What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-05-16 compared with 2021-11-18 · 955 added, 1314 removed, 542 unchanged (81% of the section changed)

1 unchanged sentence

AND SUBSIDIARIES

Balance Sheets

September 30, 2021

Consolidated Balance Sheets

March 31, 2022

December 31, 2021

1 unchanged sentence

Cash and cash equivalents

Restricted cash

Accounts receivable, net

Assets held for sale - discontinued operations

Current portion of notes receivable

7 unchanged sentences

Notes receivable

Non-current assets held for sale - discontinued operations

Right-of-use assets

Deferred tax asset, net

Other intangible assets, net

$ 281,859,000

$ 284,826,000

LIABILITIES AND STOCKHOLDERS’ EQUITY

3 unchanged sentences

Other current liabilities

Current liabilities held for sale - discontinued operations

Current portion of lease liability

3 unchanged sentences

Long term lease liability

Non-current liabilities held for sale - discontinued operations

Other long-term liabilities

Deferred tax liability, net

Commitments and contingencies (Note 9)

Stockholders’ equity

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).

Preferred stock, $ .02

47,000 shares authorized,

shares issued and outstanding ( 47,000 on December 31, 2021);

Liquidation value $ 1,000

per share, $ 46,868,000 aggregate December 31, 2021).

Common stock, $ .02 par value;

1 unchanged sentence

Additional paid-in capital

Non-controlling interest in subsidiary

Non-controlling interest in subsidiaries

Accumulated deficit

4 unchanged sentences

$ 281,859,000

$ 284,826,000

accompanying notes to the condensed consolidated financial statements.

AND SUBSIDIARIES

Statements of Operations

Consolidated Statements of Operations

For the Three Months Ended

September 30,

For the Nine Months Ended

September 30,

Printed products

Rental income

Management fee income

Net investment income

Direct marketing

8 unchanged sentences

( 3,392,000 )

( 15,991,000 )

( 4,806,000 )

Other income (expense):

Interest income

Interest expense

Gain on extinguishment of debt

(Loss) gain on investments

( 1,703,000 )

Interest expense

( 1,378,000 )

Gain on extinguishment of debt

Loss on equity method investment

(Gain) loss on investments

( 1,077,000 )

Gain on sale of asset

Loss from continuing operations before income taxes

( 8,951,000 )

Amortization of deferred financing costs and debt discount

(Loss) income from continuing operations before income taxes

( 4,900,000 )

Income tax benefit

(Loss) income from continuing operations

Loss from continuing operations

( 8,951,000 )

Income (loss) from discontinued operations, net of tax

( 4,062,000 )

Net (loss) income

Income from discontinued operations, net of tax

( 8,951,000 )

( 4,012,000 )

Loss from continuing operations attributed to noncontrolling interest

Net (loss) income attributable to common stockholders

(Gain) loss from continuing operations attributed to

noncontrolling interest

Net loss attributable to common stockholders

( 8,048,000 )

( 3,981,000 )

(Loss) earnings per common share – continuing operations:

(Loss) earnings per common share - discontinued operations:

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

Loss per common share:

Earnings per common share - discontinued operations:

Shares used in computing loss per common share:

accompanying notes to the condensed consolidated financial statements.

AND SUBSIDIARIES

Statements of Cash Flows

the Nine Months Ended September 30,

Consolidated Statements of Cash Flows

the Three Months Ended March 31,

Cash flows from operating activities:

Net (loss) income from continuing operations

Net loss from continuing operations

$ ( 8,951,000 )

Adjustments to reconcile net (loss) income from continuing operations

to net cash used by operating activities:

$ ( 4,062,000 )

Adjustments to reconcile net loss from continuing operations to net cash used by operating activities:

Depreciation and amortization

2 unchanged sentences

Loss (gain) on investments

( 8,365,000 )

Impairment of notes receivable and other investments

Gain on extinguishment of debt

Deferred tax benefit

( 4,315,000 )

Accretion of debt discount, origination fee and prepaid interest

Decrease (increase) in assets:

Accounts receivable

( 1,580,000 )

( 1,147,000 )

Prepaid expenses and other current assets

2 unchanged sentences

Accrued expenses

Other liabilities

( 4,697,000 )

( 3,521,000 )

Other liabilities

Net cash used by operating activities

3 unchanged sentences

Purchase of property, plant and equipment

( 2,816,000 )

Purchase of real estate

2 unchanged sentences

( 1,085,000 )

Purchase of marketable securities

( 4,329,000 )

( 6,581,000 )

Acquisition of American Pacific Bancorp, Inc.

Purchase of equity investment

Purchase of marketable securities

( 4,693,000 )

Sale of marketable securities

Disposal of property, plant and equipment

Note receivable investment

( 1,006,000 )

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

Payments of revolving lines of credit, net

Deferred financing fees

Debt conversion to equity in subsidiary

Issuances of common stock, net of issuance costs

1 unchanged sentence

Cash flows from discontinued operations:

Cash provided (used) by discontinued operations

Cash provided by investing activities

Cash used by financing activities

Net cash provided (used) by discontinued operations

Net increase in cash

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

Cash, cash equivalents, and restricted cash

at end of period

Cash (used) provide by discontinued operations

Net cash used by discontinued operations

Net increase (decrease) in cash

( 2,784,000 )

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

accompanying notes to the condensed consolidated financial statements.

AND SUBSIDIARIES

Statements of Changes in Stockholders’ Equity

in Subsidiary

December 31, 2020

$ 174,380,000

$ ( 101,382,000 )

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

( 3,981,000 )

( 4,012,000 )

March 31, 2021

$ 235,027,000

$ ( 105,363,000 )

$ 133,616,000

of common stock, net

based payments, net of tax effect

of preferred stock

( 8,418,000 )

( 8,646,000 )

June 30, 2021

$ 279,947,000

$ ( 113,781,000 )

$ 170,688,000

of common stock, net

based payments, net of tax effect

of American Pacific Bancorp

( 6,598,000 )

( 6,675,000 )

September 30, 2021

$ 294,682,000

Consolidated Statements of Changes in Stockholders’

Preferred Stock

Additional Paid-in

Non- controlling Interest in

Balance, December 31, 2021

$ 294,686,000

$ ( 132,384,000 )

December 31, 2019

$ 200,304,000

Issuance of common stock, net

Conversion of debt to equity in subsidiary

Stock based payments, net of tax effect

( 8,048,000 )

of common stock, net

based payments, net of tax effect

( 8,951,000 )

Balance March 31, 2022

$ 296,450,000

March 31, 2020

$ ( 140,432,000 )

Balance, December 31, 2020

$ 174,380,000

of common stock, net

based payments, net of tax effect

June 30, 2020

$ ( 101,382,000 )

Issuance of common stock, net

Stock based payments, net of tax effect

( 3,981,000 )

( 4,012,000 )

of common stock, net

of preferred stock, net

based payments, net of tax effect

(loss) income

September 30, 2020

Balance, March 31, 2021

$ 235,027,000

6 unchanged sentences

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 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, 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

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

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

This 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.

business lines are:

(1) Product Packaging, (2) Biotechnology, (3) Direct Marketing, (4) Commercial Lending, (5) Securities and

Investment Management, (6) Alternative Trading (7) Digital Transformation, (8) Secure Living, and (9) Alternative Energy.

Each of these

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

divisions, their business lines, subsidiaries, and operating territories:

(1) Our Product Packaging line is led by Premier Packaging

Corporation, Inc.

(“Premier”), a New York corporation.

Premier operates in the paper board and fiber based folding carton,

consumer product packaging, and document security printing markets.

It markets, manufactures, and sells sophisticated custom folding

cartons, mailers, photo sleeves and complex 3-dimensional direct mail solutions.

Premier is currently located in its new facility in

Rochester, NY, and primarily serves the US market.

(2) The Biotechnology business line was created to invest in or acquire companies

in the BioHealth and BioMedical fields, including businesses focused on the advancement of drug discovery and prevention, inhibition,

and treatment of neurological, oncological, and immune related diseases.

This division is also targeting unmet, urgent medical needs,

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

(3) Direct Marketing, led by the holding corporation, Decentralized Sharing Systems, Inc.

(“Decentralized”) provides

services to assist companies in the emerging growth “Gig” business model of peer-to-peer decentralized sharing marketplaces.

Direct 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’s products include, among other things,

nutritional and personal care products sold throughout North America, Asia Pacific, Middle East, and Eastern Europe.

(4) Our Commercial

Lending business division, driven by American Pacific Bancorp (“APB”), is organized for the purposes of being a financial

network holding company, focused on acquiring equity positions in (i) undervalued commercial bank(s), bank holding companies and nonbanking

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

in—nonbanking activities closely related to banking, including loan syndication services, mortgage banking, trust and escrow services,

banking technology, loan servicing, equipment leasing, problem asset management, SPAC (special purpose acquisition company) consulting

services, and advisory capital raising services.

