What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-05-16 compared with 2021-11-18 · 308 added, 316 removed, 190 unchanged (77% of the section changed)

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in the forward-looking statements.

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

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”

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business lines are:

(1) Premier Packaging, (2) Direct Marketing/Online Sales Group, (3) IP Monetization, (4) BioHealth Group, (5) Securities

and Fintech Group, (6) Energy Group, (7) Secure Living, (8) Blockchain Technology, and (9) Investment Banking.

Each of these business

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

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

(1) Premier Packaging Corporation

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

(“IP Technology”).

Premier Packaging operates

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

It markets, manufactures, and sells mailers,

photo sleeves, sophisticated custom folding cartons, and complex 3-dimensional direct mail solutions designed to provide functionality,

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

IP Technology

Management Inc., manages, licenses, and acquires intellectual property assets for the purpose of monetizing these assets through a variety

of value-enhancing initiatives, including, but not limited to, investments in the development and commercialization of patented technologies,

licensing, strategic partnerships, and commercial litigation.

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 use, healthy living and lifestyle, and travel.

Direct will also help to support the direct selling industry

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

addition to the three business lines and subsidiaries listed above 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.

(“DSS 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 others.

(7) Secure Living, led by DSS Secure

(“DSS Secure Living”), a Nevada Corporation, develops top of the line advanced technology, energy efficiency,

quality of life living environments and home security for everyone for new construction and renovations of residential single and multifamily

living facilities.

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

(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 Sept 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 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.

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

LiquidValue Asset Management Pte Ltd., AMRE Asset Management, Inc.

and American Medical REIT Inc.

under which it acquired a 52.5% controlling

ownership interest in AMRE Asset Management Inc.

(“AAMI”) which currently has a 93% equity interest in American Medical REIT

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

and formulate investment strategy for AMRE.

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

acquisition and divestments in accordance with the investment strategies.

AMRE is a Maryland corporation, organized for the purposes

(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 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.

AMRE was formed to originate, acquire,

the REIT was formed to originate, acquire,

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

AMRE is planned to qualify as a Real Estate Investment Trust for

federal income tax purposes, which will provide.

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

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

of AMRE at a per share price of $10, for a total consideration of $2,645,250.

The additional 264,525 Class A Common Shares acquired increases

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

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

(“Impact BioMedical”), pursuant to a Share

Exchange Agreement by and among the Company, DSS BioHealth Security, Inc.

(“DSS BioHealth”), Alset International Limited

(formally Singapore eDevelopment Ltd.), and Global Biomedical Pte Ltd.

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

shareholders (the “Share Exchange”).

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

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

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

As a result of the Share Exchange, Impact BioMedical is now a

wholly owned subsidiary of DSS BioHealth, the Company’s wholly owned subsidiary.

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

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.

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

entered into a corporate venture to form and operate a

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

DSS Securities,

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

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

(“Presidio”), a

Maryland corporation, that invests primarily in commercial properties, such as office, industrial and retail properties, as well as in

residential across the United States.

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

at $5.00 per share for a total purchase price of $1,000,000.

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

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

Under the terms of this distribution agreement, Impact

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

The products to be distributed

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

Kids ProbioticsTM, and PGut Baby ProbioticsTM.

Under the terms of the ten-year distribution agreement, Impact BioMedical will have exclusive

rights to distribute the products within the United States, Canada, Singapore, Malaysia, and South Korea and non-exclusive distribution

rights in all other countries.

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

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

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 technology.

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.

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

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in prepayment of interest for the first year.

As of September 30, 2021, the Company held 91,460,978 class A common shares equating to

a 46.8% ownership interest in SHRG with aggregate fair value of the Company’s investment in SHRG at September 30, 2021, of approximately

The Company, via three (3) of the Company’s existing board members, currently holds four (4) of the five (5) SHRG board

of director seats.

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

Board, along with Mr.

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

May 4, 2020), and Mr.

As of and through June 30, 2020, the Company classified its investment in Sharing Services

(“SHRG”), a publicly traded company, as marketable equity security and measured it at fair value with gains

and losses recognized in other income.

In July 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.

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%.

via three (3) of the Company’s existing board members, currently holds four (4) of the five (5) SHRG board of director seats.

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

Heng Fai Ambrose 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).

