What changed in this filing

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Item 1. Financial Statements

2023-05-15 compared with 2022-11-14 · 683 added, 848 removed, 691 unchanged (69% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

Current assets:

Cash and cash

Accounts receivable, net

Current portion of notes

and cash equivalents

receivable, net

portion of notes receivable

expenses and other current assets

Total current assets

Property, plant and equipment, net

Investment in real estate, net

current assets

Property, plant and equipment,

Investment in real estate,

Other investments

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Right-of-use assets

Other intangible assets,

intangible assets, net

$ 226,750,000

$ 248,916,000

LIABILITIES AND STOCKHOLDERS’

AND STOCKHOLDERS’ EQUITY

expenses and deferred revenue

current liabilities

Accounts payable

Accrued expenses and deferred

Other current liabilities

Current portion of lease

portion of lease liability

portion of long-term debt, net

Total current liabilities

current liabilities

Long-term debt, net

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Other long-term liabilities

Commitments and contingencies

Stockholders’ equity

Preferred stock, $ .02 par

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

Liquidation value $ 1,000 per share,

zero aggregate.

zero on December 31, 2021).

Common stock, $ .02 par value;

shares authorized, 139,017,172 shares issued and outstanding ( 79,745,886 on December 31, 2021)

Additional paid-in capital

Deferred tax liability

and contingencies (Note 11)

Stockholders’

stock, $ .02 par

47,000 shares

authorized, 0 shares issued and outstanding ( 0

on December 31, 2022);

Liquidation value $ 1,000 per

share, zero aggregate

on December 31, 2022).

Common stock, $ .02

shares authorized, 139,017,172

shares issued and outstanding ( 139,017,172

on December 31, 2022)

paid-in capital

( 202,378,000 )

( 194,343,000 )

Total stockholders’

Stockholder’s Equity

Non-controlling

interest in subsidiaries

Total stockholders’

stockholders’ equity

liabilities and stockholders’ equity

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Consolidated Statements of Operations

the Three Months Ended

September 30,

the Nine Months Ended

September 30,

For the Three Months Ended

Printed products

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Net investment income

Direct marketing

Total revenue

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Cost of revenue

general and administrative (including stock based compensation)

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

Total costs and expenses

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( 7,319,000 )

( 32,042,000 )

( 15,991,000 )

Other income (expense):

Interest income

Dividend Income

Other income (expense)

Interest expense

( 1,703,000 )

Gain on extinguishment

Gain/(loss) on equity method

( 1,645,000 )

( 2,556,000 )

Interest expense

Loss on equity method investment

Loss on investments

( 2,869,000 )

( 2,996,000 )

( 10,479,000 )

( 10,894,000 )

on sale of assets

Loss from continuing operations

before income taxes

( 24,801,000 )

( 8,299,000 )

( 39,161,000 )

( 25,777,000 )

Income tax benefit

Loss from continuing operations

( 24,801,000 )

( 6,675,000 )

( 39,161,000 )

( 21,462,000 )

from discontinued operations, net of tax

( 24,801,000 )

( 6,675,000 )

Gain on sale of asset

Loss from operations before income taxes

( 8,633,000 )

( 8,951,000 )

Loss from continuing

operations attributed to noncontrolling interest

loss attributable to common stockholders

( 8,633,000 )

( 8,951,000 )

(Gain) loss from operations attributed to noncontrolling interest

Net loss attributable to common stockholders

( 8,035,000 )

1 unchanged sentence

Loss per common share:

Earnings per common share

- discontinued operations:

Shares used in computing

loss per common share:

Shares used in computing loss per common share:

accompanying notes to the condensed consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

the Nine Months Ended September 30,

the Three Months Ended March 31,

Cash flows from operating activities:

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Stock based compensation

Gain/(loss) on equity method investment

Loss (gain) on investments

Loss on allowance for obsolescence of inventory

Change in ROU assets and lease liabilities, net

Gain on extinguishment of debt

Deferred tax benefit

( 4,315,000 )

Accretion of debt discount, origination fee and prepaid interest

( 2,287,000 )

Gain on sale of assets

Loss on equity method investment

Loss on investments

Change in ROU assets

Change in ROU liabilities

Impairment of notes receivable and other investments

1 unchanged sentence

Accounts receivable

( 3,316,000 )

( 1,580,000 )

Prepaid expenses and other current assets

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( 9,551,000 )

Other liabilities

( 4,697,000 )

Other liabilities

Net cash used by operating activities

3 unchanged sentences

Purchase of property, plant and equipment

( 1,349,000 )

( 2,816,000 )

Purchase of real estate

( 6,565,000 )

Purchase of investment

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( 4,693,000 )

( 8,789,000 )

Disposal of property, plant and equipment

Asset acquired with APB acquisition

Purchase of equity investment

( 1,276,000 )

Sale of marketable securities

Issuance of new notes receivable, net origination fees

( 4,687,000 )

( 24,048,000 )

Disposal of property, plant and equipment

Change in equity investment

Payments received on notes receivable

Purchase of intangible assets

( 1,115,000 )

Net cash used by investing activities

( 17,816,000 )

Issuance of new notes receivable, net origination fees

Net cash provided (used) by investing activities

( 5,359,000 )

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Borrowings of long-term debt

Deferred financing fees

Debt conversion to equity in subsidiary

Issuances of common stock, net of issuance costs

Net cash provided by financing activities

Cash flows from discontinued operations:

Cash provided by discontinued operations

Cash provided by investing activities

Net cash used by discontinued operations

Net increase (decrease) in cash

Net cash (used) provided by financing activities

( 2,896,000 )

Net decrease in cash

( 5,558,000 )

( 2,784,000 )

Cash and cash equivalents at beginning of period

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Consolidated Statements of Changes in Stockholders’ Equity

controlling Interest in

Preferred Stock

Additional Paid-in

Non- controlling Interest in

Balance, December 31, 2022

3 unchanged sentences

$ 156,681,000

Issuance of common stock, net of expenses

Stock based payments

( 8,035,000 )

1 unchanged sentence

( 8,633,000 )

( 39,161,000 )

Balance, September

Balance, March 31, 2023

$ 317,126,000

5 unchanged sentences

$ ( 132,384,000 )

Beginning balance

$ 163,896,000

1 unchanged sentence

Issuance of common stock, net of expenses

Conversion of debt to equity in subsidiary

Stock based payments

Conversion of preferred stock

Acquisition of American Pacific Bancorp

( 8,048,000 )

1 unchanged sentence

( 8,951,000 )

Balance, September

$ 294,682,000

$ ( 120,379,000 )

$ 175,897,000

$ 199,292,000

Ending balance

Balance, March 31, 2022

$ 296,450,000

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market operated by OTC Markets Group Inc.

accompanying condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments, unless

otherwise indicated) necessary to present fairly our consolidated financial position as of September 30, 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, and 10-K/A for the fiscal year ended December 31, 2021 (“Form

10-K”, “Form 10-K/A”), and our other reports on file with the Securities and Exchange Commission (the “SEC”).

May 13, 2021, Sentinel Brokers, LLC.

(“Sentinel 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 Co.”),

a company registered in the state of New York, and in December 2022, Sentinel LLC exercised this option to increase its equity position

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

corporate bonds as well as preferred stock, and is registered with the Securities and Exchange Commission, is a member of the Financial

Industry Regulatory Authority, Inc.

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

January 24, 2022, DSS entered into a business consulting agreement with Sharing Services Global Corporation (“SHRG”).

part of this agreement, 50,000,000 warrants were exercised, which increased the Company’s ownership of SHRG to approximately 65 %.

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 up to 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 .

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.

May 17, 2022, the shareholders of the Company approved the issuance of up to 21,366,177

Shares of our Common Stock to Alset International, a related party, to purchase the Convertible Promissory Note issued by American

Medical REIT, Inc.

with a principal amount of $ 8,350,000

and accrued but unpaid interest of $ 367,000

through May 15, 2022.

This transaction was finalized in July 2022.

May 17, 2022, the shareholders of the Company approved the acquisition of 62,122,908 shares of True Partners Capital Holdings Limited

(“True Partners”), a company publicly traded on the Hong Kong stock exchange in exchange for 17,570,948 shares of DSS stock.

The True Partner shares were acquired from Alset EHome International, Inc.

(“Alset EHome”), a related party.

Ambrose Chan, our director and Executive Chairman, is also Chairman of the Board, Chief Executive Officer, and the largest beneficial

owner of the outstanding shares of Alset EHome.