(5) Securities and Investment Management was established to develop and/or acquire assets

in the securities trading or management arena, and to pursue, among other product and service lines, broker dealers, and mutual funds

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

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

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

the REIT was formed to originate,

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

(6) Alternative Trading was established to develop and/or

acquire assets and investments in the securities trading and/or funds management arena.

Alternative Trading, 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, and cryptocurrency via an alternative trading platform using blockchain

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

FPO, IPO, ITO, PPO, 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).

(7) Digital Transformation was

established to be a Preferred Technology Partner and Application Development Solution for mid cap brands in various industries including

the direct selling and affiliate marketing sector.

Digital improves marketing, communications and operations processes with custom software

development and implementation.

(8) The Secure Living division has developed a plan for fully sustainable, secure, connected, and healthy

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

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

(9) The Alternative Energy group was established to

help lead the Company’s future in the clean energy business that focuses on environmentally responsible and sustainable measures.

Alset Energy, Inc, the holding company for this group, and its wholly owned subsidiary, Alset Solar, Inc., pursue utility-scale solar

farms to serve US regional power grids and to provide underutilized properties with small microgrids for independent energy.

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

5 unchanged sentences

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

Under the terms of the Share Exchange, the Company issued 483,334

shares of the Company’s common stock, par

per share, 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”).

3 unchanged sentences

the biomedical field for decades.

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

effort in the research and development (R&D), drug discovery and development for the prevention, inhibition, and treatment of neurological,

oncological, and immune related diseases.

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

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

and treatment of neurological, oncological, and immune related diseases.

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

which provided for an investment of $ 40,000,200

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

6 unchanged sentences

(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

accounting principles (“U.S.

GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8.03

of Regulation S-X for smaller reporting companies.

Accordingly, these statements do not include all the information and footnotes required

GAAP for complete financial statements.

In the opinion of management, the accompanying balance sheets and related interim statements

of operations and cash flows include all adjustments considered necessary for their fair presentation in accordance with U.S.

significant intercompany transactions have been eliminated in consolidation.

results are not necessarily indicative of results expected for the full year.

For further information regarding the Company’s accounting

policies, refer to the audited consolidated financial statements and footnotes thereto included in the Company’s Form 10-K for

the fiscal year ended December 31, 2020.

of Consolidation - The consolidated financial statements include the accounts of Document Security Systems, Inc.

September 13, 2021, the Company finalized a shareholder agreement between its subsidiary, DSS Financial Management, Inc.

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

a vehicle for private and institutional investors seeking a highly liquid investment fund with attractive risk adjusted returns relative

to market unpredictability and volatility.

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

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

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.

December 23, 2021, DSS purchased 50,000,000

share of Sharing Services Global Corporation (“SHRG”) via a private placement.

With this purchase, DSS increased its ownership

of voting shares from approximately 47% of SHRG to approximately 58 %.

SHRG aims to build shareholder value by developing or acquiring businesses that increase the Company’s product and services portfolio,

business competencies and geographic reach .

the Company, through its subsidiaries, markets and distributes its health and wellness and other products primarily in the United States,

Canada, and the Asia Pacific region using a direct selling business model.

SHRG markets its products and services through its

independent sales force, using its proprietary websites, including:

www.elevacity.com and www.thehappyco.com.

SHRG, headquartered

in Plano, Texas, was incorporated in the State of Nevada on April 24, 2015, and is an emerging growth company.

SHRG Common Stock

is traded, under the symbol “SHRG,” in the OTCQB Market, an over-the-counter trading platforms market operated by OTC Markets

The accompanying condensed

consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly our

consolidated financial position as of March 31, 2022 and December 31, 2021, and the results of our consolidated operations for the interim

periods presented.

We follow the same accounting policies when preparing quarterly financial data as we use for preparing annual data.

These statements should be read in conjunction with the consolidated financial statements and the notes included in our latest annual

report on Form 10-K for the fiscal year ended December 31, 2021 (“Form 10-K”), and our other reports on file with the Securities

and Exchange Commission (the “SEC”).

of Consolidation - The

consolidated financial statements include the accounts of DSS, Inc.

and its subsidiaries.

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

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

9 unchanged sentences

Reclassifications

- Certain amounts on the accompanying consolidated

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.

- Certain amounts on the accompanying consolidated balance sheets for the year ended December 31, 2021, have been reclassified

to conform to current period presentation.

Equivalents – All highly liquid investments with maturities of three months or less at the date of purchase are classified

as cash equivalents.

Amounts included in cash equivalents in the accompanying consolidated balance sheets are money market funds whose

adjusted costs approximate fair value.

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

21 unchanged sentences

such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

carrying amounts reported in the balance sheet of cash and cash equivalents, accounts receivable, prepaids, accounts payable and accrued

expenses approximate fair value because of the immediate or short-term maturity of these financial instruments.

Marketable securities

classify as a Level 1 fair value financial instrument.

The fair value of notes receivable approximates their carrying value as the stated

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

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

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

The fair value

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

carrying amounts reported in the consolidated balance sheet of cash and cash equivalents, accounts receivable, prepaids, accounts payable

and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments.

securities classify as a Level 1 fair value financial instrument.

The fair value of notes receivable approximates their carrying value

as the stated or discounted rates of the notes do not reflect recent market conditions.

The fair value of revolving credit lines notes

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

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

– Inventories consist primarily of paper,

pre-printed security paper, paperboard, fully prepared packaging, and health and beauty products which and are stated at the lower of

cost or net realizable value on the first-in, first-out (“FIFO”) method.

Packaging work-in-process and finished goods included

the cost of materials, direct labor and overhead.

At the closing of each reporting period, the Company evaluates its inventory in order

to adjust the inventory balance for obsolete and slow-moving items.

An allowance for obsolescence of approximately $ 22,000 and

$ 388,000 associated

with the inventory at our SHRG subsidiary was recorded as of March 31, 2022, and December 31, 2021, respectively.

Write-downs and write-offs

are charged to cost of revenue.

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

6 unchanged sentences

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.

The Company also owns approximately 127,179,000

shares of Alset Intl, a company publicly listed

on the Singapore Exchange Limited.

This service agreement will allow HWH Korea to utilize the Company’s merchant account in connection

with their direct marketing network with periodic remittance of the cash collected to them for a fee of 2.5 %

of amounts collected.

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,

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”)

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are capitalized as a component of the acquired assets.

This includes all costs related to finding, analyzing and negotiating a transaction.

This includes all costs related to finding, analyzing and negotiating a

The allocation of the purchase price is an area that requires judgment and significant estimates.

Tangible and intangible assets include

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

(if applicable).

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

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

capitalization rates and available market information.

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

of certain assets of its plastic printing business line, which it operated under Plastic Printing Professionals, Inc.

(“DSS Plastics”),

a wholly owned subsidiary of the Company.

That sale was consummated and closed on August 14, 2020.

The remaining assets of DSS Plastics

were either sold, separately disposed, or retained by other existing DSS businesses lines.

Accordingly, the operations of DSS Plastics

have been discontinued.

Based on the magnitude of DSS Plastics’ historical revenue to the Company and because the Company has exited

the production of laminated and surface printed cards, this sale represented a significant strategic shift that has a material effect

on the Company’s operations and financial results.

Accordingly, the Company has applied discontinued operations treatment for this

sale as required by Accounting Standards Codification 210-05—Discontinued Operations.

The major classes of assets and liabilities

of DSS Plastics are classified as Held For Sale – Discontinued Operations on the Consolidated Balance Sheets and the operating

results of the discontinued operations is reflected on the Consolidated Statements of Operations as Loss from Discontinued Operations.

May 7, 2021, the Company completed the sale of 100 % of the capital stock of DSS Digital Inc.

(“DSS Digital”), the Company’s

wholly owned subsidiary, which researched, developed, marketed, and sold the Company’s digital products worldwide.

magnitude of DSS Digital’s historical revenue to the Company and because the Company has exited the brand authentication services,

functional anti-counterfeiting technology and technologies to satisfy commercial and consumer product needs for branding, intelligent

packaging, and marketing, this sale represented a significant strategic shift that has a material effect on the Company’s operations

and financial results.

Accordingly, the Company has applied discontinued operations treatment for this sale as required by Accounting

Standards Codification 210-05—Discontinued Operations.

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.

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.

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.

For the three months ended 31, 2022, potential dilutive instruments includes

both warrants and options of 3,556 and 11,930 shares respectively.

For the three months ended 31, 2021, potential dilutive instruments

includes both warrants and options of 29,314 and 13,596 shares respectively.

Additionally for March 31, 2021, there were 43,000 shares

of preferred a stock convertible into 6,570,000 shares of common stock

Concentration

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

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

the three months ended March 31, 2022, two customers accounted for 10 %

and 3 %, respectively, %

of our consolidated revenue.

As of September 30, 2021, these two customers

accounted for 73 %

of our consolidated trade accounts receivable balance.

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

As of March 31, 2022, these two customers accounted for 29 %

and 6 % of our consolidated trade accounts

receivable balance.

