes receivable and other investments on the consolidated balance sheet.

The SHRG Note was valued at

$ 15,043,000 as

of April 5, 2021, net of discount.

As of June 30, 2021, the amortized value of the note approximates $ 15,911,000 and

approximates fair value.

Company, via three (3) of the Company’s existing board members, currently holds three (3) of the five (5)

SHRG board of director seats.

John “JT” Thatch, DSS’s Lead Independent Director and as well the CEO of SHRG is

on the SHRG Board, along with Mr.

Chan, DSS’s Executive Chairman of the board of directors (joined the SHRG Board effective May

4, 2020), and Mr.

April 5, 2021, Decentralized Sharing Systems, Inc., a subsidiary of the Company entered into a convertible promissory note (“SHRG

Note”) with Sharing Services Global Corporation (“SHRG”), a company registered in the state of Nevada.

loaned the principal sum of $ 30,000,000 , with interest at a rate of 8 %, and shall be due and payable in full on demand by the Company,

or if the demand is not sooner made, April 5, 2024 .

The interest shall be prepaid annually in cash or Class A Common Shares.

during the term of the SHRG Note, at the sole discretion of the Company, the outstanding principal can be converted in whole or in part

into whole shares of SHRG Class A Common Stock at a conversion rate of $ 0.20 .

The Company received a $ 3,000,000 loan origination fee

associated with this note which has been recorded as an offset to the SHRG Note and will be amortized monthly in the amount of approximately

$ 83,000 through the term of the SHRG Note.

Accordingly, in April 2021, the SHRG issued to the Company 27,000,000 shares of its Class

A Common Stock, including 15,000,000 shares in payment of the loan origination fee and 12,000,000 shares in prepayment of interest for

the first year In addition, the Company received 150,000,000 warrants both issued and vested on April 5, 2021.

These warrants have an

exercise price of $ 0.22 and expire April 5, 2026.

Under ASC 815 (“Topic 815”), the warrants received with the SHRG Note do

not meet the definition of a derivative but do require treatment as an equity investment (See Note 6).

Accordingly, the value of the

note was allocated between current portion of notes receivable and other investments on the consolidated balance sheet.

The SHRG Note

was valued at $ 15,043,000 as of April 5, 2021, net of discount.

As of September 30, 2021, the amortized value of the note approximates

$ 16,830,000 and approximates fair value.

Company, via three (3) of the Company’s existing board members, currently holds three (3) of the five (5) SHRG board of director

John “JT” Thatch, DSS’s Lead Independent Director and as well the CEO of SHRG is on the SHRG Board, along

Chan, DSS’s Executive Chairman of the board of directors (joined the SHRG Board effective May 4, 2020), and Mr.

Heuszel, the CEO of the Company (joined the SHRG Board effective September 29, 2020).

Sentinel Brokers Company, Inc.

On May 13, 2021, a subsidiary

of the Company entered a revolving credit promissory note (“Sentinel Note”) with Sentinel Brokers Company, Inc.

(“Sentinel”),

a company registered in the state of New York.

The Sentinel Note has an aggregate principal balance up to $ 600,000 , to be funded at request

The Sentinel Note, which incurs interest at a rate of 6.65 % is payable in areas until the principal is paid in full at the

maturity date of May 13, 2023 .

As of June 30, 2021, there is $ 0 outstanding on the Sentinel Note.

On the same date, the Company entered

into a stock purchase agreement (“Sentinel Agreement”) to acquire a 24.9% equity position of Sentinel for the purchase price

of $ 300,000 .

Brokers Company, Inc.

May 13, 2021, a subsidiary of the Company entered a revolving credit promissory note (“Sentinel Note”) with Sentinel Brokers

Company, Inc.

(“Sentinel”), a company registered in the state of New York.

The Sentinel Note has an aggregate principal balance

up to $ 600,000 ,

to be funded at request of Sentinel.

The Sentinel Note, which incurs interest at a rate of 6.65 %

is payable in areas until the principal is paid in full at the maturity date of May

As of September 30, 2021, there is

outstanding on the Sentinel Note.

May 13, 2021, the Company entered into a stock purchase agreement (“Sentinel Agreement”) to acquire a 24.9 %

equity position of Sentinel for the purchase price of $ 300,000 .

May 14, 2021 , DSS Pure Air, Inc.

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The Puradigm Note has an aggregate principal

balance up to $ 5,000,000 ,

to be funded at request of Puradigm.

The Puradigm Note, which incurs interest at a rate of 6.5 %

due quarterly, has a maturity date of May

The Puradigm Note contains an options

conversion clause that allows the Company to convert all, or a portion of all, into new issued member units of Puradigm with the maximum

principal amount equal to 18 %

of the total equity position of Puradigm at conversion.

The outstanding principal and interest as of June 30, 2021, approximated $ 2,772,000 .

On August 2, 2021, the Company advanced an additional $ 750,000

toward the Puradigm Note.

balance up to $ 5,000,000 , to be funded at request of Puradigm.

The Puradigm Note, which incurs interest at a rate of 6.5 % due quarterly,

has a maturity date of May 14, 2023 .

The Puradigm Note contains an options conversion clause that allows the Company to convert all,

or a portion of all, into new issued member units of Puradigm with the maximum principal amount equal to 18 % of the total equity position

of Puradigm at conversion.

The outstanding principal and interest as of September 30, 2021, approximated $ 4,156,000 .

On October 8, 2021,

the Company advanced an additional $ 400,000 toward the Puradigm Note.

Harris-Montgomery

Counties Management District

September 23, 2021, APB entered into refunding bond anticipatory note (“District Note”) with Harris-Montgomery Counties Management

District (the “District”), which operates as a conservation and reclamation district pursuant to Chapter 3891, Texas Special

District Local Laws Code;

Chapter 375, Texas Local Government Code;

and Chapter 49, Texas Water Code.

The District Note was in the sum

of $ 3,500,000

and incurs interest at a rate of 4.15 %

Principal and interest are

due in full on September

note may be redeemed prior to maturity with 10 days written notice to APB at a price equal to principal plus interest accrued on the

redemption date.

The District Note is included

in current portion of notes receivable on the consolidated balance sheet at September 30, 2021.

Financial Instruments

Cash Equivalents and Marketable Securities

following tables show the Company’s cash and cash equivalents and marketable securities and investments by significant investment

category as of June 30, 2021, and December 31, 2020:

Cash Equivalents, Restricted Cash and Marketable Securities

following tables show the Company’s cash, cash equivalents, restricted cash, and marketable securities by significant

investment category as of September 30, 2021, and December 31, 2020:

Schedule of Cash and Marketable Securities by Significant Investment Category

and Restricted Cash

Cash and cash equivalents

Restricted cash

Money Market Funds

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AMRE’s investors the opportunity for direct ownership of Class A licensed medical

on March 3, 2020, the Company entered into a Promissory Note with AMRE,

pursuant to which AMRE has issued the Company a promissory note for the principal amount of $ 800,000

on March 3, 2020, the Company entered into a Promissory Note with AMRE, pursuant to which AMRE has issued the Company a promissory note

for the principal amount of $ 800,000

(the “Note”).

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The Warrants also grants piggyback registration rights to the Company as set forth in the Warrants.

As of March 31,

As of September

30, 2021, this Note had outstanding principal and interest of approximately $ 898,000 .

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AMRE entered into a $ 200,000

unsecured promissory note with LVAM.

calls for interest to be paid annually on March 2 with interest fixed at 8.0 %.

unsecured promissory note with LiquidValue

Asset Management Pte Ltd (“LVAMPTE”).

The Note calls for interest to be paid annually on March 2 with interest fixed

See Note 7 for further details.

LVAMPTE is majority owned subsidiary of Alset International Limited whose Chief Executive Office and

largest shareholder is Heng Fai Ambrose Chan, the Chairman of the Board and largest shareholder of the Company.

June 18, 2021, DSS Securities, entered into a stock purchase agreement with AMRE to acquire 264,525 Class A Common Shares of AMRE at

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June 18, 2021, AMRE Shelton, LLC., (“AMRE Shelton”) a subsidiary of AMRE financed the purchase of a 40,000 square foot, 2.0

story, Class A+ multi-tenant medical office building located on a 13.62 acre site in Shelton, Connecticut (See Note 7).

In accordance

with Topic 805, the acquisition of the medical facility has been determined to be an acquisition of assets as s ubstantially

all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable

purchase price of the acquisition was $ 7,150,000 .

Included in investments, real estate on the consolidated balance sheet is $ 4,640,000 ,

$ 1,600,000 ,

and $ 325,000

the facility, land and tenant improvements respectively.

Also include in the value of the property is $ 585,000

intangible assets with an estimated useful life approximating 3

story, Class A+ multi-tenant medical office building located on a 13.62-acre site in Shelton, Connecticut (See Note 7) for the purchase

price of $ 7,150,000 .