This transaction was completed with the transfer of DSS share to Alset EHome on July

1, 2022 with the issuance of DSS shares, which were valued at $ 0.34 per share, to Alset EHome.

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, 2023 and December 31, 2022, 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, 2022 (“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.

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Reclassifications -

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

to conform to current period presentation, as have certain amounts for the three and nine months ended September 30, 2021.

For the three months ended March 31, 2022, $ 577,000 of was reclassified from Interest expense, to Cost of revenue

on the consolidated income statements 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

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adjusted costs approximate fair value.

Receivable – The Company extends credit to its customers in the normal course of business.

The Company performs

ongoing credit evaluations and generally do not require collateral.

Payment terms are generally 30 days but up to net 105 for

certain customers.

The Company carries its trade accounts receivable at invoice amount less an allowance for doubtful accounts.

periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based upon

management’s estimates that include a review of the history of past write-offs and collections and an analysis of current

credit conditions.

As of March 31, 2023, the Company established a reserve for doubtful accounts of approximately $ 29,000

December 31, 2022).

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

receivable, unearned interest, and related recognition - The Company records all future payments of principal and interest on

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

For equity method investments, the Company regularly

reviews its investments to determine whether there is a decline in fair value below book value.

If there is a decline that is other-than-temporary,

the investment is written down to fair value.

See Note 6 for further discussion on investments.

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

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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, air filtration systems,

and health and beauty products which and are stated at the lower of cost or net realizable value on the first-in, first-out

– Inventories consist primarily of paper, pre-printed security paper, paperboard, fully prepared packaging, air filtration

systems, and health and beauty products which and are stated at the lower of cost or net realizable value on the first-in, first-out

(“FIFO”) method.

Packaging work-in- process and finished goods included the cost of materials, direct labor and overhead.

At the closing of each reporting period, the Company evaluates its inventory in order to adjust the inventory balance for obsolete

and slow-moving items.

An allowance for obsolescence of approximately $ 434,000

and $ 388,000

associated with the inventory at our SHRG subsidiary was recorded as of September 30, 2022, and December 31, 2021, respectively.

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 $ 57,000 and $ 742,000 associated with the inventory at our SHRG subsidiary

was recorded as of March 31, 2023, and December 31, 2022, respectively.

Write- downs and write-offs are charged to cost of revenue.

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

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

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

acquisition costs are expensed as incurred.

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

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

and all acquisition costs are expensed as incurred.

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

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

See Note 5 regarding the

acquisitions.

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

Direct acquisition-related costs

are capitalized as a component of the acquired assets.

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

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

Tangible and intangible assets include

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

(if applicable).

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

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

capitalization rates and available market information.

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

and nine months ended September 30, 2022, potential dilutive instruments include both warrants and options of 0 and 11,597 shares respectively.

For the three and nine months ended September 30, 2021, potential dilutive instruments include both warrants and options of 29,314 and

13,596 shares respectively.

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 March 31, 2023, potential dilutive instruments included

warrants of 5,000

and for the three months ended March 31, 2022

potential dilutive instruments included both warrants and options of 3,556 and 11,930 .

Concentration

of Credit Risk - The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured

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, 2022, one customer accounted for 13 %

of our consolidated revenue.

As of September 30, 2022, this same customer accounted for 35 %

of our consolidated trade accounts receivable

During the nine months ended September 30, 2021, this customer accounted for 31 %

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

of December 31, 2022, two customers accounted for approximately 14 % and 6 % of our consolidated revenue and these two customers accounted

for approximately 36 % and 17 % of our consolidated trade accounts receivable balance.

of March 31, 2023, one customer accounted for approximately 23 %

of our consolidated revenue and 47 %

of our consolidated trade accounts receivable

During the nine months ended September

30, 2022, vendor 1 accounted for 43 % and vendor 2 accounted for 21 % of our consolidated inventory purchases.

As of September 30, 2021,

vendor 1 accounted for 76 % of our consolidated inventory purchases.

of our trade accounts receivable balance.

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

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We recognize penalties and accrued interest related to unrecognized tax benefits in income tax expense.

Accounting Pronouncements - In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, “Financial

Instruments-Credit Losses (Topic 326)”, which requires entities to measure all expected credit losses for financial assets held

at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

This replaces the

existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost.

guidance is effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022.

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

For Loans And Lease Losses - On January 1, 2023, the Company adopted amended accounting guidance “ ASU No.2016-13 –

Credit Losses” which requires an allowance for credit losses to be deducted from the amortized cost basis of financial assets

to present the net carrying value at the amount that is expected to be collected over the contractual term of the asset considering relevant

information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported

In estimating expected losses in the loan and lease portfolio, borrower-specific financial data and macro-economic assumptions

are utilized to project losses over a reasonable and supportable forecast period.

Assumptions and judgment are applied to measure amounts

and timing of expected future cash flows, collateral values and other factors used to determine the borrowers’ abilities to repay

After the forecast period, the company utilizes longer-term historical loss experience to estimate losses over the remaining

contractual life of the loans.

Prior to 2023, the allowance for credit losses represented the amount that in management’s judgment

reflected incurred credit losses inherent in the loan and lease portfolio as of the balance sheet date.

Going Concern - The accompanying consolidated financial statements have been prepared assuming that the Company

will continue as a going concern.

This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities

in the normal course of business.

These consolidated financial statements do not include any adjustments to the specific amounts and

classifications of assets and liabilities, which might be necessary should we be unable to continue as a going concern.

While the Company

has approximately $ 13.7 million in cash, the Company has incurred operating losses as well as negative cash flows from operating and

investing activities over the past two years.

from its $ 13.7

million in cash as of March 31, 2023, the Company believes it can continue as a going concern, due to its ability to generate

operating cash through the sale of its $ 13.4

million of Marketable Securities, and the anticipated receipts of principal and interest on its Notes receivable of approximately

million through March 31, 2024.

Also, our subsidiary Impact BioMedical is in the process of an IPO in which DSS projects to maintain

a minimum of 55 %

Initial conversations with underwriters are providing an estimate of $ 30

million potential capital raise.

This is expected to close early 3rd quarter 2023.

SHRG is in the process of up

listing to NASDQ and conversations with the underwriter involved illustrate an approximate raise of $ 15

million dollars.

A significant portion of the funds raised from this up listing will be used to repay loans SHRG owes to DSS.

Additionally, we are in negotiations with Pinnacle Bank to extend our note payable, approximating $ 40.2 million

through November 2024.

Company’s management intends to take actions necessary to continue as a going concern.

Management’s plans concerning these

matters include, among other things, continued growth among our operating segments, and tightly controlling operating costs and reducing

spending growth rates wherever possible to return to profitability.

In addition, the Company has taken steps, and will continue to take

measures, to materially reduce the expenses and cash burn at all corporate and business line levels.

the Company’s current operating levels and capital usage, we believe that without any further acquisition or investments, our $ 13.7

million in aggregate cash, as of March 31, 2023, along with the $ 13.4 million of Marketable Securities, and the anticipated receipts

of principal and interest on its Notes receivable of approximately $ 12 million through March 2024, would allow us to fund our nine business

lines current and planned operations through March 2024.

Based on this, the Company has concluded that substantial doubt of its ability

to continue as a going concern has been alleviated.

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

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sales and recognizes revenue as items are shipped.

of September 30, 2022, the Company had no unsatisfied performance obligations for contracts with an original expected duration of greater

of March 31, 2023, 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, 2022, and December 31, 2021, the Company

At March 31, 2023, and December 31, 2022, the Company

established a reserve for doubtful accounts of approximately $ 29,000 and $ 29,000 respectively.

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There were no sales commissions capitalized

as of September 30, 2022.

as of March 31, 2023.

and Handling Costs

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to these costs are reflected as revenue.

Note 12 for disaggregated revenue information.

See Note 14 for disaggregated revenue information.

Inventory consisted of the following

Finished Goods

Work in Process

Raw Materials

Inventory Gross

Less allowance for obsolescence

Inventory Net

Notes Receivable

October 15, 2020, APB entered into a loan agreement with (“Note 1”) with Borrower 1.

Note 1, 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 September

30, 2022 and December 31, 2021, approximated $ 0 and $ 39,000 , respectively and is classified as a Current portion of notes receivable

on the Consolidated Balance Sheets at December 31, 2021.

The outstanding balance of $ 39,000 was converted to equity in Borrower 1.

February 8, 2021, the Company entered into a convertible promissory note (“Note 1”) with Borrower 1, a company registered

in Gibraltar.

