What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-10-22 compared with 2022-08-17 · 1979 added, 2290 removed, 459 unchanged (90% 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 Stockholders and the Board of Directors of DSS, Inc.

(formerly, Document Security Systems, Inc.

and Subsidiaries)

on the Financial Statements

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

(formerly Document Security Systems, Inc and Subsidiaries) (the

Company) as of December 31, 2020, the related consolidated statements of operations and comprehensive income (loss), changes in stockholders’

equity and cash flows for the year then ended, and the related notes to the consolidated financial statements (collectively, the financial

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

as of December 31, 2020, 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 U.S.

federal 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 included 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 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.

for Business Combinations – Impact BioMedical, Inc.

described in Note 8 to the consolidated financial statements, the Company completed its acquisition of Impact BioMedical, Inc.

related party during the year ended December 31, 2020 for consideration of approximately $38 million.

In connection with this transaction,

the Company evaluated whether this transaction qualified as a business combination, evaluated the classification of the preferred shares

as either a liability or equity, determined the fair value of the consideration paid, determined the fair value of the separately identifiable

assets acquired and liabilities assumed and reflected the excess of the consideration paid over net assets acquired as goodwill.

In connection

with this transaction a deferred tax liability was recorded resulting in the release of a previously recorded valuation allowance.

operations of this acquisition are considered to be a single reporting unit.

evaluation of the classification of the transaction as a business combination and the preferred shares issued as permanent equity is

Further, based on the stage of development of the business and the related party nature of the transaction, the valuation of

the consideration paid, assets acquired, liabilities assumed, and related non-controlling interest is complex and judgmental.

The valuation

models used by management when determining their estimated fair value require subjective assumptions.

In particular, the fair value estimates

are sensitive to changes in assumptions for revenue growth, gross margin, and operating expenses as well as weighted average cost of

capital, illiquidity discounts relating to the consideration paid, and lack of control discounts for the non-controlling interest.

Additionally,

the accounting for the transaction and income tax accounting related to the opening balance sheet was complex.

Due to the complexity

of the transactions and subjectivity involved with the assumptions used, we identified the business combination as a critical audit matter,

which required a high degree of auditor judgement.

the matter involved performing subjective procedures and evaluating audit evidence in connection with forming our overall opinion on

the financial statements.

The primary procedures we performed included:

(i) Obtaining an understanding and evaluating of the design

of controls over accounting for and reporting of the transaction, (ii) auditing the appropriateness of management’s conclusions

surrounding the classification of this transaction as a business combination and the preferred share consideration as permanent equity,

(iii) auditing management’s assessment of the identification of assets to be acquired and valued, (iv) auditing management’s

development of the assumptions used in the valuation models applied and the reasonableness of those assumptions, and auditing the disclosures

over this transaction, and (v) auditing the calculation of the deferred tax liability recorded related to the transaction.

Professionals

with specialized skills and knowledge were used to assist in evaluating certain methodologies and assumptions used in determining fair

of Investments in Related Parties – Alset International, Inc.

and Sharing Services Global Corp

described in Note 7 to the consolidated financial statements, the Company has an equity investment in Alset International, Inc.

a related party, of approximately $6.8 million as of December 31, 2020, recorded as a marketable security with a readily determinable

This investment was previously recorded at cost, less impairment.

During the year ended December 31, 2020, the Company recorded

unrealized gains associated with this investment of approximately $3.4 million.

The Company also has an equity investment in Sharing

Services Global Corp (“SHRG”), a related party, of approximately $12.2 million as of December 31, 2020, recorded as an equity

method investment, as the Company has significant influence of SHRG.

Prior to obtaining significant influence, the investment was accounted

for as a marketable security with a readily determinable fair value.

During the year ended December 31, 2020, the Company recorded unrealized

gains associated with this investment of approximately $6.8 million, prior to gaining significant influence, and income of approximately

$600,000 associated with the Company’s share of equity in SHRG.

Further, the Company holds a warrant to purchase additional shares

of SHRG amounting to approximately $1.1 million, which is accounted for as an investment in an equity instrument and recorded at fair

value, resulting in approximately $350,000 of unrealized gains.

evaluation of the related party relationships and proper accounting treatment is complex and involves a high degree of subjectivity and

effort in performing procedures surrounding the classification and calculations related to the investments.

to the complexity of the transactions and subjectivity involved with the assumptions used, we identified the accounting for these related

party investments as a critical audit matter, which required a high degree of auditor judgement.

the matter involved performing subjective procedures and evaluating audit evidence in connection with forming our overall opinion on

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”).

The primary procedures we performed included:

(i) Obtaining

an understanding and evaluating of the design of controls over the determination the investments, (ii) evaluating the related party nature

of the investment and whether the investment was classified and recorded utilizing the appropriate accounting guidance, (iii) recalculating

the respective investment values and gains associated with those investments, and (iv) auditing the reasonableness of the presentation

and disclosure of the investments.

Freed Maxick CPAs, P.C.

served as the Company’s auditor from 2004 to 2020.

31, 2021, except for the effect of discontinued operations discussed in Note 17 to the consolidated financial statements and except for

the retrospective application of changes to the Company’s reportable segments discussed in Note 19, as to which the date for each

is March 31, 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, 2021 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, 2021, 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.

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.

of Financial Statements

discussed in Note 2 to the consolidated financial statements, the Company’s consolidated financial statements as of and for the

years ended December 31, 2023 and 2022 have been restated to correct certain misstatements.

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.

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.

March 31, 2022 (except for the 2021 Restatement described in Note 2 and

the effects thereof, as to which the date is August 17, 2022)

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 10 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 $51,595,000 classified as held for sale.

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

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 3 and 10.

Evaluation of Intangible Assets and Goodwill for

As described in Notes 3 and 11 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 3 and 11.

Grassi & Co., CPAs, P.C.

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

Jericho, New York

March 27, 2024, except for Notes 2, 3, 4, 7, 10, 11, 12, 19, and 21, as to which date is October 22, 2024

AND SUBSIDIARIES

2 unchanged sentences

(as restated)

Current assets:

Cash and cash

Cash and cash equivalents

Accounts receivable, net

Assets held for sale

discontinued operations

Current portion of notes

expenses and other current assets

Current assets - discontinued operations

Current portion of notes receivable

Prepaid expenses and other current assets

Total current assets

5 unchanged sentences

Notes receivable

Non-current assets held for sale - discontinued

Non-current assets - discontinued operations

Right-of-use assets

Other intangible assets,

Other intangible assets, net

$ 153,192,000

LIABILITIES AND STOCKHOLDERS’

$ 248,915,000

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

Accrued expenses and deferred

Accrued expenses and deferred revenue

Other current liabilities

Current Liabilities held

for sale - discontinued operations

Current portion of lease

portion of long-term debt, net

Current Liabilities - discontinued operations

Current portion of lease liability

Current portion of long-term debt, net

Total current liabilities

1 unchanged sentence

Long term lease liability

Non-current liabilities held for sale - discontinued

Non-current liabilities - discontinued operations

Other long-term liabilities

Deferred tax liability, net

Commitments and contingencies

Commitments and contingencies (Note 18)

Stockholders’ equity

Preferred stock, $ .02

shares authorized, shares issued and outstanding ( 43,000

on December 31, 2020);

Liquidation value $ 1,000

per share, $ aggregate.

on December 31, 2020).

Preferred stock, $ .02 par value;

47,000 shares authorized, zero shares issued and outstanding ( zero on December 31, 2022);

Liquidation value $ 1,000 per share, zero aggregate.

zero on December 31, 2022).

Common stock, $ .02 par value;

1 unchanged sentence

Additional paid-in capital

Non-controlling interest

in subsidiary

Accumulated deficit

( 256,176,000 )

( 194,343,000 )

stockholders’ equity

liabilities and stockholders’ equity

Total DSS stockholders’ equity

Non-controlling interest in subsidiaries

Total stockholders’ equity

Total liabilities and stockholders’ equity

$ 153,192,000

accompanying notes.

$ 248,915,000

See accompanying notes.

AND SUBSIDIARIES

Statements of Operations and Comprehensive (Loss) Income

Statements of Operations

the Years Ended December 31,

(as restated)

Printed products

3 unchanged sentences

Direct marketing

Commission revenue

Total revenue

Costs and expenses:

Cost of revenue, exclusive of depreciation

and amortization

Selling, general and administrative (including

stock-based compensation)

Depreciation and amortization

Cost of revenue

Selling, general and administrative (including stock based

compensation)

Total costs and expenses

4 unchanged sentences

Interest income

Dividend income

Other income (expense)

Interest expense

Litigation loss

( 8,750,000 )

Gain on extinguishment of debt

(Loss)/gain on equity method investment

Loss on investments

( 4,967,000 )

(Loss) gain on investments

( 1,196,000 )

Amortization of deferred

financing costs and debt discount

(Loss) income from continuing

operations before income taxes

Impairment of investment

( 5,637,000 )

Impairment of intangible assets

( 7,418,000 )

Impairment of real estate assets

Impairment of fixed assets

Impairment of assets upon deconsolidation

( 6,220,000 )

Provision for loan losses

( 3,794,000 )

Impairment of goodwill

( 30,978,000 )

(Loss)/gain on sale

( 1,300,000 )

Loss from continuing operations before income taxes

( 74,039,000 )

( 42,737,000 )

Income tax loss

(Loss) income from continuing

Loss from continuing operations

( 74,043,000 )

Income (loss) from discontinued

operations, net of tax

(loss) income

( 42,909,000 )

Loss from continuing

operations attributed to noncontrolling interest

(loss) income attributable to common stockholders

Loss from discontinued operations, net of tax

( 3,481,000 )

Earnings per common

Earnings per common share -

discontinued operations:

Shares used in computing

loss (earnings) per common share:

accompanying notes.