In accordance with Topic 805, the acquisition of the medical facility has been determined to be an acquisition of

assets as s ubstantially all of the fair value of the gross assets acquired is concentrated in a

single identifiable asset or a group of similar identifiable assets.

These assets are classified as investments, real estate on

the consolidated balance sheet.

The purchase price has been allocated as $ 4,640,000 , $ 1,600,000 , and $ 325,000 for the facility, land

and tenant improvements respectively.

Also include in the value of the property is $ 585,000 of intangible assets with an estimated useful

life approximating 3 years.

All assets were allocated on a relative fair value basis.

As of June 30, 2021, no depreciation or amortization has been recognized for these assets.

Contained within the sale-purchase agreement

for this facility, is a $ 1,500,000

earnout due to the seller if certain criteria

As of June 30, 2021, no liability has been recorded for this earnout.

the three and six months ended June 30, 2021, AMRE had net losses of $ 191,000

and $ 249,000 , respectively, of which $ 70,000

and $ 93,000 , respectively is attributable to the non-controlling interest.

Contained within the sale-purchase agreement for

this facility, is a $ 1,500,000 earnout due to the seller if certain criteria are met.

As of September 30, 2021, no liability has been

recorded for this earnout.

the three- and nine-months ended September 30, 2021, AMRE had net losses of $ 545,000 and $ 778,000 , respectively, of which $ 38,000 and

$ 131,000 , respectively is attributable to the non-controlling interest.

BioMedical, Inc.

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

(“Impact”), pursuant to a Share

Exchange Agreement by and among the Company, DSS BioHealth, and related parties Alset Intl (formally Singapore eDevelopment

Limited), 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”), with a stated

value of $ 46,868,000 ,

or $ 1,000 per

share, for a total consideration of $ 50 million

to acquire 100 %

(“Impact”), pursuant to a Share Exchange

Agreement by and among the Company, DSS BioHealth, and related parties Alset Intl (formally Singapore eDevelopment Limited), 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

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”), with a stated value of $ 46,868,000 ,

or $1,000 per share, for a total consideration of $ 50

million to acquire 100 %

of the outstanding shares of Impact.

The acquisition was done to add assets and a foundation of products with international market

opportunities and demand, and which can be structured into long- term scalable, reoccurring license revenue within the DSS BioHealth

line of business.

Due to several factors, including a discount for illiquidity, the value of the Series A Preferred Stock was

discounted from $ 46,868,000 to

$ 35,187,000 ,

The acquisition was done to add assets and a foundation of products with international market opportunities

and demand, and which can be structured into long- term scalable, reoccurring license revenue within the DSS BioHealth line of business.

Due to several factors, including a discount for illiquidity, the value of the Series A Preferred Stock was discounted from $ 46,868,000

to $ 35,187,000 ,

thus reducing the final consideration given to approximately $ 38,319,000 .

The Company incurred approximately $ 295,000 in

cost associated with the acquisition of Impact which were recorded as general and administrative expenses.

As a result of the Share

Exchange, Impact is now a wholly owned subsidiary of DSS BioHealth, the Company’s wholly owned subsidiary and operating

results of the acquisition will be included in the Company’s financial statements beginning August 21, 2020.

Impact BioMedical

has several subsidiaries that are not wholly owned by Impact and have an ownership percentage ranging from 63.6 %

During the three and six months ended June 30, 2021, Impact has incurred approximately $ 563,000 and

$ 1,262,000 respectively

of cost, of which $ 158,000 and $ 166,000 respectively

of cost incurred is attributable to non-controlling interest.

Although Impact historically, and to date has not generated any

revenues, the acquisition of Impact meets the definition of a business with inputs, processes and outputs, and therefore, the

Company has concluded to account for this transaction in accordance with the acquisition method of accounting under Topic

The Company incurred approximately $ 295,000

in cost associated with the acquisition of Impact

which were recorded as general and administrative expenses.

As a result of the Share Exchange, Impact is now a wholly owned subsidiary

of DSS BioHealth, the Company’s wholly owned subsidiary and operating results of the acquisition are included in the Company’s

financial statements beginning August 21, 2020.

Impact BioMedical has several subsidiaries that are not wholly owned by Impact and have

an ownership percentage ranging from 63.6 %

During the three and nine months ended September 30, 2021, Impact has incurred approximately $ 657,000

and $ 1,964,000

respectively of net losses, of which

and $ 281,000

respectively of loss incurred is attributable

to non-controlling interest.

Although Impact historically, and to date has not generated any revenues, the acquisition of Impact meets

the definition of a business with inputs, processes and outputs, and therefore, the Company has concluded to account for this transaction

in accordance with the acquisition method of accounting under Topic 805.

Pacific Bancorp.

September 9, 2021, the Company finalized a stock purchase agreement (the “SPA”) with American Pacific Bancorp (“APB”),

which provided for an investment of $ 40,000,000

by the Company into APB for an aggregate

shares of the APB’s Class A Common Stock,

par value $ 0.01

Subject to the terms and conditions

contained in the SPA, the shares issued at a purchase price of $ 6.00

As a result of this transaction, DSS

owns approximately 53 %

of APB, and as a result its operating results

will be included in the Company’s financial statements beginning September 9, 2021.

The Company incurred approximately $ 36,000

in cost associated with the acquisition of

APB which were recorded as general and administrative expenses.

The acquisition of APB meets the definition of a business

with inputs, processes and outputs, and therefore, the Company has concluded to account for this transaction in accordance with the acquisition

method of accounting under Topic 805.

Activity from September 9, 2021, to September 30, 2021, was not significant.

The next largest

shareholder of APB is Alset EHome International, Inc.

AEI’s Chairman and CEO, Heng Fai Chan, and a member

of the AEI’s Board of Directors, Wu Wai Leung William, each serve on both the AEI Board and the Board of the Company.

of the Company, Mr.

Heuszel, also has an approximate 2 % equity position of APB.

following summary, prepared on a proforma basis, combines the consolidated results of operations of the Company with those of APB as

if the acquisition took place on January 1.

The pro forma consolidated results include the impact of certain adjustments.

Schedule of Business Acquisition, Pro Forma Information

Net (loss)/income

$ ( 19,215,000

Basic (loss)/earnings per share

Diluted (loss)/earnings per share

We are currently in the

process of completing the purchase price accounting and related allocations associated with the acquisition of APB.

The Company is

in the process of completing valuations and useful lives for certain assets acquired in the transaction and the purchase price

allocation will be completed with finalization of those valuations.

We expect the preliminary purchase price accounting to be

completed during the three months ending December 31, 2021.

For the purposes of these financial statements, $ 16,945,000

and $ 20,301,000

of the purchase price has been allocated to Goodwill and Non-controlling interest in subsidiary, respectively, on the consolidate

balance sheet at September 30, 2021.

Net assets acquired were approximately $ 3,400,000 and included approximately

$ 1,250,000 in cash, $ 1,900,000 in marketable securities, $ 330,000 in notes receivable and $ 101,000 of accounts payable and accrued liabilities.

APB and the company in which APB owns marketable securities share a common director.

International Limited (formally Singapore eDevelopment Limited)

2 unchanged sentences

of the outstanding shares of Alset International Limited (“Alset Intl”), formerly named Singapore eDevelopment Limited (“SED”),

a company incorporated in Singapore and publicly listed on the Singapore Exchange Limited as of June 30, 2021 and December 31, 2020.

This investment is classified as a marketable security and is classified as long-term assets on the consolidated balance sheets as the

Company has the intent and ability to hold the investments for a period of at least one year.

a company incorporated in Singapore and publicly listed on the Singapore Exchange Limited as of September 30, 2021, and December 31,

This investment is classified as a marketable security and is classified as long-term assets on the consolidated balance sheets

as the Company has the intent and ability to hold the investments for a period of at least one year.

The Chairman of the Company, Mr.

Ambrose Chan, is the Executive Director and Chief Executive Officer of Alset Intl.

Chan is also the majority shareholder of Alset

Intl as well as the largest shareholder of the Company.

The fair value of the marketable security as of June 30, 2021 and December 31,

2020 was approximately $ 5,863,000

Heng Fai Ambrose Chan, is the Executive Director and Chief Executive Officer of Alset Intl.

Chan is also the majority shareholder

of Alset Intl as well as the largest shareholder of the Company.

The fair value of the marketable security as of September 30, 2021,

and December 31, 2020, was approximately $ 5,990,000

and $ 6,830,000

respectively, and during the six months

ended June 30, 2021 the Company recorded unrealized loss on this investment of approximately $ 967,000 .

respectively.

During the three

months ended September 30, 2021, the Company recorded unrealized gain on this investment of approximately $ 127,000 ,

and during the nine months ended September 30, 2021, the Company recorded an unrealized loss of approximately $ 839,000 .

Services Global Corp.

of and through June 30, 2020, the Company classified its investment in Sharing Services Global Corp.

of and through September 30, 2020, the Company classified its investment in Sharing Services Global Corp.