The Company loaned the principal sum of $ 800,000 , with principal and interest at a rate of 4 % , due in one year from date

The outstanding principal and interest as of September 30, 2022 and December 31, 2021, approximated $ 0 and $ 829,000 , respectively,

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

Borrower 2 repaid

the principal and interest in full in April 2022.

February 21, 2021, Impact BioMedical, Inc.

a subsidiary of the Company, entered into a promissory note (“Note 3”) with an

The Company loaned the principal sum of $ 206,000 , with interest at a rate of 6.5 % , and maturity date of August 19, 2022.

This note was amended to extend the maturity date to February 19, 2024 .Monthly payments are due on the twenty-first day of each month

and continuing each month thereafter until February 19, 2024, 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, 2022, and December 31, 2021 approximated $ 206,000 and $ 197,000 respectively, with $ 16,000 classified

in Current portion of notes receivable and $ 190,000 classified as Notes receivable on the accompanying consolidated balance sheets.

4, related party

May 13, 2021, and later amended in April 2022, Sentinel Brokers, LLC, a subsidiary of the Company entered a revolving credit

promissory note (“Note 4”) with Borrower 4, a company registered in the state of New York, of which Sentinel Brokers,

LLC., owns 24.9 % of the company’s outstanding common stock.

The Note 4 has an aggregate principal balance up to $ 3,000,000 ,

to be funded at request of Borrower 4.

Note 4, which incurs interest at a rate of 6.65 %

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

May 13, 2023 .

As of September 30, 2022 and December 31, 2021, there was $ 309,000

respectively, and is included in Current portion of notes receivable on the accompanying consolidated balance sheet.

The Company loaned the principal sum of $ 800,000 , with principal and interest at a rate of 4 %, due in one year from the date

Borrower 2 repaid the principal and interest in full in April 2022.

May 14, 2021, DSS Pure Air, Inc.

a subsidiary of the Company entered into a convertible promissory note (“Note 5”) with Borrower

a subsidiary of the Company entered a convertible promissory note (“Note 2”) with Borrower

2, a company registered in the state of Texas.

Note 5 has an aggregate principal balance up to $ 5,000,000 , to be funded at request of

Note 5interest accrues at a rate of 6.5 % due quarterly, and has a maturity date of May 14, 2023 .

Note 3 has an aggregate principal balance up to $ 5,000,000 , to be funded at the request of

Note 2, which incurs interest at a rate of 6.65 % due quarterly, has a maturity date of May 1, 2023 .

Note 2 contains an optional

conversion clause that allows the Company to convert all, or a portion of all, into new issued member units of Borrower 5 with the maximum

conversion clause that allows the Company to convert all, or a portion of all, into newly issued member units of Borrower 2 with the maximum

principal amount equal to 18% of the total equity position of Borrower 2 at conversion.

The outstanding principal and interest as of

September 30, 2022 and December 31, 2021, approximated $ 5,333,000 and $ 5,081,000 , respectively, which is included in Current portion

of notes receivable on the accompanying consolidated balance sheet.

March 31, 2023, and December 31, 2022, approximated $ 5,503,000 and $ 5,420,000 , respectively, which is included in current notes receivable

on the accompanying consolidated balance sheet.

September 23, 2021, APB entered into refunding bond anticipatory note (“Note 3”) with Borrower 3, which operates as a conservation

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The District Note was in the sum of $ 3,500,000 and incurs interest at a rate of 5.59 % per annum.

and interest are due in full on September 22, 2022 .

This 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.

At maturity, the outstanding principal and interest of $ 3,645,000

of Note 6 was converted into a new note with interest accruing at approximately 5.6 % per year with a maturity date of September 21, 2023.

The outstanding principal and interest of $ 3,650,000 and $ 3,540,000 of the Note 6 is included in Current portion of notes receivable

on the consolidated balance sheet at September 30, 2022 and December 31, 2021, respectively.

and interest are due in full on September 22, 2022 , and later amended to extend the maturity date to September 22, 2023.

This 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

The outstanding principal and interest of $ 3,751,000 and $ 3,701,000 of Note 3 is included in current portion of notes receivable

on the consolidated balance sheet at March 31, 2023 and December 31, 2022, respectively.

October 25, 2021, APB entered into loan agreement (“Note 4”) with Borrower 4, a company registered in the state of Utah.

Note 7 has an initial aggregate principal balance up to $ 1,000,000 , to be funded at request of Borrower 7, with an option to increase

Note 4 has an initial aggregate principal balance up to $ 1,000,000 , to be funded at the request of Borrower 4, with an option to increase

the maximum principal borrowing to $ 3,000,000 .

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and interest of approximately $ 884,000 and $ 896,000 of the note is included in current portion of notes receivable on the consolidated

balance sheet at September 30, 2022 and December 31, 2021, respectively.

The maturity date of Note 7 is in the process of being extended.

June 13, 2019, APB extended the credit (“Note 8”) to an individual (“Borrower 8”) in the form of a promissory

note for $ 250,000 , bearing interest at 15 % , with a maturity date of May 15, 2020 .

On June 5, 2020, the Company further extended the same

credit in the form of a promissory note for $ 250,000 , bearing interest at 15 % , with a maturity date of May 14, 2021 .

On August 30, 2021,

the Company further extended the same credit in the form of a promissory note for $ 250,000 , bearing interest at 12.5 % , with a maturity

date of May 15, 2023 .

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

$ 256,000 is included in Current portion of notes receivable on the consolidated balance sheet at September 30, 2022 and $ 260,000 is in

included in Notes receivable at December 31, 2021.

9, related party

October 7, 2021, HWH World, Inc., a subsidiary of the Company entered into a revolving loan commitment (“Note 9”) with

balance sheet at March 31, 2023 and December 31, 2022, respectively.

As of December 31, 2022, this note is in default.

The Company has

placed a reserve of $ 896,000 against this note as of December 31, 2022.

May 14, 2021, APB extended the credit (“Note 5”) to an individual (“Borrower 5”) in the form of two promissory

notes for $ 250,000 and $ 10,000 respectively, bearing interest at 12.5 %, with a maturity date of May 15, 2023 .

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 $ 260,000 and $ 9,300 are included in current portion of Notes receivable on the consolidated balance sheet

at March 31, 2023 and $ 252,000 and $ 9,000 are included in Note receivable at December 31, 2022.

October 27, 2021, HWH World, Inc., a subsidiary of the Company entered a revolving loan commitment (“Note 6”) with

Borrower 8, a company registered in Taiwan.

Note 9 has an principal balance of $ 52,000

Note 6 has a principal balance of $ 52,000

and incurred no interest through the maturity date of December

The outstanding principal at September 30, 2022 and December 31, 2021 is $ 61,000

The outstanding principal at March 31, 2023 and December 31, 2022 is $ 66,000

and $ 63,000 ,

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

This note was amended in April 2022 to extend the maturity

date through April 2023.

The Chief Operating Officer of DSS is the sole shareholder of Borrower 9.

was amended in April 2022 to borrow up to $ 102,000

and extend the maturity date through April 2023 bearing interest rate of 18 %.

The due date of this loan is currently being re-negotiated.

December 28, 2021, APB entered into promissory note (“Note 7”) with Borrower 7, a company registered in the state of California.

Note 10 has an principal balance of $ 700,000 .

Note 8 has a principal balance of $ 700,000 .

Note 7, 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 $ 759,000 and $ 700,000 of Note 10 is included in Current

portion of notes receivable on the consolidated balance sheet at September 30, 2022 and December 31, 2021.

On December 29, 2022, the maturity date of this note was extended to May 31, 2023 .

The outstanding

principal and interest of $ 707,000 and $ 701,000 of Note 7 is included in current portion of notes receivable on the consolidated balance

sheet at March 31, 2023 and December 31, 2022, respectively.

January 24, 2022, APB and Borrower 8 entered into a promissory note (“Note 8”) in the principal sum of $ 100,000 with interest

of 6 %, due annually, and maturing in January 2024 .

The outstanding principal and interest at September 30, 2022 approximates $ 104,000 ,

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

The outstanding principal and interest at March 31, 2023 approximates $ 107,000 and

at December 31, 2022 approximates $ 106,000 , and is included in Notes receivable on the accompanying consolidate balance sheet.

March 2, 2022, APB and Borrower 9, a corporation organized under the laws of the Republic of Korea entered into a promissory note (“Note

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8 %, and matures in March 2024 , with interest payable quarterly.

