What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-27 compared with 2023-03-31 · 1281 added, 1524 removed, 780 unchanged (78% of the section changed)

4 unchanged sentences

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Income (Loss)

Statements of Operations

Consolidated Statements of Cash Flows

2 unchanged sentences

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and

Stockholders of DSS, Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheet of DSS, Inc, and its subsidiaries (the “Company”) as of December

31, 2022, and the related consolidated statement of operations and comprehensive loss, stockholders’ equity, and cash flows for

the year ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31,

2022, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally

accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

To the Board of Directors and

Stockholders of DSS,

Opinion on the Financial Statements

We have audited the accompanying consolidated balance

sheets of DSS, Inc, and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements

of operations, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as

the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended,

in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required

to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations

of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform,

an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal

control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal

control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

Audit Matters

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated

or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

in real estate

described in Note 9 to the consolidated financial statements, the Company owns real estate properties through their subsidiaries with

a net book value of approximately $55,029,000.

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are

matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the

audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially

challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the

financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions

on the critical audit matters or on the accounts or disclosures to which they relate.

Investments in real estate

As described in Note 9 to the consolidated financial

statements, the Company owns real estate properties through their subsidiaries with a net book value of approximately $6,279,000, with

an additional $51,530,000 classified as held for sale.

We identified the value of the real estate to be a critical audit matter.

principal consideration for our determination of management’s assessment of impairment of the real estate as a critical audit matter

is the high degree of subjective auditor judgment associated with evaluating management’s determination of impairment of the real

estate properties, which is primarily due to the complexity of the valuation models used and the sensitivity of the underlying significant

The key assumptions used within the valuation models included site valuations and various approaches such as cost, sales

comparison, etc.

The calculated fair values are sensitive to changes in these key assumptions.

the Critical Audit Matter was addressed in the Audit

audit procedures related to the determination of the fair value of the real estate properties included the following, among others:

obtained management’s rollforward of investments in real estate from December 31, 2021, to December 31, 2022 and tested any

material additions by vouching to invoices and contracts.

obtained third party valuations that assess the fair value of the properties from management.

assessed the qualifications and competence of management and the qualifications, competence and objectivity of third-party specialist.

engaged a valuation firm to review the valuation reports provided by management to determine if the reports were reasonable and acceptable

based on the methodologies used by management’s third party valuation firm.

We also assessed the qualifications and competence

of the valuation firm.

compared the net book value of the real estate properties to the fair values of the properties per the third party valuations to

determine that the carrying value is less than fair value and no impairment exists.

assessed the sufficiency of the Company’s disclosure of its accounting for these real estate properties included in Note 9.

The principal consideration for our determination

of management’s assessment of impairment of the real estate as a critical audit matter is the high degree of subjective auditor

judgment associated with evaluating management’s determination of impairment of the real estate properties, which is primarily due

to the complexity of the valuation models used and the sensitivity of the underlying significant assumptions.

The key assumptions used

within the valuation models included site valuations and various approaches such as cost, sales comparison, etc.

The calculated fair values

are sensitive to changes in these key assumptions.

How the Critical Audit Matter was addressed in

Our audit procedures related to the determination

of the fair value of the real estate properties included the following, among others:

We obtained management’s rollforward of investments in real estate from December 31, 2022, to December 31, 2023 and tested any material additions by vouching to invoices and contracts.

We obtained third party valuations that assess the fair value of the properties from management.

We assessed the qualifications and competence of management and the qualifications, competence and objectivity of third-party specialist.

We engaged a valuation firm to review the valuation reports provided by management to determine if the reports were reasonable and acceptable based on the methodologies used by management’s third-party valuation firm.

We also assessed the qualifications and competence of the valuation firm.

We compared the net book value of the real estate properties to the fair values of the properties per the third-party valuations to determine that the carrying value is less than fair value and impairment was addressed properly.

During the year ended December 31, 2023, Management reclassified the land and building related to AMRE LifeCare and AMRE Winter Haven to assets held for sale.

We assessed the sufficiency of the Company’s disclosure of its accounting for these real estate properties included in Notes 2 and 9.

Evaluation of Intangible Assets and Goodwill for

As described in Notes 2 and 10 to the consolidated

financial statements, the Company holds Intangible Assets and Goodwill through its subsidiaries with

a net book value of approximately $20,193,000 and $26,862,000, respectively.

We identified the value of Intangible Assets and Goodwill

to be a critical audit matter.

The principal consideration for our determination

of management’s assessment of impairment of the Intangible Assets and Goodwill as a critical audit matter is the high degree of

subjective auditor judgment associated with evaluating management’s determination of impairment of Intangible Assets and Goodwill,

which is primarily due to the complexity of the valuation models used and the sensitivity of the underlying significant assumptions.

key assumptions used within the valuation models included qualitative and quantitative assessments.

The calculated fair values are sensitive

to changes in these key assumptions.

How the Critical Audit Matter was addressed in

Our audit procedures related to the determination

of the fair value of the Intangible Assets and Goodwill included the following, among others:

We obtained management’s rollforward of Intangible Assets and Goodwill in from December 31, 2022, to December 31, 2023 and tested any material additions and disposals by vouching to agreements.

We obtained management’s qualitative and quantitative assessments and third-party valuations that assess the fair value of the Intangible Assets and Goodwill.

We assessed the qualifications and competence of management and the qualifications, competence and objectivity of third-party specialists.

We reviewed the valuation reports provided by management to determine if the reports were reasonable and acceptable based on the methodologies used by management’s third-party valuation firm.

We audited the critical inputs used in the valuation calculations and utilized the services of an independent auditor engaged specialist to ensure the methodologies and assumptions utilized by the Company’s independent specialists were reasonable and in accordance with industry standards.

We assessed the sufficiency of the Company’s disclosure of its accounting for Intangible Assets and Goodwill included in Notes 2 and 10.

& CO., CPAs, P.C.

have served as the Company’s auditor since 2022.

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders of DSS, Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheets of DSS, Inc.

and its subsidiaries (the “Company”) as of December

31, 2022 and the related consolidated statements of operations and comprehensive (loss) income, stockholders’ equity and cash flows

for the year then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion,

the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December

31, 2022, and the results of its consolidated operations and its consolidated cash flows for the year then ended, in conformity with

accounting principles generally accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit,

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or

fraud, and performing procedures that respond to those risks.

Such procedures include examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides

a reasonable basis for our opinion.

discussed in Note 2, the 2021 consolidated financial statements have been restated to correct an error related to inventory.

Audit Matters

critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated

or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

acquisition of American Pacific Bancorp and real estate asset acquisitions

described in Note 8 to the consolidated financial statements, the Company completed the acquisition of American Pacific Bancorp.

the assets acquired and liabilities assumed were required to be recorded at fair value as of the acquisition date.

Also described in

Note 8, the Company completed acquisitions of real estate assets as each transaction was concentrated in a single identifiable asset

or group of assets.

The Company utilized third-party valuation specialists to assist in the preparation of these valuations.

We identified

the fair value determination of the acquired assets, liabilities assumed, and residual value of goodwill as well as the allocation of

the real estate assets’ purchase price to be a critical audit matter.

principal considerations for our determination that estimation of the fair value of the assets acquired in the acquisitions of is a critical

audit matter are that there was a high estimation uncertainty due to significant judgments with respect to assumptions used to estimate

the future revenues and cash flows, including revenue growth rates, operating margins, the discount rate, the valuation methodologies

applied by the third-party valuation specialist for the fair value of the intangible assets.

This in turn led to a high degree of auditor

judgment, subjectivity, and efforts in performing procedures and evaluating audit evidence related to management’s forecasted future

revenues and cash flows and valuation methodologies.

In addition, the audit effort involved the use of specialists to assist in performing

these procedures and evaluating the audit evidence obtained.

audit procedures included the following:

management’s process for developing the fair value estimates.

the market indicators used by management in developing their fair value estimates.

the completeness and accuracy of underlying data used in the fair value estimates.

an internal valuation specialist to evaluate:

methodologies used and whether they were acceptable for the underlying assets or operations and being applied correctly,

appropriateness of the discount rate used by recalculating the weighted average cost of capital, and

qualification of third-party valuation specialists engaged by the Company based on their credentials and experience.

Turner Stone & Company, LLP

have served as the Company’s auditor since 2021.

We have served as the Company’s auditor since 2022.

Jericho, New York

March 27, 2024

AND SUBSIDIARIES

5 unchanged sentences

Current portion of notes receivable

Assets held for sale

Prepaid expenses and other current assets

40 unchanged sentences

$ 248,916,000

accompanying notes.

See accompanying notes.

AND SUBSIDIARIES

Statements of Operations and Comprehensive Loss

Statements of Operations

the Years Ended December 31,

17 unchanged sentences

Interest expense

( 2,910,000 )

Litigation loss

Gain on extinguishment of debt

Gain/ (loss) on equity method investment

( 8,750,000 )

Gain on extinguishment of debt

Loss on equity method investment

Loss on investments

3 unchanged sentences

( 5,637,000 )

Impairment of fixed asset

Gain on Sale of Assets

Loss from continuing operations before income taxes

Impairment of fixed assets

Impairment of intangible assets

( 7,418,000 )

Impairment of investment in real estate

Impairment of goodwill

( 30,978,000 )

Income tax (loss) benefit

Loss from continuing operations

Provision for loan losses

( 3,794,000 )

Loss on sale of assets

( 1,300,000 )

Income (loss) from discontinued operations, net of tax

Loss before income taxes

( 97,499,000 )

( 69,490,000 )

Loss from continuing operations attributed to noncontrolling interest

Income tax loss

$ ( 97,503,000 )

$ ( 69,662,000 )

Net loss attributed to noncontrolling interest

Net loss attributable to common stockholders

2 unchanged sentences

Loss per common share:

Earnings per common share - discontinued operations:

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

accompanying notes.

See accompanying notes.

AND SUBSIDIARIES

2 unchanged sentences

Cash flows from operating activities:

Net loss from continuing operations

Net loss from operations

$ ( 97,503,000 )

$ ( 69,662,000 )

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

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

Depreciation and amortization

4 unchanged sentences

( 7,721,000 )

Change in ROU liabilities

Gain on extinguishment of debt

Deferred tax loss (benefit)

( 4,032,000 )

Deferred tax loss

Loss on sales of assets

Impairment of fixed assets

Impairment of notes receivable and other investments

Impairment of intangible assets

Impairment of real estate

Impairment of Goodwill

Impairment of accounts receivable

Impairment of notes receivable

Impairment of other investments

2 unchanged sentences

( 1,891,000 )

( 2,084,000 )

( 6,306,000 )

Prepaid expenses and other current assets

( 2,210,000 )

Increase (decrease) in liabilities:

Accounts payable

( 2,260,000 )

Accrued expenses

Other liabilities

( 15,646,000 )

Change in ROU liabilities

( 1,013,000 )

Other liabilities

Net cash used by operating activities

4 unchanged sentences

( 2,294,000 )

( 14,283,000 )

Purchase of real estate

( 56,794,000 )

Purchase of investment

( 4,130,000 )

Purchase of marketable securities

( 14,884,000 )

( 8,171,000 )

Disposal of property, plant & equipment

1 unchanged sentence

( 1,879,000 )

Asset acquired with Sentinel acquisition

Conversion of SHRG to consolidation

( 12,225,000 )

Change in Equity investment

1 unchanged sentence

( 1,046,000 )

( 3,621,000 )

Payment received on notes receivable

Sale of marketable securities

Purchase of intangible assets

( 18,110,000 )

Net cash used by investing activities

( 17,969,000 )

Net cash provided (used) by investing activities

( 17,969,000 )

4 unchanged sentences

Borrowings of long-term debt

Deferred financing fees

( 1,425,000 )

Issuances of common stock, net of issuance costs

Net cash provided by financing activities

Cash flows from discontinued operations:

Cash provide by discontinued operations

Cash provided by investing activities

Net cash used by discontinued operations

Net cash (used) provided by financing activities

( 2,417,000 )

Net decrease in cash

( 12,675,000 )

( 37,305,000 )

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

accompanying notes.

See accompanying notes.

AND SUBSIDIARIES

Statements of Changes in Stockholders’ Equity

the Years Ended December 31, 2022 and 2021

December 31, 2021

the Years Ended December 31,

Balance, December 31, 2021

$ 296,199,000

2 unchanged sentences

$ 198,185,000

of common stock, net of expenses

of Sentinel Brokers Company Inc

Acquisition of Sharing Services

Global Corporation

based payments

Issuance of common stock, net of expenses

Acquisition of Sentinel Brokers Company, Inc.

Acquisition of Sharing Services Global Corporation

Stock based payments

( 59,840,000 )

2 unchanged sentences

( 69,661,000 )

December 31, 2022

Balance, December 31, 2022

$ 319,766,000

5 unchanged sentences

$ ( 194,343,000 )

$ 125,562,000

$ 156,681,000

$ 319,766,000

$ ( 194,343,000 )

$ 125,562,000

$ 156,681,000

Issuance of common stock, net of expenses

Stock based payments

Conversion of preferred stock

Acquisition of American Pacific Bancorp

Acquisition of Sharing Services Global Corporation

Acquisition of Sentinel Brokers Company, Inc.