( 26,752,000 )

$ ( 77,524,000 )

$ ( 69,661,000 )

Loss attributed to noncontrolling interest

Net loss attributable to common stockholders

$ ( 60,627,000 )

$ ( 59,840,000 )

Amounts attributable to DSS stockholders

Loss from continuing operations net of taxes

$ ( 57,335,000.00 )

$ ( 38,153,000.00 )

Loss from discontinued operations net of taxes

( 3,292,000.00 )

( 21,687,000.00 )

Net loss attributable to DSS stockholders

$ ( 60,627,000.00

$ ( 59,840,000.00

Loss per common share attributable to common stockholders – continuing operations

Loss per common share attributable to common stockholders - discontinued

Shares used in computing loss per common share:

See accompanying notes.

AND SUBSIDIARIES

2 unchanged sentences

(as restated)

Cash flows from operating activities:

Net (loss) income from continuing operations

$ ( 77,524,000 )

Adjustments to reconcile net (loss) income from continuing operations to net

cash used by operating activities:

$ ( 69,661,000 )

Loss from discontinued operations

( 3,481,000 )

( 26,752,000 )

Loss from continuing operations

( 74,043,000 )

( 42,909,000 )

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

Depreciation and amortization

Stock based compensation

(Loss)/gain on equity method investment

Loss (gain) on investments

Gain/(loss) on equity method investment

Loss on investments

Change in ROU assets

( 7,521,000 )

Gain on extinguishment of debt

Deferred tax benefit

( 4,032,000 )

( 1,774,000 )

Deferred tax loss

Loss on sales of assets

Impairment of fixed assets

Impairment of assets upon deconsolidation

Impairment of intangible assets

Impairment of real estate

Impairment of Goodwill

Impairment of accounts receivable

Impairment of notes receivable

Impairment of other investments

Decrease (increase) in assets:

6 unchanged sentences

Accounts payable

( 2,260,000 )

Accrued expenses

( 15,646,000 )

Change in ROU liabilities

( 1,013,000 )

Other liabilities

Net cash (used) provided by operating activities - continuing operations

( 15,713,000 )

Net cash used by operating activities - discontinued operations

( 3,481,000 )

( 39,431,000 )

Net cash used by operating activities

5 unchanged sentences

Purchase of real estate

( 56,794,000 )

Purchase of investment

( 4,130,000 )

Purchase of marketable securities

( 5,374,000 )

( 9,791,000 )

Disposal of property, plant & equipment

Asset acquired with APB acquisition

( 1,879,000 )

Asset acquired with Sentinel acquisition

Conversion of SHRG to consolidation

Change in Equity investment

Issuance of new notes receivable, net origination fees

( 1,046,000 )

Note receivable investment

( 3,612,000 )

Payment received on notes receivable

Sale of marketable securities

Purchase of intangible assets

Net cash provided (used) by investing activities - continuing operations

( 8,018,000 )

Net cash used by investing activities

Net cash used by investing activities - discontinued operations

( 9,951,000 )

Net cash provided (used) by investing activities

( 17,969,000 )

2 unchanged sentences

( 4,246,000 )

Borrowings of long-term debt

Payments of revolving lines of credit, net

Deferred financing fees

( 3,362,000 )

Borrowings of long-term debt

Issuances of common stock, net of issuance costs

Net cash provided by financing activities

Cash flows from discontinued operations:

Cash (used) provide by discontinued operations

Cash used by investing activities

Cash provided (used) by financing activities

Net cash used by discontinued operations

Net increase in cash

Net cash (used) provided by financing activities - continuing operations

( 2,417,000 )

Net cash used provided by financing activities - discontinued operations

Net cash (used) provided by financing activities

( 2,417,000 )

Net (decrease) increase in cash – continuing operations

( 9,194,000 )

Net decrease in cash – discontinued operations

( 3,481,000 )

( 49,524,000 )

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, 2021 and 2020

controlling Interest in

the Years Ended December 31,

(as restated)

Balance, December 31, 2021

1 unchanged sentence

$ ( 134,503,000 )

Issuance of common stock, net

Conversion of preferred stock

Stock based payments, net of tax effect

Acquisition of American Pacific Bancorp

$ 161,776,000

$ 198,185,000

Issuance of common stock, net of expenses

Acquisition of Sentinel Brokers Company, Inc.

Acquisition of Sharing Services Global Corporation

Acquisition of Impact Biomedical, Inc.

Acquisition of Impact Biomedical, Inc., shares

Stock based payments

( 59,840,000 )

( 9,821,000 )

( 69,661,000 )

Balance, December 31, 2022

2021 (as restated)

$ 319,766,000

1 unchanged sentence

$ 125,562,000

$ 156,681,000

(as restated)

Balance, December 31, 2022

1 unchanged sentence

$ ( 194,343,000 )

Issuance of common stock, net

Conversion of preferred stock

Stock based payments, net of tax effect

Acquisition of Impact Biomedical, Inc.

Net (loss) income

$ 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

Acquisition of Sentinel Brokers Company, Inc.

Fractional shares as a result of reverse stock split

Dividend in kind -

Deconsolidation of Sharing Services Global Corporation

( 1,206,000 )

Deconsolidation of SHRG

( 60,627,000 )

( 16,897,000 )

( 77,524,000 )

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.

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:

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.

Our divisions, their business

lines, subsidiaries, and operating territories:

(1) Our Product Packaging line is led by Premier Packaging Corporation, Inc.

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

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, led by the holding corporation, Decentralized Sharing

Systems, Inc.

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

of peer-to-peer decentralized sharing marketplaces.

Direct specializes in marketing and distributing its products and services through

its subsidiary and partner network, using the popular gig economic marketing strategy as a form of direct marketing.

Direct’s products

include, among other things, nutritional and personal care products sold throughout North America, Asia Pacific, Middle East, and Eastern

(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 trust (“REIT”), organized

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

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

the REIT was formed

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

(6) Alternative Trading was established

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

Trading, in partnership

with recognized global leaders in alternative trading systems, intends to own and operate in the US a single or multiple vertical digital

asset exchanges for securities, tokenized assets, utility tokens, and cryptocurrency via an alternative trading platform using blockchain

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.

(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

Corporation, Inc.

(“Premier”), a New York corporation.

Premier operates in the paper board and fiber based folding

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

It markets, manufactures, and sells sophisticated custom

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

Premier is currently located in its new

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

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

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

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

This division is also targeting

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

diseases, such as tuberculosis and influenza.

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

(“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 sector.

Digital improves marketing, communications and operations processes with custom software

development and implementation.

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

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

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

(9) The Alternative Energy group was established to

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

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

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

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

(“Impact BioMedical”), pursuant to a Share

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

(“DSS BioHealth”), Alset International Limited

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

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

shareholders (the “Share Exchange”).

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

shares of the Company’s common stock, par

per share, nominally valued at $ 6.48

per share, and 46,868

newly issued shares of the Company’s Series

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

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

wholly owned subsidiary of DSS BioHealth, the Company’s wholly owned subsidiary (see Note 7).

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

the biomedical field for decades.

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

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

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

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

Subject to the terms and conditions

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

As a result of this transaction, DSS

became the majority owner of APB.

(see Note 8).

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 to operate a vehicle

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

unpredictability and volatility.

the terms of this agreement, 4000 shares or 40% of the Company’s subsidiary Liquid Asset Limited Management Limited (“LVAM”),

a Hong Kong company was transferred to HR1 whereas at the conclusion of the transaction DFMI would own 60% of LVAM and HR1 would own

LVAM executes within reliable platforms

and broad market access and uses proprietary systems and algorithms to trade liquid exchange-traded funds (ETFs), stocks, futures or

Aimed at providing consistent returns while offering the unique ability to liquidate the portfolio within 5 to 10 minutes under

normal market conditions, LVAM provides an array of advanced tools and products enabling customers to explore multiple opportunities,

strengthen and diversify their portfolios, and meet their individual investing goals.

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

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

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

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

The Company, headquartered in Plano, Texas, was incorporated in the State of Nevada on April

24, 2015, and is an emerging growth company.

The Company’s Common Stock is traded, under the symbol “SHRG,” in the

OTCQB Market, an over-the-counter trading platforms market operated by OTC Markets Group Inc.

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.

(“Sentinel LLC”), subsidiary of the Company entered into a stock purchase agreement

(“Sentinel Agreement”) to acquire a 24.9 % equity position of Sentinel Brokers Company, Inc.

(“Sentinel Co.”),

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

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.

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

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

with a principal amount of $ 8,350,000

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

This transaction was finalized in July 2022.

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

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

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

(“Alset EHome”), a related party.

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

owner of the outstanding shares of Alset EHome.

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

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

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Company has restated the accompanying financial statements for the year ended December 31, 2021, along with certain notes to such restated

Restatement of Previously Issued Financial Statements

The Company has restated the accompanying

financial statements for the year ended December 31, 2023 and 2022, along with certain notes to such restated financial statements.

adjustments recorded were related to the correction of an error identified by management.

The nature and impact of this adjustment

on the Company’s previously issued financial statements is summarized as follows and the effects by impacted line items are

detailed in the tables below.

Impacted amounts and associated disclosures are restated within the accompanying notes to the

financial statements.

The adjustments recorded were related to the correction of an error identified by management.

The nature and impact

of this adjustment on the Company’s previously issued financial statements is summarized as follows and the effects by impacted

line items are detailed in the tables below.

Impacted amounts and associated disclosures are restated within the accompanying notes to

the financial statements.

Company’s Premier Packaging subsidiary relocated to a new manufacturing and warehouse facility in March 2022 resulting in a consolidation

of its warehousing function from its previous manufacturing facility and multiple third-party locations.

Due to this relocation, Premier

Packaging performed a physical count of its inventory as of June 30, 2022, which is in addition to its annual inventory physical count

that took place beginning on December 30, 2021 and concluded on January 1, 2022 for inclusion in its December 31, 2021 financial statements.