The outstanding principal and interest at September 30, 2022 is $ 887,000 ,

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

May 9, 2022, DSS PureAir and Borrower 5 entered into a promissory note (“Note 13”) in the principal sum of $ 210,000 with

interest of 10 % , is due in three quarterly installments beginning on August 9, 2022 with the first two payment consisting of interest

All unpaid principal and interest is due on February 9, 2023.

The outstanding principal and interest at September 30, 2022 approximates

The outstanding principal and interest at March 31, 2023 is $ 766,000 ,

net of $ 23,000 of unamortized origination fees, of which $ 376,000 is included in current notes receivable on the accompanying consolidated

balance sheet.

The outstanding principal and interest at December 31, 2022 is $ 874,000 net of $ 25,000 of unamortized origination

May 9, 2022, DSS PureAir and Borrower 11 entered into a promissory note (“Note 10”) in the principal sum of $ 210,000

with interest of 10 %,

is due in three quarterly installments beginning on August 9, 2022, with the first two payment consisting of interest only.

unpaid principal and interest are due on February

The outstanding principal and interest at March 31, 2023 approximates $ 221,000

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

14, related party

August 29, 2022, DSS Financial Management, Inc.

(“DSSFM”) entered into subordinated loan agreement (“Note

14”) with Borrower 14, a broker/dealer, of which DSSFM owns 24.9 % of the company’s outstanding common stock, in the

The outstanding principal and interest at December 31, 2022 approximates

$ 213,000 , and is included in current portions of notes receivable on the accompanying consolidate balance sheet.

August 29, 2022, DSS Financial Management Inc and Borrower 11 entered into a promissory note (“Note 11”) in the

principal sum of $ 100,000

with interest of 8 %,

due at maturity date of August

The outstanding principal and interest at September 30, 2022 approximates $ 101,000 ,

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

July 26, 2022, APB entered into a revolving credit promissory note (Note 15) with Borrower 15 for the principal sum up to $ 1,000,000

which accrues interest at 8 % per year and maturing on July 26, 2024 .

Interest payments are due quarterly beginning on September 30, 2022.

Principal and any unpaid interest is due upon maturity.

The outstanding principal and interest at September 30, 2022 approximates $ 917,000 ,

is due in three quarterly installments beginning on September 14, 2022.

All unpaid principal and interest is due on August

The outstanding principal and interest at March 31, 2023 approximates $ 101,000 and at December 31, 2022 was $ 100,000 ,

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

July 26, 2022, APB and Borrower 12 entered into a promissory note (“Note 12”) in the principal sum of $ 1,000,000 with interest

All unpaid principal and interest due on July 26, 2024 .

The outstanding principal and interest on March 31, 2023, approximates

$ 440,000 , net of $ 80,000 of unamortized origination fees and is included in Notes receivable on the accompanying consolidate balance

The outstanding principal and interest at December 31, 2022 approximates $ 924,000 , net of $ 66,000 of unamortized

origination fees and is included in Notes receivable on the accompanying consolidate balance sheet.

Financial Instruments

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

category as of September 30, 2022, and December 31, 2021:

Schedule of Cash and Marketable Securities by Significant Investment Category

category as of March 31, 2023, and December 31, 2022:

of Cash and Marketable Securities by Significant Investment Category

Adjusted Cost

Money Market Funds

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( 6,804,000 )

Investment in unconsolidated

( 3,174,000 )

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Marketable Securities

( 3,659,000 )

Convertible securities

$ ( 3,659,000 )

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

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determined for each individual security in the investment portfolio.

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.

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.

As of December 31, 2021, SHRG had total current assets of $ 28,494,000 and total assets of $ 45,660,000 .

Also as of December 31, 2021 SHRG

had total current liabilities of $ 10,418,000 and total liabilities of $ 22,463,000 .

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 nine months ended September 30, 2022, SHRG incurred $ 1,632,000 of losses

of which, $ 702,000 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.

Provision for Credit Losses

Effective December 31, 2022, the

Company adopted amended accounting guidance “ ASU No.2016-13 – Credit Losses” for the measurement of credit losses

on financial instruments and other financial assets.

That guidance requires an allowance for credit losses to be deducted from the amortized

cost basis of financial assets to present the net carrying value that is expected to be collected over the contractual term of the assets

considering relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability

of the reported amount.

The guidance replaced the previous incurred loss model for determining the allowance for credit losses.

As of December 31, 2022, and March

31, 2023 we have reviewed the entire loan portfolio as well as all financial assets of the Company for the purpose of evaluating the loan

portfolio and the loan balances, including a review of individual and collective portfolio loan quality, loan(s) performance, including

past due status and covenant defaults, assessment of the ability of the borrower to repay the loan on the loan terms, whether any loans

should be placed on nonaccrual or returned to accrual, any concentrations in any single borrower and/or industry that we might need to

further manage, and if any specific or general loan loss reserve should be established for the entire loan portfolio or for any specific

We analyzed the loan loss reserve

from three basis:

general loan portfolio reserves;

industry portfolio reserves, and specific loan loss reserves.

General Loan Portfolio Reserve

- Based upon a relatively young loan portfolio that are relatively new loans to generally credit worthy borrowers, we do not believe

that a substantial general loan portfolio reserve is due at this time.

However, we do recognize that some inherent risks are in all loan

portfolios, thus we recorded a general contingent portfolio reserve of $ 145,000 or approximately ¼ of 1% of the loan portfolio

loan balance as of December 31, 2022 and March 31, 2023.

Industry Portfolio Reserves

- Given the relatively young loan portfolio and a diversification of the portfolio over several different loan products, the risk

Accordingly, we have not recorded a discretionary reserve as of December 31, 2022 and March 31, 2023.

Specific Loan Reserves

- Previously, we had identified credit weaknesses and borrower

repayment weakness in the Borrow 6 loan, which has a current principal and interest balance of $ 896,000 .

As of December 31, 2022 and

March 31, 2023 we have recorded a specific loan loss reserve for the full balance due the Company.

The following table identifies the loan loss reserve for the period ending

March 31, 2023 and December 31, 2022:

Schedule of Loan loss reserve

General Loan Portfolio Reserve

Specific Loan Reserves

International Limited , related party

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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 September 30, 2022, and December 31, 2021, was approximately $ 3,370,000

and $ 4,909,000 respectively.

During the nine months ended September 30, 2022 and September 30, 2021, the Company recorded unrealized

loss on this investment of approximately $ 1,539,000 and $ 967,000 , respectively.

The fair value of the marketable security as of March 31, 2023, and December 31, 2022, was approximately $ 2,289,000 and $ 3,319,000

respectively.

During the three month ended March 31, 2023 and March 31, 2022, the Company recorded unrealized loss on this investment

of approximately $ 1,156,000 and $ 305,000 , respectively.

Park Capital, Inc.

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

October 10, 2019, the Company entered 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

This 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.

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

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 September 30, 2022.

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

at September 30, 2022.

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 December 31, 2022 and as of March 31, 2023.

Capital International LLC

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The Company’s portion

of net loss in BMIC during the nine months ended September 30, 2022, approximated $ 10,000 .

of net loss in BMIC during the three months ended March 31, 2023, approximated $ 4,300 .

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

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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

certain BioMed products to resellers.

The products to be distributed by the Company include BioMed’s PGut Premium Probiotics ® ,

PGut Allergy Probiotics ® , PGut SupremeSlim Probiotics ® , PGut Kids Probiotics ® , and PGut

Baby Probiotics ® .

the terms of the Distribution Agreement, the Company will have exclusive rights to distribute the products within the United States,

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

a related party, 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 805.

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.

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.

Heng Fai Ambrose Chan, the Chairman of the Company’s board

of directors and its largest shareholder.

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”),

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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 120,000

shares or 16 % as of September 30, 2022.

As of September 30, 2022, and December 31, 2021, the fair value of the Company’s investment

in Vivacitas is not readily available, and therefore is recorded at cost in the amount of $ 4,100,000 and $ 4,035,000 , respectively.

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

of the available options under the Vivacitas

Agreement #1 for $ 1,000,000 .

This, along with the shares received as part Vivacitas Agreement #2 increased the Company’s equity position in Vivacitas to approximately

as of December 31, 2022.

As of December 31, 2022, the Company determined to impair 100 %

of its investment in Vivacitas, in the amount of $ 4,100,000 .

September 2021, the Company’s subsidiary SHRG, Stemtech Corporation (“Stemtech”) and Globe Net Wireless Corp.