(“SHRG”), a publicly

5 unchanged sentences

earnings and losses within our consolidated statement of operations.

July 22, 2020, Chan Heng Fai Ambrose, the Chairman of the Company’s board of directors, assigned a Stock Purchase and Share

Subscription Agreement by and between Mr.

Chan and SHRG, pursuant to which the Company purchased 30,000,000 shares

of Class A common stock and 10,000,000 warrants

to purchase Class A common stock for $ 3 million,

causing the Company’s ownership in SHRG to exceed 20 %.

July 22, 2020, Chan Heng Fai Ambrose, the Chairman of the Company’s board of directors, assigned a Stock Purchase and Share Subscription

Agreement by and between Mr.

Chan and SHRG, pursuant to which the Company purchased 30,000,000

shares of Class A common stock and 10,000,000

warrants to purchase Class A common stock for

million, causing the Company’s ownership

in SHRG to exceed 20 %.

The warrants have an average exercise price of $ 0.20 ,

immediately vested and may be exercised at any time commencing on the date of issuance and ending three year from such date.

warrants are considered an equity investment that is recorded at fair value with gains and losses recorded through earnings.

These warrants have been recorded at the fair value of $ 548,000 as

of June 30, 2021 as compared to $ 1,056,000 at

December 31, 2020 on the Company’s consolidated balance sheet and are included in “other investments” with the decrease

representing an unrealized loss of $ 623,000 and

$ 507,000 respectively

during the three and six months ended June 30, 2021.

These shares and warrants are also subject to a one-year trading restriction

pursuant to the terms of a Lock-Up Agreement entered into between Mr.

Chan and the Company and assigned to the Company.

of July 22, 2020, the carrying value of the Company’s equity method investment exceeded our share of the book value of the investee’s

underlying net assets by approximately $ 9,192,000

which represents primarily intangible

assets in the form of a distributor lists and goodwill arising from acquisitions.

These intangible assets have been valued at approximately

immediately vested and may be exercised at any time commencing on the date of issuance and ending three years from such date.

The warrants are considered an equity investment that is recorded at fair value with gains and losses recorded through earnings.

warrants have been recorded at the fair value of $ 324,000

as of September 30, 2021, as compared to $ 1,056,000

at December 31, 2020 on the Company’s consolidated

balance sheet and are included in “other investments” with the decrease representing an unrealized loss of $ 224,000

and $ 732,000

respectively during the three and nine months

ended September 30, 2021.

of July 22, 2020, the carrying value of the Company’s equity method investment exceeded our share of the book value of the

investee’s underlying net assets by approximately $ 9,192,000 which

represents primarily intangible assets in the form of a distributor lists and goodwill arising from acquisitions.

These intangible

assets have been valued at approximately $ 1,148,000 and

$ 8,044,000 ,

respectively.

The intangible asset arising from the distributor list has a five-year useful life.

The Company has recorded amortization

of $ 230,000 for

the three and six months ended June 30, 2021 on the consolidated statement of operations.

On April 5, 2021, a subsidiary of the Company

entered into a convertible promissory note (“SHRG Note”) with SHRG (Note 3).

The intangible asset arising from the distributor list has a five -year

The Company has recorded amortization of $ 57,000 and

$ 287,000 for

the three- and nine-months ended September 30, 2021, respectively, on the consolidated statement of operations.

April 5, 2021, a subsidiary of the Company entered into a convertible promissory note (“SHRG Note”) with SHRG (see Note

The Company loaned the principal sum of $ 30,000,000 .

Accordingly, in April 2021, the SHRG issued to the Company 27,000,000

shares of its Class A Common Stock, including

shares in payment of the loan origination

fee and 12,000,000

shares in prepayment of interest for the

In addition, the Company received 150,000,000

warrants both issued and vested on April

These warrants have an exercise price of $ 0.22

and expire April 5, 2026.

As of the date

of issuance the warrants the consideration paid allocated to the warrants amounted to approximately $ 14,957,000 .

Accordingly, in April 2021, the SHRG issued to the Company 27,000,000 shares

of its Class A Common Stock, including 15,000,000 shares

in payment of the loan origination fee and 12,000,000 shares

in prepayment of interest for the first year.

In addition, the Company received 150,000,000 warrants

both issued and vested on April 5, 2021.

These warrants have an exercise price of $ 0.22 and

As of the date of issuance the

warrants the consideration paid allocated to the warrants amounted to approximately $ 14,957,000 .

The warrants are considered an equity investment that is recorded at fair value with gains and losses recorded through earnings.

warrants have been recorded at the fair value of $ 8,992,000

as of June 30, 2021 on the Company’s

consolidated balance sheet and are included in “other investments” with the decrease representing an unrealized loss of $ 5,966,000

during the three and six months ended

June 30, 2021.

As of June 30, 2021, the Company held 91,207,378

class A common shares equating to a 46.7 %

These warrants have been recorded at the fair value of $ 6,212,000 as

of September 30, 2021, on the Company’s consolidated balance sheet and are included in “other investments” with

the decrease representing an unrealized loss of $ 2,780,000 and

$ 8,745,000 ,

respectively, during the three- and nine-months ended September 30, 2021.

As of September 30, 2021, the Company held 91,460,978 class

A common shares equating to a 46.8 %

ownership interest in SHRG.

Due to the difference in fiscal year ends between the two companies, DSS has elected to recognize its portion

of SHRG’s earnings and losses on a two month lag basis and utilized SHRG’s three-month ended April 30, 2021 reported

results to recognize a loss on the equity method investment of approximately $ 317,000 .

The aggregate fair value of the Company’s investment in SHRG at June 30, 2021 was approximately $ 12,769,000 .

following table represents SHRG operating results for the eleven-months ended March 31, 2021:

SHRG change its fiscal year end from April 30 to March 31, and due to this change and the

difference in fiscal year ends between the two companies, effective for the three- and nine-month ended September 30, 2021,

DSS changed its previous election to recognized its portion of SHRG’s earnings and losses on a two-month lag as of June 30,

2021 and has elected to recognize its portion of SHRG’s earnings and losses on a three-month lag basis going

forward and utilized SHRG’s three-month ended June 30, 2021, reported results to recognize a loss on the equity method

investment of approximately $ 1,645,000 .

change represents a change in accounting principle under ASC 250 “Accounting Changes and Error Corrections”.

aggregate fair value of the Company’s investment in SHRG at September 30, 2021 was approximately $ 8,688,000 .

following table represents SHRG operating results for the three-months ended June 30, 2021:

Schedule of Operating Result

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$ ( 2,800,118 )

Income tax provision

Income tax benefit

$ ( 3,548,007 )

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its ownership to 24.9 %.

Upon achieving greater than 20 % ownership in BMIC during the quarter ended March 31, 2021, and June 30, 2021

Upon achieving greater than 20 % ownership in BMIC during the quarter ended March 31, 2021, and September 30,

2021, the Company is currently accounting for this investment under the equity method of accounting per ASC 323.

The Company’s portion

of net income in BMIC during the three and six months ended June 30, 2021 was not significant.

The Company’s

portion of net income in BMIC during the three and nine months ended September 30, 2021, was not significant.

is a broker-dealer registered with the Securities and Exchange Commission, is a member of the Financial Industry Regulatory Authority,

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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”).

and operate a real estate title agency, under the name of Alset Title Company, Inc, a Texas corporation (“ATC”).

DSS Securities, Inc.

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There was minimal activity for the three and

six months ended June 30, 2021.

nine months ended September 30, 2021 .

Technologies Asia Pacific Holdings Limited

26 unchanged sentences

#1”) with Vivacitas Oncology Inc.

(“Vivacitas”), to purchase 500,000

shares of its common stock at the per share price

with an option to purchase 1,500,000

additional shares at the per share price of $ 1.00 .

This option will terminate upon one of the following events:

(i) Vivacitas’ board of directors cancels this option because it is

no longer in the best interest of the Company;

(“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 at the per share price of $1.00.

This option will terminate upon one

of the following events:

(i) Vivacitas’ board of directors cancels this option because it is no longer in the best interest of

(ii) December 31, 2021;

or (iii) the date on which Vivacitas receives more than $ 1.00

per share of the Company’s common stock

in a private placement with gross proceeds of $ 500,000 .

Under the terms of the Vivacitas Agreement #1, the Company will be allocated two seats on the board of Vivacitas.

On March 18, 2021,

the Company entered into an agreement with Alset EHome International, Inc.

(“Seller”) to purchase from the Seller’s

its wholly owned subsidiary Impact Oncology PTE Ltd.

or (iii) the date on which Vivacitas receives more than $1.00 per share of the Company’s common

stock in a private placement with gross proceeds of $ 500,000 .

Under the terms of the Vivacitas Agreement #1, the Company will be allocated

two seats on the board of Vivacitas.