During the three months ended March 31, 2021, these two customers accounted for 31 %

of our consolidated revenue and 57 %

of our consolidated trade accounts receivable balance.

and 8 % of our consolidated trade accounts receivable

Taxes - The Company recognizes estimated income taxes payable or refundable on income tax returns for the current year and for

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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.

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

rental income associated with its REIT, net of amortization of favorable/unfavorable lease terms relative to market and includes rental

abatements and contractual fixed increases attributable to operating leases, where collection has been considered probable, on a straight-line

basis over the term of the related lease.

The Company recognizes net investment income from its investment banking line of business as

interest owed to the Company occurs.

The Company generates revenue from its direct marketing line of business primarily through internet

sales and recognizes revenue as items are shipped.

of March 31, 2022, 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 September 30, 2021, the Company established a reserve

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

The Company does not accrue interest on past due

accounts receivable.

At March 31, 2022, and December 31, 2021, the

Company established a reserve for doubtful accounts of approximately $ 70,000

and $ 20,000 respectively.

The Company does not accrue interest on past due accounts receivable.

commissions are expensed as incurred for contracts with an expected duration of one year or less.

There were no sales commissions capitalized

as of September 30, 2021.

as of March 31, 2022.

and Handling Costs

4 unchanged sentences

Notes Receivable

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.

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 %

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

This TBD Note accrues interest at 6 %

and matures on October

As of September 30, 2021, and December

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

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 fourth quarter of 2021.

American Premium Water Corporation

On October 15, 2020, APB entered

into a loan agreement with (“APW Note”) with American Premium Water Corporation,(“APW”), a Nevada corporation.

The loan, not to exceed the principal sum of $ 200,000 , has an interest rate of 12 %, and matures on October 15, 2022 .

The outstanding

principal and interest as of March 31, 2022 and December 31, 2021, approximated $ 39,000 and is classified as a Current portion of notes

receivable on the Consolidated Balance Sheets at March 31, 2022 and December 31, 2021.

GSX repaid the principal and interest in full

in April 2022.

Group Limited

4 unchanged sentences

due in one year from date of issuance.

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

The outstanding principal and interest as of March 31, 2022 and December 31, 2021, approximated

and $ 829,000 ,

respectively, and is classified as a Current portion of notes receivable on the Consolidated Balance Sheets at December 31, 2021.

repaid the principal and interest in full in April 2022.

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.

JV”), along with Coinstreet, whose CEO is also a member of the Company’s board of directors, for the creation of a USA based

joint venture alternative trading system or exchange (“JV Exchange”).

During the nine-months ended September 30, 2021, the

Company and GSX finalized the terms of the JV Exchange.

This JV is currently in the planning stages.

February 21, 2021, Impact BioMedical, Inc.

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 ,

with interest at a rate of 6.5 %,

and maturity date of August

Monthly payments are due on the

twenty-first day of each month and continuing each month thereafter until August 19, 2022, at which time all accrued interest and

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 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 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).

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 , with interest at a rate of 6.5 %, and maturity

date of August 19, 2022.

Monthly payments are due on the twenty-first day of each month and continuing each month thereafter until August

19, 2022, at which time all accrued interest and 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 March 31, 2022, approximated

$ 207,000 and is classified in current notes receivable on the accompanying consolidated balance sheets.

Brokers Company, Inc.

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

Company, Inc.

May 13, 2021, Sentinel Brokers, LLC, 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 ,

Sentinel Note has an aggregate principal balance up to $ 600,000 ,

to be funded at request of Sentinel.

1 unchanged sentence

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 %

As of March 31, 2022 and December

31, 2021, there was $ 151,000 and

respectively, outstanding on the Sentinel Note, and is included in current notes receivable on the accompanying consolidated

balance sheet.

Also on 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 .

April 2022, the Sentinel Note was amended to increase the available revolving credit principal to $ 3,000,000 .

May 14, 2021, DSS Pure Air, Inc.

2 unchanged sentences

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 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;

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 March

31, 2022 and December 31, 2021, approximated $ 5,164,000

and $ 5,081,000 ,

respectively, which is classified as Notes receivable on the consolidated balance sheet.

Regional Management District (formally

Harris-Montgomery Counties Management District)

September 23, 2021, APB entered into refunding bond anticipatory note (“District Note”) with South Regional 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

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

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.

The outstanding principal and

interest of $ 3,576,000

and $ 3,540,000

of the District Note is included in current portion

of notes receivable on the consolidated balance sheet at March 31, 2022 and December 31, 2021, respectively.

October 25, 2021, APB entered into loan agreements (“Asili Agreement”) with Asili, LLC.

(“Asili”) a company registered

in the state of Utah.

The Asili Agreement has an initial aggregate principal balance up to $ 1,000,000 ,

to be funded at request of Asili, with an option to increase the maximum principal borrowing to $ 3,000,000 .

The Asili Agreement, which incurs interest at a rate of 8.0 %

with principal and interest due at the maturity date of October

Asili Agreement contains an optional conversion feature allowing APB to convert the outstanding principal to a 10% membership interest.

APB, as holder of the Asili Agreement, has the right to elect one member to the Asili

Board of Managers .

The outstanding principal

and interest of approximately $ 803,000

and $ 784,000

of the Asili Agreement is included in current

portion of notes receivable on the consolidated balance sheet at March 31, 2022 and December 31, 2021, respectively.

June 13, 2019, APB extended the credit to Leopoldo Bustamate (“Bustamate Note”) in the form of a promissory note for $ 249,540 ,

bearing interest at 15 %,

with a maturity date of May

On June 5, 2020, the Company further

extended the same credit in the form of a promissory note for $ 249,540 ,

bearing interest at 15 %,

with a maturity date of May

On August 30, 2021, the Company further

extended the same credit in the form of a promissory note for $ 249,540 ,

bearing interest at 12.5 %,

with a maturity date of May

The modification agreement is effective

May 14, 2021.

This promissory note is secured by a deed of trust on a tract of land, which is approximately 315 acres, and located in

Coke County, Texas.

The outstanding principal and interest of approximately $ 289,000

of the Bustamate Note is included in long

term portion of Notes receivable on the consolidated balance sheet at March 31, 2022 and December 31, 2021.

October 7, 2021, HWH World, Inc., a subsidiary of the Company entered into a revolving loan commitment (“HWH Ltd Note”)

with HWH World Ltd.

(“HWH Ltd.”) a company registered in Taiwan.

Note has an principal balance of $ 52,000

and incurred no interest through the maturity

date of December

The outstanding principal at March 31,

2022 and December 31, 2021 is $ 56,000

and $ 52,000 ,

respectively, and is included in the current portion of notes receivable.

This note is currently in default and the Company is currently

in the process of extending the terms.

In accordance with the terms of the HWH Ltd.

Note, the Company began charging interest at the

default rate of 18 %

West Park Capital Group, LLC.

On December 28, 2021, APB

entered into promissory note (“West Park Note”) with West Park Capital Group, LLC.

(“West Park”), a company registered

in the state of California.

The West Park Note has an principal balance of $ 700,000 .

The West Park Note, which incurs interest at a rate

of 12.0 % with principal and interest due at the maturity date of December 28, 2022 .

The outstanding principal and interest of $ 680,000

and $ 700,000 of the West Park Note is included in current portion of notes receivable on the consolidated balance sheet at Mach 31, 2022.

January 2021, SHRG and 1044PRO, LLC (“1044 PRO”) entered into a Funding Agreement pursuant to which the Company agreed

to provide to 1044 PRO a $ 250,000

revolving credit line and loaned $ 204,879

to 1044 PRO under the credit line.

under the credit line are payable in monthly installments in amounts determined by the amount of each cash advance.

At December 31, 2021,

loans of $ 193,000

are outstanding, net of an allowance for the

impairment losses of $ 115,000 ,

and is included in Current portion of notes receivable on the consolidated balance sheet as of December 31, 2021.

At March 31, 2022,

this loan was fully reserved for.

In connection with the loan, the Company acquired a 10 %

equity interest in 1044 PRO and a security interest in 1044 PRO’s cash receipts and in substantially all 1044 PRO’s assets.

the fiscal year 2019, SHRG received a promissory note for $ 106,404

from a prior merchant payment processor in connection

with amounts owed to the Company.

This note is fully reserved for at March 31, 2022, and December 31, 2021.

Commerce Inc.,

March 2, 2022, APB and WUURII Commerce, Inc.

(“WUURRII”), a corporation organized under the laws of the Republic of Korea

entered into a promissory note (“WUURRII Note”).

Under the terms of the WURRII Note, APB at its discretion, may lend up to

the principal sum of $ 892,500

with an interest rate of 8 %,

and matures in March 2024, with interest payable quarterly.

The outstanding principal and interest at March 31, 2022 is $ 895,000 ,

of which $ 446,000 is included in current notes receivable on the accompanying consolidated balance sheet.

January 24, 2022, APB and Farah S.

Khan (“Khan”) entered into a promissory note (“Khan Note”) in the principal

sum of $ 100,000

with interest of 6 %,

due annually, and maturing in January 2024.