As a result of this count, abnormal adjustments from the physical count to the recorded values within the Company’s ERP system

were identified.

Upon further investigation, it was discovered that several unintentional errors were made when converting the inventory

quantities into the unit of measure in the Company’s ERP system for inclusion in the December 31, 2021 financial statements.

resulting errors accumulated to an overstatement of Premier Packaging’s inventory by approximately $ 2,119,000 and its cost of revenue

excluding depreciation and amortization to be understated by approximately $ 2,119,000 .

Management and the Audit Committee of the Company

has concluded that restatement of its December 31, 2021 financial statements, filed on March 31, 2022, is required.

following tables summarize the effect of the restatement on each financial statement line items as of the December 31, 2021

OF OF THE RESTATEMENT ON EACH FINANCIAL STATEMENT LINE ITEMS

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

On May 4, 2023, the Company distributed approximately

million shares of Sharing Service Global Corporation (“SHRG”), beneficially held by the Company, in the form of a

dividend to the shareholders of the Company’s common stock.

Upon completion of this distribution, the Company retained an ownership

interest in SHRG of approximately 7 %.

Effective May 1, 2023, SHRG was deconsolidated from the consolidated financial statements (the “Deconsolidation”).

The consolidated

statement of operations does not include SHRG activity after April 30, 2023 and the assets and liabilities of SHRG are no longer included

within the Company’s consolidated balance sheet.

In the 10-Q for the second quarter of 2023, the Company recorded an approximate

$ 29.9 million loss on

deconsolidation.

The Company also recorded an decrease in accumulated deficit of $ 18.7

million to reflect the reversal of balances as of deconsolidation.

In preparation of the Form S-3 as well as the September 30,

2024 10-Q filing this transaction was revisited and it was determined that loss was unintentionally overstated by approximately $ 23.5

million driven primarily by the increases in accumulated deficit that should have been recorded as an

offset to the initial income statement loss.

In addition, the Company has determined that Deconsolidation also requires the recognition

of discontinued operations.

Management and the Audit Committee of the Company has concluded that restatement of its December 31, 2023

financial statements, filed on March 27, 2024, is required.

The following tables summarize the effect of the restatement

on each financial statement line items as of the December 31, 2023 and 2022:

of Restatement

of Previously Issued Financial Statements

As Previously

Consolidated Balance Sheets as of December 31, 2022

Cash and cash equivalents

( 3,112,000 )

Total current assets

Accounts receivable, net

( 1,791,000 )

( 2,728,000 )

Accumulated deficit

Current portion of notes receivable

Prepaid expenses and other current assets

Current assets - discontinued operations

Property, plant and equipment, net

( 6,630,000 )

Other investments

Marketable securities

( 4,251,000 )

( 1,184,000 )

Total stockholders’ equity

Right-of-use assets

Other intangible assets, net

Non-current assets - discontinued operations

Accounts payable

Accrued expenses and deferred revenue

( 6,811,000 )

Total liabilities and stockholders’ equity

Current portion of lease liability

Current Liabilities - discontinued operations

Long term lease liability

Non-current liabilities - discontinued operations

Consolidated Statements of Operations Loss for the year ended December 31, 2022

Direct marketing revenue

( 18,924,000 )

Total revenue

( 18,924,000 )

Cost of revenue

( 7,255,000 )

Selling, general and administrative (including stock based compensation)

( 28,161,000 )

Total costs and expenses

( 35,416,000 )

Operating loss

$ ( 46,471,000 )

( 16,493,000 )

$ ( 29,978,000 )

Other income (expense)

( 2,084,000 )

Interest expense

Gain (loss) on investments

$ ( 10,697,000 )

( 9,501,000 )

$ ( 1,196,000 )

Impairment of fixed assets

$ ( 2,843,000 )

( 2,843,000 )

Loss form continuing operations before taxes

$ ( 69,490,000 )

( 26,752,000 )

$ ( 42,738,000 )

Loss from discontinued operations, net of taxes

Loss per common share - basic earnings per share

Loss per common share - diluted earnings per share

Loss per common share - discontinued operations basic

Loss per common share - discontinued operations diluted

Consolidated Statements of Cash Flows for the year ended December 31, 2022

Loss from discontinued operations

$ ( 26,752,000 )

Loss from continuing operations

$ ( 42,909,000 )

Depreciation and amortization

Loss (gain) on investments

Change in ROU assets

$ ( 7,721,000 )

$ ( 7,521,000 )

Impairment of fixed assets

( 2,843,000 )

Accounts receivable

$ ( 1,891,000 )

$ ( 1,716,000 )

( 2,090,000 )

$ ( 1,550,000 )

Prepaid expenses and other current assets

( 1,445,000 )

$ ( 2,210,000 )

$ ( 1,234,000 )

Accounts payable

Accrued expenses

Change in ROU liabilities

Other liabilities

$ ( 298,000 )

Net cash used by operating activities - continuing operations

$ ( 26,953,000 )

Net cash used by operating activities - discontinued operations

( 39,431,000 )

$ ( 39,431,000 )

Purchase of property, plant and equipment

$ ( 2,294,000 )

$ ( 1,862,000 )

Purchase of marketable securities

$ ( 14,884,000 )

$ ( 5,374,000 )

Issuance of new notes receivable, net origination fees

$ ( 3,621,000 )

$ ( 3,612,000 )

Net cash used by investing activities - continuing operations

$ ( 17,969,000 )

$ ( 8,018,000 )

Net cash used by investing activities - discontinued operations

( 9,951,000 )

$ ( 9,951,000 )

Payments of long-term debt

$ ( 3,504,000 )

$ ( 3,362,000 )

Net cash used by financing activities - continuing operations

Net cash used by financing activities - discontinued operations

$ ( 142,000 )

Net increase (decrease) in cash - continuing operations

$ ( 37,305,000 )

Net increase (decrease) in cash - discontinued operations

( 49,524,000 )

$ ( 49,524,000 )

Consolidated Statements of Operations Income (Loss) for the year ended December 31, 2023

Cost of revenue, exclusive of depreciation and amortization

Direct marketing revenue

( 4,325,000 )

Total revenue

( 4,325,000 )

Cost of revenue

( 1,257,000 )

Selling, general and administrative (including stock based compensation)

( 4,729,000 )

Total costs and expenses

( 5,986,000 )

Operating loss

2 unchanged sentences

$ ( 19,800,000 )

(Loss) income from continuing operations before income taxes

Loss on investment

$ ( 32,986,000 )

1 unchanged sentence

$ ( 4,967,000 )

(Loss) income from continuing operations

Impairment of assets due to deconsolidation

$ ( 6,220,000 )

Loss from continuing operations before income taxes

$ ( 97,499,000 )

( 23,460,000 )

Net (loss) income

$ ( 74,039,000 )

Loss from discontinued operations, net of tax

( 3,481,000 )

$ ( 3,481,000 )

Net (loss) income attributable to common stockholders

$ ( 97,503,000 )

1 unchanged sentence

( 77,524,000 )

Basic earnings per share

Diluted earnings per share

Net loss attributable to common stockholders

$ ( 80,606,000 )

( 19,979,000 )

( 60,627,000 )

Loss per common share - basic earnings per share

Loss per common share - diluted earnings per share

Loss per common share - discontinued operations basic

Loss per common share - discontinued operations diluted

Consolidated Statements of Cash Flows for the year ended December 31, 2023

Net (loss) income from continuing operations

$ ( 97,503,000 )

1 unchanged sentence

$ ( 77,524,000 )

Loss from discontinued operations

$ ( 3,481,000 )

Loss from continuing operations

$ ( 74,043,000 )

Loss (gain) on investments

( 26,199,000 )

Impairment of assets

Net cash used by operating activities - continuing operations

$ ( 15,713,000 )

Net cash used by operating activities - discontinued operations

$ ( 3,481,000 )

Net decrease in cash - continuing operations

$ ( 9,194,000 )

Net decrease in cash - discontinued operations

$ ( 3,481,000 )

Consolidated Statements of Changes in Stockholders’ Equity for the year ended December 31, 2023

Net loss, accumulated deficit

Dividend in kind - Deconsolidation of Sharing Services Global Corporation

$ ( 1,206,000 )

Net loss - total

$ ( 97,503,000 )

$ ( 19,979,000 )

Accumulated deficit

$ ( 77,524,000

Net loss - accumulated deficit

$ ( 80,606,000 )

( 19,979,000 )

$ ( 60,627,000 )

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Summary of Significant Accounting Policies

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

significant intercompany balances and transactions have been eliminated in consolidation.

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

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

statements and the accompanying notes.

All significant

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”) and will be treated as discontinued operations on the face of our financial statements.

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 an impairment of assets due to the

deconsolidation of SHRG approximately $ 6,071,000 which is recorded as an impairment of assets due to

the deconsolidation

in our consolidated statements of operations.

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

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

the financial statements and the accompanying notes.

Actual results could differ materially from these estimates.

On an ongoing basis, the Company

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

of long-lived assets and goodwill, useful lives of intangible assets and property and equipment, contingencies fair values of options

and warrants to purchase the Company’s common stock, deferred revenue and income taxes, substantial doubt about ability to continue

as a going concern among others.

The Company bases its estimates on historical experience and on various other assumptions that are believed

to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

On an ongoing basis,

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

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

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

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

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

Reclassifications

– Certain amounts on the accompanying

consolidated balance sheets and income statements for the year ended December 31, 2020 have been reclassified to conform to current

year presentation.

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

cash equivalents.

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

costs approximate fair value.

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, 2021, the Company established

a reserve for doubtful accounts of approximately $ 20,000

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:

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.

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

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

securities classify as a Level 1 fair value financial instrument.

The fair value of notes receivable approximates their carrying value

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

The fair value of revolving credit lines notes

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

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

– Inventories consist primarily of paper,

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

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

Packaging work-in-process and finished goods included

the cost of materials, direct labor and overhead.