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

to purchase from the Seller’s its wholly owned subsidiary Impact Oncology PTE Ltd.

(“IOPL”) for a purchase price $ 2,480,000 .

The acquisition of IOPL has been treated as an asset acquisition as IOPL does not meet the definition of a business as defined in Topic

IOPL owns 2,480,000

shares of common stock of Vivacitas along with

the option to purchase an additional 250,000

shares of common stock.

The Sellers largest shareholder

Chan Heng Fai Ambrose, the Chairman of the Company’s board of directors and its largest shareholder.

IOPL owns 2,480,000 shares of common stock of Vivacitas along with the option to purchase an additional 250,000 shares of common

The Sellers largest shareholder is Mr.

Chan Heng Fai Ambrose, the Chairman of the Company’s board of directors and its largest

April 1, 2021, the Company entered into an additional stock purchase agreement with Vivacitas (“Vivacitas Agreement #2”),

whereas Vivacities wished to employee the service of the Chief Business Officer of Impact Biomedical, and in return for the services

whereas Vivacities wished to employ the service of the Chief Business Officer of Impact Biomedical, and in return for the services

of this individual, Vivacitas shall issue to the Company, the aggregate purchase price for the Class A Common Shares of Vivacitas at

the value of $ 1.00

per share shall be $ 120,000

to be paid in twelve (12) equal monthly installments

for the period between April 1, 2021 and March 31, 2022.

As of June 30, 2021, the Company has received 30 Common A Shares of Vivacitas.

As of June 30, 2021, the Company will have an approximate 16 %

equity position in Vivacitas.

July 22, 2021, the Company exercised 1,000,000 of

the available options under the Vivacitas Agreement #1 for $ 1,000,000 .

This, along with the shares received as part Vivacitas Agreement #2

increased the Company’s equity position in Vivacitas to 19.3 %.

the value of $ 1.00 per share shall be $ 120,000 to be paid in twelve (12) equal monthly installments for the period between April 1, 2021

and March 31, 2022.

As of September 30, 2021, the Company has received 60 Common A Shares of Vivacitas.

July 22, 2021, the Company exercised 1,000,000 of the available options under the Vivacitas Agreement #1 for $ 1,000,000 .

with the shares received as part Vivacitas Agreement #2 increased the Company’s equity position in Vivacitas to approximately 19 %

as of September 30, 2021.

Brokers Company, Inc.

May 13, 2021, a Sentinel Brokers, LLC., subsidiary of the Company entered into a stock purchase agreement (“Sentinel Agreement”)

to acquire a 24.9 %

May 13, 2021, a Sentinel Brokers, LLC., subsidiary of the Company entered into a stock purchase agreement (“Sentinel

Agreement”) to acquire a 24.9 %

equity position of Sentinel Brokers Company, Inc.

(“Sentinel”), a company registered in the state of New York, for the purchase

price of $ 300,000 .

(“Sentinel”), a company registered in the state of New York, for the

purchase price of $ 300,000 .

the three months ended September 30, 2021, the Company contributed and additional $ 750,000

capital into Sentinel, increasing its total capital investment to $ 1,050,000

as of September 30, 2021.

Under the terms of this agreement, the Company as the option to purchase an additional 50.1 %

of the outstanding Class A Common Shares.

Upon the exercising of this option, but no earlier than one year following the effective date

the Sentinel Agreement, Sentinel has the option to sell the remaining 25 %

Upon the exercising of this option, but no earlier than one year following the effective

date the Sentinel Agreement, Sentinel has the option to sell the remaining 25 %

to the Company.

In consideration of purchase price investment in Sentinel, the Company is entitled to an additional 50.1 %

of the net profits of Sentinel.

The Company currently accounts for its investment in Sentinel using the equity method in accordance with

ASC Topic 323, as it currently owns 24.9 %

The Company currently accounts for its investment in Sentinel using the equity method in accordance with ASC Topic 323,

Investments—Equity Method and Joint Ventures recognizing our share of Sentinel’s earnings and losses within our consolidated

statement of operations.

The Company recognized a loss on the equity method investment of approximately $ 18,000 for the period ending

June 30, 2021.

In consideration of purchase price investment in Sentinel, the Company is entitled to an additional 50.1% of the net

profits of Sentinel.

The Company currently accounts for its investment in Sentinel using the equity method in accordance with ASC

Topic 323, as it currently owns 24.9 %

The Company currently accounts for its investment in Sentinel using the equity method in accordance with ASC Topic 323, Investments—Equity

Method and Joint Ventures recognizing our share of Sentinel’s earnings and losses within our consolidated statement of

The Company recognized a gain on the equity method investment of approximately $ 11,000 for

the three-months ended September 30, 2021, and a loss of $ 6,000 on

the equity investment for the nine-months ended September 30, 2021.

is a broker-dealer operating primarily as a fiduciary intermediary, facilitating intuitional trading of municipal and corporate bonds

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Credit Lines - The Company’s subsidiary Premier Packaging Corporation (“Premier Packaging”) has a revolving

credit line with Citizens Bank (“Citizens”) of up to $ 800,000 that bears interest at 1 Month LIBOR plus 2.0 %.This revolving

credit line with Citizens Bank (“Citizens”) of up to $ 800,000 that bears interest at 1 Month LIBOR plus 2.0 %.

This revolving

line of credit was renewed and has a maturity date of May 31, 2021 and is renewable annually.

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July 26, 2017, Premier Packaging entered into a Loan Agreement and accompanying Term Note Non-Revolving Line of Credit Agreement with

Citizens pursuant to which Citizens agreed to lend up to $ 1,200,000

to permit Premier Packaging to purchase equipment

from time to time that it may need for use in its business.

The aggregate principal balance outstanding under the Equipment Acquisition

Line of Credit shall bear interest thereon at a per annum rate of 2 %

above the LIBOR Advantage Rate until the Conversion Date (as defined in the Term Note Non-Revolving Line of Credit).

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.

Current maturities of long-term debt are based on an estimated 48-month

amortization which will be adjusted upon conversion.

As of June 30, 2021 and December 31, 2020, the Term Note had a balance of $ 710,000

and $ 771,000

respectively.

The Company pays a monthly amount

in principal and interest.

The Term Note was

paid in full in July 2021.

Citizens pursuant to which Citizens agreed to lend up to $ 1,200,000 to permit Premier Packaging to purchase equipment from time to time

that it may need for use in its business.

The aggregate principal balance outstanding under the Equipment Acquisition Line of Credit

shall bear interest thereon at a per annum rate of 2 % above the LIBOR Advantage Rate until the Conversion Date (as defined in the Term

Note Non-Revolving Line of Credit).

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.

Current maturities of long-term debt are based on an estimated 48-month amortization

which will be adjusted upon conversion.

As of December 31, 2020, the Term Note had a balance of $ 771,000 .

The Term Note was paid in full

in July 2021.

Line of Credit - On July 31, 2020, Premier Packaging entered into a Loan Agreement and accompanying Term Note Non-Revolving Line

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renewable annually.

As of June 30, 2021 and December 31, 2020, the loan had a balance of $ 0 and Premier Packaging still has available

$ 900,000 for equipment borrowings.

As of December 31, 2020, the loan had a balance of $ 0 .

Premier did not exercise its right to renew this line of credit.

Notes - On June 27, 2019 Premier Packaging refinanced and consolidated the outstanding principal associated with the two

promissory notes for its packaging plant located in Victor, New York, for $ 1,200,000 with

Citizens Bank.

The new Promissory Note calls for monthly payments of $ 7,000 ,

with interest fixed at 4.22 %.

The new Promissory Note matures on June

27, 2029 , at which time a balloon payment of

In July of 2021, Premier Packaging repaid this note in full.

As of June 30, 2021, and December 31, 2020, the new,

consolidated Promissory Note had a balance of $ 1,080,000

and $ 1,100,000 , respectively .

Notes - On June 27, 2019, Premier Packaging refinanced and consolidated the outstanding principal associated with the two promissory

notes for its packaging plant located in Victor, New York, for $ 1,200,000 with Citizens Bank.

The new Promissory Note calls for monthly

payments of $ 7,000 , with interest fixed at 4.22 %.

The new Promissory Note matures on June 27, 2029 , at which time a balloon payment of

$ 708,000 is due.

As of December 31, 2020, the new, consolidated Promissory Note had a balance of $ $ 1,100,000 .

In July of 2021, Premier

Packaging repaid this note in full.

Citizens credit facilities to each of the Company’s subsidiaries, Premier Packaging, contain various covenants including fixed

2 unchanged sentences

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

March 2, 2020, AMRE entered into a $ 200,000 unsecured promissory note with LVAM.

The Note calls for interest to be paid annually on March

2 with interest fixed at 8.0 %.

March 2, 2020, AMRE entered into a $ 200,000

unsecured promissory note with LVAMPTE.