The outstanding principal and interest at March 31, 2022 approximates $ 101,000 ,

and is included in notes receivable on the accompanying consolidate balance sheet.

Financial Instruments

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:

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

category as of March 31, 2022, and December 31, 2021:

Schedule of Cash and Marketable Securities by Significant Investment Category

and Restricted Cash

Cash and cash equivalents

Restricted cash

Money Market Funds

Marketable Securities

( 9,121,000 )

$ ( 6,522,000 )

Cash and cash equivalents

Convertible securities

Money Market Funds

Marketable Securities

Company typically invests in highly rated securities, with the primary objective of minimizing the potential risk of principal loss.

The Company’s investment policy generally requires securities to be investment grade and limits the amount of credit exposure to

any one issuer.

Fair values were determined for each individual security in the investment portfolio.

Convertible securities

Company typically invests with the primary objective of minimizing the potential risk of principal loss.

The Company’s investment

policy generally requires securities to be investment grade and limits the amount of credit exposure to any one issuer.

Fair values were

determined for each individual security in the investment portfolio.

Medical REIT Inc.

17 unchanged sentences

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

(the “Note”).

The Note matures on

3, 2022 and accrues interest at the rate of 8.0 %

per annum and shall be payable in accordance with the terms set forth in the Note.

Under the Note, AMRE may prepay or repay all or any

portion of the Note at any time, without a premium or penalty.

If not sooner prepaid, the entire unpaid principal balance of the Note

including accrued interest will be due and payable in full on March 3, 2022.

The Note also provides the Company an option to provide

AMRE an additional $ 800,000

on the same terms and conditions as the Note,

including the issuance of warrants as described below.

As further incentive to enter into the Note, AMRE issued the Company warrants

to purchase 160,000

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

The Warrants have an exercise price of $ 5.00

per share, subject to adjustment as set forth

in the Warrants, and expire on March

Pursuant to the Warrants, if AMRE files

a registration statement with the Securities and Exchange Commission for an initial public offering (“IPO”) of AMRE’s

common stock and the IPO price per share offered to the public is less than $ 10.00

per share, the exercise price of the Warrants

shall be adjusted downward to 50 %

of the IPO price.

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

As of September

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

Upon consolidation this Note is eliminated.

AMRE entered into a $ 200,000

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

AMRE entered into

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 at 8.0 %.

See Note 7 for further details.

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Company’s total equity interest in AMRE to approximately 93 %.

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) 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.

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) 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 substantially

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

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

All assets were allocated on a relative

fair value basis.

Contained within the sale-purchase agreement for this facility, is a $ 1,500,000

earnout due to the seller if certain criteria

As of March 31, 2022, no liability has been recorded for this earnout as it isn’t probable the earnout will

be achieved as of the quarter-end

November 4, 2021, AMRE LifeCare Portfolio, LLC.

(“AMRE LifeCare”), a subsidiary of AMRE, acquired three medical facilities

located in Fort Worth, Texas, Plano, Texas, and Pittsburgh, Pennsylvania for a purchase price of $ 62,000,000 .

In accordance with Topic

805, the acquisition of the medical facility has been determined to be an acquisition of assets as 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.

These assets are

classified as investments, real estate on the consolidated balance sheet.

The purchase price has been allocated as $ 32,100,000 , $ 12,100,000 ,

and $ 1,500,000 for the facility, land and site improvements respectively.

Also include in the value of the property is $ 15,901,000 of

intangible assets with estimated useful lives ranging from 1 to 11 years.

All assets were allocated on a relative fair value basis.

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.

December 21, 2021, AMRE Winter Haven, LLC.

(“AMRE Winter Haven”), a subsidiary of AMRE, acquired a medical facility located

in Winter Haven, Florida for a purchase price of $ 4,500,000 .

In accordance with Topic 805, the acquisition of the medical facility has

been determined to be an acquisition of assets as 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.

These assets are classified as investments, real estate on the

consolidated balance sheet.

The purchase price has been allocated as $ 3,200,000 , $ 1,000,000 , and $ 222,000 for the facility, land and

site and tenant improvements respectively.

Also include in the value of the property is $ 29,000 of intangible assets with an estimated

useful life of approximating 5 years .

All assets were allocated on a relative fair value basis.

the three-months ended March 31, 2022, and 2021, AMRE had net losses of $ 1,613,000

and $ 58,000 ,

respectively, of which $ 161,000

and $ 22,000 ,

respectively is attributable to non-controlling

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

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 ,

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 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

BioMedical, a wholly owned subsidiary of the Company, has several subsidiaries that are not wholly owned by Impact Biomedical

and have an ownership percentage ranging from 63.6 %

During the three months ended March 31, 2022, and 2021, Impact Biomedical has incurred approximately $ 614,000

and $ 420,000

respectively of net losses, of which $ 67,000

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.

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

by the Company into APB for an aggregate

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

shares of the APB’s Class A Common Stock,

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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.

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.

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.

During the three months ended March 31, 2022, APB had net income of $ 547,000 ,

of which, $ 257,000

is attributable to non-controlling interest.

The next largest shareholder of APB is Alset EHome

International, Inc.

AEI’s Chairman and CEO, Heng Fai Ambrose 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.

The CEO of the Company, Mr.

Heuszel, also has an approximate 2 %

equity position of APB.

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

International Limited (formally Singapore eDevelopment Limited)

Services Global Corp.

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

(“SHRG”), a publicly

traded company, as marketable equity security and measured it at fair value with gains and losses recognized in other income.

2020, through continued acquisition of common stock, as detailed below, the Company obtained greater than 20 %

ownership of SHRG, and thus has the ability to exercise significant influence over it.

During the quarter ended September 30, 2020,

the Company began to account for its investment in SHRG using the equity method in accordance with ASC Topic 323, Investments—Equity

Method and Joint Ventures recognizing our share of SHRG’s earnings and losses within our consolidated statement of operations.

Through a series of transactions, DSS increased its ownership of voting shares in SHRG to approximately 58 % on December 23, 2021.

The 58 % ownership of SHRG 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 and began consolidating the financial

results of SHRG as of December 31, 2021.

On January 24, 2022, the Company exercised 50,000,000

warrants received as part of a consulting

agreement with SHRG at the exercise price of $ 0.0001 ,

bring its ownership percentage of voting shares to approximately 65 % .

The acquisition of SHRG 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.

During the three months ended March 31, 2022, SHRG incurred $ 7,364,000

of losses of which, $ 2,579,000

is attributed to non-controlling interest.

are currently in the process of completing the purchase price accounting and related allocations associated with the acquisition of SHRG.

The Company is in the process of completing valuations and useful lives for certain assets acquired in the transaction.

We expect the

preliminary purchase price accounting to be completed during the year ending December 31, 2022.

International Limited (formally Singapore eDevelopment Limited), related party

Company owns 127,179,311

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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 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.

a company incorporated in Singapore and publicly listed on the Singapore Exchange Limited.

This investment is classified as a marketable

security and is classified as long-term assets on the consolidated balance sheets as the Company has the intent and ability to hold the

investments for a period of at least one year.

The Chairman of the Company, Mr.

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

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.

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

(“SHRG”), a publicly

traded company, as marketable equity security and measured it at fair value with gains and losses recognized in other income.

2020, through continued acquisition of common stock, as detailed below, the Company obtained greater than 20 % ownership of SHRG, and

thus has the ability to exercise significant influence over it.

The Company currently accounts for its investment in SHRG using the equity

method in accordance with ASC Topic 323, Investments—Equity Method and Joint Ventures recognizing our share of SHRG’s

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

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 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

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 fair value of the marketable security as of March 31, 2022, and December 31, 2021, was approximately $ 4,604,000

and $ 4,909,000

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

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 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.

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.

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

Operating loss

$ ( 2,021,069 )

Loss before income taxes

$ ( 2,800,118 )

Income tax benefit

$ ( 3,548,007 )

During the three months ended March

31, 2022 and March 31, 2021, the Company recorded unrealized loss on this investment of approximately $ 305,000 , and $ 967,000 , respectively.

Century TBD Holdings, LLC

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

Note accrues interest at 6 % and matures on October 9, 2021 .

As of December 31, 2021, this TBD Note had outstanding principal and interest

of approximately $ 537,000 and was classified as Current portion of notes receivable on the consolidated balance sheet.

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 7.5 % of the issued and outstanding shares of West Park.

This note and stock exchange agreement was finalized during

the first quarter 2022 and valued at approximately $ 500,000 and is included in Investments on the consolidated balance sheet on March

The remaining $ 37,000 is included in gain (loss) on investments on the consolidated statement of operations at March 31, 2022.

Capital International LLC

September 10, 2020, the Company’s wholly owned subsidiary DSS Securities, Inc.

entered into membership interest purchase agreement

with BMI Financial Group, Inc.

a Delaware corporation (“BMIF”) and BMI Capital International LLC, a Texas limited liability

company (“BMIC”) whereas DSS Securities, Inc.

purchased 14.9 % membership interests in BMIC for $ 100,000 .