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

in Stemtech in exchange for:

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

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

“GNTW Warrant”).

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

9, 2024 , bears interest at the annual rate

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-dayperiod 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 Company 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.

November 2021, Globe Net Wireless Corp.

changed its corporate name to Stemtech Corporation.

In connection therewith, the

investee’s common stock is now traded under the symbol “STEK”.

The SHRG carries its investment in the Convertible

Note, the GNTW Warrant and the shares of GNTW common stock at fair value in accordance with GAAP.

As of March 31, 2023 and

December 31, 2022 the investment in the the GNTW Warrant and Convertible Note, were

valued at $ 144,000 , and $ 44,000 and $ 140,000 and $ 39,000 respectively.

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 for the home and car.

MojiLife’s products include esthetically attractive, cordless

scent diffusers for the home or for the car, as well as proprietary home cleaning products and accessories.

On a quarterly basis, SHRG

evaluates the recoverability of its investments and reviews current economic trends to determine the adequacy of its allowance for impairment

losses based on each investee financial performance data and other relevant information.

An estimate for impairment losses is recognized

when recovery in full of SHRG’s investment is no longer probable.

Investment balances are written off against the allowance after

the potential for recovery is considered remote.

In March of 2022, SHRG impaired the MojiLife investment as the evaluation at such time

determined the investment was not fully recoverable and 100 % valuation was reserved.

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 .

During the nine 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,

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

statement of operations., as it currently owns 24.9 % of Sentinel.

The Company’s portion of net gain in Sentinel for the nine months

ended September 30, 2022 approximated $ 143,000

May 13, 2021, Sentinel Brokers, LLC.

(“Sentinel 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 Co.”),

a company registered in the state of New York, for the purchase price of $ 300,000 .

During the nine 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

Up to and through November 30, 2022, Sentinel LLC accounted for its investment in Sentinel Co.

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.

Under the terms of this agreement, the Company had the option to purchase an

additional 50.1 % of the outstanding Class A Common Shares.

In December 2022, Sentinel LLC exercised this option to increase its equity

position to 75 %.

The acquisition of Sentinel Co.

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.

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

Co as if the acquisition took place on January 1.

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

of Business Acquisition, Pro Forma Information

2022 (unaudited)

$ ( 61,680,088 )

Basic loss per share

Diluted loss per share

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

Assets included in this acquisition are cash of $ 3,977,000 , receivables of $ 344,000 and fixed assets of $ 1,000 .

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, 2023.

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

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

In September 2021, the Company, Stemtech Corporation

(“Stemtech”) and Globe Net Wireless Corp.

(“GNTW”) entered into a Securities Purchase Agreement (the “SPA”)

pursuant to which the Company invested $ 1.4 million in Stemtech in exchange for:

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

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

(the “GNTW Warrant”).

Stemtech is a subsidiary of GNTW.

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

Company an origination fee of $ 500,000 , payable in shares of GNTW’s common stock.

The Convertible Note matures on September 9,

2024, 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

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 Company 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.

In November 2021, Globe Net Wireless Corp.

changed its corporate

name to Stemtech Corporation.

In connection therewith, the investee’s common stock is now traded under the symbol “STEK”.

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 and six months ended September 30, 2022, the Company recognized losses, before income tax, of $ 8.6 million and

$ 3.7 million in connection with its investment in the Convertible Note, the GNTW Warrant and the shares of GNTW common stock.

In September 2021, the Company entered into a Membership Unit Purchase

Agreement pursuant to which the Company 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 for the home

MojiLife’s products include esthetically attractive, cordless scent diffusers for the home or for the car, as well as proprietary

home cleaning products and accessories.

Short-Term and Long-Term Debt

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on the consolidated balance sheet.

During the nine months ended September 30, 2022, the PPP loan was forgiven in full and recorded as

a gain on extinguishment of debt on the accompanying consolidated statement of operations.

During the year ended December 31, 2022, the PPP loan was forgiven in full and recorded as a gain

on extinguishment of debt on the accompanying consolidated statement of operations.

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

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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, 2022, and December 31, 2021, the outstanding principal on the BOA Note was

$ 3,521,000 and $ 3,339,000 , respectively and had an interest rate of 4.63 %.

The outstanding balance at December 31, 2021 is included in

Long-term debt, net on the consolidated balance sheet.

As of September 30, 2022, $ 468,000 was included in Current portion of long-term

debt, net, and the remaining balance of approximately $ 3,053,000 recorded as Long-term debt, net The BOA Note contains certain covenants

that are analyzed annual.

As of September 30, 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 .

As of March 31, 2023, and December

31, 2022, the outstanding principal on the BOA Note was $ 3,290,000 and $ 3,406,000 , respectively and had an interest rate of 4.63 %.

outstanding balance at March 31, 2023 is included in Long-term debt, net on the consolidated balance sheet.

As of March 31, 2023, $ 479,000

was included in current portion of long-term debt, net, and the remaining balance of approximately $ 2,810,000 recorded as long-term debt,

The BOA Note contains certain covenants that are analyzed annual.

As of March 31, 2023, Premier is in compliance with these covenants.

August 1, 2021, AMRE Shelton, LLC., (“AMRE Shelton”) a subsidiary of AMRE, entered into a loan agreement (“Shelton

Agreement”) with Patriot Bank, N.A.

(“Patriot Bank”) in an amount up to $ 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

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.

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).

As of September 30, 2022,

the total balance due net of deferred financing costs of $ 79,000 is $ 4,821,000 .

$ 216,000 is classified as Current portion of

long-term debt, net, and the remaining balance of approximately $ 4,605,000

recorded as Long-term debt.

The affective interest rate

at December 31, 2022 was 4.25 %.

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

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

The net book value of these asset as of

March 31, 2023 approximated $ 6,727,000 .

Of the total financed, approximately $ 183,000

of principal and accrued interest is classified

as current portion of long-term debt, net, and the remaining balance of approximately $ 4,790,000

recorded as long-term debt, net of $ 17,500

in deferred financing costs.

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

1 unchanged sentence

The BMIC Loan matures on October

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

As of September 30, 2022 and December 31, 2021, $ 3,068,000 and $ 3,000,000 ,

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

As of March 31, 2023 and December 31, 2022, $ 512,000 and $ 3,000,000 ,

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

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.

Wilson Loan matures on October 12, 2022, and contains an auto renewal period of nine months.

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 nine months.

This loan was funded during March 2022.

As of September 30, 2022 $ 3,000,000 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.

As of March 31, 2023

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

As of December 31, 2022 $ 3,000,000 is included in Current portion of

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

October 27, 2021, HWH World, Inc., a subsidiary of the Company entered a revolving loan commitment (“Note 8”) with

Borrower 8, a company registered in Taiwan.

Note 8 has a principal balance of $ 52,000

and incurred no interest through the maturity date of December

The outstanding principal at March 31, 2023 and December 31, 2022 is $ 66,000

and $ 63,000 ,

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

This note was amended in April 2022 to extend the maturity

date through April 2023 bearing interest rate of 18 %.

This note is in the process of being extended.

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 supported the acquisition of three medical facilities located in Fort Worth, Texas, Plano, Texas, and

Pittsburgh, Pennsylvania for a purchase price of $ 62,000,000 .

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

The net book value of the assets acquired as of December 31, 2022 approximated $ 52,407,000 .

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 ful l.

affective interest rate at March 31, 2023 was 8.46 %.

The maturity date of November

2, 2023 , may be extended to November

As of December 31, 2021, the outstanding

principal and interest of the LifeCare agreement approximates $ 39,448,000 ,

As of December 31, 2022, the outstanding principal and interest of the LifeCare agreement approximates $ 40,193,000 ,

net of deferred financing costs of $ 270,000 .

As of September 30, 2022, the outstanding principal and interested, net of deferred financing costs of $ 352,000

approximates $ 40,133,000

is included in Current portion of long-term debt,

on the consolidated balance sheet.

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

31, 2021 At September 30, 2022, AMRE is in compliance with all covenants.

November 2021, AMRE entered into a convertible promissory note (“Alset Note”) with Alset International Limited (“Alset

International”), a related party, for the principal amount of $ 8,350,000 .

The Alset Note accrues interest at 8 % per annum and matures

As of March 31, 2023, the outstanding principal and interested approximates $ 40,486,000 ,

net of deferred financing costs of $ 270,000

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

Interest expense totaled $ 297,000

and $ 156,000 in March 2023 and March 2022 respectively.