Fractional shares as a result of reverse stock split

Deconsolidation of Sharing Services Global Corporation

( 80,606,000 )

( 16,897,000 )

( 97,503,000 )

Balance, December 31, 2023

1 unchanged sentence

$ ( 256,176,000 )

accompanying notes.

$ 319,963,000

$ ( 256,176,000 )

See accompanying notes.

AND SUBSIDIARIES

1 unchanged sentence

DESCRIPTION OF BUSINESS

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

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

(a New York corporation,

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

change became effective on September 30, 2021.

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

to 26253C 102.

(together with its consolidated subsidiaries, referred to herein as “DSS,” “we,” “us,” “our”

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

business lines are:

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

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

Each of these business lines are in

different stages of development, growth, and income generation.

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

Description of Business

The Company, incorporated

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

On September 16, 2021, the

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

(a New York corporation, incorporated

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

This change became

effective on September 30, 2021.

maintained the same trading symbol “DSS”.

(together with its consolidated subsidiaries, referred to herein as “DSS,” “we,” “us,”

“our” or the “Company”) currently operates nine (9) distinct business lines with operations and locations

around the globe.

These business lines are:

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

Securities and Investment Management, (6) Alternative Trading (7) Digital Transformation (discontinued in 2023), (8) Secure Living

(discontinued in 2023), and (9) Alternative Energy (discontinued in 2023).

Each of these business lines are in different stages of development, growth,

and income generation.

Our divisions,

their business lines, subsidiaries, and operating territories:

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

1 unchanged sentence

(“Premier”), a New York corporation.

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

consumer product packaging, and document security printing markets.

It markets, manufactures, and sells sophisticated custom folding

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

Premier is currently located in its new facility in

Rochester, NY, and primarily serves the US market.

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

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

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

This division is also targeting unmet, urgent medical needs,

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

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

(“Decentralized”) provides services

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

specializes in marketing and distributing its products and services through its subsidiary and partner network, using the popular gig

economic marketing strategy as a form of direct marketing.

Direct Marketing’s products include, among other things, nutritional

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

(4) Our Commercial Lending business

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

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

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

activities closely related to banking, including loan syndication services, mortgage banking, trust and escrow services, banking technology,

loan servicing, equipment leasing, problem asset management, SPAC (special purpose acquisition company) consulting services, and advisory

capital raising services.

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

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

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

and other acute or post-acute care centers from leading clinical operators with dominant market share in secondary and tertiary markets,

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

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

portfolio of licensed medical real estate.

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

the securities trading and/or funds management arena.

Alternative Trading, in partnership with recognized global leaders in alternative

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

Premier operates in the paper board and fiber based folding

carton, consumer product packaging, and document security printing markets.

It markets, manufactures, and sells sophisticated custom

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

Premier is currently located in its new

facility in Rochester, NY, and primarily serves the US market.

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

acquire companies in the BioHealth and BioMedical fields, including businesses focused on the advancement of drug discovery and

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

This division is also targeting

unmet, urgent medical needs, and is developing open-air defense initiatives, which curb transmission of air-borne infectious

diseases, such as tuberculosis and influenza.

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

(“Decentralized”) provides services to assist companies in the emerging growth “Gig” business model of

peer-to-peer decentralized sharing marketplaces.

Direct Marketing’s products include, among other things, nutritional and

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

(4) Our Commercial Lending

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

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

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

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

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

acquisition company) consulting services, and advisory capital raising services.

(5) Securities and Investment Management was

established to develop and/or acquire assets in the securities trading or management arena, and to pursue, among other product and

service lines, broker dealers, and mutual funds management.

Also in this segment is the Company’s real estate investment

trusts (“REIT”), organized for the purposes of acquiring hospitals and other acute or post-acute care centers from

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

operator under a triple-net lease.

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

medical real estate.

(6) Alternative Trading was established to develop and/or acquire assets and investments in the securities

trading and/or funds management arena.

Alternative Trading, in partnership with recognized global leaders in alternative trading

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

assets, utility tokens, and cryptocurrency via an alternative trading platform using blockchain technology.

The scope of services within

this section is planned to include asset issuance and allocation (securities and cryptocurrency), FPO, IPO, ITO, PPO, and UTO listings

on a primary market(s), asset digitization/tokenization (securities, currency, and cryptocurrency), and the listing and trading of digital

assets (securities and cryptocurrency) on a secondary market(s).

(7) Digital Transformation was established to be a Preferred Technology

Partner and Application Development Solution for mid cap brands in various industries including the direct selling and affiliate marketing

Digital improves marketing, communications and operations processes with custom software development and implementation.

The Secure Living division has developed a plan for fully sustainable, secure, connected, and healthy living communities with homes incorporating

advanced technology, energy efficiency, and quality of life living environments both for new construction and renovations for single

and multi-family residential housing.

(9) The Alternative Energy group was established to help lead the Company’s future in the

clean energy business that focuses on environmentally responsible and sustainable measures.

Alset Energy, Inc, the holding company for

this group, and its wholly owned subsidiary, Alset Solar, Inc., pursue utility-scale solar farms to serve US regional power grids and

to provide underutilized properties with small microgrids for independent energy.

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

which provided for an investment of $ 40,000,200 by the Company into APB for an aggregate of 6,666,700 shares of the APB’s Class

A Common Stock, par value $ 0.01 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 became the majority owner of APB.

(see Note 9).

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

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

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

unpredictability and volatility.

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

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

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

LVAM executes within reliable platforms and broad market access and uses proprietary

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

Aimed at providing consistent returns

while offering the unique ability to liquidate the portfolio within 5 to 10 minutes under normal market conditions, LVAM provides an

array of advanced tools and products enabling customers to explore multiple opportunities, strengthen and diversify their portfolios,

and meet their individual investing goals.

December 23, 2021, DSS purchased 50,000,000 shares at $ 0.06 per share of Sharing Services Global Corporation (“SHRG”) via

a private placement.

With this purchase, DSS increased its ownership of voting shares from approximately 47% of SHRG to approximately 58 % .

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

portfolio, business competencies and geographic reach.

Currently, the Company, through its subsidiaries, markets and distributes its

health and wellness and other products primarily in the United States, Canada, and the Asia Pacific region using a direct selling business

SHRG markets its products and services through its independent sales force, using its proprietary websites, including:

www.elevacity.com

and www.thehappyco.com.

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

growth company.

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

market operated by OTC Markets Group Inc.

The scope of services

within this section is planned to include asset issuance and allocation (securities and cryptocurrency), FPO, IPO, ITO, PPO, and UTO

listings on a primary market(s), asset digitization/tokenization (securities, currency, and cryptocurrency), and the listing and

trading of digital assets (securities and cryptocurrency) on a secondary market(s).

(7) Digital Transformation was established to be

a Preferred Technology Partner and Application Development Solution for mid cap brands in various industries including the direct

selling and affiliate marketing sector.

Digital improves marketing, communications and operations processes with custom software

development and implementation (discontinued in 2023).

(8) The Secure Living division has developed a plan for fully sustainable,

secure, connected, and healthy living communities with homes incorporating advanced technology, energy efficiency, and quality of

life living environments both for new construction and renovations for single and multi-family residential housing (discontinued in 2023).

Alternative Energy group was established to help lead the Company’s future in the clean energy business that focuses on

environmentally responsible and sustainable measures.

Alset Energy, Inc, the holding company for this group, and its wholly owned

subsidiary, Alset Solar, Inc., pursue utility-scale solar farms to serve US regional power grids and to provide underutilized

properties with small microgrids for independent energy (discontinued in 2023).

May 13, 2021, Sentinel Brokers, LLC.

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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”).

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

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

On 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 .

In May of 2023, Sentinel LLC acquired an additional 5 % increasing its equity position to 80.1 % .

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.

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

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.

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

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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Summary of Significant Accounting Policies

of Consolidation – The consolidated financial statements include the accounts of DSS and its subsidiaries.

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intercompany balances and transactions have been eliminated in consolidation.

Deconsolidation

of Sharing Services Global Corporation - On 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 % .

Immediately prior to this distribution, DSS owned approximately

81 % of the issued and outstanding common shares of SHRG.

A s a result, SHRG, whose operations represented

a significant portion of our Direct Marketing segment, was deconsolidated from our consolidated financial statements effective as of

May 1, 2023 (the “Deconsolidation”).

Subsequent to April 30, 2023, the assets

and liabilities of SHRG are no longer included within our consolidated balance sheets.

Any discussions related to results, operations,

and accounting policies associated with SHRG refer to the periods prior to the Deconsolidation.

Deconsolidation, we recognized a loss before income taxes of approximately $ 29,196,000 which is recorded within gain/loss investments

in our consolidated statements of operations for the three and nine months ended September 30, 2023.

Subsequent to the Deconsolidation,

we accounted for our equity ownership interest in SHRG as a marketable security and at the quoted price stock price of SHRG, valued at

approximately $ 74,000 at December 31, 2023.

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

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Reclassifications

Certain amounts on the accompanying consolidated balance sheets and income statements for the year ended December 31, 2021, have

been reclassified to conform to current period presentation, as have certain amounts for the year ended, December 31,

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

as cash equivalents.

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

adjusted costs approximate fair value.

– Interest expense associated with the debt owed by AMRE has been reclassed from Interest expense to Cost of revenue for the year ended December

31, 2022 to conform to current period presentation.

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

classified as cash equivalents.

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

funds whose adjusted costs approximates 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.

On a 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 December

31, 2022, the Company established a reserve for doubtful accounts of approximately $ 29,000 ($ 20,000 – 2021).

The Company does not

accrue interest on past due accounts receivable.

Value of Financial Instruments – Fair value is defined as the price that would be received to sell an asset or paid

to transfer a liability in an orderly transaction between market participants at the measurement date.

The Fair Value Measurement Topic

of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) establishes a

three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value.

The hierarchy gives the highest priority to

unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable

inputs (Level 3 measurements).

These tiers include:

1, defined as observable inputs such as quoted prices for identical instruments in active

2, defined as inputs other than quoted prices in active markets that are either directly

or indirectly observable such as quoted prices for similar instruments in active markets

or quoted prices for identical or similar instruments in markets that are not active;

3, defined as unobservable inputs in which little or no market data exists, therefore requiring

an entity to develop its own assumptions, such as valuations derived from valuation techniques

in which one or more significant inputs or significant value drivers are unobservable.

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

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

securities classify as a Level 1 fair value financial instrument.

The fair value of notes receivable approximates their carrying value

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

The fair value of revolving credit lines notes

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

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

– Inventories consist primarily of paper, pre-printed security paper, paperboard, fully prepared packaging, 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 $ 742,000 and $ 388,000 associated with the inventory at our SHRG subsidiary

was recorded as of December 31, 2022, and December 31, 2021, respectively.

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

The Company performs

ongoing credit evaluations and generally does not require collateral.

Payment terms are generally 30 days but up to net 120 for certain

The Company carries its trade accounts receivable at invoice amounts and its rent receivables at contract amounts, less an

allowance for credit losses.

On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for

credit losses 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.

In estimating expected losses in the accounts receivable portfolio, customer-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 customers’ abilities to pay.

At December 31, 2023,

and December 31, 2022, the Company established a reserve for credit losses of approximately $ 2,494,000 and $ 29,000 , respectively.

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

Accounts receivable, net was $ 5,673,000 , $ 7,564,000 , and $ 3,994,000 for January 1, 2022, December 31, 2022, and December

31, 2023, respectively.

Concentration

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

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 36 % and 17 % of our trade accounts

receivable balance.

As of December 31, 2023, two customers accounted for approximately 20 % and 11 % of our consolidated revenue and 39 %

and 30 % of our trade accounts receivable balance.

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

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with warrants acquired at origination, are accreted as an adjustment to yield over the term of the loan.

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

recorded at fair value with unrealized gains and losses included in earnings.

For equity securities without a readily determinable fair

value, the investment is recorded at cost, less any impairment, plus or minus adjustments related to observable transactions for the

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

For Loans And Lease Losses - On January 1, 2022, 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 2022, 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.

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

are recorded at fair value with unrealized gains and losses included in earnings.

For equity securities without a readily determinable

fair value, the investment is recorded at cost, less any impairment, plus or minus adjustments related to observable transactions for

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

For equity method investments, the Company regularly

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See Note 8 for further discussion on investments.

Value of Financial Instruments - Fair value is defined as the price that would be received to sell an asset or

paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The Fair Value Measurement

Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) establishes

a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value.

The hierarchy gives the highest priority

to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable

inputs (Level 3 measurements).

These tiers include:

● Level 1, defined as observable

inputs such as quoted prices for identical instruments in active markets.

● Level 2, defined as inputs other

than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments

in active markets or quoted prices for identical or similar instruments in markets that are not active;

● Level 3, defined as unobservable

inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived

from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The carrying amounts

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

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

Marketable securities

classify as a Level 1 fair value financial instrument.

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

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

The fair value of revolving credit lines notes payable and

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

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

(“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 $ 18,000 and

$ 57,000 associated

with the inventory at our Premier subsidiary for December 31, 2023 and 2022, respectively.