DSS Securities also

had the option to purchase an additional 10 % of the outstanding membership interest which it exercised in January of 2021 and increased

its ownership to 24.9 %.

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 nine months ended September 30, 2021, was not significant.

entered into membership interest purchase

agreement with BMI Financial Group, Inc.

a Delaware corporation (“BMIF”) and BMI Capital International LLC, a Texas

limited liability company (“BMIC”) whereas DSS Securities, Inc.

purchased 14.9 %

membership interests in BMIC for $ 100,000 .

DSS Securities also had the option to purchase an additional 10 %

of the outstanding membership interest which it exercised in January of 2021 and increased its ownership to 24.9 %.

Upon achieving greater than 20 %

ownership in BMIC during the quarter ended March 31, 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 months ended March 31, 2022,

approximated $ 49,000 .

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

1 unchanged sentence

The Company’s

chairman of the board and another independent board member of the Company also have ownership interest in this joint venture.

chairman of the board and another independent board member of the Company also have ownership interest in BMIC.

Title Company

2 unchanged sentences

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

DSS Securities, Inc.

shall own 70% of this venture with the other two shareholders being attorneys necessary to the state application

and permitting process.

ATC have initiated or have pending applications to do business in a number of states, including Texas, Tennessee,

Connecticut, Florida, and Illinois.

For the purpose of organization and the state application process, the Company’s CEO, who is

a licensed attorney, has a stated non-compensated 15% ownership interest in the venture.

There was minimal activity for the three and

nine months ended September 30, 2021 .

DSS Securities,

shall own 70% of this venture with the other two shareholders being attorneys necessary to the state application and permitting

ATC have initiated or have pending applications to do business in a number of states, including Texas, Tennessee, Connecticut,

Florida, and Illinois.

For the purpose of organization and the state application process, the Company’s CEO, who is a licensed

attorney, has a stated non-compensated 15% ownership interest in the venture.

There was minimal activity for the three months ended March

Technologies Asia Pacific Holdings Limited

1 unchanged sentence

Agreement”) with BioMed Technologies Asia Pacific Holdings Limited (“BioMed”), a limited liability company incorporated

in the British Virgin Islands, pursuant to which the Company agreed to purchase 525 ordinary shares or 4.99 % of BioMed at a purchase

price of approximately $ 630,000 .

The Subscription Agreement provides, among other things, the Company has the right to appoint a new

director to the board of BioMed.

With respect to an issuance of shares to a third party by BioMed, the Company will have the right of

first refusal to purchase such shares, as well as customary tag-along rights.

In connection with the Subscription Agreement, Impact entered

into an exclusive distribution agreement (the “Distribution Agreement”) with BioMed, to directly market, advertise, promote,

distribute, and sell certain BioMed products, which focus on manufacturing natural probiotics, to resellers.

This investment is valued

at cost as it does not have a readily determined fair value.

in the British Virgin Islands, pursuant to which the Company agreed to purchase 525

ordinary shares or 4.99 %

of BioMed at a purchase price of approximately $ 632,000 .

The Subscription Agreement provides, among other things, the Company has the right to appoint a new director to the board of BioMed.

With respect to an issuance of shares to a third party by BioMed, the Company will have the right of first refusal to purchase such shares,

as well as customary tag-along rights.

In connection with the Subscription Agreement, Impact Biomedical entered into an exclusive

distribution agreement (the “Distribution Agreement”) with BioMed, to directly market, advertise, promote, distribute, and

sell certain BioMed products, which focus on manufacturing natural probiotics, to resellers.

This investment is valued at cost as it

does not have a readily determined fair value.

focuses on manufacturing natural probiotics, pursuant to which the Company will directly market, advertise, promote, distribute and sell

8 unchanged sentences

This agreement is for ten years with

an one year auto-renewal feature.

a one year auto-renewal feature.

Oncology, Inc.

1 unchanged sentence

#1”) with Vivacitas Oncology Inc.

(“Vivacitas”), to purchase 500,000 shares of its common stock at the per share price

of $ 1.00 , with an option to purchase 1,500,000 additional shares 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

(“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;

(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.

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.

(“Seller”) 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

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

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

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

April 1, 2021, the Company

entered into an additional stock purchase agreement with Vivacitas (“Vivacitas Agreement #2”), 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.

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 16 %

as of September 30, 2021.

as of March 31, 2022.

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 %

equity position of Sentinel Brokers Company, Inc.

(“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 %

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

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.

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 .

During 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 % to

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

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 % of Sentinel.

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’s portion of net income in Sentinel for the three months ended

March 31, 2022, was not significant.

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

2 unchanged sentences

(“FINRA”), and is a member of the Securities Investor Protection Corporation (“SIPC”).

September 2021, SHRG, Stemtech Corporation (“Stemtech”) and Globe Net Wireless Corp.

(“GNTW”) entered into

a Securities Purchase Agreement (the “SPA”) pursuant to which the SHRG invested $ 1.4

in Stemtech in exchange for:

(a) a Convertible Promissory Note in the amount of $ 1.4

in favor of the SHRG (the “Convertible Note”) and (b) a detachable Warrant to purchase shares of GNTW common stock (the “GNTW

Stemtech is a subsidiary of GNTW.

As an inducement to enter into the SPA, GNTW agreed to pay to the SHRG an origination

fee of $ 500,000 ,

payable in shares of GNTW’s common stock.

The Convertible Note matures on September

bears interest at the annual rate of 10 %,

and is convertible, at the option of the holder, into shares of GNTW’s common stock at a conversion rate calculated based on the

closing price per share of GNTW’s common stock during the 30-day period ended September 19, 2021.

The GNTW Warrant expires on September

13, 2024, and conveys the right to purchase up to 1.4 million shares of GNTW’s common stock at a purchase price calculated

based on the closing price per share of GTNW’s common stock during the 10-day period ended September 13, 2021 .

In September 2021, GNTW issued to the SHRG 154,173

shares of its common stock, or less than 1% of

the shares of GNTW then issued and outstanding, in payment of the origination fee.

carries its investment in the Convertible Note, the GNTW Warrant and the shares of GNTW common stock at fair value in accordance with

During the three month ended March 31, 2022 and twelve months ended December 31, 2021, the SHRG recognized unrealized

gains, before income tax, of $ 357,000

and $ 3,700,000 ,

respectively, in connection with its investment in the Convertible Note, the GNTW Warrant and the shares of GNTW common stock.

September 2021, SHRG entered into a Membership Unit Purchase Agreement pursuant to which the SHRG acquired a 30.75 %

equity interest in MojiLife, LLC, a limited liability company, organized in the State of Utah, in exchange for $ 1,537,000 .

MojiLife is an emerging growth distributor of technology-based consumer products, such as cordless scent diffusers, for the home and

the car, as well as proprietary home cleaning products and accessories.

During the three months ended March 31, 2022, SHRG recognized

an impairment of this investment approximating $ 1,500,000 .

Short-Term and Long-Term Debt

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

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

This renewal was not exercised by Premier

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

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 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

of Credit Agreement with Citizens pursuant to which Citizens agreed to lend up to $ 900,000 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.

With a maturity date of July 28, 2021 , this equipment line is

renewable annually.

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

$ 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

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

For the year ended December

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

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

Notes - On 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

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

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

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 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

the Paycheck Protection Program (“PPP”).

The PPP, established as part of the Coronavirus Aid, Relief and Economic Security

Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll

expenses of the qualifying business.

These funds were used for payroll, benefits, rent, mortgage interest, and utilities.

4, 2020, pursuant to the terms of the SBA PPP program, the Company submitted applications for Premier Packaging and DSS Digital for a

requested 100 % loan forgiveness.

During the fourth quarter 2020, both these notes approximating $ 969,000 were forgiven in full and recognized

as a gain on the extinguishment of debt on the accompanying consolidated financial statements as of December 31, 2020.

AAMI, pursuant

to the terms of the SBA PPP program, submitted its application for 100 % loan forgiveness in October 2020, and received confirmation of

forgiveness in January 2021.

In March 2022, this debt was converted into equity in AMRE, and LVAMPTE exercised the warrants for $ 200,000

(see the consolidated statement of changes in stockholders’ equity) The

holder is a related party owned by the Chairman of the Company’s board of directors.

March 16, 2021, American Medical REIT, Inc.

received loan proceeds in the amount of approximately $ 110,000 under the Paycheck Protection

Program (“PPP”) with a fixed rate of 1 % and a 60 -month maturity term.

The PPP, established as part of the Coronavirus Aid,

Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of

the average monthly payroll expenses of the qualifying business.

These funds were used for payroll, benefits, rent, mortgage interest,

and utilities .

received loan proceeds in the amount of approximately $ 110,000

under the Paycheck Protection Program (“PPP”)

with a fixed rate of 1 %

and a 60-month maturity term.

The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”),

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

These funds were used for payroll, benefits, rent, mortgage interest, and utilities.

As of March 31, 2022, and December 31, 2021,

the outstanding principal and interest approximated $ 111,000

is included in long-term debt, net on the consolidated

balance sheet.