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

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

An allowance for obsolescence of $ 388,000 associated with

the inventory at our SHRG subsidiary was recorded as of December 31, 2021.

No allowance was recorded at December 31, 2020.

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

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

notes as notes receivable, which are then offset by the amount of any related unearned interest income.

– 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 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

on notes as notes receivable, which are then offset by the amount of any related unearned interest income.

For financial statement purposes,

7 unchanged sentences

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.

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

If there is a decline that is other-than-temporary, the investment is written down to fair value.

See Note 7 for further

discussion on investments.

Plant and Equipment –

Property, plant and equipment are recorded at cost.

Depreciation is computed using the straight-line method over the estimated useful

lives or lease period of the assets whichever is shorter.

Expenditures for renewals and betterments are capitalized.

Expenditures for

minor items, repairs and maintenance are charged to operations as incurred.

Any gain or loss upon sale 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.

Direct acquisition-related costs are capitalized

as a component of the acquired assets.

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

The allocation

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

Tangible and intangible assets include land, building

and improvements, furniture, fixtures and equipment, acquired above market and below market leases, in-place lease value (if applicable).

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

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

and available market information.

Depreciation and amortization 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.

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.

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

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

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

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

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

the investment is written down to fair value.

See Note 9 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.

Depreciation is computed using the straight-line

method over the estimated useful lives or lease period of the assets whichever is shorter.

Expenditures for renewals and betterments

are capitalized.

Expenditures for minor items, repairs and maintenance are charged to operations as incurred.

Any gain or loss upon sale

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.

Direct acquisition-related costs are capitalized as a component of the acquired assets.

This includes all costs

related to finding, analyzing and negotiating a transaction.

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

significant estimates.

Tangible and intangible assets include land, building and improvements, furniture, fixtures and equipment, acquired

above market and below market leases, in-place lease value (if applicable).

Acquisition-date fair values of assets and assumed liabilities

are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent

appraisers and that use appropriate discount and/or capitalization rates and available market information.

Depreciation and amortization

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

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 unit.

Company performed its annual goodwill impairment test as of December 31, 2021, and no impairment was deemed necessary for the goodwill

associated with Premier Packaging Company, APB and Impact BioMedical of approximately $ 1,769,000 ,

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

$ 29,744,000 ,

and $ 1,234,000

respectively.

Consistent with this accounting impairment analysis, the Company determined that due to many factors, including

the impact of the COVID-19 outbreak and the related closing of the operations of the Plastic Group, the Company has quantitatively tested

the carrying value of its goodwill associated with the DSS Plastics Group and determined that an impairment of the DSS Plastics’

goodwill had occurred and the Company recorded a full goodwill impairment of $ 685,000

during the twelve-months ended December 31, 2020.

This impairment has been included in the calculation of the discontinued operations of DSS Plastics group.

goodwill impairment recorded during the year

ended December 31, 2021.

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

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.

Assets - 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 flows.

If the carrying

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

asset or asset group to its carrying value.

Party Liabilities - On April 1, 2020 the Company’s HWH World, Inc subsidiary has a service agreement with HWH Korea, a

subsidiary of Alset International Limited (“Alset Intl.”) (formally Singapore eDevelopment Limited).

The Chairman of the

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

Chan is also the majority

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

The Company also owns approximately 127,179,000 shares of

Alset Intl, a company publicly listed on the Singapore Exchange Limited.

This service agreement will allow HWH Korea to utilize the Company’s

merchant account in connection with their direct marketing network with periodic remittance of the cash collected to them for a fee of

2.5 % of amounts collected.

As of December 31, 2021, the Company had collected approximately $ 0 as compared to $ 1,100,000 as of December

31, 2020, on behalf of HWH Korea, which is included in Accrued expenses and deferred revenue on the consolidated balance sheet.

were no amounts outstanding to this related party at December 31, 2021.

Stock Split - On May 4, 2020, DSS, Inc.

held a Special Meeting of Stockholders at which the Company’s stockholders approved

amendment to the Company’s certificate of incorporation to effect a reverse split of common stock of the Company by a ratio of

1-for-30 with the effectiveness of such amendment to be determined by the Board of Directors of the Company The form of the certificate

of amendment to effect the Reverse Split was subsequently approved by the Board on May 4, 2020.

On May 7, 2020, the Company filed a Certificate

of Amendment of Certificate of Incorporation with the Secretary of State of the State of New York to effect a 1-for-30 reverse stock

split of the Company’s outstanding common stock.

The Amendment was effective at 5:01 p.m.

Eastern Time on May 7, 2020.

stock split has been retroactively applied to all financial statements presented.

- The Company recognizes its products and services

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

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

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, 2021, 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, 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.

Amortization of intangible

assets, patent costs and acquired technology are included in depreciation and amortization on the consolidated statement of operations.

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.

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, 2021.

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 earnings per share.

Basic earnings per share reflect the actual weighted average of shares issued and outstanding during

Diluted earnings per share are computed including the number of additional shares from outstanding warrants, stock options

and preferred stock that would have been outstanding if dilutive potential shares had been issued and is calculated utilizing the treasury

stock method.

In a loss period, the calculation for basic and diluted earnings per share is the same, as the impact of potential common

shares is anti-dilutive.

For the year ended December 31, 2021, potential dilutive instruments includes both warrants and options of

3,556 and 11,930 shares respectively.

Weighted average shares outstanding used for diluted earnings per share includes the assumed

conversion of the 47,000

preferred shares, convertible into 7,233,000

common shares, for the period they were outstanding

resulting in an additional 2,471,000

shares for the year ended December 31, 2020.

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 as a result of any non-performance by the financial institutions.

2021, two customers accounted for approximately 27 %

and 14 % of our consolidated revenue.

December 31, 2021, these two customers accounted for approximately 29 %

and 19 % of our consolidated trade accounts

receivable balance.

As of December 31, 2020, these two customers accounted for approximately

20 % and 18% of our consolidated revenue and

and 19 % of our consolidated trade accounts receivable balance.

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

Business Combinations (“Topic 805”):

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

The guidance is

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

Under this guidance, an

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

asset or a group of similar identifiable assets.

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

If the threshold is not met, the

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

that together significantly contribute to the ability to create outputs.

See Note 8 regarding the acquisitions.

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.

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 .

Operations - On May 4, 2023, the Company distributed approximately 280 million shares of Sharing Service Global Corporation (“SHRG”),

beneficially held by the Company, in the form of a dividend to the shareholders of the Company’s common stock.

Upon completion

of this distribution, the Company retained an ownership interest in SHRG of approximately 7 % .

Effective May 1, 2023, SHRG was deconsolidated

from the consolidated financial statements (the “Deconsolidation”).

The consolidated statement of operations does not include

SHRG activity after April 30, 2023 and the assets and liabilities of SHRG are no longer included within the Company’s consolidated

balance sheet.

The deconsolidation of SHRG is a strategic shift, as a significant portion of the Direct Marketing line of business was

While the Decentralized Sharing Systems part of the business will continue to provide these services, SHRG was a significant

portion of this segment as it made up approximately 47 % and 20 % , respectively, of the total DSS revenue in 2022 and 2023.

the Company has applied discontinued operations treatment for this deconsolidation as required by Accounting Standards Codification 205—Discontinued

The major classes of assets and liabilities of SHRG are classified as Discontinued Operations on the Consolidated Balance

Sheets and the operating results of the discontinued operations is reflected on the Consolidated Statements of Operations as Loss from

Discontinued Operations.

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

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

and all acquisition costs are expensed as incurred.

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

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.

Operations – On April 20, 2020, the Company

executed a nonbinding letter of intent with a perspective buyer for the sale of certain assets of its plastic printing business line,

which it operated under Plastic Printing Professionals, Inc.

(“DSS Plastics”), a wholly-owned subsidiary of the Company.

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

The remaining assets of DSS Plastics were either sold, separately disposed,

or retained by other existing DSS businesses lines.

Accordingly, the operations of DSS Plastics have been discontinued.

magnitude of DSS Plastics’ historical revenue to the Company and because the Company has exited the production of laminated and

surface printed cards, this sale represented a significant strategic shift that has a material effect on the Company’s operations

and financial results.

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

Standards Codification 205—Discontinued Operations.

The major classes of assets and liabilities of DSS Plastics are classified

as Held for Sale – Discontinued Operations on the Consolidated Balance Sheets and the operating results of the discontinued operations

is reflected on the Consolidated Statements of Operations and Comprehensive Income (Loss) as Loss from Discontinued Operations.

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

of the capital stock of DSS Digital Inc.

(“DSS Digital”), the Company’s wholly owned subsidiary, which researched,

developed, marketed, and sold the Company’s digital products worldwide.

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

Adopted and Recent 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.

This guidance is effective for the Company for fiscal years, and interim periods within those fiscal years, beginning

after December 15, 2022.

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

financial statements.

December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes, which simplifies the

accounting for income taxes.

This guidance will be effective for entities for the fiscal years, and interim periods within those fiscal

years, beginning after December 15, 2020 on a prospective basis, with early adoption permitted.

We will adopt ASU 2019-12 effective March

1, 2021 and do not expect the adoption of this guidance to have a material impact on our consolidated financial statements

of COVID-19 Outbreak - The COVID-19 pandemic has created global economic turmoil and has potentially permanently impacted how

many businesses operate and how individuals will socialize and shop in the future.

We continue to feel the effect of the COVID-19 business

shutdowns and consumer stay-at-home protections.

But the effect of the economic shutdown has impacted our business lines differently,

some more severely than others.

In most cases, we believe the negative economic trends and reduced sales will recover over time.

Additionally,

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

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

impairment losses related to goodwill and other long-lived

assets and current obligations.

4 – INVENTORY

consisted of the following as of December 31:

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.

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.