Also, SHRG had an allowance for

obsolescence of approximately $ 685,000 at December 31, 2022.

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

Plant and Equipment – Property, plant and equipment are recorded at cost.

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or retirement due to obsolescence is reflected in the operating results in the period the event takes place.

in real estate, net – Acquisition of assets are recorded at their relative fair value based on total accumulated costs

of the acquisition.

in real estate, net – Acquisition 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

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).

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

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is computed using the straight-line method over the estimated useful lives of the assets.

- ASC 842 requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease

ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent

the Company’s obligation to make lease payments arising from the leases.

Operating lease ROU assets and operating lease liabilities

are recognized based on the present value and future minimum lease payments over the lease term at commencement date.

As the Company’s

leases do not provide an implicit rate, the Company used its estimated incremental borrowing rate based on the information available

at commencement date in determining the present value of lease payments.

A number of the lease agreements contain options to renew and

options to terminate the leases early.

The lease term used to calculate ROU assets and lease liabilities only includes renewal and termination

options that are deemed reasonably certain to be exercised.

Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing

operating leases longer than twelve months.

The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances

of accrued and prepaid rent, and unamortized lease incentives provided by lessors.

Operating lease cost is recognized as a single lease

cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses.

Variable lease payments

for common area maintenance, property taxes and other operating expenses are recognized as expense in the period incurred.

has elected to separate lease and non-lease components for all property leases for the purposes of calculating ROU assets and lease liabilities.

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

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

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

group to its undiscounted expected future cash flows.

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

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

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

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

– Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities

assumed in a business combination.

Goodwill is subject to impairment testing at least annually and will be tested for impairment between

annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired.

FASB ASC Topic 350 provides

an entity with the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to

a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If, after completing

the assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value,

the Company will proceed to a quantitative test.

The Company may also elect to perform a quantitative test instead of a qualitative test

for any or all of our reporting units.

The test compares the fair value of an entity’s reporting units to the carrying value of

those reporting units.

During 2023, the land and buildings related to AMRE LifeCare and AMRE Winter Haven were reclassified to Assets held for sale.

- ASC 842 requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets

and lease liabilities.

ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities

represent the Company’s obligation to make lease payments arising from the leases.

Operating lease ROU assets and operating lease

liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date.

the Company’s leases do not provide an implicit rate, the Company used its estimated incremental borrowing rate based on the information

available at commencement date in determining the present value of lease payments.

A number of the lease agreements contain options to

renew and options to terminate the leases early.

The lease term used to calculate ROU assets and lease liabilities only includes renewal

and termination options that are deemed reasonably certain to be exercised.

The Company recognized

lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer

than twelve months..

Operating lease cost is recognized as a single lease cost on a straight-line

basis over the lease term and is recorded in selling, general and administrative expenses.

Variable lease payments for common area maintenance,

property taxes and other operating expenses are recognized as expense in the period incurred.

The Company has elected to separate lease

and non-lease components for all property leases for the purposes of calculating ROU assets and lease liabilities.

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

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

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

asset or asset group to its undiscounted expected future cash flows.

If cash flows cannot be separately and independently identified

for a single asset, the Company will determine whether impairment has occurred for the group of assets for which the Company can identify

the projected cash flows.

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

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

for sale – The Company has several buildings and

the associated land they occupy for sale as of December 31, 2023.

These consist of primarily of retail space in Lindon, Utah approximating

$ 5,593,000 and the medical facilities associated with AMRE LifeCare of approximately $ 41,541,000 and AMRE Winter Haven of approximately

$ 4,396,000 , and $ 65,000 of other assets

– Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired

and liabilities assumed in a business combination.

Goodwill is subject to impairment testing at least annually and will be tested for

impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired.

ASC Topic 350 provides an entity with the option to first assess qualitative factors to determine whether the existence of events or

circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying

If, after completing the assessment, it is determined that it is more likely than not that the fair value of a reporting unit

is less than its carrying value, the Company will proceed to a quantitative test.

The Company may also elect to perform a quantitative

test instead of a qualitative test for any or all of our reporting units.

The test compares the fair value of an entity’s reporting

units to the carrying value of those reporting units.

This quantitative test requires various judgments and estimates.

The Company estimates the fair value of the reporting

unit using a market approach in combination with a discounted operating cash flow approach.

Impairment of goodwill is measured as the

excess of the carrying amount of goodwill over the fair values of recognized and unrecognized assets and liabilities of the reporting

The Company performed its annual goodwill impairment test as of December 31, 2022, and no impairment was deemed necessary for the

goodwill associated with Premier Packaging Company, APB, Impact BioMedical, SHRG, and Sentinel Co.

The Company estimates

the fair value of the reporting unit using a market approach in combination with a discounted operating cash flow approach.

of goodwill is measured as the excess of the carrying amount of goodwill over the fair values of recognized and unrecognized assets and

liabilities of the reporting unit.

The Company performed its annual goodwill impairment test as of December 31, 2023, and no impairment

was deemed necessary for the goodwill associated with Premier Packaging Company, and Impact BioMedical of $ 1,769,000 and $ 25,093,000 ,

respectively.

The goodwill for APB, and Sentinel Co.

of approximately

and $ 25,093,000 , $ 3,257,000 and $ 1,274,000 respectively.

Assets - The estimated fair values of acquired intangibles are generally determined based upon future economic benefits such

as earnings and cash flows.

Acquired identifiable intangible assets are recorded at fair value and are amortized over their estimated

useful lives.

Acquired intangible assets with an indefinite life are not amortized but are reviewed for impairment at least annually

or more frequently whenever events or changes in circumstances indicate that the carrying amounts of those assets are below their estimated

$ 29,744,000 ,

and $ 1,234,000

respectively, were deemed impaired and written

off at December 31, 2023.

Assets - The estimated fair values of acquired intangibles are generally determined based upon future economic

benefits such as earnings and cash flows.

Acquired identifiable intangible assets are recorded at fair value and are amortized over

their estimated useful lives.

Acquired intangible assets with an indefinite life are not amortized but are reviewed for impairment

at least annually or more frequently whenever events or changes in circumstances indicate that the carrying amounts of those assets

are below their estimated fair values.

Impairment is tested under ASC 350.

- The Company recognizes its revenue based on

when the title passes to the customer or when the service is completed and accepted by the customer.

Revenue is measured as the amount

of consideration the Company expects to receive in exchange for shipped product or service provided.

Sales and other taxes billed and

collected from customers are excluded from revenue.

The Company recognizes rental income associated with its REIT, net of amortization

of favorable/unfavorable lease terms relative to market and includes rental abatements and contractual fixed increases attributable to

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

recognizes net investment income from its investment banking line of business as interest and management fees related to loans managed

for third parties owed to the Company occurs.

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

through internet sales and recognizes revenue as items are shipped.

of December 31, 2022, the Company had no unsatisfied performance obligations for contracts with an original expected duration of greater

than one year.

Pursuant to Topic 606, the Company has applied the practical expedient with respect to disclosure of the deferral and

future expected timing of revenue recognition for transaction price allocated to remaining performance obligations.

The Company elected

the practical expedient allowing it to not recognize as a contract asset the commission paid to its salesforce on the sale of its products

as an incremental cost of obtaining a contract with a customer but rather recognize such commission as expense when incurred as the amortization

period of the asset that the Company would have otherwise recognized is one year or less.

of revenue - Costs of revenue includes all direct cost of the Company’s packaging, commercial and

security printing sales, primarily, paper, inks, dies, and other consumables, and direct labor, transportation, amortization,

deprecation, and manufacturing facility costs.

In addition, this category includes all direct costs associated with the

manufacturing and procurement of the products sold in the Company’s Direct Marketing line of business as well as with the

Company’s technology sales, services and licensing including hardware and software that is resold, third-party fees, and fees

paid to inventors or others as a result of technology licenses or settlements, if any.

Cost of revenue for our REIT line of business includes all direct cost associated with the maintenance and upkeep

of the related facilities, depreciation, amortization and the costs to acquire the facilities.

Our Commercial Lending operating segment

has costs of revenue associated with the impairment of notes receivable for those amounts at risk of collection.

revenue do not include expenses related to product development, integration, and support.

These costs are included in research and

development, which is a component of selling, general and administrative expenses on the consolidated statement of operations.

costs are included in selling, general and administrative.

At December 31, 2023, The Company impaired approximately

$ 7,418,000 associated with intangible assets for AMRE Lifecare and AMRE Winter Haven.

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

accepted by the customer.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for shipped product

or service provided.

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

The Company recognizes rental

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

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

over the term of the related lease.

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

and management fees related to loans managed for third parties owed to the Company occurs.

The Company generates revenue from its direct

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

As of December 31,

2023, the Company had no unsatisfied performance obligations for contracts with an original expected duration of greater than one year.

Pursuant to Topic 606, the Company has applied the practical expedient with respect to disclosure of the deferral and future expected

timing of revenue recognition for transaction price allocated to remaining performance obligations.

The Company elected the practical

expedient allowing it to not recognize as a contract asset the commission paid to its salesforce on the sale of its products as an incremental

cost of obtaining a contract with a customer but rather recognize such commission as expense when incurred as the amortization period

of the asset that the Company would have otherwise recognized is one year or less.

of revenue - Costs of revenue includes all direct cost of the Company’s packaging, commercial and security

printing sales, primarily, paper, inks, dies, and other consumables, and direct labor, transportation, amortization, deprecation, and

manufacturing facility costs.

In addition, this category includes all direct costs associated with the manufacturing and procurement

of the products sold in the Company’s Direct Marketing line of business as well as with the Company’s technology sales, services

and licensing including hardware and software that is resold, third-party fees, and fees paid to inventors or others as a result of technology

licenses or settlements, if any.

Cost of revenue for our REIT line of business includes all direct cost associated with the maintenance

and upkeep of the related facilities, depreciation, amortization and the costs to acquire the facilities.

Our Commercial Lending operating

segment has costs of revenue associated with the impairment of notes receivable for those amounts at risk of collection.

Costs of revenue

do not include expenses related to product development, integration, and support.

These costs are included in research and development,

which is a component of selling, general and administrative expenses on the consolidated statement of operations.

Legal costs are included

in selling, general and administrative.

and Handling Costs - Costs incurred by the Company related to shipping and handling are included in cost of revenue.

charged to customers pertaining to these costs are reflected as revenue.

Payments - Compensation cost for stock awards are measured at fair value and the Company recognizes compensation expense over

the service period for which awards are expected to vest.

Payments - Compensation cost for stock awards are measured at fair value and the Company recognizes compensation expense

over the service period for which awards are expected to vest.

The Company uses the Black-Scholes-Merton option pricing model for determining

8 unchanged sentences

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

A significant

portion of the Company’s sales commissions expense is generated from its direct marketing line of business.

These commissions are

based on current month shipments and are paid one month in arrears.

There were no sales commissions capitalized as of December 31, 2022.

Legal Expenses - Contingent legal fees are expensed in the consolidated statements of operations in the period that the

related revenues are recognized.

In instances where there are no recoveries from potential infringers, no contingent legal fees are paid;

however, the Company may be liable for certain out of pocket legal costs incurred pursuant to the underlying legal services agreement

that will be paid out from the proceeds from settlements or licenses that arise pursuant to an enforcement action, which will be expensed

as legal fees in the period in which the payment of such fees is probable.

Any unamortized patent acquisition costs will be expensed

in the period a conclusion is reached in an enforcement action that does not yield future royalties potential.

A significant portion of the Company’s sales commissions expense is generated from its direct marketing line of business.

commissions are based on current month shipments and are paid one month in arrears.

There were no sales commissions capitalized as of

December 31, 2023.

Legal Expenses - Contingent legal fees are expensed in the consolidated statements of operations in the period

that the related revenues are recognized.

In instances where there are no recoveries from potential infringers, no contingent legal fees

however, the Company may be liable for certain out of pocket legal costs incurred pursuant to the underlying legal services

agreement that will be paid out from the proceeds from settlements or licenses that arise pursuant to an enforcement action, which will

be expensed as legal fees in the period in which the payment of such fees is probable.

Any unamortized patent acquisition costs will

be expensed in the period a conclusion is reached in an enforcement action that does not yield future royalties potential.

and Development - Research and development costs are expensed as incurred.

Research and development costs consist primarily of

third-party research costs and consulting costs.

Research and development costs consist primarily

of third-party research costs and consulting costs.

The Company recognized costs of approximately $ 1,147,000 and $ 1,256,000 in 2023 and

2022, respectively.

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

the estimated future tax effect attributable to temporary differences and carry-forwards.

Measurement of deferred income items is based

on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not

expected to be realized.

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

and for the estimated future tax effect attributable to temporary differences and carry-forwards.

Measurement of deferred income items

is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits

not expected to be realized.

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

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 twelve months ended December 31, 2022 and 2021, potential dilutive instruments include

both warrants and options of 5,000 and

15,486 shares

respectively.

Concentration

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

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

As of December 31, 2021, two customers accounted for approximately 27 % and 14 % of our consolidated revenue and these

two customers accounted for approximately 29 % and 19 % of our consolidated trade accounts receivable balance.

of December 31, 2022, two customers accounted for approximately 14 % and

6% of our consolidated revenue and 36 %

and 17% of our trade accounts receivable balance.