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 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 %.

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

with Patriot Bank, N.A.

(“Patriot Bank”) in an amount up to $6,155,000, with the amount financed approximating $5,105,000.

to secure financing approximating $ 3,700,000

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 March 31, 2022, and December 31, 2021, the outstanding

principal on the BOA Note was $ 3,710,000

and $ 3,339,000 ,

respectively and had an interest rate of 4.63 %,

and is included in Long-term debt, net on the consolidated balance sheet.

The BOA Note contains certain covenants that are analyzed

As of March 31, 2022, Premier is in compliance with these covenants.

June 18, 2021, AMRE

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

Patriot Bank, N.A.

(“Patriot Bank”) in an amount up to $ 6,155,000 ,

with the amount financed approximating $ 5,105,000 .

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-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.

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.

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 end.

This agreement contains certain

covenants that are analyzed on an annual basis, starting December 31, 2021, of which, AMRE Shelton is in compliance as of March 31,

2022 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 5).

Of the total financed, approximately

is classified as current portion of long-term

debt, net, and the remaining balance of approximately $ 4,799,000

recorded as long-term debt, net of $ 185,000

in deferred financing costs.

October 13, 2021, LVAM entered into loan agreement with BMIC (“BMIC Loan”), whereas LVAM borrowed the principal amount of

$ 3,000,000 ,

with interest

to be charged at a variable rate to be adjusted at the maturity date .

The BMIC Loan matures on October

12, 2022 , and contains an auto renewal period

of three months.

As of Mach 31, 2022 and December 31, 2021, $ 3,021,000 and $ 3,000,000 , respectively, is included in current portion

of long-term debt, net on the consolidated balance sheet.

On October 13, 2021, LVAM

entered into loan agreement with Lee Wilson Tsz Kin (“Wilson Loan”), a related party, whereas LVAM borrowed the

principal amount of $ 3,000,000 ,

with interest to be charged at a variable rate to be calculated at the maturity date.

The Wilson Loan matures on October

12, 2022 , and contains an auto renewal period of three months.

This loan was funded during March 2022.

As of Mach 31, 2022

is included in current portion of long-term debt, net on the consolidated balance sheet.

November 2, 2021, AMRE LifeCare entered into a loan agreement (“LifeCare Agreement”) with Pinnacle Bank, (“Pinnacle

Bank”) in the amount of $ 40,300,000 .

The LifeCare Agreement calls for the principal amount of the in equal, consecutive monthly installments based upon a twenty-five ( 25 )

year amortization of the original principal amount of the LifeCare Agreement at an initial rate of interest equal to the interest rate

determined in accordance as of July 29, 2022 provided, however, such rate of interest shall not be less than 4.28 %,

with the first such installment being payable on August 29, 2022 and subsequent installments being payable on the first day of each succeeding

month thereafter until the maturity date, at which time any outstanding principal and interest is due in full.

The maturity date of November

2, 2023, may be extended to November 2, 2024.

As of December 31, 2021, the outstanding principal and interest of the LifeCare

agreement approximates $ 39,448,000 ,

net of deferred financing costs of $ 1,002,000 .

As of March 31, 2022, the outstanding principal and interested approximates $ 39,940,000

is included in long-term debt, net on the consolidated balance sheet.

AMRE is currently seeking from Pinnacle, and believes it will

obtain, a waiver on certain debt covenants.

In November 2021, AMRE entered

into a convertible promissory note (“Alset Note”) with Alset International Limited (“Alset International”) for

the principal amount of $ 8,350,000 .

The Alset Note accrues interest at 8 % per annum and matures in December 2023 , with interest due quarterly

and the principal due at maturity.

Principal and interest of approximately $ 8,688,000 is included in long-term debt, net on the accompanying

consolidated balance sheet on March 31, 2022.

On March 17, 2022, AMRE Winter

Haven, LLC (“AMRE Winter Haven”) and Pinnacle Bank (“Pinnacle”) entered into a term loan (“Pinnacle Loan”)

whereas Pinnacle lent to AMRE Winter Haven the principal sum of $ 2,990,000 , maturing on March 7, 2024 .

Payments are to be made in equal,

consecutive installments based on a 25-year amortization period with interest at 4.28 %.

The first installment is due January 1, 2023.

The Pinnacle Loan contains certain covenants that are to be tested annually.

AMRE is currently seeking from Pinnacle, and believes it will obtain, a

waiver on certain debt covenants.

The outstanding principal and interest, net of debt issuance

costs of $ 138,000 , approximates $ 2,857,000 and is included in long-term debt, net on the accompanying consolidated balance sheet at March

Sharing Services Global Corporation

October 2017, SHRG issued a Convertible Promissory Note in the principal amount of $ 50,000

(the “Note”) to HWH International,

Inc (“HWH International” or the “Holder”).

HWH International is affiliated with Heng Fai Ambrose Chan,

who became a Director of SHRG April 2020.

The Note is convertible into 333,333

shares of SHRG Common Stock.

Concurrent with

issuance of the Note, SHRG issued to HWH International a detachable warrant to purchase up to an additional 333,333

shares of SHRG Common Stock, at an exercise price

of $ 0.15 per

Under the terms of the Note and the detachable stock warrant, the Holder is entitled to certain financing rights.

If SHRG enters

into more favorable transactions with a third-party investor, it must notify the Holder and may have to amend and restate the Note and

the detachable stock warrant to be identical.

December 2019, SHRG and the holder of the SHRG $ 100,000

convertible note dated April 13, 2018 (the “April

2018Note”) entered into an amendment to the underlying promissory note.

Pursuant to the amendment, the parties extended the maturity

date of the note to April 2021.

In addition, after giving effect to the amendment, the April 2018 Note is non-interest bearing.

terms of the April 2018 Note remain unchanged.

This Note was repaid in full during March 2022.

Lease Liability

Company has operating leases predominantly for operating facilities.

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

As of March 31, 2022, 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 September 30, 2021.

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

of March 31, 2022.

minimum lease payments as of March 31, 2022, are as follows:

of Lease Liability:

5 unchanged sentences

Weighted-average discount rate

March of 2022, Premier Packaging began leasing its relocated manufacturing facilities to West Henrietta, New York.

This lease contains

an escalating payment clause, ranging from $ 61,000 per month to $ 78,000 per month, over the twelve term of the lease.

Commitments and Contingencies

Apple Litigation

November 26, 2013, DSS Technology Management, Inc.

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

(“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 California.

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

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.

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.

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.

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,

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

29 unchanged sentences

4:14-cf05330-HSG.

The parties are now engaged in discovery .

The court recently ordered Mr.

Ronaldi to produce several categories

of documents that he sought to withhold.

Discovery is ongoing .

Additionally,

on March 2, 2020, DSS and DSSTM filed a second litigation action against Jeffrey Ronaldi in the State of New York, Supreme Court, County

of Monroe, Document Security Systems, Inc.

on March 2, 2020, DSS and DSSTM filed a second litigation action against Jeffrey Ronaldi in the State of New York, Supreme Court,

County of Monroe, Document Security Systems, Inc.

and DSS Technology Management, Inc.

Jeffrey Ronaldi, Index No.:

2020002300, alleging acts

of self-dealing and conflicts of interest while he served as CEO of both DSS and DSS TM.

Ronaldi filed a Notice of Removal of this

civil litigation to the United States District Court for the Western District of New York where it was assigned Case No.

2020002300, alleging

acts of self-dealing and conflicts of interest while he served as CEO of both DSS and DSS TM.

Ronaldi filed a Notice of Removal of

this civil litigation to the United States District Court for the Western District of New York where it was assigned Case No.

6:20-cv-06265-EAW.

2 unchanged sentences

On March 16, 2021, the Western District of New York granted Mr.

Ronaldi’s motion

to have his defense costs advanced to him during the pendency of the action as they are incurred.

motion to have his defense costs advanced to him during the pendency of the action as they are incurred.

On March 26, 2021, Mr.

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.

The parties now engaged in discovery, awaiting a decision

on the Company’s objection to Mr.

Ronaldi’s fee application.

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.

Ronaldi applied to the court for reimbursement of $ 160,896.25

in legal fees which was subsequently reduced

to $ 159,771.25 .

A second application was filed on November 12, 2021, seeking $ 121,672.51

in fees for a total demand of $ 281,443.76 .

The Company has objected to the size of those bills as they were 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.

fee applications.

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 was denied.

The Company intends to vigorously prosecute this action.

Biosciences Litigation

February 15, 2021, Maiden Biosciences, Inc.

(“Maiden”) commenced an action against Document Security Stems, Inc.

(“Maiden”) commenced an action against DSS, Inc.

Decentralized Sharing Systems, Inc.

9 unchanged sentences

3:21-cv-00327.

lawsuit relates to two promissory notes executed by RBC in the 4 th quarter of 2019 in favor of Decentralized and HWH, totaling

approximately $800,000.