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were closed on March 21, 2021, and March 29, 2021, respectively, the Company owns an approximate 15.7% equity position in Vivacitas.

Seller’s largest shareholder is Mr.

The Seller’s largest shareholder is Mr.

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

On July 22, 2021, the Company exercised 1,000,000 of the available options under the Vivacitas Agreement #1, increasing

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

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

Company’s current equity position in Vivacitas approximates 16%.

April 21, 2021, the Company announced its wholly owned subsidiary, Premier Packaging Corporation’s intentions to relocate from

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In connection with this relocation, Premier Packaging has entered

into an agreement to sell its current Victor location with the anticipated closing date of January 31, 2022.

into an agreement to sell its current Victor location and closed on the transaction in March 2022.

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

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In accordance

with Topic 805, the acquisition of the medical acquired 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

This property was appraised at approximately $7,150,000, of which $6,027,000 and $815,000 was allocated to the facility

and land respectively.

Also include in the value of the property is $308,000 of intangible assets with an estimated useful life of 11

Contained within the sale-purchase agreement for this facility, is a $1,500,000 earnout due to the seller if certain criteria

As of September 30, 2021, no liability has been recorded for this earnout as management determined it is currently remote.

with Topic 805, the acquisition of the medical acquired 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.

property was appraised at approximately $7,150,000, of which $6,027,000 and $815,000 was allocated to the facility and land respectively.

Also include in the value of the property is $308,000 of intangible assets with an estimated useful life of 11 years.

Contained within

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

31, 2022, no liability has been recorded for this earnout as management determined it is currently remote.

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

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APB 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

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,

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rendered in its role as RIA, the Trust shall pay a fee for each fund calculated as a percentage of the average daily net assets.

$600,000 consideration given is recorded as an Other intangible asset, net on the Consolidated Balance Sheet at September 30, 2021.

the RIA Agreement has no defined period, this asset has been deemed an infinite life asset and no amortization has been taken.

$600,000 consideration given is recorded as an Other intangible asset, net on the Consolidated Balance Sheet at March 31, 2022.

As the RIA Agreement has no defined period, this asset has been deemed an infinite life asset and no amortization has been taken.

December 23, 2021, DSS purchased 50,000,000 shares at $0.06 per 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

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%.

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.

Currently, 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.

The Company markets its products and services

through its independent sales force, using its proprietary websites, including:

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

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

The Company’s

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

by OTC Markets Group Inc.

five reporting segments are as follows:

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

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

Premier operates in the paper board folding carton, smart packaging,

and document security printing markets.

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

and complex 3-dimensional direct mail solutions.

These products are designed to provide functionality and marketability while also providing

counterfeit protection.

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

(“Investment Bank”) This segment 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

(“BioHealth”) The BioHealth Group is our business line created to invest in, or acquire companies in the biohealth

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

neurological, oncological, and immune related diseases.

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

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

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

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

Its subsidiaries are currently headquartered

in Rochester, NY.

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

and Fintech Group:

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

the securities trading and/or funds management arena.

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

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

assets, utility tokens, 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.

This group is headquartered in Huston, Texas.

Marketing/Online Sales Group:

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

Systems, Inc.

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

of peer-to-peer direct marketing.

Direct specializes in marketing and distributing its products and services through its subsidiaries,

partner networks, and online marketplaces.

Direct marketing products include, among other things, nutritional and personal care products

sold throughout North America, Asia Pacific and Eastern Europe.

Over the past 18 months, Direct has made substantial investments in acquiring

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

Additionally, it has acquired and developed

an independent contractor sales force.

It has also made substantial investments into other direct marketing companies, including its

investment and partnership with Sharing Services Global Corporation (OTCQB:

SHRG) (“Sharing Services” or “SHRG”),

which as of September 30, 2021, Decentralized owned approximately 47% of the outstanding shares of Sharing Services.

Currently, Direct

and SHRG operate offices in USA, Canada, Hong Kong, Singapore, S.

Korea, Australia, New Zealand, Malaysia, and Singapore, with additional

offices or presence being added monthly.

Decentralized sharing systems’ mission is to become the leading direct sales platform,

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

of operations for the three- and nine-months ended September 30, 2021, as compared to the three- and nine-months ended September 30,

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

specialty foods, confections, photo packaging and direct marketing industries, among others.

The group also provides active and intelligent

packaging and document security printing services for end-user customers.