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 year ended December 31, 2022 potential dilutive instruments include both warrants and options of 5,000 shares.

the year-ended December 31, 2023, potential dilutive instruments was 0 .

- 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.

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

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

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

See Note 8 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 expensed as incurred.

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

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.

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

3 unchanged sentences

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

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

(“DSS Digital”),

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

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

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

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

and financial results.

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

Standards Codification 210-05—Discontinued Operations.

Adopted 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.

The Company adopted this pronouncement for year ended

January 1, 2022.

For Loans And Lease Losses - On January 1, 2022, 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 amount.

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.

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 obligations.

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 2022, 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

Operations and 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 $ 19.3 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 $ 19.3 million in cash as of December

31, 2022, the Company believes it can continue as a going concern, during the twelve months ended December 31, 2021, due to its

ability to generate operating cash through the sale of its $ 27.3

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 and IPO in which DSS will 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.

Our subsidiary SHRG is in the process of up

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

million dollars.

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 includes, 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 $ 19.3

million in aggregate cash, as of December 31, 2022, along with the $ 27.3 million of Marketable Securities, and the anticipated receipts

of principal and interest on its Notes receivable of approximately $ 11.2 million through March 2024, would allow us to fund our nine

business lines current and planned operations through March 2024.

Acquisition of assets

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

Direct acquisition-related costs are expensed

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.

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

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

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

Operations and 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 $ 6.6 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 $ 6.6 million

in cash as of December 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 $ 10.0 million

of Marketable Securities, and the anticipated receipts of principal and interest on its Notes receivable of approximately $ 8.8 million

through December 31, 2024.

The Company has also taken steps to sell its real estate holdings in Utah, Texas, Pennsylvania, and

These properties approximate $ 51.6

million in assets and are identified on the accompanying balance sheet as Held for sale.

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.

Although there are no assurances, we believe the above would allow us to fund our nine business lines current and planned operations

for the twelve months from the filing date of this Annual Report.

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

its ability to continue as a going concern has been alleviated.

consisted of the following as of December 31:

Inventory consisted

of the following as of December 31:

Schedule of Inventory

6 unchanged sentences

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 December 31, 2022, and December 31, 2021, approximated

and $ 39,000 ,

respectively and is classified as a Current portion of notes receivable on the Consolidated Balance Sheets at December 31, 2022 and December

February 8, 2021, the Company entered into a convertible promissory note (“Note 2”) with Borrower 2, 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 of issuance.

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

outstanding principal and interest as of December 31, 2021, approximated $ 829,000 and is classified as a Current portion of notes receivable on the Consolidated Balance Sheets at December 31, 2021.

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

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 December 31, 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

and 197,000 respectively, classified as Notes receivable on the accompanying consolidated balance sheets.

May 14, 2021, DSS Pure Air, Inc.

a subsidiary of the Company entered a convertible promissory note (“Note 4”) with Borrower

4, a company registered in the state of Texas.

Note 4 has an aggregate principal balance up to $ 5,000,000 , to be funded at request of

On May 14, 2021,

DSS Pure Air, Inc.

a subsidiary of the Company entered a convertible promissory note (“Note 1”) with Borrower 1, a company

registered in the state of Texas.

Note 1 has an aggregate principal balance up to $ 5,000,000 , to be funded at the request of Borrower

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

Note 4 contains

an optional conversion clause that allows the Company to convert all, or a portion of all, into new issued member units of Borrower 4

with the maximum principal amount equal to 18 % of the total equity position of Borrower 4 at conversion.

The outstanding principal and

interest as of December 31, 2022 and December 31, 2021, approximated $ 5,420,000 and $ 5,081,000 , 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 5”) with Borrower 5, which operates as

a conservation and reclamation district pursuant to Chapter 3891, Texas Special District Local Laws Code;

Chapter 375, Texas Local Government

and Chapter 49, Texas Water Code.

Note 1 contains an optional conversion

clause that allows the Company to convert all, or a portion of all, into newly issued member units of Borrower 1 with the maximum principal

amount equal to 18% of the total equity position of Borrower 1 at conversion .

The outstanding principal and interest as of December 31,

2023, and December 31, 2022, approximated $ 5,544,000 and $ 5,420,000 , respectively, which is included in current notes receivable on the

accompanying consolidated balance sheet.

As of December 31, 2023, the Company has a reserve of $ 2,772,000 against the principal and interest

This note is currently in default and its terms are currently being re-negotiated.

On September 23,

2021, APB entered into refunding bond anticipatory note (“Note 2”) with Borrower 2, which operates as a conservation and

reclamation district pursuant to Chapter 3891, Texas Special District Local Laws Code ;

Chapter 375, Texas Local Government Code;

Chapter 49, Texas Water Code.

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

Principal 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 date.

The outstanding principal and interest of $ 3,701,000

and $ 3,540,000 of Note 5 is included in current portion of notes receivable on the consolidated balance sheet at December 31, 2022

and December 31, 2021, respectively.

October 25, 2021, APB entered into loan agreement (“Note 6”) with Borrower 6, a company registered in the state of Utah.

Note 6 has an initial aggregate principal balance up to $ 1,000,000 ,

to be funded at request of Borrower 6, with an option to increase the maximum principal borrowing to $ 3,000,000 .

Note 6, which incurs interest at a rate of 8.0 %

with principal and interest due at the maturity date of October

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

and interest are due in full on September 22, 2022 , and later amended to extend the maturity date to September 19, 2024 .

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 $ 3,910,000 and $ 3,701,000 is included in the current portion of notes receivable on the

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

On October 25, 2021,

APB entered into a loan agreement (“Note 3”) with Borrower 3, a company registered in the state of Utah.

Note 3 has an initial

aggregate principal balance up to $ 1,000,000 , to be funded at the request of Borrower 3, with an option to increase the maximum principal

borrowing to $ 3,000,000 .

Note 3, which incurs interest at a rate of 8.0 % with principal and interest due at the maturity date of October

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

APB, as holder of Note 3, has the right to elect one member to the Board of Managers.

The outstanding principal and interest of

approximately $ 896,000

and $ 784,000

of the note is included in current portion of notes receivable on the consolidated balance sheet at December 31, 2022 and December

31, 2021, respectively.

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

The Company has placed reserve of $ 896,000 against this

note as of December 31, 2022, which is accounted for in the current portion of notes receivable.

May 14, 2021, APB extended the credit (“Note 7”) to an individual (“Borrower 7”) 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 $ 252,000 and $ 9,000 are included in current portion of Notes receivable on the consolidated balance sheet

at December 31, 2022 and $ 260,000 and $ 9,500 are included in Note receivable at December 31, 2021.

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 December 31, 2022 and December 31, 2021 is $ 63,000

and $ 52,000 ,

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

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

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

December 28, 2021, APB entered into promissory note (“Note 9”) with Borrower 9, a company registered in the state of

Note 9 has an principal balance of $ 700,000 .

Note 9, which incurs interest at a rate of 12.0 %

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

On December 29, 2022, the maturity date of this note was

extended to May 31, 2023.

The outstanding principal and interest of $ 701,000

and $ 700,000

of Note 9 is included in current portion of notes receivable on the consolidated balance sheet at December 31, 2022 and December 31,

2021, respectively.

January 24, 2022, APB and Borrower 10 entered into a promissory note (“Note 10”) in the principal sum of $ 100,000 with interest

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

The outstanding principal and interest 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 11, a corporation organized under the laws of the Republic of Korea entered into a promissory note

Under the terms of Note 11, APB at its discretion, may lend up to the principal sum of $ 892,500

with an interest rate of 8 % ,

and matures in March 2024, with interest payable quarterly.

The outstanding principal and interest at December 31, 2022 is $ 874,000 ,

net of $ 25,000 of unamortized origination fees, of which $ 446,250

is included in current notes receivable on the accompanying consolidated balance sheet.

May 9, 2022, DSS PureAir and Borrower 12 entered into a promissory note (“Note 12”) 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 are due on February 9, 2023.

This note is in default and the outstanding principal

and interest of approximately $ 884,000 was reserved for fully as of December 31, 2022.

On May 14, 2021,

APB extended the credit (“Note 4”) to an individual (“Borrower 4”) 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 was 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

for both notes were paid in full during the third quarter of 2023.

$ 252,000 and $ 9,000 are included in Note receivable at December 31,

On October 27, 2021,

HWH World, Inc., a subsidiary of the Company entered a revolving loan commitment (“Note 5”) with Borrower 5, a company registered

The outstanding principal and interest at December 31, 2023 and December 31, 2022 is $ 0 and $ 63,000 , respectively, and was

included in Notes receivable current portion.

This note has been written-off during the third quarter 2023.

On December 28, 2021,

APB entered into a promissory note (“Note 6”) with Borrower 6, a company registered in the state of California.

a principal balance of $ 700,000 .

Note 6, which incurs interest at a rate of 12.0 % with principal and interest due at the maturity date

of December 28, 2022 .

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

On November 27, 2023, the parties to Note 6 agreed to modify the payment terms of the note to be monthly payments

of $ 50,000 until the outstanding principal and interest are paid in full.

The outstanding principal and

interest of $ 253,000 and $ 701,000 is included in the Current portion of notes receivable on the consolidated balance sheet at December

31, 2023 and December 31, 2022, respectively.

On January 24, 2022,

APB and Borrower 7 entered into a promissory note (“Note 7”) in the principal sum of $ 100,000 with interest of 6 %, due annually,

and maturing in January 2024 .

The outstanding principal and interest at December 31, 2023 and December 31, 2022 approximates $ 103,000

and $ 106,000 , respectively, and is included in Notes receivable on the accompanying consolidate balance sheet.

On March 2, 2022,

APB and Borrower 8, a corporation organized under the laws of the Republic of Korea entered into a promissory note (“Note 8”).

Under the terms of Note 8, APB at its discretion, may lend up to the principal sum of $ 893,000 with an interest rate of 8 %, and matures

in March 2024 , with interest payable quarterly.

The outstanding principal and interest at December 31, 2023 is $ 446,000 , net of $ 3,500

of unamortized origination fees.

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

origination fees.

APB and Borrower 8 are currently negotiating an extension of the maturity date of this note.

On May 9, 2022,

DSS PureAir and Borrower 9 entered into a promissory note (“Note 9”) 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

This loan is currently in default and terms are currently being re-negotiated.

The outstanding principal and

interest at December 31, 2023 approximates $ 224,000

of which $ 112,000 has been reserved for and is included in current portions of notes receivable on the accompanying consolidate

balance sheet.

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 13 entered into a promissory note (“Note 13”) in the principal

sum of $ 100,000 with interest of 8 % , is due in three quarterly installments beginning on September 14, 2022.

All unpaid principal and

interest is due on August 29, 2025 .

The outstanding principal and interest at December 31, 2022 approximates $ 100,000 , and is included

in Notes receivable on the accompanying consolidate balance sheet.

July 26, 2022, APB and Borrower 14 entered into a promissory note (“Note 14”) in the principal sum of $ 1,000,000

10, related party

On August 29,

2022, DSS Financial Management Inc and Borrower 10, a related party, entered into a promissory note (“Note 10”) in the principal sum of

with interest of 8 %,

All unpaid principal and interest due on July

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 December 31, 2023 and December 31, 2022 approximates $ 100,000 ,

and $ 100,000 ,

respectively, and is included in Notes receivable on the accompanying consolidate balance sheet, of which $ 76,000

is included in the Current portion of notes receivable and $ 24,000

is included in the long-term portion of notes receivable at December 31, 2023.

DSS owns 24.9 % of the outstanding common shares of Borrower 10.

11, related party

On July 26, 2022,

APB and Borrower 11 entered into a promissory note (“Note 11”) in the principal sum of $ 1,000,000 with interest of 8 %.

unpaid principal and interest due on July 26, 2024 .

The outstanding principal and interest on December 31, 2023, approximates $ 939,000 ,

net of $ 20,000 of unamortized origination fees and is included in notes receivable on the accompanying consolidate balance sheet.

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.

Heng Fai Ambrose Chan, the Chairman of DSS, Inc is also the on the board

of directors of Borrower 11.

12, related party

2022, DSS and Borrower 12, entered into a convertible promissory note (“Note 12”) in the principal sum of $ 27,000,000

with interest of 8 %,

with an optional conversion into shares of Borrower 12 at a conversion price of $ 0.03 ,

maturing on June

14, 2024 , with interest due quarterly.

In December 2022, this note was fully reserved for.

On August 31, 2023, the full value

of the outstanding principal and interest of this note was exchanged for 26,000

shares of Series D Preferred Stock with a par value of $ 0.0001

Beginning on September 1, 2028, these Series D Preferred Shares may be redeemed in the amount of $ 1,000

Due to the lack of liquidity of these shares, the Company has placed no value on these shares.

Heng Fai Ambrose Chan, the Chairman of DSS, Inc is also the Chairman of

On February 19, 2021, Impact BioMedical,

Inc, entered into a promissory note with an individual.

The Company loaned the principal sum of $ 206,000 , with interest at a rate of

6.5 %, and maturity date of August 19, 2022 later amended 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.

This note is secured by certain real property situated in Collier

County, Florida.