Maiden, a 2020 default judgment creditor of RBC, in the principal amount of $4,329,000, now complains about those

notes, the funding of those notes, the subsequent default of those notes by RBC, and HWH and Decentralize’s subsequent Article

9 foreclosure or deed-in-lieu debt conveyances.

In the instant lawsuit, Maiden asserts claims against Defendants for unjust enrichment,

fraudulent transfer under the Texas Uniform Fraudulent Transfer Act, and violation of the Racketeer Influenced and Corrupt Organizations

lawsuit relates to two promissory notes executed by RBC in the 4 th quarter of 2019

in favor of Decentralized and HWH, totaling approximately $800,000.

Maiden, a 2020 default judgment creditor of RBC, in the principal

amount of $4,329,000, now complains about those notes, the funding of those notes, the subsequent default of those notes by RBC, and

HWH and Decentralized’s subsequent Article 9 foreclosure or deed-in-lieu debt conveyances.

In the instant lawsuit, Maiden

asserts claims against Defendants for unjust enrichment, fraudulent transfer under the Texas Uniform Fraudulent Transfer Act, and violation

of the Racketeer Influenced and Corrupt Organizations Act.

Maiden also seeks a judgment from the court declaring:

“(1) Defendants lacked a valid security interest in RBC and RBC Subsidiaries’

assets and therefore lacked the authority to sell the assets during the public foreclosure sale;

(2) Defendant Heuszel’s low bid

at the public foreclosure sale was invalid and void;

(3) the public foreclosure sale was conducted in a commercially unreasonable manner;

and (4) Defendants do not have the legal authority to transfer RBC and RBC’s Subsidiaries assets to Heuszel and HWH.” Maiden

seeks to recover from Defendants:

(1) treble damages or, alternatively, damages in the amount of their underlying judgment plus the other

creditors’ claims or the value of the assets transferred, whichever is less, plus punitive or exemplary damages;

(2) pre and post-judgment

“(1) Defendants

lacked a valid security interest in RBC and RBC Subsidiaries’ assets and therefore lacked the authority to sell the assets during

the public foreclosure sale;

(2) Defendant Heuszel’s low bid at the public foreclosure sale was invalid and void;

(3) the public

foreclosure sale was conducted in a commercially unreasonable manner;

and (4) Defendants do not have the legal authority to transfer

RBC and RBC’s Subsidiaries assets to Heuszel and HWH.” Maiden seeks to recover from Defendants:

(1) treble damages or, alternatively,

damages in the amount of their underlying judgment plus the other creditors’ claims or the value of the assets transferred, whichever

is less, plus punitive or exemplary damages;

(2) pre- and post-judgment interest;

and (3) attorneys’ fees and cost .

3 unchanged sentences

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

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

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.

17 unchanged sentences

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

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

two-week docket.

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

4 unchanged sentences

Stockholders’ Equity

connection with the Share Exchange for Impact BioMedical described in Note 5, on August 18, 2020, the Company filed a Certificate of

Amendment of its Certificate of Incorporation (the “Certificate of Amendment”) to increase the number of authorized shares

of the Company, including 47,000 shares of Preferred Stock, with a par value of $ 0.02 , of which 47,000 shares were designated Series

A Preferred Stock.

The Certificate of Amendment, the form of which was previously disclosed in a Schedule 14A Definitive Proxy Statement

filed with the Securities and Exchange Commission on July 14, 2020.

As described in Note 5, this transaction is a related party transaction.

of the Series A Preferred Stock have no voting rights, except as required by applicable law or regulation, and no dividends accrue or

are payable on the Series A Preferred Stock.

The holders of Series A Preferred Stock are entitled to a liquidation preference at a liquidation

value of $ 1,000 per share aggregating to $ 46,868,000 , and the Company has the right to redeem all or any portion of the then outstanding

shares of Series A Preferred Stock, pro rata among all holders, at a redemption price per share equal to such liquidation value per share.

The Series A Preferred Stock ranks senior to Common Stock and any other class of securities that is specifically designated as junior

to the Series A Preferred Stock with respect to rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution

or winding up of the affairs of the Company, in respect of a liquidation preference equal to its par value of $ 1,000 .

A holder of Series

A Preferred Stock has the option to convert each share of Series A Preferred Stock into a number of common shares in the Company equal

to the $1,000 liquidation preference divided by a conversion price of $ 6.48 or 154.32 shares subject to a Beneficial Ownership Limitation

of 19.99 %, as defined in the Share Exchange Agreement.

Additionally, the Company has the option to require conversion of all outstanding

Series A Preferred Stock into common stock at any time, subject to the Beneficial Ownership Limitation discussed.

In aggregate the Series

A Preferred Shares are convertible into 7,232,670 shares of the Company’s common stock at the date of issuance.

The Company evaluated

the classification of the Series A Preferred Shares under the guidance enumerated in ASC 470, 480, and 815 and determined that based

on the features noted above the instruments are accounted for as permanent equity.

On October 16, 2020, GBM converted 4,293 shares of

the Series A Convertible Preferred Stock into 662,500 shares of the Company’s common A Shares.

On May 28, 2021, GBM converted 35,316

shares of the Series A Convertible Preferred Stock into 5,450,000 shares of the Company’s common A Shares.

On June 21, 2021, GBM

converted 7,259 shares of the Series A Convertible Preferred Stock into 1,120,170 shares of the Company’s common A Shares.

January 19, 2021, the Company entered into an underwriting agreement, as amended by Amendment No.

1 effective as of January 19, 2021

2021 Underwriting Agreement”), with Aegis Capital Corp., as representative of the underwriters, which provided

for the issuance and sale by the Company and the purchase by the underwriters, in a firm commitment underwritten public offering (the

2021 Offering”), of 6,666,666 shares of the Company’s common stock, $ 0.02 par value per share.

Subject to the

terms and conditions contained in the Jan.

2021 Underwriting Agreement, the shares were offered in a public offering at a price of $ 3.60

per share, less certain underwriting discounts and commissions.

The Company also granted the underwriters a 45-day option to purchase

up to 1,000,000 additional shares of the Company’s common stock on the same terms and conditions for the purpose of covering any

over-allotments in connection with the Jan.

2021 Offering.

This overallotment was exercised in full.

The net offering proceeds to the

Company from the Jan.

2021 Offering are approximately $ 24.9 million, after deducting estimated underwriting discounts and commissions

and other estimated offering expenses

February 4, 2021, the Company entered into an underwriting agreement (the “Feb.

2021 Underwriting Agreement”) with Aegis

Capital Corp., as representative of the underwriters named therein, which provided for the issuance and sale by the Company and the purchase

by the underwriters, in a firm commitment underwritten public offering (the “Feb.

2021 Offering”), of 12,319,346 shares of

the Company’s common stock, $ 0.02 par value per share.

Subject to the terms and conditions contained in the Feb.

2021 Underwriting

Agreement, the shares were sold at a public offering price of $ 2.80 per share, less certain underwriting discounts and commissions.

Company also granted the underwriters a 45-day option to purchase up to 1,847,901 additional shares of the Company’s common stock

on the same terms and conditions for the purpose of covering any over-allotments in connection with the Feb.

2021 Offering, which over-allotment

option was exercised in full on February 9, 2021.

The net offering proceeds to the Company from the Feb.

2021 Offering are approximately

$ 36.14 million, including the exercise of the underwriter’s over-allotment option, and after deducting estimated underwriting discounts

and commissions and other estimated offering expenses.

May 26, 2021, the Company entered into an underwriting agreement (the “May 2021 Underwriting Agreement”) with Aegis Capital

Corp., as representative of the underwriters named therein, which provided for the issuance and sale by the Company and the purchase

by the underwriters, in a firm commitment underwritten public offering (the “May 2021 Offering”), of 29,000,000 shares of

the Company’s common stock, $ 0.02 par value per share.

Subject to the terms and conditions contained in the May 2021 Underwriting

Agreement, the shares were sold at a public offering price of $ 1.50 per share, less certain underwriting discounts and commissions.

Company also granted the underwriters a 45-day option to purchase up to 4,350,000 additional shares of the Company’s common stock

on the same terms and conditions for the purpose of covering any over-allotments in connection with the May 2021 Offering, which over-allotment

option was exercised in full on June 16, 2021.

The net offering proceeds to the Company from the May 2021 Offering are approximately

$ 45.75 million, including the exercise of the underwriter’s over-allotment option, and after deducting estimated underwriting discounts

and commissions and other estimated offering expenses.

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.

February 28, 2022, DSS entered into an Amendment to Stock Purchase Agreement (the “Amendment”) with its shareholder Alset

EHome International Inc.

(“AEI”), pursuant to which the Company and AEI have agreed to amend certain terms of the Stock Purchase

Agreement dated January 25, 2022 (the “SPA”).

Pursuant to the SPA, AEI had agreed to purchase 44,619,423

shares of the Company’s common stock for

a purchase price of $ 0.3810

per share, for an aggregate purchase price of

$ 17,000,000 .

Pursuant to the Amendment, the number of shares of the common stock of the Company that the AEI will purchase has been reduced to 3,986,877

shares for an aggregate purchase price of $ 1,519,000 .