November 2021, AMRE entered into a convertible promissory note (“Alset Note”) with Alset International Limited

(“Alset International”), a related party, 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 $ 8,805,000 is

included in long-term debt, net on the accompanying consolidated balance sheet on June 30, 2022.

On May 17, 2022, the shareholders of

the Company approved the issuance of up to 21,366,177 Shares our Common Stock to Alset International to purchase the Convertible Promissory

Note issued by American Medical REIT, Inc.

with a principal amount of $ 8,350,000 and accrued but unpaid interest of $ 367,000 through

May 15, 2022.

Principal and interest of approximately

is included in long-term debt, net on the accompanying consolidated balance sheet on December 31, 2022.

On May 17, 2022, the

shareholders of the Company approved the issuance of up to 21,366,177

Shares our Common Stock to Alset International to purchase the Convertible Promissory Note issued by American Medical REIT, Inc.

with a principal amount of $ 8,350,000

and accrued unpaid interest of $ 119,000

through March 31, 2023.

This transaction was finalized in July 2022 and is eliminated upon consolidation into DSS.

Interest expense

for this note totaled $ 286,000

in March 2023 and $ 338,000 in March 2022.

March 17, 2022, AMRE Winter Haven, LLC (“AMRE Winter Haven”) and Pinnacle Bank (“Pinnacle”) entered into a

1 unchanged sentence

maturing on March

Payments are to be made in equal, consecutive installments based on a 25-year amortization period with interest at 4.28 % .

7, 2024 to acquire a medical facility located in Winter Haven, Florida for a purchase price of $ 4,500,000 .

The assets acquired 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

The net book value of the assets acquired as of December 31, 2022 approximated $ 4,450,000 .

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.

This agreement contains certain covenants that are analyzed on an annual basis,

starting December 31, 2021 At September 30, 2022, AMRE is in compliance with all covenants.

The outstanding principal and interest,

net of debt issuance costs of $ 104,000 ,

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

December 31, 2022, AMRE is in compliance with all covenants.

The outstanding principal and interest, net of debt issuance costs of

approximates $ 2,982,000

and is included in Long-term debt, net on the accompanying consolidated balance sheet at September 30, 2022.

Services Global Corporation

October 2017, Sharing Services issued a Convertible Promissory Note in the principal amount of $ 50,000 (the “Note”) to HWH

International, Inc.

(“HWH” or the “Holder”), a related party.

HWH is affiliated with Heng Fai Ambrose Chan, who

became a Director of the Company in April 2020.

The Note is convertible into 333,333 shares of the Company’s Common Stock.

with issuance of the Note, the Company issued to HWH a detachable stock warrant to purchase up to an additional 333,333 shares of the

Company’s Common Stock, at an exercise price of $ 0.15 per share.

Under the terms of the Note and the detachable stock warrant,

the Holder is entitled to certain financing rights.

If the Company 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.

On August 9, 2022,

HWH and the Company executed an agreement to settle the Note and cancel the related stock warrant for $ 78,635.62 , which amount represents

the principal plus accrued interest.

The Company made the payment to HWH on August 9, 2022.

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

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

All other terms of the April

2018 Note remain unchanged.

This Note was repaid in full during March 2022.

and is included in long-term debt, net on the accompanying consolidated balance sheet at March 31, 2023.

Interest expense equaled

for March 2023 and $ 5,000 in March 2022.

March 30, 2023, Premier Packaging, a subsidiary of the Company entered into a loan and security agreement with Union Bank & Trust

Company for the principal amount of $ 790,000 and shall accrued interest at the rate of 7.44 %.

Principal and interest shall be repaid

in the approximate amount of $ 14,000 through March 2029.

This loan is collateralized by a Bobst Model Novacut and is guaranteed by DSS,

summary of scheduled principal payments of long-term debt, not including revolving lines of credit, subsequent to December 31,

2022, are as follows:

of Notes Payable and Long-term Debt

Lease Liability

Company has operating leases predominantly for operating facilities.

As of September 30, 2022, the remaining lease terms on our operating

leases range from less than one to twelve years.

As of March 31, 2023, the remaining lease terms on our operating

leases range from less than one to five years.

Renewal options to extend our leases have not been exercised due to uncertainty.

4 unchanged sentences

There are no significant finance leases as

of September 30, 2022.

minimum lease payments as of September 30, 2022, are as follows:

of March 31, 2023.

minimum lease payments as of March 31, 2023, are as follows:

of Lease Liability:

3 unchanged sentences

( 2,043,000 )

Present value of remaining

lease payments

Present value of remaining lease payments

Weighted-average remaining lease term (years)

1 unchanged sentence

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 year term of the lease.

contains an escalating payment clause, ranging from $ 61,000

per month to $ 78,000

per month, over the twelve-year term of the lease.

Commitments and Contingencies

Ronaldi Litigation

April 2019 DSS commenced an action in New York State Supreme Court, Monroe County, Index No.

E2019003542, against Jeffrey Ronaldi, our

former Chief Executive Officer.

The New York action sought a declaratory judgment that, contrary to informal claims made by him, Mr.

Ronaldi’s employment agreement with us expired by its terms and that he is not entitled to any cash bonuses or other unpaid amounts.

The lawsuit also sought an injunction against Mr.

Ronaldi from interfering with any of DSS’ IP litigation.

Ronaldi subsequently

commenced an action against DSS in the Superior Court of California, County of San Diego, on November 8, 2019, under case number 37-2019-00059664-CU-CO-CTL,

in which he alleged that DSS terminated his employment in April 2019 in order to avoid paying him certain employment-related amounts.

DSS was successful in dismissing the California case and consolidating it with the action pending in Monroe County, New York.

asserted counterclaims in the Monroe County, New York action similar to those he originally brought in California.

Ronaldi claimed

that his termination violated an alleged employment agreement or implied-in-fact employment agreement and that he should have remained

employed through 2019.

Ronaldi seeks to recover:

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

(ii) $ 769 in

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

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

(iv) $ 3,077 in

alleged unpaid sick time compensation;

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

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

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

and (viii) a $ 450,000 performance

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

He further claimed an interest in any

recovery in DSS Technology Management v.

Apple, Inc., Case No.

4:14-cf05330-HSG .

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.

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.

6:20-cv-06265-EAW.

pieces of Ronaldi litigation were settled and were discontinued with prejudice as of October 19, 2022.

Biosciences Litigation

February 15, 2021, Maiden Biosciences, Inc.

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

(“DSS”), Decentralized

Sharing Systems, Inc.

(“Decentralized”), HWH World, Inc.

(“HWH”), RBC Life International, Inc.

(RBC International)

(together, the “DSS Defendants”), Frank D.

Heuszel (“Heuszel”), RBC Life Sciences, Inc (“RBC”), Steven

Brown, Clinton Howard, and Andrew Howard (collectively, “Defendants”).

The lawsuit is currently pending in the United

States District Court Northern District of Texas, Dallas Division, and is styled and numbered Maiden Biosciences, Inc.

Document Security

Stems, Inc., et al., Case No.

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 $ 1,000,000 .

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 first asserted claims against Defendants for unjust enrichment,

fraudulent transfer under the Texas Uniform Fraudulent Transfer Act (“TUFTA”), and violation of the Racketeer Influenced

and Corrupt Organizations Act (“RICO”).

Maiden also sought 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 sought 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.

March 30, 2021, Defendants DSS, Decentralized, HWH, RBC International, and Heuszel filed a motion to dismiss seeking to dismiss Maiden’s

unjust enrichment, exemplary damages, and RICO claims against DSS, Decentralized, HWH, RBC Life International, Inc., and Heuszel, as

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

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 International, and Heuszel.

Among other things,

the Court held that Maiden failed to plausibly plead certain causes of action, including (1) the civil RICO claim against DSS, Decentralized,

HWH, RBC International, and Heuszel, (2) the TUFTA claim against DSS, and (3) the unjust enrichment claim against DSS and RBC International.

Notably, the Court declined the request to dismiss the TUFTA claim against RBC International.

On September 3, 2021, Maiden filed its

first amended complaint, asserting a single cause of action against the DSS Defendants, Heuszel, and RBC for an alleged TUFTA violation.

Maiden sought the same relief requested in its original complaint.

Maiden, however, abandoned its request for treble damages.

17, 2021, the DSS Defendants filed a motion to dismiss the amended complaint seeking to dismiss Maiden’s TUFTA claim to the extent

it seeks to avoid a transfer of assets owned by any of RBC’s subsidiaries, including but not limited to RBC Life Sciences USA,

Further, the motion to dismiss sought the dismissal of Maiden’s TUFTA claim against Heuszel.