In addition, the division produces a wide array of printed

materials, such as folding cartons and paperboard packaging, security paper, vital records, prescription paper, birth certificates, receipts,

identification materials, entertainment tickets, secure coupons and parts tracking forms.

The division also provides resources and production

equipment for our ongoing research and development of security printing, brand protection, consumer engagement and related technologies.

Premier is nearing completion of its facility expansion with operations expected to begin at the new 105,000 sq.

facility in early

over 25 years, Premier has been a market leader in providing solutions for paperboard packaging from consumer retail packaging and heavy

mailing envelopes, to sophisticated custom folding cartons and complex three-dimensional direct mail solutions.

Premier’s innovative

products and design team delivers packaging that provides functionality, marketability, and sustainability, with its fiber-based packing

solutions providing an alternative to traditional plastic packaging.

2019, we have accelerated the transformation of Premier’s operations, investing in state-of-the-art manufacturing equipment, people,

and processes to increase its capacity, improve quality and delivery, and to ensure it has the resources to support its growing customer

base and their evolving supply chain demands.

(“Commercial Lending”) through its operating company, American Pacific Bancorp (“APB”) provides

an integrated suite of financial services for businesses that 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.

to continue to develop and expand its lending platform to serve the small to mid-size commercial borrower and to continue to acquire

equity positions of commercial banks in the US to develop its lending network and to provide global banking services to clients worldwide,

including servicing markets with limited access to traditional US banking services.

APB’s target customers are businesses with

annual revenues of $5 million to $50+ million, including manufacturers, wholesalers, retailers, distributors, importers, and service

APB has expertise in, and services tailored for, specific industries, including beverage, food and agribusiness, technology,

healthcare, government, higher education, clean technology, and environmental services.

Biotechnology:

(“Biotech”) This sector, through its subsidiary Impact BioMedical, Inc.

targets unmet, urgent medical needs and expands

the borders of medical and pharmaceutical science.

Impact drives mission-oriented research, development, and commercialization of solutions

for medical advances in human wellness and healthcare.

By leveraging technology and new science with strategic partnerships, Impact Bio

provides advances in drug discovery for the prevention, inhibition, and treatment of neurological, oncology and immuno-related diseases.

Other exciting technologies include a breakthrough alternative sugar aimed to combat diabetes and functional fragrance formulations aimed

at the industrial and medical industry.

business model of BioHealth and Impact BioMedical revolves around two methodologies – Licensing and Sales Distribution.

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

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

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

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

This global distribution

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

and Investment Management:

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

trading or management arena, and to pursue, among other product and service lines, real estate investment funds, broker dealers, and

mutual funds management.

This business sector has already established the following business lines and associated products and services:

Management Fund:

In March 2020, DSS Securities formed AMRE (“American Medical REIT”) and its management company AAMI

(“AMRE Asset Management, Inc.) Through AAMI/AMRE, a medical real estate investment trust, fulfills community needs for quality

healthcare facilities while enabling care providers to allocate their capital to growth and investment in their contemporary clinical

and critical care businesses.

Urban and suburban communities are in need of modern healthcare facilities that provide a range of

medical outpatient services.

The funds ultimate product is an investor opportunity in a managed medical real estate investment trust.

Estate Title Services:

Alset Title Company, Inc.

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

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

Through bundled services, Alset Title Company, Inc.

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

Sentinel primarily operates as a financial intermediary, facilitating institutional trading of municipal and corporate bonds

as well as preferred stock, and accelerates the trajectory of the DSS digital securities business.

WestPark, a company we hold a minority interest in, is a full-service investment banking and securities brokerage firm

which serves the needs of both private and public companies worldwide, as well as individual and institutional investors.

BMI is a private investment bank specializing in corporate finance advising, raising equity, and venture services, providing

a global “one-stop” corporate consultancy to listed companies.

From corporate finance to professional valuation, corporate

communications to event management, BMI services companies in the US, Hong Kong, Singapore, Taiwan, Japan, Canada, and Australia.

AmericaFirst:

DSS AmericaFirst is a suite of mutual funds managed by DSS Wealth Management.

DSS AmericaFirst expects to expand

into numerous investment platforms including additional mutual funds, exchange-traded funds, unit investment trusts, and closed-end

DSS AmericaFirst currently consists of four mutual funds that seek to outperform their respective benchmark indices by applying

a quantitative rules-based approach to security selection.