This transaction was completed on March 9, 2022.

In addition, the Company’s Executive Chairman and a significant stockholder, Heng

Fai Ambrose Chan, is the Chairman, Chief Executive Officer and largest shareholder of AEI.

On March 10, 2022, the Company

issued 894,084 shares of common stock to Heng Fai Ambrose Chan pursuant to his employment agreement.

These shares were issued in consideration

of $ 340,000 due under this employment agreement.

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

3 unchanged sentences

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

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

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

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.

The financial results for these subsidiaries

have been presented as discontinued operations in the accompanying consolidated financial statements.

consideration paid to the Company under the Asset Purchase Agreement for the sale of the assets included a one-time cash payment of $ 683,000

and an additional contingent earn-out payment

of an aggregate amount of up to $ 517,000

based on future quarterly gross revenue of the

business to be conducted by the buyer with the sold assets.

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

the earn out will be recorded when determined realizable.

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

of this earn out, all of which was recognized

during the year ended December 31, 2020.

The net effect of all assets disposed of resulted in a net loss of $ 111,000

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,

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.

Also recorded was $ 240,000

of current liabilities held for sale –

discontinued operations and $ 505,000

of non-current liabilities held for sale –

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

September 30, 2020

Printed products

Total revenue

Costs and expenses:

Cost of revenue, exclusive of depreciation and amortization

Selling, general and administrative (including stock-based compensation)

Depreciation and amortization

Impairment of goodwill

Total costs and expenses

Operating loss

( 1,570,000 )

Other income (expense):

Interest expense

Loss on sale of assets held for sale

Income (loss) before income taxes

( 1,702,000 )

Income tax expense (benefit)

Income (loss) from discontinued operations

( 1,702,000 )

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”).

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

September 30, 2021

December 31, 2020

Current assets:

Accounts receivable, net

Prepaid expenses and other current assets

Total current assets

Property, plant and equipment, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

Accrued expenses and deferred revenue

Total current liabilities

Digital, Inc.

Statements of Operations - Discontinued Operations

For the Three Months Ended

For the Nine Months Ended

September 30,

Technology sales, services and licensing

Total revenue

Costs and expenses:

Cost of revenue, exclusive of depreciation and amortization

Selling, general and administrative (including stock-based compensation)

Depreciation and amortization

Total costs and expenses

Operating income

Income before income taxes

Income tax expense (benefit)

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.

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.

federal, U.S.

state and foreign jurisdictions.

We are routinely subject to examination by taxing authorities in these various jurisdictions.

At September 30, 2021, there are no ongoing

income tax audits.

Supplemental Cash Flow Information

following table summarizes supplemental cash flows for the nine-months ended September 30, 2021, and 2020:

During the three months ended March

31, 2022, the Company’s stock compensation approximated $ 4,000 or less than $ .01 basic and diluted loss per share.

Cash Flow Information

following table summarizes supplemental cash flows for the three-months ended March 31, 2022, and 2021:

Schedule of Supplemental Cash Flow Information

4 unchanged sentences

Termination of right of use lease liability

Shares received for loan origination fee

$ ( 3,000,000 )

Shares received for prepaid loan interest

$ ( 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

Debt conversion to equity

Shares issued for accrued bonus

Segment Information

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.

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.

These products

are designed to provide functionality and marketability while also providing counterfeit protection.

A second, BioHealth Group,

invests in, or acquires companies in the biohealth and biomedical fields, including businesses focused on the advancement of drug

discovery and prevention, inhibition, and treatment of neurological, oncological, and immune related diseases.

This division is also

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

The BioHealth Group is also targeting unmet, urgent medical needs.

A third operating segment, Securities and Fintech

Group (“Securities”) was established to develop and/or acquire assets and investments in the securities trading and/or

funds management arena.

Further, Securities, in partnership with recognized global leaders in alternative trading systems, intends

to own and operate in the US a single or multiple vertical digital asset exchanges for securities, tokenized assets, utility tokens,

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).

Company’s nine businesses lines are organized, managed and internally reported as five operating segments.

One of these operating

segments, Product Packaging, is the Company’s packaging and printing group.

Product 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.

These products are designed to provide functionality and marketability

while also providing counterfeit protection.

A second, Biotechnology, invests in, or acquires companies in the biohealth and biomedical

fields, including businesses focused on the advancement of drug discovery and prevention, inhibition, and treatment of neurological,

oncological, and immune related diseases.

This division is also developing open-air defense initiatives, which curb transmission of air-borne

infectious diseases, such as tuberculosis and influenza.

Biotechnology is also targeting unmet, urgent medical needs.

A third operating

segment, Securities and Investment Management (“Securities”) was established to develop and/or acquire assets and investments

in the securities trading and/or funds management arena.

Further, Securities, in partnership with recognized global leaders in alternative

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

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

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.

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

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, 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, Commercial

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.

From this financial platform, the Company shall provide an integrated suite of financial services for businesses that shall include commercial

business lines of credit, land development financing, inventory financing, third party loan servicing, and services that address the

financial needs of the world Gig Economy.

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:

segment structure presented below represents a change from the prior year for the inclusion of our Biotechnology, Securities, and Commercial

Lending 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 year ended

March 31, 2022 and 2021, as necessary, below for reconciliation purposes.

information concerning the Company’s operations by reportable segment for the three months ended March 31, 2022 and 2021 is as

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

September 30, 2021

Packaging and Printing

Investment Banking

Three Months Ended March 31, 2022

Product Packaging

Commercial Lending

Direct Marketing

Biohealth Group

Biotechnology

Depreciation and amortization

1 unchanged sentence

Stock based compensation

Impairment of goodwill

Net income (loss) from continuing operations

2 unchanged sentences

( 1,480,000 )

Capital expenditures

Identifiable assets

Three Months Ended

September 30,2020

Packaging and Printing

Direct Marketing

Biohealth Group

Depreciation and amortization

Interest expense

Stock based compensation

Net income (loss) from continuing operations

( 8,951,000 )

1 unchanged sentence

Identifiable assets

Nine Months Ended

September 30, 2021

Packaging and Printing

Investment Banking

Three Months Ended March 31,2021

Product Packaging

Commercial Lending

Direct Marketing

Biohealth Group

Biotechnology

Depreciation and amortization

1 unchanged sentence

Stock based compensation

Impairment of goodwill

Net income (loss) from continuing operations

2 unchanged sentences

( 4,062,000 )

( 10,058,000 )

( 21,462,000 )

Capital expenditures

Identifiable assets

Nine Months Ended

September 30,2020

Packaging and Printing

Direct Marketing

Biohealth Group

Depreciation and amortization

Interest expense

Stock based compensation

Net income (loss) from continuing operations

Capital expenditures

Identifiable assets

following tables disaggregate our business segment revenues by major source:

Schedule of Disaggregation of Revenue

Printed Products Revenue Information:

Three months ended September 30, 2021

Packaging Printing and Fabrication

Commercial and Security Printing

Total Printed Products

Three months ended September 30, 2020

Packaging Printing and Fabrication

Commercial and Security Printing

Total Printed Products

Nine months ended September 30, 2021

Products Revenue Information:

Three months ended March 31, 2022

Packaging Printing and Fabrication

1 unchanged sentence

Total Printed Products

Nine months ended September 30, 2020

Three months ended March 31, 2021

Packaging Printing and Fabrication

2 unchanged sentences

Direct Marketing

Three months ended September 30, 2021

Direct Marketing Internet Sales

Total Direct Marketing

Three months ended September 30, 2020

Direct Marketing Internet Sales

Total Direct Marketing

Nine months ended September 30, 2021

Three months ended March 31, 2022

Direct Marketing Internet Sales

Total Direct Marketing

Nine months ended September 30, 2020

Three months ended March 31, 2021

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

Three months ended March 31, 2022

Rental income

Total Rental Income

Nine months ended September 30, 2020

Three months ended March 31, 2021

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 .

Management Fee Income

months ended March 31, 2022

Management fee income

Total Management fee income

months ended March 31, 2021

Management fee income

Total Management fee income

Net Investment Income

months ended March 31, 2022

Net investment income

Total Management fee income

months ended March 31, 2021

Management fee income

Total Management fee income

On April 29, 2022,

a purported shareholder of the Company filed a lawsuit in the New York Supreme Court in Monroe County (the “Complaint”) against

the Company and members of the Company’s Board.

In general, the Complaint alleges that the defendants breached their fiduciary

duty to defendant with regards to the transactions described in proposals 1 and 2 in our definitive proxy statement.

believes that the claims asserted in the above-described actions are without merit and that no supplemental disclosure is required under

applicable law.

However, in order to moot the unmeritorious disclosure claims, to avoid the risk of the above-described actions delaying

or adversely affecting the transactions and to minimize the costs, risks and uncertainties inherent in litigation, without admitting

any liability or wrongdoing, the Company has determined to voluntarily supplement its proxy statement.

plaintiff has withdrawn a request for hearing on their order to show cause to enjoin us from going forward on our proxy proposals 1 and

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