19, 2021, the Court granted the motion to dismiss in part, dismissing Maiden’s claim against Heuszel and determined Maiden failed

to plead that it was a creditor of RBC USA or RBC’s other subsidiaries.

However, the Court permitted Maiden to replead once again.

December 17, 2021, Maiden filed its second amended complaint which now asserts a single TUFTA claim against only the DSS Defendants,

RBC, and RBC USA.

During the discovery period, the Parties conducted written discovery, production of documents, and depositions of fact

witnesses and expert witnesses.

The discovery period closed on August 9, 2022.

The DSS Defendants have engaged Stout Risius Ross, LLC

to provide expert opinions regarding the value of the assets at issue.

On August 15, 2022, the DSS Defendants filed a motion to exclude

Maiden’s designated expert.

The DSS Defendants’ motion to exclude is still before the Court for determination.

the Company is preparing for trial which is set for December 5, 2022 on the Court’s two-week docket.

The Company intends to vigorously

defend its position at trial that Maiden should recover nothing on account of its TUFTA claim.

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

been finally adjudicated.

Adverse decisions in any of the foregoing may have a material adverse effect on our results of operations,

cash flows or our financial condition.

The Company accrues for potential litigation losses when a loss is probable and estimable.

March 19, 2022, Impact BioMedical entered into a License Agreement (“Equivir License”) with a third-party (“Licensee”)

where the Licensor is granted the right, amongst other things, to develop, commercialize, and sell the Company’s Equivir technology.

Agreement – On March 19, 2022, Impact BioMedical entered into a License Agreement (“Equivir License”) with

a third-party (“Licensee”) where the Licensor is granted the right, amongst other things, to develop, commercialize, and

sell the Company’s Equivir technology.

In exchange, the Licensee shall pay the Company a royalty of 5.5% of net sales.

Under the terms of the Equivir Agreement, the Company

shall reimburse the Licensee for 50% of the development costs provided that the development costs shall not exceed $ 1,250,000 .

September 30, 2022, no liability has been recorded in relation to the Equivir License as development of the Equivir technology has not

begun and no reasonable amount can be estimated.

terms of the Equivir Agreement, the Company shall reimburse the Licensee for 50% of the development costs provided that the development

costs shall not exceed $ 1,250,000 .

As of March 31, 2023 and December 31, 2022, no liability has been recorded in relation to the Equivir

License as development of the Equivir technology has not begun and no reasonable amount can be estimated .

Stockholders’ Equity

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 up to 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 .

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 up to 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 .

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.

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.

March 10, 2022, the Company issued 894,084 shares of common stock to Mr.

7 unchanged sentences

These shares were issued in consideration of $ 5,848,000 due under this employment agreement.

May 17, 2022, the shareholders of the Company approved the issuance of up to 21,366,177

Shares of our Common Stock to Alset International, a related party, to purchase the Convertible Promissory Note issued by American

Medical REIT, Inc.

May 17, 2022, the shareholders of the Company approved the issuance of up to 21,366,177 Shares of our Common Stock to Alset International,

a related party, to purchase the Convertible Promissory Note issued by American Medical REIT, Inc.

with a principal amount of $ 8,350,000

and accrued but unpaid interest of $ 367,000

through May 15, 2022.

and accrued but unpaid interest of $ 367,000 through May 15, 2022.

This transaction was finalized in July 2022.

1 unchanged sentence

(“True Partners”), a company publicly traded on the Hong Kong stock exchange in exchange for 17,570,948 shares of DSS stock

The True Partner shares were acquired from Alset EHome International, Inc.

value on the agreed upon date of February 18, 2022 which was approximately $ 0.41 per share.

The True Partner shares were acquired from

Alset EHome International, Inc.

(“Alset EHome”), a related party.

Ambrose Chan, our director and Executive Chairman, is also Chairman of the Board, Chief Executive Officer, and the largest beneficial

owner of the outstanding shares of Alset EHome.

This transaction was completed with the transfer of DSS share to Alset EHome on July

1, 2022 with the issuance of DSS shares, which were valued at $0.34 per share, to Alset EHome.

Heng Fai Ambrose Chan, our director and Executive Chairman,

is also Chairman of the Board, Chief Executive Officer, and the largest beneficial owner of the outstanding shares of Alset EHome.

transaction was completed with the transfer of DSS share to Alset EHome on July 1, 2022.

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 nine months ended September

During the three months ended March

31, 2022, the Company’s stock compensation approximated $ 4,000 .

Supplemental Cash Flow Information

following table summarizes supplemental cash flows for the nine-months ended September 30, 2022, and 2021:

Schedule of Supplemental Cash Flow Information

following table summarizes supplemental cash flows for the three-months ended March 31, 2023, and 2022:

of Supplemental Cash Flow Information

Cash paid for interest

Non-cash investing and financing activities:

Termination of right of use lease asset

$ ( 744,000 )

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 )

Notes receivable converted to equity investments

Shares issued for the acquisition of marketable securities

Shares issued for the acquisition of notes receivable

Right of use asset addition

Shares issued in lieu of bonus cash

Segment Information

47 unchanged sentences

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

information concerning the Company’s operations by reportable segment for the three and nine months ended September 30, 2022 and

2021 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:

Schedule of Operations by Reportable Segment

Ended September 30, 2022

The amounts for these segments have been included in the corporate reporting segment for the year ended

March 31, 2023 and 2022, as necessary, below for reconciliation purposes.

information concerning the Company’s operations by reportable segment for the three months ended March 31, 2023 and 2022 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:

of Operations by Reportable Segment

Three Months Ended March 31, 2023

Product Packaging

Commercial Lending

Direct Marketing

Biotechnology

2 unchanged sentences

Interest Income

Net income (loss) from

continuing operations

( 1,077,000 )

( 15,379,000 )

( 3,182,000 )

( 4,475,000 )

( 24,801,000 )

Capital expenditures

Identifiable assets

Ended September 30,2021

Biotechnology

Depreciation and amortization

Interest expense

Stock based compensation

Income tax benefit

Net income (loss) from

continuing operations

( 1,304,000 )

( 4,311,000 )

( 6,675,000 )

Capital expenditures

Identifiable assets

Ended September 30, 2022

Biotechnology

Depreciation and amortization

Interest expense

Stock based compensation

Net income (loss) from

continuing operations

( 19,102,000 )

Net income (loss) from continuing operations

( 3,187,000 )

4 unchanged sentences

Identifiable assets

Ended September 30,2021

Three Months Ended March 31,2022

Product Packaging

Commercial Lending

Direct Marketing

Biotechnology

2 unchanged sentences

Stock based compensation

Income tax benefit

Net income (loss) from

continuing operations

( 9,088,000 )

Net income (loss) from continuing operations

( 4,486,000 )

5 unchanged sentences

following tables disaggregate our business segment revenues by major source:

Schedule of Disaggregation of Revenue

Products Revenue Information:

ended September 30, 2022

Packaging Printing and Fabrication

Commercial and Security

Printed Products

ended September 30, 2021

Packaging Printing and Fabrication

Commercial and Security

Printed Products

ended September 30, 2022

of Disaggregation of Revenue

Three months ended March 31, 2023

Packaging Printing and Fabrication

Commercial and Security

Printed Products

ended September 30, 2021

Commercial and Security Printing

Total Printed Products

Three months ended March 31, 2022

Packaging Printing and Fabrication

Commercial and Security

Printed Products

ended September 30, 2022

Direct Marketing

Internet Sales

Direct Marketing

ended September 30, 2021

Direct Marketing

Internet Sales

Direct Marketing

ended September 30, 2022

Direct Marketing

Internet Sales

Direct Marketing

ended September 30, 2021

Direct Marketing

Internet Sales

Direct Marketing

ended September 30, 2022

Rental income

Total Rental Income

ended September 30, 2021

Rental income

Total Rental Income

ended September 30, 2022

Commercial and Security Printing

Total Printed Products

Three months ended March 31, 2023

Direct Marketing Internet Sales

Total Direct Marketing

Three months ended March 31, 2022

Direct Marketing Internet Sales

Total Direct Marketing

Three months ended March 31, 2023

Rental income

Total Rental Income

ended September 30, 2021

Three months ended March 31, 2022

Rental income

Total Rental Income

ended September 30, 2022

Total Rental Income

ended September 30, 2021

Total Rental Income

ended September 30, 2022

Total Management fee

ended September 30, 2021

Total Management fee

Three months ended March 31, 2023

Management fee income

Total Management fee income

Three months ended March 31, 2022

Management fee income

Total Management fee income

Investment Income

ended September 30, 2022

Net Investment

Three months ended March 31, 2023

Net investment income

Total Investment income

ended September 30, 2021

Net Investment

Total Rental Income

ended September 30, 2022

Net investment

Total Management fee

ended September 30, 2021

Net Investment

Total Management fee

Three months ended March 31, 2022

Net Investment income

Total Investment income

Related Party Transactions

Company owns 127,179,311 shares or approximately 4 % of the outstanding shares of Alset International Limited (“Alset Intl”),

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

This investment is classified as a marketable

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

investments for a period of at least one year.