The Note calls for interest to be paid annually on March 2 with interest fixed at 8.0 %.

As of December 31, 2020, accrued interest is included in the outstanding balance.

If not paid sooner,

the entire unpaid principal balance is due in full on March 2, 2022 .

As further incentive to enter into this Note, AMRE granted LVAM

warrants to purchase shares of common stock of AMRE (the “Warrants”).

The amount of the warrants granted is the equivalent

of the Note Principal divided by the Exercise Price.

The Warrants are exercisable for four years and are exercisable at $ 5.00 per share

(the “Exercise” Price).

If not paid sooner, the entire unpaid principal balance

is due in full on March

As further incentive to enter into this

Note, AMRE granted LVAMPTE warrants to purchase shares of common stock of AMRE (the “Warrants”).

The amount of the

warrants granted is the equivalent of the Note Principal divided by the Exercise Price.

The Warrants are exercisable for four

years and are exercisable at $ 5.00

per share (the “Exercise” Price).

The value of the warrants is not considered to be material.

The holder is a related party owned by

the Chairman of the Company’s board of directors.

As of June 30, 2021, the new promissory note, inclusive of unpaid interest, had

a balance of $ 222,000 .

The holder is a related party owned by the Chairman of the Company’s

board of directors.

As of September 30, 2021, the new promissory note, inclusive of unpaid interest, had a balance of $ 226,000 .

Q2 2020, the Company received loan proceeds for Premier Packaging, DSS Digital, and AAMI in the amount of approximately $ 1,078,000 under

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May 20, 2021, Premier Packaging entered into master loan and security agreement (“BOA Note”) with Bank of America, N.A.

to secure financing in an amount not to exceed $ 3,200,000

to purchase a new Heidelberg XL 106-7+L printing

The aggregate principal balance outstanding under the BOA Note shall bear interest at a variable rate on or before the

loan closing.

At closing, the interest rate shall be fixed for the duration of the Loan.

As of June 30, 2021, the outstanding

principal on the BOA Note was $ 1,113,000

to secure financing in an amount not to exceed $ 3,200,000 to purchase a new Heidelberg XL 106-7+L printing press.

The aggregate principal

balance outstanding under the BOA Note shall bear interest at a variable rate on or before the loan closing.

At closing, the interest

rate shall be fixed for the duration of the Loan.

As of September 30, 2021, the outstanding principal on the BOA Note was $ 1,855,000

and had an interest rate of 2.42 %.

On July 16, 2021, Premier Packaging drew an additional $ 742,000

against the BOA Note.

On June 18, 2021, AMRE

Shelton, LLC., (“AMRE Shelton”) a subsidiary of AMRE, entered into a loan agreement (“Shelton Agreement”)

June 18, 2021, AMRE Shelton, LLC., (“AMRE Shelton”) a subsidiary of AMRE, entered into a loan agreement (“Shelton Agreement”)

with Patriot Bank, N.A.

1 unchanged sentence

The Shelton Agreement contains monthly payments of principal and an initial interest 4.25%.

The interest will be

adjusted commencing on July 1, 2026, and continuing for the next succeeding 5 year period shall be determined one month prior to the

change date and shall be an interest rate equal to two hundred fifty (250) basis points above the Federal Home Loan Bank Boston

5-Year/25-Y ear amortizing advance rate, but in no event less than 4.25% for the term of 120 months with a balloon payment

approximating $ 2,829,000

due at term end.

The interest will be adjusted commencing

on July 1, 2026 and continuing for the next succeeding 5 year period shall be determined one month prior to the change date and shall

be an interest rate equal to two hundred fifty (250) basis points above the Federal Home Loan Bank Boston 5-Year/25-Year amortizing

advance rate, but in no event less than 4.25% for the term of 120 months with a balloon payment approximating $ 2,829,000 due at term

This agreement contains certain covenants that are analyzed on an annual basis, starting December 31, 2021.

funds borrowed were used to purchase a 40,000 square foot,

2.0 story, Class A+ multi-tenant medical office building located on a 13.62 acre site (See Note 5).

Of the total financed, approximately $ 189,000 is classified as current portion of long-term debt, net, and the remaining

balance of approximately $ 4,916,000 recorded as long-term debt, net of $ 186,000 in deferred financing costs.

The funds borrowed were

used to purchase a 40,000 square foot, 2.0 story, Class A+ multi-tenant medical office building located on a 13.62 acre site (See Note

Of the total financed, approximately $ 191,000 is classified as current portion of long-term debt, net, and the remaining balance

of approximately $ 4,699,000 recorded as long-term debt, net of $ 185,000 in deferred financing costs.

Lease Liability

Company has operating leases predominantly for operating facilities.

As of June 30, 2021, the remaining lease terms on our operating

As of September 30, 2021, the remaining lease terms on our operating

leases range from less than one to five years .

5 unchanged sentences

There are no significant finance leases as

of June 30, 2021.

minimum lease payments as of June 30, 2021 are as follows:

Schedule of Future Minimum Lease Payments

of September 30, 2021.

minimum lease payments as of September 30, 2021, are as follows:

of Lease Liability

Schedule of Future Minimum Lease Payments

Total lease payments

7 unchanged sentences

(“DSSTM”) filed suit against Apple, Inc.

in the United States District Court for the Eastern District of Texas, for patent infringement (the “Apple Litigation”).

The complaint alleges infringement by Apple of DSSTM’s patents that relate to systems and methods of using low power wireless peripheral

(“Apple”) in the

United States District Court for the Eastern District of Texas, for patent infringement (the “Apple Litigation”).

The complaint

alleges infringement by Apple of DSSTM’s patents that relate to systems and methods of using low power wireless peripheral devices.

DSSTM is seeking a judgment for infringement, injunctive relief, and compensatory damages from Apple.

On October 28, 2014, the

case was stayed by the District Court pending a determination of Apple’s motion to transfer the case to the Northern District of

On October 28, 2014, the case was

stayed by the District Court pending a determination of Apple’s motion to transfer the case to the Northern District of California.

On November 7, 2014, Apple’s motion to transfer the case to the Northern District of California was granted.

30, 2014, Apple filed two Inter Partes Review (“IPR”) petitions with the Patent Trial and Appeal Board (“PTAB”)

for review of the patents at issue in the case.

On December 30, 2014,

Apple filed two Inter Partes Review (“IPR”) petitions with the Patent Trial and Appeal Board (“PTAB”) for review

of the patents at issue in the case.

The PTAB instituted the IPRs on June 25, 2015.

The California District Court then stayed

the case pending the outcome of those IPR proceedings.

Oral arguments of the IPRs took place on March 15, 2016, and on June 17, 2016,

PTAB ruled in favor of Apple on both IPR petitions.

The California District Court then stayed the case

pending the outcome of those IPR proceedings.

Oral arguments of the IPRs took place on March 15, 2016, and on June 17, 2016, PTAB ruled

in favor of Apple on both IPR petitions.

DSSTM then filed an appeal with the U.S.

Court of Appeals for the Federal Circuit

(the “Federal Circuit”) seeking reversal of the PTAB decisions.

Court of Appeals for the Federal Circuit (the “Federal

Circuit”) seeking reversal of the PTAB decisions.

Oral arguments for the appeal were held on August 9, 2017.

On March 23, 2018, the Federal Circuit reversed the PTAB, finding that the PTAB erred when it found the claims of U.S.

On March 23, 2018,

the Federal Circuit reversed the PTAB, finding that the PTAB erred when it found the claims of U.S.

6,128,290 to be unpatentable.

The Federal Circuit affirmed its decision on July 12, 2018, when it denied Apple’s petition for panel rehearing

of the Federal Circuit’s Opinion and Judgment issued on March 23, 2018.

On July 27, 2018, the District Court judge lifted the Stay

resuming the litigation, which had a trial date set for the week of February 24, 2020.

On January 14, 2020, the Court in the case DSS

Technology Management, Inc.

Apple, Inc., 4:14-cv-05330-HSG pending in the Northern District of California issued an order that denied

DSS’ motion to amend its infringement contentions.

In the same Order, the Court granted Apple’s motion to strike DSS’

infringement expert report.

DSS filed a motion for leave to file a motion for reconsideration of the Court’s order denying DSS

the right to amend its infringement contentions and motion to strike DSS infringement expert report.

On February 18, 2020, the Court

denied DSS’s motion for leave to file a motion for reconsideration.

On February 24, 2020, the Court signed a Final Judgment stipulating

that Apple was “entitled to a judgment of non-infringement of U.S.

6,128,290 as a matter of law.” On March 10,

2020, DSS filed an appeal of this Final Judgment to the United States Court of Appeals for the Federal Circuit under DSS Technology Management

Apple, Federal Circuit Docket no.

On April 27, 2021, the Court of Appeals heard oral argument, and on April 30, 2021, the

Court affirmed the District Court’s judgment.

The Company is currently evaluating its options for further proceedings on appeal.