The outstanding principal and interest as of December 31, 2023, approximately $ 203,000 and is classified in current

notes receivable on the accompanying consolidated balance sheets.

The outstanding principal and interest as of December 31, 2022 is approximately

$ 206,000 with $ 16,000 classified in Current portion of notes receivable and $ 190,000 classified as Notes receivable on the accompanying

consolidated balance sheets.

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

On May 8, 2023, DSS

Financial Management Inc and Borrower 14 entered into a promissory note (“Note 14”) in the principal sum of $ 102,000 with

interest at the prime rate plus 2 % ( 10.5 % at December 31, 2023) with a maturity date of May 7, 2026 .

The outstanding principal and interest

at December 31, 2022 approximates $ 924,000 ,

at December 31, 2023 approximates $ 107,000 with approximately $ 53,000 of principal and accrued interest classified as Current portion

notes receivable, and the remaining balance of approximately $ 54,000 is recorded as notes receivable, on the accompanying consolidated

balance sheet.

On June 27, 2023,

DSS and Borrower 15 entered into a convertible promissory note (“Note 15”) in the principal sum of $ 1,400,000 with

a discount of $ 300,000 and interest rate of 10 % and maturity date of September 1, 2024 .

The outstanding principal, interest, and associated

discount was fully reserved for as of December 31, 2023.

On March 31,2023,

DSS Biohealth Security, Inc and Borrower 16 entered into a promissory note (“Note 16”) in the principal sum of $ 140,000 and

interest rate floating daily to Wall Street Journal Prime rate per annum ( 8.5 % at September 31, 2023) with the total outstanding principal

and interest due at the maturity date of March 31, 2025 .

The outstanding principal and interest at December 31, 2023 approximates $ 133,000 .

Of the total financed, approximately $ 99,000 of principal and accrued interest is classified as Current portion of notes receivable and

the remaining balance of approximately $ 34,000 is recorded as Notes receivable on the accompanying consolidated balance sheet.

On September 28,

2023, APB and Borrower 17 entered into a promissory note (“Note 17”) in the principal sum of $ 400,000 with interest of 5 %.

All unpaid principal and interest due on November 12, 2023 .

As of December 31, 2023, this loan has been paid off in full.

On August 11, 2022,

APB and Borrower 18 entered into a promissory note (“Note 18”) in the principal sum of $ 1,430,000 with interest of 8 %.

unpaid principal and interest due on August 12, 2024 .

The outstanding principal and interest on December 31, 2023, approximates $ 1,102,000 ,

net of $ 375,000 of unamortized origination fees and is included in Notes receivable on the accompanying consolidate balance sheet.

outstanding principal, interest, and associated fees were fully reserved for as of December 31, 2023.

Provision for Credit Losses

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.

of December 31, 2022, 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 loan.

As of December 31, 2022, the Company had a total of $ 12,641,000

We analyzed the loan loss reserve

from three basis:

January 1, 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

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.

Accounts receivable are stated

at the amount owed by the customer.

The Company maintains an allowance for credit losses for accounts receivable and unbilled receivables,

based on expected credit losses resulting from the inability of our customers to make required payments.

The allowance for credit losses

is estimated based on historical experience, current economic conditions and the creditworthiness of customers.

Receivables are charged

to the allowance when determined to be no longer collectible.

The Company regularly monitors and assesses its risk of not collecting amounts

owed by customers and records its allowance for credit losses based on the results of this analysis.

As of December 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.

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.

Portfolio Reserves - Given the relatively young loan portfolio and a diversification of the portfolio over several different loan

products, the risk is reduced.

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

Loan Reserves - Previously, we had identified credit weaknesses and borrower repayment weakness in the Borrow 6 loan, which

year-ended December 31, 2023 and December 2022, the Company recorded a Loan loss reserve of approximately $ 4,933,000 and $ 1,041,000 ,

respectively.

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 $ 194,000

for December 31, 2023 and $ 145,000 for December 31, 2022 or approximately ¼ of 1% of the loan portfolio loan balance.

Portfolio Reserves – Given the relatively young loan portfolio and a diversification of the portfolio over several different

loan products, the risk is reduced.

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

Loan Reserves - Previously, we had identified credit weaknesses and borrower repayment weakness in the Borrower 4 loan, which

has a current principal and interest balance of $ 884,000 .

As of December 31, 2022 we have recorded a specific loan loss reserve for the full balance due the Company as of December 31, 2022.

The following table identifies the loan loss reserve for the period ending December 31, 2022:

OF LOAN LOSS RESERVE

As of December 31, 2023 and December 31, 2022 we have recorded a specific loan

loss reserve for the full balance due the Company.

As of December 31, 2023, the Company identified credit weakness in borrower 2 and

has placed a reserve approximating $ 2,884,000 against the outstanding principal and interest.

As of December 31, 2023, the Company identified

credit weakness in borrower 16 and placed a reserve of $ 1,046,000 against the outstanding principal and interest.

The Company identified

credit weakness in Borrower 19 and has placed a reserve of $ 1,102,000 against the outstanding principal and interest.

The following table identifies the loan

loss reserve for the period ending December 31, :

Schedule of Loan Loss Reserve

General Loan Portfolio Reserve

Specific Loan Reserves

in the allowance for doubtful accounts and loan loss reserve were as follows:

of Allowance for Doubtful Accounts and Loan Loss Reserve

Allowance for credit losses

Loan loss reserve

Balance at January 1, 2022

Adoption of CECL

Bad debt expense

Balance at December 31, 2022

Bad debt expense

( 1,037,000 )

Balance at December 31, 2023

FINANCIAL INSTRUMENTS

Financial Instruments

Cash Equivalents and Marketable Securities

following tables show the Company’s cash and marketable securities by significant investment category as of December 31:

OF CASH AND MARKETABLE SECURITIES BY SIGNIFICANT INVESTMENT CATEGORY

Adjusted Cost

The following tables show the Company’s

cash and marketable securities by significant investment category as of December 31:

Schedule of Cash and Marketable Securities by Significant Investment Category

Unrealized Gain/Loss

4 unchanged sentences

( 17,325,000 )

Convertible securities

$ ( 17,325,000 )

1 unchanged sentence

Marketable Securities

( 17,976,000 )

Convertible securities

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

The Company’s investment

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

Fair values were

determined for each individual security in the investment portfolio.

$ ( 17,976,000 )

The following tables shows the

Company’s net unrealized (loss) gain recognized during the year on marketable securities still held as of December 31:

of Net Unrealized (Loss) Gain Recognized on marketable Securities

Net gains (losses) recognized during the year on marketable securities

$ ( 5,521,000 )

$ ( 2,757,000 )

Net gains (losses) realized during the year on marketable securities sold during the period

( 1,973,000 )

Net unrealized gain (loss) recognized during the reporting year on marketable

securities still held at the reporting date

$ ( 3,548,000 )

$ ( 3,834,000 )

The Company typically

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

The Company’s investment policy generally

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

Fair values were determined for

each individual security in the investment portfolio.

On July 1 st ,

2023, The Company intended to sell its subsidiary, HWH World, Inc.

The proposed transaction had the Company sell 1,000 shares

of common stock, representing all the issued and outstanding common stock shares of HWH World for the sum $ 706,000 representing

the gross proceeds of the sale of HWH inventory less cost of goods sold.

The parties involved amended the terms of this agreement during

the third quarter of 2023 from that of equity transaction to the purchase of inventory and assumption of certain liabilities by SHRG.

The amended agreement identified the purchase price approximating $ 758,000 to be paid from amongst other things, the gross proceeds generated

by the sale of the inventory acquired.

The value of the inventory sold approximates $ 698,000 and the value of the liabilities assumed

by SHRG as part of this transaction is approximately $ 59,000 .

Further, the agreement includes payment of 1% royalty, starting November

1, 2023, being defined as 1% of the gross sale price of all Seller’s new products made and sold outside of existing inventory on

the schedule, for a period ending October 31, 2033.

There is substantial doubt regarding SHRG’s ability to sell and pay for the

inventory acquired, and therefore, the Company has determined not to record a receivable for the purchase price.

A net loss approximating

$ 639,000 associated with this transaction has been recorded during the third quarter of 2023 and is included in Loss/Gain on sale of

assets on the consolidated statement of operations.

On July 1 st ,

2023, The Company sold 100 % of the equity in its subsidiary HWH Holdings, Inc, a Texas corporation (“HWHH”) to SHRG for a purchase price

approximating $ 259,000 .

This amount is to be paid from gross proceeds generated by the sale of the inventory acquired as part of the

This transaction was later amended during the third quarter of 2023 to assign the purchase of HWHH from SHRG to Ascend Management

(“Ascend”), a Singaporean limited company.

There is substantial doubt regarding Ascend’s ability to sell

and pay for the inventory acquired, and therefore, the Company has determined not to record a receivable for the purchase price.

loss approximating $ 617,000 associated with this transaction has been recorded during the third quarter of 2023 and is included in Loss/Gain

on sale of assets on the consolidated statement of operations.

International Limited , related party

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 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.

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 December 31, 2022, and December 31, 2021, was approximately $ 3,319,000

and $ 4,909,000

respectively.

During the year ended December 31, 2022 and December 31, 2021, the Company recorded unrealized loss on this investment

of approximately $ 1,590,000

and unrealized gain of $ 1,920,000 ,

respectively.

fair value of the marketable security as of December 31, 2023, and December 31, 2022, was approximately $ 3,269,000 and $ 3,319,000 respectively.

During the year ended December 31, 2023 and December 31, 2022, the Company recorded unrealized loss on this investment of approximately

$ 50,000 and unrealized loss of $ 1,590,000 , respectively.

Park Capital, Inc.

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

a Florida limited liability company.

The Company loaned the principal sum of $ 500,000 , of which up to $ 500,000 and all accrued interest

can be paid by an “Optional Conversion” of such amount up to 19.8 % (non-dilutable) of all outstanding membership interest

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.

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 December 31, 2022.

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

On December 30,

2020, the Company signed a binding letter of intent with West Park Capital, Inc (“West Park”) and Century TBD Holdings,

LLC (“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 December 31, 2022 and as of December 31, 2023.

Capital International LLC

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

entered into membership interest purchase agreement

with BMI Financial Group, Inc.

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

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

On September 10,

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

entered into membership interest purchase agreement with BMI Financial

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

whereas DSS Securities, Inc.

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

DSS Securities also

had the option to purchase an additional 10 % of the outstanding membership interest which it exercised for $ 100,000 in January of 2021

and increased its ownership to 24.9 %.

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

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

The Company’s portion

of net loss in BMIC during the year ended December 31, 2022, approximated $ 19,500 and $ 19,000 for year ended December 31, 2021.

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

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

The Company’s

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

DSS Securities also had the option to purchase

an additional 10 % of the outstanding membership interest which it exercised for $ 100,000 in January of 2021 and increased its ownership

Upon achieving greater than 20 % ownership in BMIC during the quarter ended September 30, 2021, the Company is currently accounting

for this investment under the equity method of accounting per ASC 323.

The Company’s portion of net loss in BMIC during the year

ended December 31, 2023, approximated $ 34,000 and $ 20,000 for year ended December 31, 2022.

BMIC is a broker-dealer

registered with the Securities and Exchange Commission, is a member of the Financial Industry Regulatory Authority, Inc.

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

The Company’s chairman of the board and

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

Technologies Asia Pacific Holdings Limited

December 19, 2020, Impact BioMedical, a wholly owned subsidiary of the Company, entered into a subscription agreement (the “Subscription

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

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

price of approximately $ 632,000 .

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

director to the board of BioMed.

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

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

In connection with the Subscription Agreement, Impact Biomedical

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

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

This investment

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

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

Canada, Singapore, Malaysia, and South Korea and non-exclusive distribution rights in all other countries.

In exchange, the Company agreed

to certain obligations, including mutual marketing obligations to promote sales of the products.

This agreement is for ten years with

a one year auto-renewal feature.

On December 19,

2020, Impact BioMedical, a wholly owned subsidiary of the Company, entered into a subscription agreement (the “Subscription Agreement”)

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

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

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

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

such shares, as well as customary tag-along rights.

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

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

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

This investment is valued at cost as

it does not have a readily determined fair value.

Under the terms

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

Malaysia, and South Korea and non-exclusive distribution rights in all other countries.

In exchange, the Company agreed to certain obligations,

including mutual marketing obligations to promote sales of the products.

This agreement is for ten years with a one year auto-renewal

Oncology, Inc.

March 15, 2021, the Company, through one of its subsidiaries, entered into a Stock Purchase Agreement (the “Vivacitas Agreement

#1”) with Vivacitas Oncology Inc.

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

of $ 1.00 , with an option to purchase 1,500,000 additional shares at the per share price of $ 1.00 .

This option will terminate upon one

of the following events:

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

(ii) December 31, 2022;

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

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

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

two seats on the board of Vivacitas.

On March 15, 2021,

the Company, through one of its subsidiaries, entered into a Stock Purchase Agreement (the “Vivacitas Agreement #1”) with

Vivacitas Oncology Inc.

(“Vivacitas”), to purchase 500,000 shares of its common stock at the per share price of $ 1.00 , with

an option to purchase 1,500,000 additional shares at the per share price of $ 1.00 .