(“Direct”) Through its holding company, Decentralized Sharing Systems, Inc.

and its subsidiaries and partners,

including Sharing Services Global Corporation provide an array of products and services, through an independent contractor network.

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

promotes products and services that fulfill its corporate position

of health, wealth, and happiness.

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

versions of themselves.

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

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

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

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

As to the happiness component ,

the company is working with other partners to either acquire or partner in products and/or services to allow its consumers to enjoy and

healthy living, including a global travel membership network.

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

brand, primarily in the United States and Canada.

Sharing Services markets its products and services through its independent contractor

distribution system and using its proprietary website:

www.elevacity.com.

In February 2021, the Company launched its new business brand,

“The Happy Co.,” at its Elevacity division.

Elevacity as several well-known and signature products, including its top product

lines of “Happy Coffees” and “Nootropic Beverages”.

Elevacity also sells a “healthy shake”, a “Keto

Coffee Booster”, “Energy Caps”, “XanthoMax© Happy Caps”, “Wellness Vitamin Patches”, various

beauty and skin care products, and other wellness products.

of operations for the three months ended March 31, 2022, as compared to the three months ended March31, 2021.

discussion should be read in conjunction with the financial statements and footnotes contained in this Quarterly Report and in our Annual

Report on Form 10-K for the year ended December 31, 2021.

months ended September 30,

the three- and nine-months ended September 30, 2021, total revenue increased 24% and 30% respectively, as compared to the

three- and nine-months ended September 30, 2020.

Revenues from the sale of Printed products increased 15%, and 27% during

the three- and nine-months ended September 30, 2021, respectively, as compared to the same period in 2020, primarily due to an increase

in packaging sales due to the addition of new customers and existing customers return to pre-Covid 19 operations.

Direct marketing revenue

increase illustrates the Company’s continued expansion into the direct marketing industry and its associated opportunities.

income is derived from the Company’s Investment in real estate, net.

Three months ended September 30,

Nine months ended September 30,

ended September 30,

Three months ended

March 31, 2022

Three months ended

March 31, 2021

Printed products

Rental income

Management fee income

Net investment income

Direct marketing

Total Revenue

the three months ended March 31, 2022, total revenue increased 175% as compared to the three months ended March 31, 2021.

Revenues from the sale of Printed products decreased 8% during the three months ended March 31, 2022, as compared to the same

period in 2021, primarily due to manufacturing down time related to relocating Premier’s manufacturing plant during Q1 2022.

Net investment income, Rental income and Management fee income, $129,000, $1,663,000 and $11,000 respectively, represent

new revenue streams for the Company and are associated with our Securities and Commercial Lending business segments.

The Company’s

Direct Marketing revenues increased 1040% in 2022 as compared to 2021 due primarily to the increase sales in our Asian

markets, and the inclusion of SHRG revenue for the period January 1, 2022, to March 31, 2022.

Three months ended

March 31, 2022

Months ended March 31, 2021

Costs and expenses

11 unchanged sentences

including materials, direct labor, transportation and manufacturing facility costs.

Costs of goods sold increased 24% and 38%

for the three- and nine-months ended September 30, 2021, respectively as compared to the same periods in 2020.

This increase is driven

primarily by an increase in manufacturing costs associated with the products sold as part of our Direct Marketing, and Packaging and

Printing segments, in particular, increases in freight, paper, and overhead costs.

general and administrative compensation costs, excluding stock-based compensation, increased 379% and 451% during the

three- and nine-months ended September 30, 2021, respectively, as compared to the same periods in 2020, primarily due to changes in headcount

year over year associated with addition of our Direct Marketing and BioHealth business segments, and performance bonus accruals approximating

$6.2 million.

Costs of goods sold increased 66% for the

three months ended March 31, 2022, respectively as compared to the same periods in 2021.

This increase is driven primarily by

an increase in manufacturing costs associated with the products sold as part of our Direct Marketing, and Packaging and Printing segments,

in particular, increases in freight, paper, and overhead costs.

general and administrative compensation costs, excluding stock-based compensation, increased 152% during the three months

ended March 31, 2022, as compared to the same periods in 2021, primarily due to additional head count associated with the inclusion

of SHRG compensation costs for the three months ended March 31, 2022.

and amortization include the depreciation of machinery and equipment used for production, depreciation of office equipment and building

1 unchanged sentence

non-compete agreements and patents, and internally developed patent assets.