Inventory consisted

of the following as of December 31:

Schedule of Inventory

(as restated)

Finished Goods

5 unchanged sentences

Notes Receivable

TBD Holdings, LLC.

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

a Florida limited liability company.

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

of which up to $ 500,000

and all accrued interest can be paid by an “Optional

Conversion” of such amount up to 19.8 %

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

This TBD Note accrues interest at 6 %

and matures on October

As of December 31, 2021, and December

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

This asset was classified as long-term portion of Notes receivable on the consolidated balance sheet as December 31, 2021,

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

On December 30, 2020, the Company signed a binding

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

agreement whereby DSS will assign the TBD Note to West Park and West Park shall issue to DSS a stock certificate reflecting 7.5 %

of the issued and outstanding shares of West Park.

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

the first quarter of 2022.

Group Limited

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

a company registered in Gibraltar.

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.

The 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.

The GSX Note shall be converted, at the

Company’s option, into shares of GSX at the conversion price of $ 1.05

As of the date of filing, this

note is in default.

The Company and GSX are currently re-negotiating the terms of the GSX Note.

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

JV”), along with Coinstreet, whose CEO is also a member of the Company’s

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

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

This JV is currently in the planning

February 21, 2021, Impact BioMedical, Inc.

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

Dustin Crum (“Mr.

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

date of August 19, 2022.

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

19, 2022, at which time all accrued interest and the entire remaining principal shall be due and payable in full.

This note is secured

by certain real property situated in Collier County, Florida.

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

$ 197,000 and is classified in current notes receivable on the accompanying consolidated balance sheets.

Brokers Company, Inc.

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

Company, Inc.

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

The Sentinel Note has an aggregate principal balance

up to $ 600,000 ,

to be funded at request of Sentinel.

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

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

As of December 31, 2021, there is $ 0

outstanding on the Sentinel Note.

May 14, 2021, DSS Pure Air, Inc.

a subsidiary of the Company entered into a convertible promissory note (“Puradigm Note”)

with Puradigm, LLC (“Puradigm”), a company registered in the state of Texas.

The Puradigm Note has an aggregate principal

balance up to $ 5,000,000 ,

to be funded at request of Puradigm.

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

due quarterly, has a maturity date of May

The Puradigm Note contains an options

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

principal amount equal to 18 %

of the total equity position of Puradigm at conversion.

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

$ 5,081,000 ,

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

Harris-Montgomery

Counties Management District

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

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

District Local Laws Code;

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 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;

and Chapter 49, Texas Water Code.

The District Note was in the sum

of $ 3,500,000

and incurs interest at a rate of 4.15 %

Principal and interest are due in full on September

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

redemption date.

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.

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.

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 $ 3,540,000

of the District Note is included in current portion

of notes receivable on the consolidated balance sheet at December 31, 2021.

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

(“Asili”) a company registered

in the state of Utah.

The Asili Agreement has an initial aggregate principal balance up to $ 1,000,000 , to be funded at request of Asili,

with an option to increase the maximum principal borrowing to $ 3,000,000 .

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

with principal and interest due at the maturity date of October 25, 2022 .

The Asili Agreement contains an optional conversion feature

allowing APB to convert the outstanding principal to a 10% membership interest in Asili, at a ratio of $1,000,000 to 10%.

APB, as holder

of the Asili Agreement, has the right to elect one member to the Asili Board of Managers.

The outstanding principal and interest of $ 784,000

of the Asili Agreement is included in current portion of notes receivable on the consolidated balance sheet at December 31, 2021.

Park Capital Group, LLC.

December 28, 2021, APB entered into promissory note (“West Park Note”) with West Park Capital Group, LLC.

(“West Park”),

a company registered in the state of California.

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

The West Park Note, which incurs

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

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 of $ 700,000 of the West Park Note is included in current portion of notes receivable on the consolidated balance sheet at December

June 13, 2019, the Company extended the credit to Leopoldo Bustamate (“Bustamate Note”) in the form of a promissory note

for $ 249,540 , bearing interest at 15 % , with a maturity date of May 15, 2020 .

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

in the form of a promissory note for $ 249,540 , bearing interest at 15 % , with a maturity date of May 14, 2021 .

On August 30, 2021, the

Company further extended the same credit in the form of a promissory note for $ 249,540 , bearing interest at 12.5 % , with a maturity date

of May 15, 2023 .

The modification agreement is effective May 14, 2021.

This promissory note is secured by a deed of trust on a tract

of land, which is approximately 315 acres, and located in Coke County, Texas.

The outstanding principal and interest of $ 260,000 of the

Bustamate Note is included in long term portion of Notes receivable on the consolidated balance sheet at December 31, 2021.

October 7, 2021, HWH entered into a revolving loan commitment (“HWH Ltd Note”) with HWH World Ltd.

a company registered in Taiwan.

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

of December 31,2021 .

The outstanding principal at December 31, 2021 is $ 52,000 and is included in the current portion of notes receivable.

This note is currently in default and the Company is currently in the process of extending the terms.

In accordance with the terms of

Note, the Company began charging interest at the default rate of 18 % on January 1, 2022 .

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

agreed to provide to 1044 PRO a $ 250,000

revolving credit line and loaned $ 204,879

to 1044 PRO under the credit line.

Borrowings under the credit line are payable in monthly installments in amounts determined by the

amount of each cash advance.

At December 31, 2021, loans of $ 193,000

are outstanding, net of an allowance for the impairment losses of $ 115,000 ,

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

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

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

the fiscal year 2019, SHRG received a promissory note for $ 106,404 from a prior merchant payment processor in connection with amounts

owed to the Company.

At December 31, 2021, $ 15,000 is outstanding and included in Current portion of notes receivable on the consolidated

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.

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 %,

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, 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

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.

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, 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, 2021 and

December 31, 2020:

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

and Cash Equivalents

Restricted Cash

Unrealized Gain/Loss

Cash And Cash Equivalents

Marketable Securities

Money Market Funds

Marketable Securities

Convertible securities

Cash and cash equivalents

( 17,325,000 )

$ ( 17,325,000 )

Money Market Funds

Marketable 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.

7 - INVESTMENTS

International Limited (formally Singapore eDevelopment Limited)

of December 31, 2018, the Company owned 21,196,552

ordinary shares of Alset International Limited

(“Alset Intl”), formerly named Singapore eDevelopment Limited (“SED”), a company incorporated in Singapore and

publicly listed on the Singapore Exchange Limited.

and an existing three-year warrant to purchase up to 105,982,759

ordinary shares at an exercise price of SGD$ 0.040

(US$ 0.0298 )

per share During the year ended December 31, 2019 the Company exercised 61,977,577

of the warrants for total cost of $ 1,829,000

and at December 31, 2019 recorded the investment

at cost, less impairment under the measurement alternative in ASC 321 for a total value of $ 2,154,000 .

As of June 26, 2020, the Company exercised the remaining warrants for total cost of $ 1,291,000

bringing its total ownership to 127,179,291

shares or approximately 7 %

of the outstanding shares of Alset Intl as of December 31, 2020.

Historically and through June 30, 2020, the Company carried its investment

in Alset Intl at cost, less impairments under the measurement alternative in ASC 321 in part due to the restriction on the sale of shares

which expired on September 17, 2019 as well as the lack of historical volume associated with the shares of Alset Intl.

During the third

quarter 2020, the Company determined fair value based on the volume of shares traded on the Singapore Exchange which has a breadth and

scope comparable to United States markets, as well as a consistent and observable market price.

Accordingly, this investment is now 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.

( 17,976,000 )

Convertible securities

$ ( 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

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.

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

of the Company.

The fair value of the marketable security as of December 31, 2021 and 2020, respectively, was approximately $ 4,909,000

and $ 6,830,000 .

During the years ended December 31, 2021 and 2020, the Company recorded an unrealized losses and gains on this investment of approximately

and $ 3,384,200 ,

respectively.

Heng Fai Ambrose Chan, is the Executive Director and Chief Executive

Officer of Alset Intl.

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

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.

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.

purchased 14.9 %

membership interests in BMIC for $ 100,000 .

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

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

Upon achieving greater than 20 %

ownership in BMIC, the Company began accounting for this investment under the equity method of accounting per ASC 323.

The Company’s

portion of net loss in BMIC for the year ended December 31, 2021, was $ 19,000 , and is included in Investments, equity method

on the Consolidated Balance Sheet.

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.

Title Company

or about August 28, 2020, the Company’s wholly owned subsidiary, DSS Securities, Inc.

entered into a corporate venture to form

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

DSS Securities, Inc.

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

and permitting process.

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

Connecticut, Florida, and Illinois.

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

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

There was minimal activity for the year ended

December 31, 2021.

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

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 $ 630,000 .

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

to the board of BioMed.

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

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

In connection with the Subscription Agreement, Impact entered into an

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,

2 unchanged sentences

it does not have a readily determined fair value.

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

certain BioMed products to resellers.

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

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

Baby Probiotics ® .

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

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.

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, 2021;

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

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

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

two seats on the board of Vivacitas.

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

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

value of $ 1.00

per share shall be $ 120,000

to be paid in twelve (12) equal monthly installments

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

As of December 31, 2021, the Company has received 90,000 Common A Shares

of Vivacitas.

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

of the available options under the Vivacitas

Agreement #1 for $ 1,000,000 .

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

as of December 31, 2021.

Brokers Company, Inc.

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

Agreement”) to acquire a 24.9 %

equity position of Sentinel Brokers Company, Inc.

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

purchase price of $ 300,000 .

During the three months ended September 30, 2021, the Company contributed an additional $ 750,000 capital

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

Under the terms of this agreement, the Company as the option

to purchase an additional 50.1 %

of the outstanding Class A Common Shares.

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

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

to the Company.

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

profits of Sentinel.

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

Topic 323, Investments—Equity Method and Joint Ventures recognizing our share of Sentinel’s earnings and losses

within our consolidated statement of operations.