This option will terminate upon one of the following

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

December 31, 2022;

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

placement with gross proceeds of $ 500,000 .

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

the board of Vivacitas.

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

5 unchanged sentences

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

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

On April 1, 2021,

the Company entered into an additional stock purchase agreement with Vivacitas (“Vivacitas Agreement #2”), whereas Vivacities

wished to employ the service of the Chief Business Officer of Impact Biomedical, and in return for the services of this individual, Vivacitas

shall issue to the Company, the aggregate purchase price for the Class A Common Shares of Vivacitas at the value of $ 1.00

per share shall be $ 120,000 to be paid in twelve (12) equal monthly installments for the period between April 1, 2021 and March 31, 2022 .

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

with the shares received as part Vivacitas Agreement #2 increased the Company’s equity position in Vivacitas to approximately 16 %

as of December 31, 2022.

As of 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 $ 4,035,000 ,.

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”).

shall issue to the Company, the aggregate purchase price for the Class A Common Shares of Vivacitas at the value of $ 1.00 per share shall

be $ 120,000 to be paid in twelve (12) equal monthly installments for the period between April 1, 2021 and March 31, 2022 .

On 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 16 % as of December

As of 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 $ 4,035,000 , As of December 31, 2022, the Company determined to impair 100 % of its investment in

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

In September 2021,

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

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

(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.

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 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-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

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.

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

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”.

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.

During the year ended

December 31, 2022, the Company recognized losses, before income tax, of $ 1.2

million and $ 4.9

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

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

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 December 31, 2023 and December 31, 2022 the investment

in the GNTW Warrant and Convertible Note, were valued at $ 0 , and $ 44,000 and $ 0 and $ 39,000 , respectively.

In 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.

March of 2022, SHRG impaired the MojiLife investment as the evaluation at such time determined the investment was not fully

Pacific Bancorp.

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

which provided for an investment of $ 40,000,000 by the Company into APB for an aggregate 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 have

been 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.

Since acquisition, APB has incurred approximately $ 194,000 of

net losses, of which approximately $ 96,000 of loss incurred is attributable to non-controlling interest.

The next largest shareholder

of APB is Alset EHome International, Inc.

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

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

The CEO of the Company, Mr.

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

Company has completed the valuation of good will and non-controlling interest, which approximate $ 29,744,000 and $ 33,099,000 , respectively.

Goodwill is driven by other intangible assets that do not qualify for separate recognition and is not deductible for tax purposes.

assets acquired were approximately $ 3,400,000 and included approximately $ 1,250,000 in cash, $ 1,900,000 in marketable securities, $ 330,000

in notes receivable and $ 101,000 of accounts payable and accrued liabilities.

APB and the company in which APB owns marketable securities

share a common director.

Services Global Corp.

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

(“SHRG”), a publicly

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

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

thus has the ability to exercise significant influence over it.

The Company accounted for its investment in SHRG using the equity

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

earnings and losses within our consolidated statement of operations.

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

Subscription Agreement by and between Mr.

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

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

warrants to purchase Class A common stock for

million, causing the Company’s ownership

in SHRG to exceed 20 %.

The warrants have an average exercise price of $ 0.20 ,

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

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

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

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

These intangible

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

$ 8,044,000 ,

respectively.

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

A common shares equating to a 46.8 %

ownership interest in SHRG.

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

at $ 0.06 per

share via a private placement.

With this purchase, DSS increased its ownership of voting shares to 141,853,537 , increase its

ownership from approximately 47 %

of SHRG to approximately 58 %,

at December 31, 2021.

SHRG share price on December 22, 2021 was $ 0.09 per share, thus the fair value of shares owned on December 22,

2021 approximated $ 12,767,000 .

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

received as part of a consulting agreement with SHRG at the exercise price of $ 0.0001 ,

increasing its total number of shares owned to 191,853,537 , bringing its ownership percentage of voting shares to approximately 65 %.

During the fourth quarter of 2022, SHRG purchased back a significant number of its outstanding voting shares, increase the

Company’s ownership percentage of voting shares to approximately 73 % at December 31, 2022.

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.

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

2021 (unaudited)

Net (loss)/income

$ ( 37,236,000 )

Basic (loss)/earnings per share

Diluted (loss)/earnings per share

completed the purchase price accounting and related allocations associated with the acquisition of SHRG for the year ended December

The valuation of Sharing Services has considered both the Market and Income Approaches.

The Market Approach using the

public stock of SHRG produced a mean business enterprise value using projected 2023 results.

The Income Approach was based upon the

use of a discounted pro forma cash flow model and produced a business enterprise value.

No weighting was applied to the Market

Approach using the guideline public company method or the Income Approach given the fact the Market Approach using the public stock

of SHRG is the best indicator of value.

As such, we have applied all weighting to the Market Approach using the public stock of

The application of these weightings produced a concluded business enterprise value of $ 34.26 million for SHRG.

This analysis

identified an impairment to SHRG’s Linden, Utah facility and land of approximately $ 2,843,000 .

The associated facility has a useful life of 28

years as of December 31, 2021.

SHRG owned trademarks and formulas increased in fair value approximately $ 86,000

and has useful life of 5

years as of December 31, 2021.

The Company had previously identified intangible assets in the form of a distributor lists and

increase the fair value approximately $ 132,000

and had a remaining useful life of 1

year at December 31, 2021.

Also, identified was goodwill valued at $ 3,257,000 .

Company, via three (3) of the Company’s existing board members, currently holds three (3) of the seven (7) SHRG board of director

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

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

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

Sentinel Brokers Company, Inc.

On 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 30, 2021.

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.

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.

The 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.

SCHEDULE OF BUSINESS ACQUISITION, PRO FORMA INFORMATION

2022 (unaudited)

2021 (unaudited)

$ 21,144 , 000

$ ( 61,680,088 )

$ ( 36,202,377 )

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

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.

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”).

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.

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.

PROPERTY PLANT AND EQUIPMENT AND INVESTMENT IN REAL ESTATE, NET

plant and equipment consisted of the following as of December 31, 2022:

OF PROPERTY, PLANT AND EQUIPMENT

Property Plant and Equipment and Investment in Real Estate, Net

Property, plant and

equipment consisted of the following as of December 31, 2023:

Schedule of Property, Plant and Equipment

Machinery and equipment

Building and improvements

28 - 39 years

Furniture and fixtures

3 unchanged sentences

Property, plant and equipment, net

expense for the years ended December 31, 2022 and 2021 was $ 1,569,000

and $ 1,129,000

respectively.

Of the $ 1,569,000 of depreciation, $ 872,000 is included in selling, general and administrative costs, and the remaining

$697,000 is included in cost of revenue.

Estate consisted of the following at December 31:

OF INVESTMENT IN REAL ESTATE

Depreciation expense

for the years ended December 31, 2023 and 2022 was $ 802,000 and $ 1,569,000 respectively.

Real Estate consisted

of the following at December 31:

Schedule of Investment in Real Estate

Building and improvements

1 unchanged sentence

Investment in real estate

Depreciation expense for the years ended December 31, 2022 and 2021 was

$ 2,077,000 and $ 420,000 respectively.

Depreciation expense

for the years ended December 31, 2023 and 2022 was $ 2,085,000 and $ 2,077,000 respectively.

INTANGIBLE ASSETS

On August 25, 2022, DSS PureAir,

a subsidiary of the Company finalized an asset purchase agreement with Celios Corporation (“Celios”) to acquire inventory,

patents, and other intangible assets associated with that inventory, and other intangible assets from Celios for $ 900,000 .

intangible assets were valued at $ 409,000 with an estimated remaining useful life between 3 and 20 years.

June 18, 2021, AMRE Shelton financed the purchase of a 40,000 square foot, 2.0 story, Class A+ multi-tenant medical office building located

on a 13.62 -acre site in Shelton, Connecticut.

Include in the value of the property is $ 585,000 of intangible assets with an estimated

useful life of 3 years.

November 4, 2021, AMRE LifeCare acquired three medical facilities located in Fort Worth, Texas, Plano, Texas, and Pittsburgh, Pennsylvania.

Include in the value of the property is $ 15,901,000 of intangible assets with estimated useful lives ranging from 1 to 11 years.

December 21, 2021, AMRE Winter Haven, LLC.

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

in Winter Haven, Florida.

Include in the value of the property is $ 29,000 of intangible assets with an estimated useful life of approximating

assets are comprised of the following as of December 31:

OF INTANGIBLE ASSETS

Carrying Amount

Intangible Assets

August 25, 2022, DSS PureAir, a subsidiary of the Company finalized an asset purchase agreement with Celios Corporation (“Celios”)

to acquire inventory, patents, and other intangible assets associated with that inventory, and other intangible assets from Celios for

The related intangible assets were valued at $ 409,000 with an estimated remaining useful life between 3 and 20 years.

Intangible assets are comprised of the

following as of December 31:

Schedule of Intangible Assets

Gross Carrying Amount

Accumulated Amortization

Carrying Amount

technology assets

intangibles customer lists, licenses, site/tenant improvements, in-place and favorable or unfavorable leases

intangibles patents and patent rights

application costs

Accumulated Amortization

Net Carrying Amount

Developed technology assets

Acquired intangibles customer lists, licenses, non-compete agreements, branding, product formulas,

tenant improvements, in-place, favorable and unfavorable leases

Acquired intangibles patents and patent rights

Patent application costs

Patent application costs are amortized over their expected useful life which is generally the remaining legal life of the patent.

of December 31, 2022, the weighted average remaining useful life of these assets in service was approximately 2.7

amortized for the year ended December 31, 2022 and 2021 was approximately $ 9,279,000 and $ 3,279,000 , respectively.

amortization for each of the five succeeding fiscal years is as follows:

OF ESTIMATED FUTURE AMORTIZATION OF INTANGIBLE ASSETS

of December 31, 2023, the weighted average remaining useful life of these assets in service was approximately 1.7 years.

amortized for the year ended December 31, 2023 and 2022 was approximately $ 2,319,000 and $ 9,279,000 ,

respectively.

Expected amortization for each of the

five succeeding fiscal years is as follows:

Schedule of Estimated Future Amortization of Intangible Assets

ACCRUED EXPENSES AND DEFERRED REVENUE

expenses and deferred revenue consist of the following for the year ended December 31:

OF ACCRUED EXPENSES AND DEFERRED REVENUE

Accrued Expenses and Deferred Revenue

Accrued expenses and deferred revenue

consist of the following for the year ended December 31:

Summary of Accrued Expenses and Deferred Revenue

Customer deposits

1 unchanged sentence

Accrued wages

Employee stock warrants liabilities

Settlement liability

3 unchanged sentences

Sales tax payable

Accrued expenses and deferred revenue

Accrued expenses and

deferred revenue

SHORT TERM AND LONG-TERM DEBT

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

The Note calls

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

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

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

The amount of the warrants granted is the equivalent

of the Note Principal divided by the Exercise Price.

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

(the “Exercise” Price).

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

Short Term and Long-Term Debt

Notes - On March 2, 2020, AMRE entered into a $ 200,000

unsecured promissory note with LVAMPTE, a related party.

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

fixed at 8.0 %.

As further incentive to enter into this Note, AMRE granted LVAMPTE warrants to purchase shares of common stock of AMRE (the “Warrants”).

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

The Warrants are exercisable

for four years and are exercisable at $ 5.00

per share (the “Exercise” Price).

In March 2022, this debt was converted into equity in AMRE, and LVAMPTE exercised

the warrants for $ 200,000

(see the consolidated statement of changes in stockholders’ equity) The holder is a related party owned by the Chairman

of the Company’s board of directors.

March 16, 2021, American Medical REIT, Inc.

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

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

The PPP, established as part of the Coronavirus Aid,

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

the average monthly payroll expenses of the qualifying business.

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

and utilities.

As of December 31, 2021, the outstanding principal and interest approximated $ 111,000 is included in long-term debt, net

on the consolidated balance sheet.

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.

On May 20, 2021,

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

to secure financing approximating $ 3,710,000 to purchase a new Heidelberg XL 106-7+L printing press.

1 unchanged sentence

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

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

$ 3,406,000 and $ 3,339,000 , respectively and had an interest rate of 4.63 %.

The outstanding balance at December 31, 2022 is included in

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

As of December 31, 2022, $ 474,000 was included in current portion of long-term

debt, net, and the remaining balance of approximately $ 2,932,000 recorded as long-term debt, The BOA Note contains certain covenants

that are analyzed annual.

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

Total interest expense for 2022 is $ 140,000 .

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

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

due at term end.

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 years.

The net book value of these asset as of

December 31, 2022 approximated $ 6,727,000 .

Of the total financed, approximately $ 216,000

of principal and accrued interest is classified

as current portion of long-term debt, net, and the remaining balance of approximately $ 4,783,000

recorded as long-term debt, net of $ 73,000

in deferred financing costs.

Interest expense

totaled in 2022 equaled $ 212,000

On October 13, 2021, LVAM entered

into loan agreement with BMIC (“BMIC 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 adjusted at the maturity date.

The BMIC Loan matures on October 12, 2022 , and contains

an auto renewal period of three months.