For the three- and nine-months ended September 30, 2021,

depreciation and amortization expense increased 203% and 156% respectively as compared to the same periods in 2020 due primarily to the

amortization on newly acquired intangibles assets.

fees increased 33% and 56% respectively during the three- and nine-months ended September 30, 2021, as compared to the same periods

in 2020, mostly due to increases in legal services related to the Direct Marketing business segment, and yearly audit fees.

Also included is the depreciation of the buildings acquired

and amortization of intangible assets included in real estate acquisitions made by our REIT business line for the three months

ended March 31, 2022, depreciation and amortization expense increased 535% as compared to the same periods in 2021 due primarily

to the amortization on newly acquired intangibles assets, as well as the acquisition of several properties made by our REIT business

fees increased 25% during the three months ended March 31, 2022, as compared to the same periods in 2021, primarily

due to an increase in legal fees associated with the direct marketing segment, and due diligence fees related to potential

acquisitions.

based compensation includes expense charges for all stock-based awards to employees, directors and consultants.

1 unchanged sentence

option grants, warrant grants, and restricted stock awards.

Stock based compensation decreased 90% and 77% respectively during the three-

and nine-months ended September 30, 2021, as compared to the same periods in 2020, driven by the expiration of options awarded to employees

no longer with the Company.

Stock based compensation decreased 93% during the three months ended March

31, 2022, as compared to the same periods in 2021, driven by the expiration of options awarded to employees no longer with the Company.

and marketing which include internet and trade publication advertising, travel and entertainment costs, sales-broker commissions,

and trade show participation expenses.

The decreased of 13% and increase of 17% respectively during the three- and nine- months ended

September 30, 2021, as compared to the same periods in 2020, is a result of the commissions paid to brokers associated with the Company’s

Direct Marketing segment.

and utilities decreased by 30% and of 26% respectively during the three- and nine-months ended September 30, 2021, as compared to

the same period in 2020, primarily due to a decrease in facilities maintenance costs and utilities for the Company.

This was offset by

a new facility lease in Houston, Texas started during the first quarter of 2021.

and development costs increases during the three- and nine-months ended September 30, 2021, as compared to the same period in 2020

are due to the acquisition of Impact Biomedical, Inc.

in 2020 and the related costs for continued research and development of the acquired

product formulations as well as development of new technologies.

The increased 513% during the three months ended March 31, 2022 as compared to the same

periods in 2021, is a result of the commissions paid to brokers associated with the Company’s Direct Marketing segment, and

in particular, the inclusion of SHRG financial results for the three months ended March 31, 2022.

and utilities increased 161% during the three months ended March 31, 2022, as compared to the same period in 2021,

primarily due to a new facility lease in Houston, Texas started during the first quarter of 2021.

and development costs decreased 31% during the three months ended March 31, 2022, as compared to the same period in 2021 are

due to a decrease in such activities at our Impact Biomedical, Inc.

operating expenses consist primarily of equipment maintenance and repairs, office supplies, IT support, and insurance costs.

the three- and nine-months ended September 30, 2021, other operating expenses decreased 1% and increased 60% respectively as compared

to the same period in 2020 due to increased software costs associated with enhancements to the Company’s ERP system as well as

new software implement as part of the Company’s Direct Marketing segment and increased D&O insurance.

the three months ended March 31, 2022, other operating expenses increased 61% as compared to the same period in 2021 due to increased

software costs associated with enhancements to the Company’s ERP system as well as new software implement as part of the Company’s

Direct Marketing segment and increased D&O insurance premiums.