The Company’s portion of net income in Sentinel for the year ended

December 31, 2021, was not significant.

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”).

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

(“GNTW”) entered into

a Securities Purchase Agreement (the “SPA”) pursuant to which the SHRG invested $ 1.4 million in Stemtech in exchange for:

(a) a Convertible Promissory Note in the amount of $ 1.4 million in favor of the SHRG (the “Convertible Note”) and (b) a detachable

Warrant to purchase shares of GNTW common stock (the “GNTW Warrant”).

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 .

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 of 10 % , and is convertible, at the option of the

holder, into shares of GNTW’s common stock at a conversion rate calculated based on the closing price per share of GNTW’s

common stock during the 30-day period ended September 19, 2021.

The GNTW Warrant expires on September 13, 2024 and conveys the right

to purchase up to 1.4 million shares of GNTW’s common stock at a purchase price calculated based on the closing price per share

of GTNW’s common stock during the 10-day period ended September 13, 2021.

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

of its common stock, or less than 1% of the shares of GNTW then issued and outstanding, in payment of the origination fee.

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

During the three and nine months ended December 31, 2021, the SHRG recognized unrealized gains, before income tax, of

$ 1.2 million and $ 3.3 million, respectively, in connection with its investment in the Convertible Note, the GNTW Warrant and the shares

of GNTW common stock.

September 2021, the 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 SHRG organized in the State of Utah, in exchange for $ 1,537,000 .

MojiLife is an emerging growth

distributor of technology-based consumer products, such as cordless scent diffusers, for the home and the car, as well as proprietary

home cleaning products and accessories.

During the nine months ended December 31, 2021, the SHRG recognized equity in losses of $ 59,629 ,

before income tax, in connection with its investment in MojiLife.

8 – Acquisitions

Medical REIT Inc.

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

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

and American Medical REIT Inc.

under which it acquired a 52.5 % controlling

ownership interest in AMRE Asset Management Inc.

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

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

and formulate investment strategy for AMRE.

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

acquisition and divestments in accordance with the investment strategies.

AMRE is a Maryland corporation, organized for the purposes

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

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

AMRE was formed to originate, acquire,

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

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

federal income tax purposes, which will provide.

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

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

for the principal amount of $ 800,000

(the “Note”).

The Note matures on

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

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

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

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

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

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

The Note also provides the Company an option to provide

AMRE an additional $ 800,000

on the same terms and conditions as the Note,

including the issuance of warrants as described below.

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

to purchase 160,000

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

The Warrants have an exercise price of $ 5.00

per share, subject to adjustment as set forth

in the Warrants, and expire on March

Pursuant to the Warrants, if AMRE files

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

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

per share, the exercise price of the Warrants

shall be adjusted downward to 50 %

of the IPO price.

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

As of December

31, 2021, this Note had outstanding principal and interest of approximately $ 914,000 .

Upon consolidation this Note is eliminated.

entered into a $ 200,000

unsecured promissory note with LiquidValue Asset

Management Pte Ltd (“LVAMPTE”).

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

See Note 12 for further details.

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

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

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

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

The additional 264,525 Class A Common Shares acquired increases the

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

June 18, 2021, AMRE Shelton, LLC.

(“AMRE Shelton”), a subsidiary of AMRE financed the purchase of a 40,000 square foot, 2.0

story, Class A+ multi-tenant medical office building located on a 13.62-acre site in Shelton, Connecticut (See Note 12) for the purchase

price of $ 7,150,000 .

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

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

single identifiable asset or a group of similar identifiable assets.

These assets are classified as investments, real estate on

the consolidated balance sheet.

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

and tenant improvements respectively.

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

life approximating 3 years.

All assets were allocated on a relative fair value basis.

Contained within the sale-purchase agreement for

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

As of December 31, 2021, no liability has been

recorded for this earnout.

November 4, 2021, AMRE LifeCare Portfolio, LLC.

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

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

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

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

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

All assets were allocated on a relative

fair value basis.

December 21, 2021, AMRE Winter Haven, LLC.

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

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

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

been determined to be an acquisition of assets as s ubstantially all of the fair value of the gross

assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets.

These assets are classified

as investments, real estate on the consolidated balance sheet.

The purchase price has been allocated as $ 3,200,000 , $ 1,000,000 , and $ 222,000

for the facility, land and site and tenant improvements respectively.

Also include in the value of the property is $ 29,000 of intangible

assets with an estimated useful life of approximating 5 years.

All assets were allocated on a relative fair value basis.

the year ended December 31, 2021, AMRE had net losses of $ 2,835,000

of which $ 138,000 and is attributable to the non-controlling

BioMedical, Inc.

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

(“Impact”), pursuant to a Share Exchange

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

Biomedical Pte Ltd.

(“GBM”) which was previously approved by the Company’s shareholders (the “Share Exchange”).Under

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

shares of the Company’s common stock, par

per share, nominally valued at $ 6.48

per share, and 46,868

newly issued shares of the Company’s Series

A Convertible Preferred Stock (“Series A Preferred Stock”), with a stated value of $ 46,868,000 ,

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

million to acquire 100 %

of the outstanding shares of Impact.

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

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

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

to $3 5,187,000 ,

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

The Company incurred approximately $ 295,000

in cost associated with the acquisition of Impact

Biomedical which were recorded as general and administrative expenses.

As a result of the Share Exchange, Impact Biomedical

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

are included in the Company’s financial statements beginning August 21, 2020.

Impact BioMedical has several subsidiaries that are

not wholly owned by Impact Biomedical and have an ownership percentage ranging from 63.6 %

During the year ended December 31, 2021, Impact has incurred approximately $ 2,535,000

of net losses, of which $ 407,000

of loss incurred is attributable to non-controlling

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

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

with the acquisition method of accounting under Topic 805

Pacific Bancorp.

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

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

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

shares of the APB’s Class A Common Stock,

par value $ 0.01

Subject to the terms and conditions

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

As a result of this transaction, DSS

owns approximately 53 %

of APB, and as a result its operating results have been included in the Company’s financial statements beginning September

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.

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

if the acquisition took place on January 1.

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

SCHEDULE OF BUSINESS ACQUISITION, PRO FORMA INFORMATION

Net (loss)/income

$ ( 32,217,000 )

Basic (loss)/earnings per share

Diluted (loss)/earnings per share

The 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.

Net assets acquired

were approximately $ 3,400,000

and included approximately $ 1,250,000

in cash, $ 1,900,000

in marketable securities, $ 330,000

in notes receivable and $ 101,000

of accounts payable and accrued liabilities.

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

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 currently accounts for its investment

in SHRG using the equity method in accordance with ASC Topic 323, Investments—Equity Method and Joint Ventures recognizing

our share of SHRG’s earnings and losses within our consolidated statement of operations.

July 22, 2020, Chan Heng Fai Ambrose, the Chairman of the Company’s board of directors, assigned 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 $ 3 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.

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

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

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

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

decrease representing an unrealized loss of $ 224,000 and

$ 732,000 respectively

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

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

underlying net assets by approximately $ 9,192,000

which represents primarily intangible

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

These intangible assets have been valued at approximately

and $ 8,044,000 ,

respectively.

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

The Company has recorded amortization of $ 57,000

and $ 287,000

for the three- and nine-months ended September

30, 2021, respectively, on the consolidated statement of operations.

On April 5, 2021, a subsidiary of the Company entered into a convertible

promissory note (“SHRG Note”) with SHRG (see Note 4).

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

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

shares of its Class A Common Stock, including

shares in payment of the loan origination

fee and 12,000,000

shares in prepayment of interest for the

In addition, the Company received 150,000,000

warrants both issued and vested on April

These warrants have an exercise price of $ 0.22

and expire April

As of the date of issuance the

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

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

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 from approximately 47 % of SHRG to approximately 58%.

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)

2020 (unaudited)

$ 102,308,000

Net (loss)/income

$ ( 37,236,000

Basic (loss)/earnings per share

Diluted (loss)/earnings per share

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

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

We expect the

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

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 Lead Independent Director and as well the CEO of SHRG is on the SHRG Board, along

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

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

9 - PROPERTY PLANT AND EQUIPMENT

plant and equipment consisted of the following as of December 31:

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

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.

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.

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

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

Machinery and equipment

Building and improvements

1 unchanged sentence

Software and websites

Construction in progress

Less accumulated depreciation

Property, plant and equipment, net

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

accumulated depreciation

plant and equipment, net

Depreciation expense for the

years ended December 31, 2021 and 2020 was $ 1,129,000 and $ 710,000 respectively.

Investment in real estate

Depreciation expense

for the years ended December 31, 2023 and 2022 was $ 2,085,000 and $ 2,077,000 respectively.

INTANGIBLE ASSETS

January 24, 2020 and April 8, 2020, the Company foreclosed on two separate note receivables with RBC Life Sciences, Inc.

during which the Company acquired $ 637,000 of intangible assets as settlement of the amounts owed.

These assets are being amortized over

their useful lives.

August 21, 2020, the Company completed its acquisition of Impact BioMedical, (see Note 8) during which the Company, based on valuations

performed, acquired $ 22,260,000

of developed technology assets.

were placed in service on January 1, 2021 and will be amortized over a 20 -year

useful life when placed in service.

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:

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

Carrying Amount

Gross Carrying Amount

Accumulated Amortization

Carrying Amount

Accumulated Amortization

Net Carrying Amount

Developed technology assets

Acquired intangibles customer lists, licenses,

site/tenant improvements, in-place and favorable or unfavorable leases

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

application costs are amortized over their expected useful life which is generally the remaining legal life of the patent.

December 31, 2021, the weighted average remaining useful life of these assets in service was approximately 3.6 years.

amortized for the year ended December 31, 2021 and 2020 was approximately $ 3,279,000

and $ 374,000 ,

Patent application costs are amortized over their expected useful life which is generally the remaining legal life of the patent.