Company owns 127,179,291

shares or approximately 4 %

of the outstanding shares of Alset International Limited (“Alset Intl”), a company incorporated in Singapore and

publicly listed on the Singapore Exchange Limited.

This investment is classified as a marketable security and is classified as

long-term assets on the consolidated balance sheets as the Company has the intent and ability to hold the investments for a period

of at least one year.

The Chairman of the Company, Mr.

Heng Fai Ambrose Chan, is the Executive Director and

Chief Executive Officer of Alset Intl.

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 September 30, 2022, and December 31, 2021, was approximately $ 3,370,000

and $ 4,909,000 respectively.

During the nine months ended September 30, 2022 and September 30, 2021, the Company recorded unrealized

loss on this investment of approximately $ 1,539,000 and $ 967,000 , respectively.

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.

value of the marketable security as of March 31, 2023, and December 31, 2022, was approximately $ 2,289,000

and $ 3,319,000

respectively.

During the three-month ended March 31, 2023 and December 31, 2022, the Company recorded unrealized loss on this

investment of approximately $ 1,156,000

and $ 1,590,000 ,

respectively.

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

17 unchanged sentences

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

or about August 28, 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 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

The Company’s CEO, who is a licensed attorney, has a stated non-compensated 15% ownership interest in the venture.

was minimal activity for the nine months ended September 30, 2022 .

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

which provided for an investment of $ 40,000,000 by the Company into APB for an aggregate of 6,666,700 shares of the APB’s Class

A Common Stock, par value $ 0.01 per share.

Subject to the terms and conditions contained in the SPA, the shares issued at a purchase

price of $ 6.00 per share.

As a result of this transaction, DSS owns approximately 53 % of APB, and as a result its operating results will

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

The Company incurred approximately $ 36,000 in cost

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

The acquisition of APB meets the definition

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

with the acquisition method of accounting under Topic 805.

During the nine months ended September 30, 2022, APB had net income of $ 645,000 ,

of which, $ 306,000 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.

October 7, 2021, HWH World, Inc., a subsidiary of the Company entered into a revolving loan commitment (“Note 9”) with Borrower

9, a company registered in Taiwan.

Note 9 has an principal balance of $ 52,000 and incurred no interest through the maturity date of December

The outstanding principal at September 30, 2022 and December 31, 2021 is $ 61,000 and $ 52,000 , respectively, and is included

in the Current portion of notes receivable.

This note was amended in April 2022 to extend the maturity date through April 2023.

At December 31, 2022 the full value of this investment was impaired.

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

2 unchanged sentences

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

As of September 30, 2022 and December 31, 2021, $ 3,068,000 and $ 3,000,000 ,

As of March 31, 2023 and December 31, 2022, $ 512,000 and $ 3,000,000 ,

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

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.

Wilson Loan matures on October 12, 2022 , and contains an auto renewal period of nine months.

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 nine months.

This loan was funded during March 2022.

As of September 30, 2022 $ 3,000,000 is included in Current portion of long-term debt, net on the consolidated balance sheet.

As of March 31, 2023

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

Interest expense equaled $ 8,000

November 2021, AMRE entered into a convertible promissory note (“Alset Note”) with Alset International Limited (“Alset

3 unchanged sentences

Principal and interest of approximately $ 8,469,000 is

included in long-term debt, net on the accompanying consolidated balance sheet on June 30, 2022.

On May 17, 2022, the shareholders of

the Company approved the issuance of up to 21,366,177 Shares our Common Stock to Alset International to purchase the Convertible Promissory

Note issued by American Medical REIT, Inc.

with a principal amount of $ 8,350,000 and accrued but unpaid interest of $ 367,000 through

May 15, 2022.

This transaction was finalized in July 2022 and is eliminated upon consolidation into DSS.

included in long-term debt, net on the accompanying consolidated balance sheet on December 31, 2022.

On May 17, 2022, the shareholders

of the Company approved the issuance of up to 21,366,177 Shares our Common Stock to Alset International Limited (“Alset International”),

a related party, to purchase the Convertible Promissory Note issued by American Medical REIT, Inc.

with a principal amount of $ 8,350,000

and accrued but unpaid interest of $ 367,400 through May 15, 2022.

This transaction was finalized in July 2022.

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

2 unchanged sentences

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 .

Pursuant to the SPA, AEI had agreed to purchase up to 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 .

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.

May 13, 2021, and later amended in April 2022, Sentinel Brokers, LLC, a subsidiary of the Company entered a revolving credit promissory

note (“Note 4”) with Borrower 4, a company registered in the state of New York and related party.

Note 4 has an aggregate

principal balance up to $ 3,000,000 , to be funded at request of Borrower 4.

Note 4, which incurs interest at a rate of 6.65 % is payable

in areas until the principal is paid in full at the maturity date of May 13, 2023 .

As of September 30, 2022 and December 31, 2021, there

was $ 309,000 and $ 0 , respectively, outstanding on the, and is included in current notes receivable on the accompanying consolidated

balance sheet.

During the three months ended September 30, 2022, Sentinel Brokers converted approximately $ 1,364,000 of Note 4 into 13.64

preferred shares of Borrower 4.

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

(the “Note”) to HWH International, Inc.

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.

October 2017, Sharing Services issued a Convertible Promissory Note in the principal amount of $ 50,000 (the “Note”) to HWH

International, Inc.

(“HWH” or the “Holder”), a related party.

HWH is affiliated

with Heng Fai Ambrose Chan, who became a Director of the Company in April 2020.

The Note is convertible into 333,333 shares of the Company’s

Common Stock.

Concurrent with issuance of the Note, the Company issued to HWH a detachable stock warrant to purchase up to an additional

333,333 shares of the Company’s Common Stock, at an exercise price of $ 0.15 per share.

Under the terms of the Note and the detachable

stock warrant, the Holder is entitled to certain financing rights.

If the Company 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.

9, 2022, HWH and the Company executed an agreement to settle the Note and cancel the related stock warrant for $ 78,635.62 , which amount

represents the principal plus accrued interest.

HWH is affiliated with Heng Fai Ambrose Chan, who

became a Director of the Company in April 2020.

The Note is convertible into 333,333 shares of the Company’s Common Stock.

with issuance of the Note, the Company issued to HWH a detachable stock warrant to purchase up to an additional 333,333 shares of the

Company’s Common Stock, at an exercise price of $ 0.15 per share.

Under the terms of the Note and the detachable stock warrant,

the Holder is entitled to certain financing rights.

If the Company 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.

On August 9, 2022,

HWH and the Company executed an agreement to settle the Note and cancel the related stock warrant for $ 78,635.62 , which amount represents

the principal plus accrued interest.

The Company made the payment to HWH on August 9, 2022.

May 17, 2022, the shareholders of the Company approved the issuance of up to 21,366,177 Shares our Common Stock to Alset International

Limited (“Alset International”), a related party, to purchase the Convertible Promissory Note issued by American Medical

with a principal amount of $ 8,350,000 and accrued but unpaid interest of $ 367,400 through May 15, 2022.

This transaction was

finalized in July 2022.

May 17, 2022, the shareholders of the Company approved the acquisition of 62,122,908 shares of True Partners Capital Holdings Limited

7 unchanged sentences

Subsequent Events

On October 20, 2022, Sentinel Brokers, LLC.

entered into an on demand promissory note with Borrower 4, a related

party, in the amount of $ 1,000,000 .

This note accrues interest at 8 % per year with principal and interest due in full on April 20, 2023.

May 4, 2023, the Company distributed approximately 280 million shares of SHRG beneficially held by DSS and Decentralized Sharing Systems

in the form of a dividend to the shareholders of DSS common stock.

Upon completion of this distribution, DSS will retain an ownership

interest in SHRG of approximately 7 %.

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