Income (Expense)

Three months ended September 30, 2021

Three months ended September 30, 2020

Nine months ended September 30, 2021

ended September 30,

Three months ended

March 31, 2022

Three months ended

March 31,2021

Other Income (Expense)

1 unchanged sentence

Interest Expense

Other Expense

Loss on investments

Loss on equity method investment

(Loss) gain on investments

(10,894,000 )

Gain/(Loss) on extinguishment of debt

Amortization of deferred financing costs and debt discount

Gain on extinguishment of debt

Gain on sale of assets

Total other income

1 unchanged sentence

$ (1,508,000 )

income is recognized on the Company’s money markets, notes receivable, and the accretion of the discount on convertible notes

receivable identified in Note 3.

income represents recognition of amortization of note origination fees.

expense increased 7% and 54% during the three- and nine-months ended September 30, 2021, respectively,

as compared to the same period in 2020, due to increasing debt balances.

loss on equity investment Loss from equity method investment is driven by the Company’s prorated portion of Sharing Services

Global Corp’s earnings for the three- and nine-months ended September 30, 2021.

gain on investments consists of realized losses on marketable securities which are recognized as the difference between the purchase

income is recognized on the Company’s money markets, and notes receivable, identified in Note 3.

expense represents cost associated with the impairment of investments and notes receivables for SHRG approximating $1,637,000.

expense increased 6790% during the three months ended March 31, 2022, as compared to the same period in 2021, due to increasing

debt balances.

on investments consists of net realized losses on marketable securities which are recognized as the difference between the purchase

price and sale price of the common stock investment.

For the three- and nine-months ended September 30, 2021, $0 and $519,000 respectively,

realized loss was recorded.

Also unrealized losses on marketable securities which are recognized on the change in fair market value on

our common stock investment driven by unrealized losses on Alset International Limited of approximately $839,000 for the nine-months

ended September 30, 2021.

Also included are the loss of approximately $9,477,000 on warrants which are recognized as the change in option

value of warrants held at September 30, 2021 (See Note 6).

on extinguishment of debt in April 2020, AAMI received funds from the SBA Paycheck Protection Program of $116,000.

As of January

8, 2021, this note was forgiven in full.

Three months ended September 30,

Nine months ended September 30,

ended September 30,

(Loss) income from continuing operations

Income (loss) from discontinued

operations, net of tax

Net (loss) income

For the three- and nine-months

ended September 30, 2021, the Company recorded net loss from continuing operations of $6,675,000 and $21,462,000 respectively,

as compared to a net gain of $5,182,000 and $3,511,000 during the same periods in 2020.

The increase in net loss during

the three- and nine-months ended September 30, 2021, as compared to the same periods in 2020 primarily reflect the company’s unrealized

losses on its marketable securities, and warrants, increased costs associated with new business lines, as well as increases in performance-based

compensation.

The loss from continuing operations for the three- and nine-months ended September 30, 2021, is inclusive of a $1,624,000

and $4,315,000 respectively, income tax benefit.

Our effective tax rate for the nine-month periods ended September 30, 2021,

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.

Also included are net unrealized losses on marketable securities which are recognized

on the change in fair market value on our common stock investment.

Loss on equity method investment

is the Company’s prorated portion of earnings on its investments treated under the equity method of account for the three months

ended March 31, 2022.

Gain on extinguishment

of debt consists of funds received by AAMI in April 2020, by the SBA Paycheck Protection Program of $112,000.

As of January 8, 2021, this note was forgiven in full.

Gain on sale of assets

is driven by the Company’s gain on the sale of Premier’s manufacturing facility in Victor, NY, as well as other capital assets.

Three months ended

March 31, 2022

Three months ended

March 31,2021

Loss from continuing operations

$ (8,950,000 )

$ (4,062,000 )

Income from discontinued operations, net of tax

$ (8,950,000 )

$ (4,012,000 )

the three months ended March 31, 2022, and March 31, 2021, the Company recorded net loss from continuing operations of $8,950,000

and $4,012,000 respectively.

The increase in net loss during the three months ended March 31, 2022, as compared

to the same periods in 2021 primarily reflect the inclusion of the Company’s SHRG subsidiary in the first quarter 2022.

AND CAPITAL RESOURCES

Company has historically met its liquidity and capital requirements primarily through the sale of its equity securities and debt financings.

As of September 30, 2021, the Company had cash of approximately $69.1 million.

As of September 30, 2021, the Company believes

As of March 31, 2022 the Company had cash of approximately $53.8 million.

As of March 31, 2022, the Company believes

that it has sufficient cash to meet its cash requirements for at least the next 12 months from the filing date of this Annual Report.

10 unchanged sentences

There have been

no material changes to such critical accounting policies as of the Quarterly Report on Form 10-Q for the quarter ended September 30,

no material changes to such critical accounting policies as of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

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 2. Management’s Discussion and Analysis