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.

amortization for each of the five succeeding fiscal years is as follows:

Expected amortization for each of the

five succeeding fiscal years is as follows:

Schedule of Estimated Future Amortization of Intangible Assets

NOTE 11 – ACCRUED EXPENSES AND DEFERRED

Accrued expenses and deferred revenue consist

of the following for the years ended December 31,

OF ACCRUED EXPENSES AND DEFERRED REVENUE

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

1 unchanged sentence

Accrued expenses

Income tax payable

Sales tax payable

Accrued expenses and deferred revenue

Accrued expenses and

deferred revenue

SHORT TERM AND LONG-TERM DEBT

Credit Lines - The Company’s subsidiary Premier Packaging has a revolving credit line with Citizens Bank (“Citizens”)

of up to $ 800,000

that bears interest at 1 Month LIBOR plus 2.0 %

as of December 31, 2020) and had a maturity date of May

31, 2022 and was renewable annually.

This renewal was not exercised by Premier Packaging.

As of December 31, 2021, the revolving line had a balance of $ 0 .

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

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

that it may need for use in its business.

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

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

Note Non-Revolving Line of Credit).

Effective on the Conversion Date, the interest shall be adjusted to a fixed rate equal to 2% above

the bank’s Cost of Funds, as determined by Citizens.

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

which will be adjusted upon conversion.

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

The Term Note was paid in full

in July 2021.

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

of Credit Agreement with Citizens pursuant to which Citizens agreed to lend up to $ 900,000 to permit Premier Packaging to purchase equipment

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

The aggregate principal balance outstanding under the Equipment Acquisition

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

in the Term Note Non-Revolving Line of Credit).

Effective on the Conversion Date, the interest shall be adjusted to a fixed rate equal

to 2 % above the bank’s Cost of Funds, as determined by Citizens.

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

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

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

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

with Citizens Bank.

The new Promissory

Note calls for monthly payments of $ 7,000 ,

with interest fixed at 4.22 %.

The new Promissory Note matures on June 27, 2029, at which time a balloon payment of $ 708,000

As of December 31, 2020, the new,

consolidated Promissory Note had a balance of $ 1,100,000 .

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

Citizens credit facilities to the Company’s subsidiary Premier Packaging, contain various covenants including fixed charge coverage

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

For the year ended December 31, 2020,

Premier Packaging was in compliance with the annual covenants.

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

unsecured promissory note with LVAMPTE.

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

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

If not paid sooner, the entire unpaid principal balance

is due in full on March 2, 2022.

As further incentive to enter into this Note, AMRE granted 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

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).

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

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

board of directors.

As of December 31, 2021, the new promissory note, inclusive of unpaid interest, had a balance of $ 230,000

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

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

the Paycheck Protection Program (“PPP”).

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

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

expenses of the qualifying business.

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

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

requested 100 % loan forgiveness.

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

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

AAMI, pursuant

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

forgiveness in January 2021.

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.

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.

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.

The aggregate principal balance

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

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

2021, the outstanding principal and interest approximated $ 111,000

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

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

(“BOA”) to secure financing approximating $ 3,700,000

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

The aggregate principal balance outstanding under the BOA Note shall bear

interest at a variable rate on or before the loan closing.

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

As of December 31, 2021, the outstanding principal on the BOA Note was $ 3,339,000

and had an interest rate of 3.35 %,

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

June 18, 2021, AMRE

Shelton entered into a loan agreement (“Shelton Agreement”) with Patriot Bank, N.A.

(“Patriot Bank”) in an amount

up to $ 6,155,000 , with the amount financed approximating $ 5,105,000 .

The Shelton Agreement contains monthly payments of principal and

an initial interest 4.25 %.

The interest will be adjusted commencing on July 1, 2026 and continuing for the next succeeding 5 year period

shall be determined one month prior to the change date and shall be an interest rate equal to two hundred fifty (250) basis points above

the Federal Home Loan Bank Boston 5-Year/25-Year amortizing advance rate, but in no event less than 4.25 % for the term of 120 months

with a balloon payment approximating $ 2,829,000

due at term end.

This agreement contains certain

covenants that are analyzed on an annual basis, starting December 31, 2021.

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

foot, 2.0 story, Class A+ multi-tenant medical office building located on a 13.62 acre site.

Of the total financed, approximately

is classified as current portion of long-term

debt, net, and the remaining balance of approximately $ 4,673,000

recorded as long-term debt, net of $ 180,000

in deferred financing costs.

On October 13, 2021, LVAM

entered into loan agreement with BMIC (“BMIC Loan”), whereas LVAM borrowed the principal amount of $ 3,000,000 , with interest

to be charged at a variable rate to be calculated 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, 2021, $ 3,000,000 is included in current portion of long-term debt, net on the consolidated

balance sheet.

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

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

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

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

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

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

The 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 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

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

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

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

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, 2021, the outstanding principal and interest of the LifeCare agreement

approximates $ 39,448,000 ,

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

net of deferred financing costs of $ 270,000 .

Of this, $ 381,000 is included in current portion of long-term debt, net and $ 39,067,000 is included in long-term debt, net

on the consolidated balance sheet.

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

(the “Note”) to HWH International,

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

HWH International is affiliated with Heng Fai Ambrose

Chan, who became a Director of SHRG April 2020.

The Note is convertible into 333,333

shares of SHRG Common Stock.

Concurrent with

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

shares of SHRG Common Stock, at an exercise price

of $ 0.15 per

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

If SHRG enters

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

the detachable stock warrant to be identical.

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

convertible note dated April 13, 2018 (the “April

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

Pursuant to the amendment, the parties extended the maturity

date of the note to April 2021.

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

terms of the April 2018 Note remain unchanged.

As of the date of this report, this note is currently in default..

holder of the note are discussing options, which may include the conversion in full or in part of the note, and the repayment of any

remainder of the note.

SHRG intends to conclude these discussions and to settle the April 2018 Note in the foreseeable future.

summary of scheduled principal payments of long-term debt, not including revolving lines of credit, subsequent to December 31, 2021

are as follows:

As of December 31, 2023, the outstanding principal and interested approximates $ 41,331,000 .

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

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

amortization period with interest at 4.28 %.

The first installment is due January 1, 2023.

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

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, 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 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

of Equity – On February 20, 2020, the Company entered into an underwriting agreement (the “Underwriting

Agreement #1”) with Aegis Capital Corp.

(the “Underwriter”), which provided for the issuance and sale by the

Company and the purchase by the Underwriter, in a firm commitment underwritten public offering (the “Feb.

Offering”), of 740,741 shares

of the Company’s common stock, $ 0.02 par

value per share.

Subject to the terms and conditions contained in the Underwriting Agreement #1, the shares were sold to the

Underwriter at a public offering price of $ 5.40 ($ 0.18 per

shares pre-reverse stock split) per share, less certain underwriting discounts and commissions.

The Company also granted the

Underwriters a 45-day option to purchase up to 111,111 additional

shares of the Company’s common stock on the same terms and conditions for the purpose of covering any over-allotments in

connection with the Feb.

2020 Offering which were exercised.

The net offering proceeds to the Company from the Feb.

2020 Offering

were approximately $ 4 million,

after deducting estimated underwriting discounts and commissions and other estimated offering expenses.

The offering was closed on

February 25, 2020.

Heng Fai Ambrose Chan, the Chairman of the Company’s Board of Directors, purchased $ 2 million

of shares in the Feb.

2020 Offering.

May 15, 2020, the Company entered into an underwriting agreement (the “Underwriting Agreement #2”) with the Underwriter,

which provided for the issuance and sale by the Company and the purchase by the Underwriter, in a firm commitment underwritten public

offering (the “May 2020 Offering”), of 769,230 shares of the Company’s common stock, $0.02 par value per share.

to the terms and conditions contained in the Underwriting Agreement #2, the shares were sold to the Underwriter at a public offering

price of $ 7.80 per share, less certain underwriting discounts and commissions.

The Company also granted the Underwriters a 45-day option

to purchase up to 115,384 additional shares of the Company’s common stock on the same terms and conditions for the purpose of covering

any over-allotments in connection with the May 2020 Offering which was exercised.

The net offering proceeds to the Company from the May

2020 Offering were approximately $ 6.2 million, after deducting estimated underwriting discounts and commissions and other estimated offering

The May 2020 Offering was closed on June 26, 2020.

July 7, 2020, the Company entered into an underwriting agreement (the “Underwriting Agreement #3”) with the Underwriter,

which provided for the issuance and sale by the Company and the purchase by the Underwriter, in a firm commitment underwritten public

offering (the “July 2020 Offering”), of 1,028,800 shares of the Company’s common stock, $ 0.02 par value per share.

Subject to the terms and conditions contained in the Underwriting Agreement #3, the shares were sold to the Underwriter at a public offering

price of $ 6.25 per share, less certain underwriting discounts and commissions.

The Company also granted the Underwriters a 45-day option

to purchase up to 154,320 additional shares of the Company’s common stock on the same terms and conditions for the purpose of covering

any over-allotments in connection with the July 2020 Offering which was exercised.

The net offering proceeds to the Company from the

July 2020 Offering were approximately $ 6.7 million.

The July 2020 Offering was closed on July 10, 2020.

July 28, 2020, the Company entered into an underwriting agreement (the “Underwriting Agreement #4”) with the “Underwriter,

which provided for the issuance and sale by the Company and the purchase by the Underwriter, in a firm commitment underwritten public

offering (the “July 2020 Offering #2”), of 453,333 shares of the Company’s common stock, $ 0.02 par value per share.

Subject to the terms and conditions contained in the Underwriting Agreement #4, the shares were sold to the Underwriter at a public offering

price of $ 7.50 per share, less certain underwriting discounts and commissions.

The Company also granted the Underwriters a 45-day option

to purchase up to 38,533 additional shares of the Company’s common stock on the same terms and conditions for the purpose of covering

any over-allotments in connection with the July 2020 Offering #2.