March 10, 2020 DSS filed an appeal of this Final Judgment to the United States Court of Appeals for the Federal Circuit under DSS Technology

Management v.

Apple, Federal Circuit Docket no.

On April 27, 2021, the Court of Appeals heard oral argument, and on April

30, 2021, the Court affirmed the District Court’s judgment.

After considering all factors the Company has elected to

not pursue any further appeals on this matter.

Case is deemed closed.

The Federal Circuit affirmed its decision on July 12, 2018, when it denied Apple’s petition for panel rehearing of the Federal

Circuit’s Opinion and Judgment issued on March 23, 2018.

On July 27, 2018, the District Court judge lifted the Stay resuming the

litigation, which had a trial date set for the week of February 24, 2020.

On January 14, 2020, the Court in the case DSS Technology Management,

Apple, Inc., 4:14-cv-05330-HSG pending in the Northern District of California issued an order that denied DSS’ motion to

amend its infringement contentions.

In the same Order, the Court granted Apple’s motion to strike DSS’ infringement expert

DSS filed a motion for leave to file a motion for reconsideration of the Court’s order denying DSS the right to amend its

infringement contentions and motion to strike DSS infringement expert report.

On February 18, 2020, the Court denied DSS’s motion

for leave to file a motion for reconsideration.

On February 24, 2020, the Court signed a Final Judgment stipulating that Apple was “entitled

to a judgment of non-infringement of U.S.

6,128,290 as a matter of law.” On March 10, 2020, DSS filed an appeal of this

Final Judgment to the United States Court of Appeals for the Federal Circuit under DSS Technology Management v.

Apple, Federal Circuit

On April 27, 2021, the Court of Appeals heard oral argument, and on April 30, 2021, the Court affirmed the District

Court’s judgment.

After considering all factors the Company has elected to not pursue any further appeals on this matter.

is deemed closed.

Ronaldi Litigation

16 unchanged sentences

(i) $144,658 in wages from April 11, 2019 through December 31, 2019;

$769 in alleged unpaid based salary for time worked before April 11, 2019;

alleged unpaid based salary for time worked before April 11, 2019;

(iii) $15,385 in alleged paid time off compensation;

(iv) $3,077 in alleged unpaid sick time compensation;

(iv) $3,077 in

alleged unpaid sick time compensation;

(v) $26,077 in waiting-time penalties;

(vi) $91,000 in unspecified

expense reimbursement;

(vii) $300,000 in alleged cash bonuses ($100,000 per year) based on DSS’s performance in 2017, 2018 and

and (viii) a $450,000 performance bonus based on the result of certain alleged net proceeds from patent infringement litigation.

He further claims an interest in any recovery in DSS Technology Management v.

(vi) $91,000 in unspecified expense reimbursement;

$300,000 in alleged cash bonuses ($100,000 per year) based on DSS’s performance in 2017, 2018 and 2019;

and (viii) a $450,000 performance

bonus based on the result of certain alleged net proceeds from patent infringement litigation.

He further claims an interest in any recovery

in DSS Technology Management v.

Apple, Inc., Case No.

4:14-cf05330-HSG.

The parties are

now engaged in discovery.

The parties are now engaged in discovery .

Additionally,

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Ronaldi applied

to the court for reimbursement of $ 160,896

in legal fees.

The Company has objected to the

size of that bill as it was based on out-of-town billing rates and the result of an excessive number of hours spent on litigation.

parties now engaged in discovery, awaiting a decision on the Company’s objection to Mr.

to the court for reimbursement of $ 160,896 in legal fees.

The Company has objected to the size of that bill as it was based on out-of-town

billing rates and the result of an excessive number of hours spent on litigation.

The parties now engaged in discovery, awaiting a decision

on the Company’s objection to Mr.

Ronaldi’s fee application.

engaged in court-ordered mediation on June 17, 2021 but the matter did not resolve.

Following mediation the Company moved to stay the

federal court action pending the outcome of the state court action to avoid inconsistent rulings on common issues of law and fact.

motion to stay is pending.

The Company intends to vigorously defend its position.

The parties engaged in court-ordered mediation on June 17, 2021,

but the matter did not resolve.

Following mediation, the Company moved to stay the federal court action pending the outcome of the state

court action to avoid inconsistent rulings on common issues of law and fact.

The motion to stay is pending.

The Company intends to vigorously

defend its position.

Biosciences Litigation

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and (3) attorneys’ fees and cost .

On March 30, 2021,

Defendants DSS, Decentralized, HWH, RBC Life International, Inc., and Heuszel filed a motion to dismiss seeking to dismiss

Maiden’s unjust enrichment, exemplary damages, and RICO claims against DSS, Decentralized, HWH, RBC Life International, Inc.,

and Heuszel, as well as Maiden’s fraudulent transfer claims against DSS and RBC International, Inc.

On August 9, 2021, the

Court the entered an order granting in part the motion to dismiss filed on behalf of DSS, Decentralized, HWH, RBC Life

International, Inc., and Heuszel.

Among other things, the Court held that Maiden failed to plausibly plead certain causes of action,

including (1) the civil RICO claim against DSS, Decentralized, HWH, RBC Life International, Inc., and Heuszel, (2) the TUFTA claim

against DSS, and (3) the unjust enrichment claim against DSS and RBC Life International, Inc.

Notably, the Court declined the

request to dismiss the TUFTA claim against RBC Life International, Inc.

March 30, 2021, Defendants DSS, Decentralized, HWH, RBC Life International, Inc., and Heuszel filed a motion to dismiss seeking to dismiss

Maiden’s unjust enrichment, exemplary damages, and RICO claims against DSS, Decentralized, HWH, RBC Life International, Inc., and

Heuszel, as well as Maiden’s fraudulent transfer claims against DSS and RBC International, Inc.

On August 9, 2021, the Court then

entered an order granting in part the motion to dismiss filed on behalf of DSS, Decentralized, HWH, RBC Life International, Inc.,

Among other things, the Court held that Maiden failed to plausibly plead certain causes of action, including (1) the civil

RICO claim against DSS, Decentralized, HWH, RBC Life International, Inc., and Heuszel, (2) the TUFTA claim against DSS, and (3) the unjust

enrichment claim against DSS and RBC Life International, Inc.

Notably, the Court declined the request to dismiss the TUFTA claim against

RBC Life International, Inc.

The Court granted Maiden leave to file an amended complaint.

Maiden’s deadline to do so is Monday, September 6, 2021.

Maiden’s deadline to do so is Monday,

September 6, 2021.

The Company intends to vigorously defend its position.

On September 3, 2021, Maiden filed its amended complaint, asserting

a single cause of action against the DSS Defendants and RBC for an alleged TUFTA violation.

Generally, Maiden is seeking the same relief

requested in its original complaint.

Maiden, however, has abandoned its request for treble damages.

On September 17, 2021, the DSS Defendants

filed a motion to dismiss the amended complaint seeking to dismiss Maiden’s TUFTA claim to the extent it seeks to avoid a transfer

of assets owned by any of RBC’s subsidiaries, including but not limited to RBC Life Sciences USA, Inc.

Further, the motion to dismiss

also seeks the dismissal of Maiden’s TUFTA claim against Heuszel.

The DSS Defendants’ motion to dismiss the amended complaint

will be ripe for determination on or after October 22, 2021.

Trial is currently set for December 5, 2022 on the Court’s two-week

addition to the foregoing, we may become subject to other legal proceedings that arise in the ordinary course of business and have not

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and commissions and other estimated offering expenses.

Compensation - The Company records stock-based payment expense related to options and warrants based on the grant date fair

value in accordance with FASB ASC 718.

Stock-based compensation includes expense charges for all stock-based awards to employees,

directors and consultants.

September 3, 2021, DSS entered into a subscription agreement (the “AEI Subscription Agreement”) with AEI, which provided

for an investment of up to $ 15,000,000 by AEI into the Company in exchange of an aggregate of 12,156,000 shares of the Company’s

common stock, $ 0.02 par value per share.

Subject to the terms and conditions contained in the AEI Subscription Agreement, the shares

were issued at a purchase price of $ 1.234 per share.

Prior to this transaction, AEI indirectly held a significant investment in the Company

through majority-owned subsidiaries.

AEI’s Chairman and CEO, Heng Fai Chan, and a member of the AEI’s Board of Directors,

Wu Wai Leung William, each serve on both the AEI Board and the Board of the Company.

Compensation - The Company records stock-based payment expense related to options and warrants based on the grant date fair value

in accordance with FASB ASC 718.

Stock-based compensation includes expense charges for all stock-based awards to employees, directors

and consultants.

Such awards include option grants, warrant grants, and restricted stock awards.

During the three months

ended June 30, 2021, the Company’s stock compensation was a credit of approximately $ 30,000 or

less than ($ .01 ) basic

and diluted loss per share for the three months ended June 30, 2021($ 54,000 or

less than $ .04 basic

and diluted loss per share – June 30, 2020).