As of December 31, 2022 and December 31, 2021, $ 3,000,000 and $ 3,000,000 , respectively, is included

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

On October 13, 2021, LVAM entered

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

$ 3,000,000 , with interest to be charged at a variable rate to be calculated at the maturity date.

The Wilson Loan matures on October 12,

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

As of December 31, 2023, and December

31, 2022, the outstanding principal on the BOA Note was $ 2,932,000 and $ 3,406,000 , respectively and had an interest rate of 4.63 %.

of December 31, 2023, $ 491,000 was included in the current portion of long-term debt, net, and the remaining balance of approximately

$ 2,442,000 recorded as long-term debt, The BOA Note contains certain covenants that are analyzed annually.

As of December 31, 2023, Premier

is in compliance with these covenants.

On 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 of 4.25 %.

The interest will be adjusted commencing

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

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

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

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-acre site.

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 included in the value of the property is $ 585,000 of

intangible assets with an estimated useful life of approximating 3 years.

The net book value of these assets as of December 31, 2023

approximated $ 6,729,000 .

Of the total financed, approximately $ 206,000 of principal and accrued interest is classified as current portion

of long-term debt, net, and the remaining balance of approximately $ 4,402,000 recorded as long-term debt, net of $ 50,000 in deferred

financing costs.

On October 13, 2021,

LVAM entered into loan agreement with BMIC (“BMIC 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 adjusted at the maturity date.

The BMIC Loan matures on October 12,

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

As of December 31, 2023 and December 31, 2022, $ 547,000 and $ 3,000,000 , respectively,

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

On October 13, 2021,

LVAM entered into a 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 December 31, 2023

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

Interest expense equaled $ 8,000 in 2022.

On 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 December 31, 2022 and December 31, 2021 is $ 63,000

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 bearing interest rate of 18 % .

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

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

$ 2,131,000 is included in the Current portion of long-term debt, net on the consolidated balance sheet.

As of December 31, 2022 $ 3,008,000

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

On 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 to 11 years.

The net book value of the assets acquired as of

December 31, 2022 approximated $52,407,000 .

The LifeCare Agreement calls for the principal amount of the in equal, consecutive

monthly installments based upon a twenty-five ( 25 )

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 included 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 is approximately $ 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

2 unchanged sentences

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

The affective interest rate at December

31, 2022 was 8.46 %.

maturity date of November 2, 2023, may be extended to November 2, 2024.

As of December 31, 2021, the outstanding principal and

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

affective interest rate at December 31, 2022 was 8.46 %.

The maturity date of November

2, 2023 , may be extended to November

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 December 31, 2023, the outstanding principal and interested approximates $ 41,331,000 .

net of deferred financing costs of $270,000 is included in current portion of long-term debt, on the consolidated balance

Interest expense totaled $ 2,418,000

In November 2021, AMRE entered

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

Interest expense for the year-ended December 31, 2023 and 2022 approximated $ 3,773,000

and $ 2,418,000 ,

respectively.

This note is in default and demand was made for final payment to be made

by December 22, 2023.

This amount is past due.

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

This transaction

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

Interest expense for this note totaled $ 346,000 in 2022.

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

loan (“Pinnacle Loan”) whereas Pinnacle lent to AMRE Winter Haven the principal sum of $ 2,990,000 ,

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

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 years.

The net book value of the assets acquired as

of December 31, 2022 approximated $4,450,000.

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

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 December 31, 2022.

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

expense for this note totaled $ 677,000

for year ended December 31, 2023 and $ 346,000

for year ended December 31, 2022.

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

term loan (“Pinnacle Loan”) whereas Pinnacle lent to AMRE Winter Haven the principal sum of $ 2,990,000 ,

maturing on March

7, 2024 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 included in the value of the property is $ 29,000

of intangible assets with an estimated useful life of approximately 5

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

Payments are to be made in equal, consecutive installments based on a 25 -year

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

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

note is currently due.

The outstanding principal and interest, net of debt issuance costs of $ 17,000 ,

approximates $ 2,977,000

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

accompanying consolidated balance sheet at December 31, 2022.

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

The outstanding

principal and interest, net of debt issuance costs of $ 60,000 ,

approximates $ 2,952,000

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

Interest expense equaled

for the year 2022.

for year ended December 31, 2023 and $ 153,000

for year ended December 31, 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,

As of December 31, 2023, the outstanding principal and interest approximates $ 719,000 of which $ 112,000 was included in the current

portion of long-term debt, net, and the remaining balance of approximately $ 607,000 recorded as long-term debt.

summary of scheduled principal payments of long-term debt, not including revolving lines of credit, subsequent to December 31, 2023 are

Schedule of Notes Payable and Long-term Debt

Lease Liability

Company has operating leases predominantly for operating facilities.

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

leases range from less than one to twelve years .

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

options are not reasonably certain of exercise by the Company.

There is no transfer of title or option to purchase the leased assets

upon expiration.

There are no residual value guarantees or material restrictive covenants.

There are no significant finance leases as

of December 31, 2023.

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

of Lease Liability:

of Future Minimum Lease Payments

Total lease payments

Imputed Interest

( 1,598,000 )

Present value of remaining lease payments

Weighted-average remaining lease term (years)

Weighted-average discount rate

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

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

per month to $ 78,000

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

Total lease expense during the years ended December 31, 2023 and 2022

approximated $ 790,000

and $ 975,000 ,

respectively.

STOCKHOLDERS’ EQUITY

Stockholders’ Equity

Equity transactions –

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

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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 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,

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

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.

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.

This 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

in accordance with FASB ASC 718.

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

and consultants.

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.

On April 10, 2023, the Company

issued 62,354 shares of common stock to Mr.

Frank Heuszel, CEO of DSS, pursuant to his employment agreement.

These shares were issued

to settle a previously recorded liability of approximately $ 268,000 .

January 4, 2024 the Company effected a reverse stock split of 1

As of December 31, 2023 and December 31, 2022, there were 140,264,240

and 139,017,000

shares of our Common Stock issued and outstanding, respectively, which was converted to 7,066,772

and 6,950,858

shares, respectively.

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

fair value in accordance with FASB ASC 718.

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

directors and consultants.

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

During the twelve months ended December

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

Warrants – The following is a summary with respect to warrants outstanding and exercisable as of December 31, and activity during the years then ended :

SCHEDULE OF WARRANT ACTIVITY

Outstanding at January 1:

Granted during the year

Lapsed/terminated

Outstanding at December 31:

Exercisable at December 31:

Weighted average months remaining

Company did not issue any warrants in 2022 or 2021.

During the year ended

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

During the year ended December 31, 2023 there were none .

Warrants – The Company did not issue any warrants in 2023 or 2022, nor did it have any outstanding warrants as of December 31,

2023 and 2022.

Incentive Plan – On December 9, 2019, the Company’s shareholders adopted the 2020 Employee, Director and Consultant

Equity Incentive Plan (the “2020 Plan”).

The 2020 Plan provides for the issuance of an initial 241,204 shares

of common stock authorized to be issued for grants of options, restricted stock and other forms of equity to employees, directors

and consultants.

addition, on the first day of each calendar year, for a period of not more than ten (10) years, commencing January 1, 2021, or the

first business day of the calendar year if the first day of the calendar year falls on a Saturday or Sunday, the shares available

under this plan will automatically increase in an amount equal to the lesser of (i) five percent (5%) of the total number of shares

of Common Stock outstanding as of December 31 of the preceding fiscal year or (ii) such number of shares of Common Stock as

determined by the Board of Directors.

the terms of the 2020 Plan, options granted thereunder may be designated as options which qualify for incentive stock option

treatment (“ISOs”) under Section 422A of the Internal Revenue Code, or options which do not qualify

As of December 31, 2022, there are 3,513,130 shares

available under this plan.

Options – On June 20, 2013, the Company’s shareholders adopted the 2013 Employee, Director and Consultant Equity Incentive

Plan (the “2013 Plan”).

The 2013 Plan provides for the issuance of up to a total of 50,000 shares of common stock authorized

to be issued for grants of options, restricted stock and other forms of equity to employees, directors and consultants.

Under the terms

of the 2013 Plan, options granted thereunder may be designated as options which qualify for incentive stock option treatment (“ISOs”)

under Section 422A of the Internal Revenue Code, or options which do not qualify (“NQSOs”).

As of December 31, 2022, no shares

remained available under this plan.

following is a summary with respect to options outstanding as of December 31, 2022 and 2021 and activity during the years then ended:

SUMMARY OF STOCK OPTION ACTIVITY UNDER STOCK OPTION AND INCENTIVE PLANS

Number of Options

Weighted Average Exercise Price

Weighted Average life Remaining (Years)

Number of Options

Weighted Average Exercise Price

Weighted Average life Remaining (Years)

Outstanding at January 1,

Lapsed/terminated

Outstanding at December 31,

Exercisable at December 31,

Expected to vest at December 31,

Aggregate intrinsic value of outstanding options at December 31,

Aggregate intrinsic value of exercisable options at December 31,

Aggregate intrinsic value of options expected to vest at December 31,

fair value of each option award is estimated on the date of grant utilizing the Black-Scholes-Merton Option Pricing Model.

estimates the expected volatility of the Company’s common stock at the grant date using the historical volatility of the Company’s

common stock over the most recent period equal to the expected stock option term.

aggregate grant date fair value of options that vested during 2022 and 2021 was approximately $ 0 and $ 2,000 , respectively.

were no options exercised during 2022 or 2021.

The 2020 Plan provides for the issuance of an initial 241,204 shares of common stock

authorized to be issued for grants of options, restricted stock and other forms of equity to employees, directors and consultants.

addition, on the first day of each calendar year, for a period of not more than ten (10) years, commencing January 1, 2021, or the first

business day of the calendar year if the first day of the calendar year falls on a Saturday or Sunday, the shares available under this

plan will automatically increase in an amount equal to the lesser of (i) five percent (5%) of the total number of shares of Common Stock

outstanding as of December 31 of the preceding fiscal year or (ii) such number of shares of Common Stock as determined by the Board of

Under the terms of the 2020 Plan, options granted thereunder may be designated as options which qualify for incentive stock

option treatment (“ISOs”) under Section 422A of the Internal Revenue Code, or options which do not qualify (“NQSOs”).

As of December 31, 2023, there are 460,846 shares available under this plan.

Options – On June 20, 2013, the Company’s shareholders adopted the 2013 Employee, Director and Consultant Equity

Incentive Plan (the “2013 Plan”).

The 2013 Plan provides for the issuance of up to a total of 50,000

shares of common stock authorized to be issued for grants of options, restricted stock and other forms of equity to employees,

directors and consultants.

Under the terms of the 2013 Plan, options granted thereunder may be designated as options which qualify

for incentive stock option treatment (“ISOs”) under Section 422A of the Internal Revenue Code, or options which do not

qualify (“NQSOs”).

During the year ended December 31, 2023, 5,333 options were forfeited.

As of December 31, 2023, no

shares remained available under this plan.

Impact BioMedical, Inc.

Equity Transactions

On August 8, 2023 DSS BioHealth

Securities, Inc.

(“DSS BioHealth”), a wholly-owned subsidiary of the Company, and the sole shareholder of Impact BioMedical

Inc., distributed to the shareholders of DSS on record as of July 10, 2023 4 shares of Impact Bio’s stock for 1 share they owned

of DSS stock.

Each share of Impact BioMedical distributed as part of the distribution will not be eligible for resale until 180 days from

the date Impact BioMedical’s initial public offering becomes effective under the Securities Act, subject to the discretion of the

Company to lift the restriction sooner.

On October 31,

2023, Impact BioMedical effected a reverse

stock split of 1 for 55 .

As of December 31, 2023 and December 31, 2022, there were 3,877,282,251 shares of our Common Stock

issued and outstanding which was converted to 70,496,041 shares.

Also on October 31, 2023, DSS BioHealth Securities, Inc., the

Company’s largest shareholder converted 60,496,041 shares of Common Stock into 60,496,041 shares of Series A Convertible

Preferred Shares, reducing its ownership of the Company’s Common Stock from approximately 88 % to approximately 12 %.

Preferred Shares are voting shares and convertible.

Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the

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( 14,839,000 )

( 5,336,000 )

Total deferred

1 unchanged sentence

increase in allowance

( 3,498,000 )

tax effect of discontinued operations

Total income tax loss (benefit)

$ ( 4,032,000 )

components of deferred tax assets and liabilities are as follows:

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Net operating loss carry forwards

Net operating loss IRC 382 limited

Unrealized loss on securities

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Net deferred tax liabilities

December 31, 2022 and 2021, the Company has approximately $ 108.4 million

and $ 58.5 million

in federal net operating loss carryforwards (“NOLs”), respectively, available to reduce future taxable income.

provisions of the Internal Revenue Code, the net operating losses are subject to review and possible adjustment by the Internal

Revenue Service and state tax authorities.

Certain tax attributes are subject to an annual limitation as a result of certain

cumulative changes in ownership interest of significant shareholders which could constitute a change of ownership as defined under

Internal Revenue Code Section 382.

For the year ended December 31, 2021, the Company has completed a full analysis of historical

ownership changes and determined that a portion of the net operating losses have a limitation on future deductibility.