During the three and nine months ended

September 30, 2021, the Company’s stock compensation approximated $ 13,000 and $ 42,000 , respectively or less than $ .01 basic and

diluted loss per share.

June 4, 2020, the Company entered into an agreement with an investor relations firm to provide services over a 14-month period in exchange

shares of common stock.

The shares were issued

on the date of the agreement and were valued by the Company at $ 210,000 .

The value assigned to the shares is included in other assets on the accompanying consolidated balance sheets and will be expensed into

marketing expense as it is earned.

For the three and six month period ending June 30, 2021, the Company recognized $ 45,000 and $ 90,000

respectively.

for 21,000 shares of common stock.

The shares were issued on the date of the agreement and were valued by the Company at $ 210,000 .

value assigned to the shares is included in other assets on the accompanying consolidated balance sheets and will be expensed into marketing

expense as it is earned.

For the three- and nine-month period ending September 30, 2021, the Company recognized $ 15,000 and $ 105,000 respectively.

Discontinued Operations

a result of the insufficient cash flows from the operations of Plastic Printing Professionals, Inc.

as well as the disruption of our

business from the COVID-19 pandemic, on April 20, 2020, the Company executed a nonbinding letter of intent with a buyer for substantially

all the assets of this business line.

with an intent to exit this business line.

As a result, management has decided to fully impair

its goodwill related to DSS Plastics.

The impact to DSS’s first quarter earnings of this impairment was approximately $ 685,000 .

On August 14, 2020, the Company entered into a final Asset Purchase Agreement and the Company terminated its production and office personnel

August 14, 2020, the Company entered into a final Asset Purchase Agreement and the Company terminated its production and office personnel

and maintained only a few employees to assist in and facilitate the sale of its assets.

8 unchanged sentences

the earn out will be recorded when determined realizable.

As of June 30, 2021, the Company has recognized $ 390,000

As of September 30, 2021, the Company has recognized $ 390,000

of this earn out, all of which was recognized

2 unchanged sentences

to the third quarter 2020.

These amounts

are included in Loss from Discontinued Operations.

Included in its Right-of-use assets is the lease of the Company’s facility in

Brisbane, Ca.

In April 2021, the Company terminated this lease with the landlord effective March 31, 2021 and therefore, wrote off the

asset and corresponding liability associated with the lease at March 31, 2021.

These amounts are

included in Loss from Discontinued Operations.

Included in its Right-of-use assets is the lease of the Company’s facility in Brisbane,

In April 2021, the Company terminated this lease with the landlord effective March 31, 2021, and therefore, wrote off the asset and

corresponding liability associated with the lease at March 31, 2021.

As of December 31, 2020, $ 744,000

was record as non-current asset held for

sale – discontinued operations on the consolidated balance sheet.

was record as non-current asset held for sale

– discontinued operations on the consolidated balance sheet.

Also recorded was $ 240,000

3 unchanged sentences

discontinued operations.

of Discontinued Operations

The following table shows

the results of operations of the discontinued operation.

Plastic Printing Professionals, Inc.

Consolidated Statements of Operations and Comprehensive

Loss - Discontinued Operations

The Company has incurred $ 204,000 of cost associated with wind-down activities for the nine-months ended

September 30, 2021.

following table shows the results of operations of the discontinued operation.

Schedule of Discontinued Operations

Printing Professionals, Inc.

Statements of Operations and Comprehensive Loss - Discontinued Operations

For the Three Months Ended

June 30, 2020

September 30, 2020

Printed products

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Interest expense

Loss on sale of assets held for sale

Income (loss) before income taxes

3 unchanged sentences

( 1,702,000 )

$ ( 1,278,000 )

May 7, 2021, the Company completed the sale of 100 %

of the capital stock of DSS Digital Inc., the Company’s wholly-owned subsidiary (“DSS Digital”), to Proof Authentication

Corporation (the “Buyer”) pursuant to a stock purchase agreement (the “Digital Purchase Agreement”).

to the terms of the Digital Purchase Agreement, the Buyer purchased DSS Digital for a purchase price of $ 5,000,000 ,

consisting of $ 3

million in cash;

million in potential earn-out if certain performance

targets are met during an earn-out period commencing on the one-year anniversary of the closing and ending the day before the six-year

of the closing;

million in trade credit or license fee rebates.

Consistent with the Company’s policy for accounting for gain contingencies, the earn out will be recorded when determined realizable

which did not occur during the three-months ended June 30, 2021.

Also, the Company has not utilized the $ 0.5 million trade credit

as of June 30, 2021.

The net effect of sale of DSS Digital, inclusive of income tax, is a net gain of $ 2,226,000 .

This amount is included in Income (loss) from Discontinued Operations on the accompanying consolidated statement of operations.

The following tables show the

major classes of assets and liabilities held for sale and results of operations of the discontinued operation.

of Assets and Liabilities Held for Sale

DSS Digital, Inc.

May 7, 2021, the Company completed the sale of 100 % of the capital stock of DSS Digital Inc., the Company’s wholly-owned subsidiary

(“DSS Digital”), to Proof Authentication Corporation (the “Buyer”) pursuant to a stock purchase agreement (the

“Digital Purchase Agreement”).

Pursuant to the terms of the Digital Purchase Agreement, the Buyer purchased DSS Digital for

a purchase price of $ 5,000,000 , consisting of $ 3 million in cash;

$ 1.5 million in potential earn-out if certain performance targets are

met during an earn-out period commencing on the one-year anniversary of the closing and ending the day before the six-year of the closing;

and $ 0.5 million in trade credit or license fee rebates.

Consistent with the Company’s policy for accounting for gain contingencies,

the earn out will be recorded when determined realizable which did not occur during the three- and nine-months ended September 30, 2021.

Also, the Company has not utilized the $ 0.5 million trade credit as of September 30, 2021.

The net effect of sale of DSS Digital, inclusive

of income tax, is a net gain of $ 2,226,000 .

This amount is included in Income (loss) from Discontinued Operations on the accompanying

consolidated statement of operations.

following tables show the major classes of assets and liabilities held for sale and results of operations of the discontinued operation.

Schedule of Assets and Liabilities Held for Sale

Digital, Inc.

Balance Sheets - Assets and Liabilities Held for Sale

June 30, 2021

September 30, 2021

December 31, 2020

9 unchanged sentences

Total current liabilities

DSS Digital, Inc.

Digital, Inc.

Statements of Operations - Discontinued Operations

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Technology sales, services and licensing

5 unchanged sentences

Total costs and expenses

Operating (loss) income

Income (loss) before income taxes

Operating income

Income before income taxes

Income tax expense (benefit)

Income (loss) from discontinued operations

effective tax rate for the six-month ended June 30, 2021 was 17.3 %.

There was no tax provision for June 30, 2020 due to the expected tax benefit from net operating losses (NOLs) being fully offset by an

increase in the valuation allowance.

The Company recorded a discrete tax expense in the six-month period ended June 30, 2021, of $ 83,000

reducing the tax benefit from our forecasted annual effective tax rate.

This discrete item relates to the tax effect of the GAAP over

tax basis of a subsidiary that was sold in the six-month period ended June 30, 2021.

of December 31, 2020, the Company has domestic net operating loss (“NOL”) carryforwards of approximately $ 56.7

The utilization of these NOLs is limited

Income from discontinued operations

effective tax rate for the nine-months ended September 30, 2021, was 17.3 %

on continuing operations.

There was no tax provision for September 30, 2020, due to the expected tax benefit from net operating

losses (NOLs) being fully offset by an increase in the valuation allowance.

The Company also recorded a discrete tax expense in

the nine-month period ended September 30, 2021, of $ 83,000

related to the sale of DSS Digital which is included in discontinued operations.

discrete item relates to the tax effect of the GAAP over tax basis of a subsidiary that was sold in the nine-month period ended

September 30, 2021.

This discrete tax expense is included in the total tax provision of $ 596,000

which is in discontinued operations.

of December 31, 2020, the Company has domestic net operating loss (“NOL”) carryforwards of approximately $ 56.7 million.

utilization of these NOLs is limited under Sec.

382 of the Internal Revenue Code.

valuation allowance has been recorded to reduce the deferred tax asset to the expected realizable amount, leaving $ 2.1 million

available for use.

of June 30, 2021, no benefit for losses incurred by our foreign subsidiaries have been recorded as those losses are not anticipated to

provide any tax benefits in future periods.

were no unrecognized tax benefits related to uncertain tax positions at June 30, 2021 and December 31, 2020.

A valuation allowance has been recorded to reduce the

deferred tax asset to the expected realizable amount, leaving $ 2.1 million available for use.

of September 30, 2021, no benefit for losses incurred by our foreign subsidiaries have been recorded as those losses are not anticipated

to provide any tax benefits in future periods.

were no unrecognized tax benefits related to uncertain tax positions at September 30, 2021 and December 31, 2020.

a result of our operations, we file income tax returns in various jurisdictions including U.S.