Approximately

$ 43.8 million

of net operating losses incurred prior to 2020 will be unable to offset future taxable income and have been reserved via a valuation

allowance to reduce the deferred tax asset to the expected realizable amount, leaving $ 2.9

million available for use which expire at various dates through 2038 and the residual which never expire.

This analysis is currently

being performed for tax year ending December 31, 2022.

Additionally, at December 31, 2022 and 2021, the Company had approximately

$ 43.6 million

of California and Illinois NOL carry-forwards, respectively, which expire

through 2042 .

The NOL carry-forwards may be

limited in certain circumstances, including ownership change and have been fully reserved via a valuation allowance.

valuation allowance for deferred tax assets increased approximately $ 15.4 million and $ 2.7

million for the years ended December 31, 2022 and December 31, 2021, respectively.

The valuation allowance for deferred tax liability increased

approximately $ 1.4 million

in the year ended December 31,2022 and increased approximately $ 2.8 million

December 31, 2023 and 2022, the Company has approximately $ 138.9 million and $ 108.4 million in federal net operating loss carryforwards

(“NOLs”), respectively, available to reduce future taxable income.

Under the provisions of the Internal Revenue Code, the

net operating losses are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities.

tax attributes are subject to an annual limitation as a result of certain cumulative changes in ownership interest of significant shareholders

which could constitute a change of ownership as defined under Internal Revenue Code Section 382.

For the year ended December 31, 2021,

the Company has completed a full analysis of historical ownership changes and determined that a portion of the net operating losses have

a limitation on future deductibility.

Approximately $ 43.8 million of net operating losses incurred prior to 2020 will be unable to offset

future taxable income and have been reserved via a valuation allowance to reduce the deferred tax asset to the expected realizable amount,

leaving $ 2.9 million available for use which expire at various dates through 2038 and the residual which never expire.

This analysis

is currently being performed for tax year ending December 31, 2023.

Additionally, at December 31, 2023 and 2022, the Company had approximately

$ 20.7 million and $ 43.6 of California and Illinois NOL carry-forwards, respectively, which expire through 2043 .

The NOL carry-forwards

may be limited in certain circumstances, including ownership change and have been fully reserved via a valuation allowance.

valuation allowance for deferred tax assets increased approximately $ 5.5 million and $ 15.4 million for the years ended December 31, 2023

and December 31, 2022, respectively.

The valuation allowance for deferred tax liability increased approximately $ 1.1 million in the year

ended December 31,2023 and decreased approximately $ 9.9 million for the year ended December 31, 2022.

differences between the United States statutory federal income tax rate and the effective income tax rate in the accompanying consolidated

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DEFINED CONTRIBUTION PENSION PLAN

Defined Contribution Pension Plan

Company maintains a qualified employee savings plans (the “401(k) Plan”) that qualifies as a deferred salary arrangement

9 unchanged sentences

COMMITMENTS AND CONTINGENCIES

Company has operating leases predominantly for operating facilities.

As of December 31, 2022, the remaining lease terms on our operating

leases range from one

to sixty-three

Termination options are not reasonably

certain of exercise by the Company.

There is no transfer of title or option to purchase the leased assets upon expiration.

no residual value guarantees or material restrictive covenants.

There are no significant finance leases as of December 31, 2022.

Operating cash paid for the year ended December 31, 2022 and December 31, 2021 was approximately $ 977,000

and $ 190,000

respectively.

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

SCHEDULE OF FUTURE MINIMUM PAYMENTS UNDER OPERATING LEASES

Total lease payments

Imputed Interest

( 2,131,000 )

Present value of remaining lease payments

Weighted-average remaining lease term (years)

Weighted-average discount rate

Agreements – The Company has employment or severance agreements with members of its management team.

The employment or severance

agreements provide for severance payments in the event of termination for certain causes.

As of December 31, 2022 and 2021, the Company

accrued approximately $ 0 and $ 7,276,000 , respectively, for Mr.

Heng Fai Ambrose Chan, an executive of the Company’s DSS

Cyber Security Pte.

Ltd subsidiary in accordance with the terms of his employment contract.

Also, as of December 31, 2022, the minimum

severance payments under these employment agreements are, in aggregate, approximately $ 220,000 .

Proceedings –

Apple Litigation

November 26, 2013, DSS Technology Management, Inc.

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

(“Apple”) in the

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

The complaint

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

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

On October 28, 2014, the case was

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

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

On December 30, 2014,

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

of the patents at issue in the case.

The PTAB instituted the IPRs on June 25, 2015.

The California District Court then stayed the case

pending the outcome of those IPR proceedings.

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

in favor of Apple on both IPR petitions.

DSSTM then filed an appeal with the U.S.

Court of Appeals for the Federal Circuit (the “Federal

Circuit”) seeking reversal of the PTAB decisions.

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

On March 23, 2018,

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

6,128,290 to be unpatentable.

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

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

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

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

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

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

amend its infringement contentions.

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

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

infringement contentions and motion to strike DSS infringement expert report.

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

for leave to file a motion for reconsideration.

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

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

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

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

Apple, Federal Circuit

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

Court’s judgment.

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

is deemed closed.

Ronaldi Litigation

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;

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,

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.

Both pieces of Ronaldi litigation were settled

and were discontinued with prejudice as of October 19, 2022.

Biosciences Litigation

Commitments and Contingencies

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.

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 .

As of December 31, 2023 and December 31, 2022, $200,000 and $0, respectively, has been accrued for in relation to the Equivir License

as development of the Equivir technology.

Agreements – As of December 31, 2023, the Company has no employment or severance agreements with members of its management

Proceedings – Maiden Biosciences Litigation

February 15, 2021, Maiden Biosciences, Inc.

77 unchanged sentences

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

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 .

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.

Contingent Litigation Payments –

The Company retains the services of professional service providers, including law firms that specialize in intellectual property licensing,

enforcement and patent law.

These service providers are often retained on an hourly, monthly, project, contingent or a blended fee basis.

In contingency fee arrangements, a portion of the legal fee is based on predetermined milestones or the Company’s actual collection

The Company accrues contingent fees when it is probable that the milestones will be achieved, and the fees can be reasonably

As of December 31, 2022, the Company had not accrued any contingent legal fees pursuant to these arrangements.

Payments – The Company is party to certain agreements with funding partners who have rights to portions of intellectual

property monetization proceeds that the Company receives.

As of December 31, 2022, there are no contingent payments due.

DISCONTINUED OPERATIONS

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

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

“Digital Purchase Agreement”).

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

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

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

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

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

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

the earn out will be recorded when determined realizable which did not occur during the twelve-months ended December 31, 2022.

The Company has not utilized the $ 0.5 million trade credit as of December 31, 2022.

The net effect of sale of DSS Digital, inclusive

of income tax, is a net gain of $ 2,333,000 .

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

consolidated statement of operations.

Litigation Payments – The Company retains the services of professional service providers, including law firms that

specialize in intellectual property licensing, enforcement and patent law.

These service providers are often retained on an hourly,

monthly, project, contingent or a blended fee basis.

In contingency fee arrangements, a portion of the legal fee is based on

predetermined milestones or the Company’s actual collection of funds.

The Company accrues contingent fees when it is probable

that the milestones will be achieved, and the fees can be reasonably estimated.

As of December 31, 2023 and 2022 the Company had not

accrued any contingent legal fees pursuant to these arrangements.

Payments – The Company is party to certain agreements with funding partners who have rights to portions of

intellectual property monetization proceeds that the Company receives.

As of December 31, 2023 and 2022, there are no contingent payments

SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental Cash Flow Information

cash flow information for the years ended December 31:

2 unchanged sentences

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 )

Right of use asset

Acquisition of APB net assets

Shares issued in lieu of bonus cash

1 unchanged sentence

Purchase of marketable security with Company stock

Third party Note receivable received in lieu of cash

SEGMENT INFORMATION

Segment Information

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

48 unchanged sentences

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

information concerning the Company’s operations by reportable segment for the twelve months ended December 31, 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:

information concerning the Company’s operations by reportable segment for the twelve months ended December 31, 2023 and 2022 is

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

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Biotechnology

Assets held for sale

Depreciation and amortization

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( 12,084,000 )

( 69,662,000 )

Capital expenditures

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Total Rental Income

Commission Income

Twelve months ended December 31, 2023

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Total commission income

Twelve months ended December 31, 2022

months ended December 31, 2023

Management fee income

Total Management fee income

Twelve months ended December 31, 2022

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During the year ended December 31, 2023 and December 31, 2022, the Company recorded unrealized loss on this

investment of approximately $ 1,590,000 and $ 1,920,000 , respectively.

investment of approximately $ 50,000 and unrealized loss of $ 1,590,000 , respectively.

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

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

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, Inc.

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

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

There was minimal

activity for the year ended December 31, 2022.

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

which provided for an investment of $ 40,000,200 by the Company into APB for an aggregate of 6,666,700 shares of the APB’s Class

A Common Stock, par value $ 0.01 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 have

been 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.

Since acquisition, APB has incurred approximately $ 895,000 of

net losses, of which approximately $ 361,000 of loss incurred is attributable to non-controlling interest.

The next largest shareholder

of APB is Alset EHome International, Inc.

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

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

The CEO of the Company, Mr.

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

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 December 31, 2022 and December 31, 2021 is $ 63,000

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 bearing interest rate of 18 %.

October 13, 2021, LVAM entered into loan agreement with BMIC (“BMIC 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 adjusted at the maturity date.

amount of $ 3,000,000 , with interest to be charged at a variable rate to be adjusted at the maturity date.

The BMIC Loan matures on October

12, 2022 , and contains an auto renewal period

of three months.

As of December 31, 2022 and December 31, 2021, $ 3,000,000

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

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

As of December 31, 2023 and December 31, 2022, $ 547,000 and $ 3,000,000 ,

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

October 13, 2021, LVAM entered into a 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.

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This loan was funded during March 2022.

As of December 31, 2022 $ 3,000,000 is included in Current portion of long-term debt, net on the consolidated balance sheet.

As of December 31, 2023 $ 2,131,000 is included in the Current portion of long-term debt, net on the consolidated balance sheet.

December 31, 2022 $ 3,008,000 is included in the Current portion of long-term debt, net on the consolidated balance sheet.

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 $ 8,469,000

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 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.

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 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 December

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

Interest expense for this note totaled

$ 677,000 for year ended December 31, 2023 and $ 346,000 for year ended December 31, 2022.

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

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

On July 26, 2022, APB and Borrower 11 entered into a promissory note (“Note

11”) in the principal sum of $ 1,000,000 with interest of 8 %.

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

The outstanding

principal and interest on December 31, 2023, approximates $ 939,000 , net of $ 20,000 of unamortized origination fees and is included in

notes receivable on the accompanying consolidate balance sheet.

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.

Heng Fai Ambrose Chan, the Chairman of DSS, Inc is also the on the board of directors of Borrower 11.

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

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

On August 29, 2022, DSS Financial

Management Inc and Borrower 10, a related party, entered into a promissory note (“Note 10”) in the principal sum of $ 100,000

with interest of 8 %, is due in three quarterly installments beginning on September 14, 2022.

All unpaid principal and interest is due

on August 29, 2025 .

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

respectively, and is included in Notes receivable on the accompanying consolidate balance sheet, of which $ 76,000 is included in the Current

portion of notes receivable and $ 24,000 is included in the long-term portion of notes receivable at December 31, 2023.

SUBSEQUENT EVENTS

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,

Subsequent Events

The Company has evaluated all

subsequent events and transactions through March 26, 2024, the date that the consolidated financial statements were available

to be issued and other then the reverse stock split identified in Note 14 and noted no subsequent events requiring financial statement recognition or disclosure.

9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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The audit report

of Turner, Stone & Company, LLP on our financial statements for the year ended December 31, 2021 contained

no adverse opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles.

the years ended December 31, 2021 and 2020 and the interim period ending June 30, 2022, there were no “disagreements” (as

of Turner, Stone & Company, LLP on our financial statements for the year ended December 31, 2021 contained no adverse opinion or

disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles.

the year ended December 31, 2021 and the interim period ending June 30, 2022, there were no “disagreements” (as

such term is defined in Item 304 of Regulation S-K) with the Former Accountant or the Previous Accountant on any matter of accounting

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financial statements for such periods.

the years ended December 31, 2021 and 2020 and the interim period ending June 30, 2022, there were the following “reportable events”

(as such term is defined in Item 304 of Regulation S-K):

as disclosed in Part II, Item 9A of the Company’s Form 10-K/A for the

year ended December 31, 2021, the Former Accountant advised the Company that the internal controls necessary for the Company to develop

reliable financial statements for such period did not exist;

and as disclosed in the Company’s Current Report on Form 8-K dated

December 3, 2021, the Previous Accountant advised the Company that the internal controls necessary for the Company to develop reliable

financial statements for such period did not exist.

to retaining the New Accountant, the Company did not consult with the New Accountant regarding either:

(i) the application of accounting

principles to a specified transaction, either contemplated or proposed, or the type of audit opinion that might be rendered on the Company’s

financial statements;

or (ii) any matter that was the subject of a “disagreement” or a “reportable event” (as

those terms are defined in Item 304 of Regulation S-K).

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data