2 unchanged sentences

We are routinely subject to examination by taxing authorities in these various jurisdictions.

At June 30, 2021, there are no ongoing

At September 30, 2021, there are no ongoing

income tax audits.

Supplemental Cash Flow Information

following table summarizes supplemental cash flows for the six months ended June 30, 2021 and 2020:

following table summarizes supplemental cash flows for the nine-months ended September 30, 2021, and 2020:

Schedule of Supplemental Cash Flow Information

4 unchanged sentences

Termination of right of use lease liability

Shares received for loan origination

Shares received for loan origination fee

$ ( 3,000,000 )

1 unchanged sentence

$ ( 2,440,000 )

Series A Preferred Shares issued for Impact BioMedical

Common Shares issued for Impact Biomedical

Long-lived assets acquired through settlement of notes receivable

Acquisition of APB net assets

Shares issued for marketing services

Segment Information

Company’s eight businesses lines are organized, managed and internally reported as four operating

Company’s nine businesses lines are organized, managed and internally reported as five operating

One of these operating segments, Premier Packaging, is the Company’s packaging and printing group.

22 unchanged sentences

Also in this segment is the Company’s real

estate investment trust (“REIT”), organized for the purposes of acquiring hospitals and other acute or post-acute

care centers from leading clinical operators with dominant market share in secondary and tertiary markets, and leasing each property

to a single operator under a triple-net lease.

the REIT was formed to originate, acquire, and lease a credit-centric

portfolio of licensed medical real estate.

The fourth segment, Direct Marketing/Online Sales Group, provides services to assist

companies in the emerging growth gig business model of peer-to-peer decentralized sharing marketplaces.

It specializes in marketing

and distributing its products and services through its subsidiary and partner network, using the popular gig economic marketing

strategy as a form of direct marketing.

Direct marketing products include, among other things, nutritional and personal care

products sold throughout North America, Asia Pacific and Eastern Europe.

segment structure presented below represents a change from the prior year for the inclusion of our BioHealth Group and REITs segments

and the removal of our Plastics segment, Digital Group and IP Technology Management segment as the Plastics segment was discontinued

in 2020, DSS Digital was sold and discontinued in May 2021 and activities surrounding our IP Technology Management segment have

significantly decreased.

The amounts for these segments have been included in the Corporate reporting segment for the three months ended

June 30, 2021 and 2020 below for reconciliation purposes.

information concerning the Company’s operations by reportable segment for the three and six months ended June 30, 2021 and 2020

estate investment trust (“REIT”), organized for the purposes of acquiring hospitals and other acute or post-acute care

centers from leading clinical operators with dominant market share in secondary and tertiary markets, and leasing each property to a

single operator under a triple-net lease.

the REIT was formed to originate, acquire, and lease a credit-centric portfolio of

licensed medical real estate.

The fourth segment, Direct Marketing/Online Sales Group, provides services to assist companies in the

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

It specializes in marketing and distributing

its products and services through its subsidiary and partner network, using the popular gig economic marketing strategy as a form of

direct marketing.

Direct marketing products include, among other things, nutritional and personal care products sold throughout

North America, Asia Pacific and Eastern Europe.

The fifth business line, Investment Banking, is organized for the purposes of

being a financial network holding company, focused providing commercial loans and on acquiring equity positions in (i) undervalued

commercial bank(s), bank holding companies and nonbanking licensed financial companies operating in the United States, South East

Asia, Taiwan, Japan and South Korea, and (ii) companies engaged in—nonbanking activities closely related to banking, including

loan syndication services, mortgage banking, trust and escrow services, banking technology, loan servicing, equipment leasing,

problem asset management, SPAC (special purpose acquisition company) consulting, and advisory capital raising services.

financial platform, the Company shall provide an integrated suite of financial services for businesses that shall include commercial

business lines of credit, land development financing, inventory financing, third party loan servicing, and services that address the

financial needs of the world Gig Economy.

segment structure presented below represents a change from the prior year for the inclusion of our BioHealth Group, Securities, and

Investment Banking segments and the removal of our Plastics segment, Digital Group and IP Technology Management segment as the Plastics

segment was discontinued in 2020, DSS Digital was sold and discontinued in May 2021 and activities surrounding our IP Technology Management

segment have significantly decreased.

The amounts for these segments have been included in the Corporate reporting segment for the three-

and nine-months ended September 30, 2021 and 2020, as necessary, below for reconciliation purposes.

information concerning the Company’s operations by reportable segment for the three and nine months ended September 30, 2021, and

2020 is as follows.

The Company relies on intersegment cooperation and management does not represent that these segments, if operated independently,

would report the results contained herein:

The Company relies on intersegment cooperation and management does not represent that these segments, if operated

independently, would report the results contained herein:

Schedule of Operations by Reportable Segment

Three Months Ended June 30, 2021

Three Months Ended

September 30, 2021

Packaging and Printing

Investment Banking

Direct Marketing

9 unchanged sentences

Identifiable assets

Three Months Ended June 30, 2020

Three Months Ended

September 30,2020

Packaging and Printing

5 unchanged sentences

Net income (loss) from continuing operations

( 1,139,000 )

Capital expenditures

Identifiable assets

Six Months Ended June 30, 2021

Nine Months Ended

September 30, 2021

Packaging and Printing

Investment Banking

Direct Marketing

8 unchanged sentences

( 10,058,000 )

( 21,462,000 )

Capital expenditures

Identifiable assets

Six Months Ended June

Nine Months Ended

September 30,2020

Packaging and Printing

5 unchanged sentences

Net income (loss) from continuing operations

( 1,941,000 )

( 1,676,000 )

Capital expenditures

3 unchanged sentences

Printed Products Revenue Information:

Three months ended June 30, 2021

Three months ended September 30, 2021

Packaging Printing and Fabrication

1 unchanged sentence

Total Printed Products

Three months ended June 30, 2020

Three months ended September 30, 2020

Packaging Printing and Fabrication

1 unchanged sentence

Total Printed Products

Six months ended June 30, 2021

Nine months ended September 30, 2021

Packaging Printing and Fabrication

1 unchanged sentence

Total Printed Products

Six months ended June 30, 2020

Nine months ended September 30, 2020

Packaging Printing and Fabrication

2 unchanged sentences

Direct Marketing

Three months ended June 30, 2021

Three months ended September 30, 2021

Direct Marketing Internet Sales

Total Direct Marketing

Three months ended June 30, 2020

Three months ended September 30, 2020

Direct Marketing Internet Sales

Total Direct Marketing

Six months ended June 30, 2021

Nine months ended September 30, 2021

Direct Marketing Internet Sales

Total Direct Marketing

Six months ended June 30, 2020

Nine months ended September 30, 2020

Direct Marketing Internet Sales

Total Direct Marketing

Three months ended September 30, 2021

Rental Income

Total Rental Income

Three months ended September 30, 2020

Rental Income

Total Rental Income

Nine months ended September 30, 2021

Rental Income

Total Rental Income

Nine months ended September 30, 2020

Rental Income

Total Rental Income

Subsequent Events

October 13, 2021, DFMI entered into a loan agreement with LVAM, whereby DFMI would lend to LVAM a principal sum not to exceed $ 3,000,000 with

interest charged at a variable rate and maturing on October

12, 2022 , with an auto renewal period

of three months.

November 4, 2021, AMRE acquired three medical facilities located in Fort Worth, Texas, Plano, Texas, and Pittsburgh, Pennsylvania

for a purchase price of $ 62,000,000 .

These facilities are tenanted and operated by LifeCare Hospitals, a specialty hospital operator with a focus on long-term acute and

critical care.

medical facilities acquired by AMRE are currently under an 18 -year

lease with eleven

years remaining and an option to renew for an additional five years.

These facilities have a total capacity of 195

hospital beds spanning a gross floor area of approximately 320,000

The purchase price was funded through multiple borrowing facilities, including $ 13,940,000

in the form of a convertible promissory note from APB, a related party, and $ 8,350,000

from Alset International Limited.

The terms under the convertible promissory note with APB, includes interest on the outstanding

balance at a rate of eight percent ( 8.00 %) per annum and is to be payable in cash quarterly in arrears commencing on the 29th day of

January 2022, and continue on the 29th day of each April, July, October and January thereafter through maturity .

AMRE may prepay or

repay all or any portion of the note in cash upon thirty (30) days written notice to the Company, without premium or penalty.

option of the Company, the unpaid principal and interest balance on the note may be converted, in whole or in part, at any time on

or before the maturity date, into fully-paid and non-assessable shares of common stock par value $0.001 per share of common stock of

AMRE at a conversion rate equal to $ 10.00 per share .

facilities have varying maturity dates through November 2023 .

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-Q

Item 1. Financial Statements