The net offering proceeds to the Company from the July 2020 Offering

#2 were approximately $3.3 million, after deducting estimated underwriting discounts and commissions and other estimated offering expenses.

The initial July 2020 Offering #2 was closed on July 31, 2020, and the overallotment was exercised on August 7, 2020.

connection with the Share Exchange for Impact BioMedical described in Note 8, on August 18, 2020, the Company filed a Certificate

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

of the Company, including 47,000

shares of Preferred Stock, with a par value of

of which 47,000

shares were designated Series A Preferred Stock.

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

Securities and Exchange Commission on July 14, 2020.

As described in Note 8, this transaction is a related party transaction.

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

are payable on the Series A Preferred Stock.

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

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

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

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

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

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

A holder of Series

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

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

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

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

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

In aggregate the Series

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

The Company evaluated

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

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

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

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

On May 28, 2021, GBM converted 35,316

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

On June 21, 2021, GBM

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

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

1 effective as of January 19, 2021

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

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

2021 Offering”), of 6,666,666

shares of the Company’s common stock, $ 0.02

par value per share.

Subject to the terms and

conditions contained in the Jan.

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

per share, less certain underwriting discounts

and commissions.

The Company also granted the underwriters a 45-day option to purchase up to 1,000,000

additional shares of the Company’s common

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

2021 Offering.

overallotment was exercised in full.

The net offering proceeds to the Company from the Jan.

2021 Offering are approximately $ 24.0

million, after deducting estimated underwriting

discounts and commissions and other estimated offering expenses

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

2021 Underwriting Agreement”) with Aegis

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

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

2021 Offering”), of 12,319,346

shares of the Company’s common stock, $ 0.02

par value per share.

Subject to the terms and

conditions contained in the Feb.

2021 Underwriting Agreement, the shares were sold at a public offering price of $ 2.80

per share, less certain underwriting discounts

and commissions.

The Company also granted the underwriters a 45-day option to purchase up to 1,847,901

additional shares of the Company’s common

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

2021 Offering, which

over-allotment option was exercised in full on February 9, 2021.

The net offering proceeds to the Company from the Feb.

2021 Offering

are approximately $ 39.7

million, including the exercise of the underwriter’s

over-allotment option, and after deducting estimated underwriting discounts and commissions and other estimated offering expenses.

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

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

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

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

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

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

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

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

option was exercised in full on June 16, 2021.

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

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

and commissions and other estimated offering expenses.

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

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

common stock, $ 0.02 par value per share.

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

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

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

through majority-owned subsidiaries.

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

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

Warrants – The following is a summary with respect to warrants outstanding and exercisable as of December 31, 2021 and

2020 and activity during the years then ended:

SCHEDULE OF WARRANT ACTIVITY

Outstanding at January 1:

Granted during the year

Lapsed/terminated

Outstanding at December

Exercisable at December

Weighted average months remaining

Company did not issue any warrants in 2021 or 2020.

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, 2021, no shares

remained available under this plan.

December 9, 2019, the Company’s shareholders adopted the 2020 Employee, Director and Consultant Equity Incentive Plan (the “2020

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.

In 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.

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, 2021, there

are 483,125 shares available under this plan.

following is a summary with respect to options outstanding as of December 31, 2021 and 2020 and activity during the years then ended:

SUMMARY OF STOCK OPTION ACTIVITY UNDER STOCK OPTION AND INCENTIVE PLANS

Average Exercise Price

Average life Remaining (Years)

Average Exercise Price

Average life Remaining (Years)

Outstanding at January 1,

Lapsed/terminated

Outstanding at December 31,

Exercisable at December 31,

Expected to vest at

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 2021 and 2020 was approximately $ 2,000 and $ 100,000 , respectively.

were no options exercised during 2021 or 2020.

Stock - Restricted common stock may be issued under the Company’s 2013 or 2020 Plan for services to be rendered which may

not be sold, transferred or pledged for such period as determined by our Compensation Committee and Management Resources.

stock compensation cost is measured as the stock’s fair value based on the quoted market price at the date of grant.

The restricted

shares issued reduce the amount available under the employee stock option plans.

Compensation cost is recognized only on restricted shares

that will ultimately vest.

The Company estimates the number of shares that will ultimately vest at each grant date based on historical

experience and adjust compensation cost and the carrying amount of unearned compensation based on changes in those estimates over time.

Restricted stock compensation cost is recognized ratably over the requisite service period which approximates the vesting period.

employee may not sell or otherwise transfer unvested shares and, if employment is terminated prior to the end of the vesting period,

any unvested shares are surrendered to us.

The Company has no obligation to repurchase any restricted stock.

April 3, 2020, the Company issued an aggregate of 5,833

shares of fully vested restricted stock to members

of the Company’s management team of with a two-year lock-up period and had an aggregated grant date fair value of approximately

which is included in stock-based compensation

for the year ended December 31, 2020.

Stockholders’ Equity

Equity transactions –

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.

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

Heng Fai Ambrose Chan pursuant to his employment agreement.

These shares were issued in consideration of $ 340,000 due under this employment agreement.

May 5, 2022, the Company issued 63,205 shares of common stock to Mr.

Frank Heuszel, CEO of DSS, pursuant to his employment agreement.

These shares were issued in consideration of $ 29,000 due under this employment agreement.

May 25, 2022, the Company issued 15,389,995 shares of common stock to Mr.

Heng Fai Ambrose Chan pursuant to his employment agreement.

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

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

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

with a principal amount of $ 8,350,000

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

This transaction was finalized in July 2022.

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

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

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.

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

3 unchanged sentences

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

During the year ended December

31, 2021, the Company had stock compensation expense of approximately $ 46,000

or less than $ 0.01

basic and diluted earnings per shares ($ 188,000 ,

basic and $ 0.03

diluted earnings per share for the corresponding

year ended December 31, 2020, respectively).

April 3, 2020, by unanimous written consent, the Board of Directors authorized the Company to issue individual stock grants of the Company’s

common stock, pursuant to the Company’s 2020 Employee, Director and Consultant Equity Incentive Plan, to certain managers and directors

in the amount of 8,900 shares, at $ 6.60 per share which were immediately vested and issued.

5,800 of these shares where were fully vested

restricted stock to members of the Company’s management team with a two-year lock-up period.

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

for 21,000 shares of common stock.

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

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

expense as it is earned.

The Company recognized $ 105,000 for the year ended December 31, 2021.

September 23, 2020, by written consent of the Chief Executive Officer and the Chairman of the board, the Company to issue individual

stock grants of the Company’s common stock, pursuant to the Company’s 2020 Employee, Director and Consultant Equity Incentive

Plan, to a consultant of the Company in the amount of 20,000 shares, at $ 4.48 per share which were immediately vested.

14 - INCOME TAXES

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

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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provision (benefit) for income taxes consists of the following:

SCHEDULE OF INCOME TAX PROVISION

of Income Tax Provision

Currently payable:

Total currently payable

Total deferred

(decrease) increase

( 14,839,000 )

tax effect of discontinued operations

Total income tax benefit

$ ( 4,032,000

Total deferred

( 15,390,000 )

increase in allowance

Total income tax loss (benefit)

components of deferred tax assets and liabilities are as follows:

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Deferred tax assets:

operating loss carry forwards

Net operating loss carry forwards

Net operating loss IRC 382 limited

Unrealized loss on securities

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Goodwill and other intangibles

Investment in pass-through

Investment in pass-through entity

Deferred revenue

Operating Lease Liability

Depreciation and amortization

Gross deferred tax assets

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Goodwill and other intangibles

Unrealized gains

-of-use asset

Depreciation and amortization

Right -of-use asset

Gross deferred tax liabilities

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( 34,838,000 )

deferred tax liabilities

( 29,357,000 )

2017 Tax Cuts and Jobs Act repeals the corporate alternative minimum tax (AMT) and permits existing minimum tax credits carryovers to

offset the regular tax liability for any tax year.

Further, the credit is refundable for any tax year beginning after December 31, 2017

and before December 31, 2020 in an amount equal to 50

percent of the excess of the minimum tax credit

over regular liability.

Any remaining credit will be fully refundable for the year ended December 31, 2021.

As of December 31, 2021

and 2020, the Company had $ 0

of minimum tax credit included in prepaids and

other current assets in the accompanying consolidated balance sheet.

December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the “Act”).

The legislation

significantly changed U.S.

tax law by, among other things, lowering corporate income tax rates, implementing a territorial tax system

and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries.

The Act permanently reduced the U.S.

income tax rate from a maximum of 35% to a 21 % rate, effective January 1, 2018

losses from the Company’s foreign subsidiaries amounted to $ 0.7

million and $ 0.4

million for 2021 and 2020,

respectively.

The balance of pretax earnings or loss for each of those years were domestic.

the Tax Cuts and Jobs Act provides for a territorial tax system, beginning in 2018, it includes the foreign-derived intangible income

(“FDII”) and global intangible low-taxed income (“GILTI”) provisions.

The Company elected to account for GILTI

tax in the period in which it is incurred.

The GILTI provisions require the Company to include in its U.S.

income tax return foreign

subsidiary earnings from its Controlled Foreign Corporations (“CFCs”) in excess of an allowable return on the foreign subsidiary’s

tangible assets.

The FDII provisions allow for a deduction equal to a percentage of the foreign-derived intangible income of a domestic

As a result of these provisions, the Company did not have any additional tax expense or benefit from either GILTI or FDII.

March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the economic

uncertainty resulting from the COVID-19 pandemic.

The CARES Act includes many measures to assist companies, including temporary changes

to income and non-income based laws, some of which were enacted as part of the Tax Cuts and Jobs Act of 2017 (“TCJA”).

of the key changes include eliminating the 80% of taxable income limitation by allowing corporate entities to fully utilize NOLs to offset

taxable income in 2019, 2020 and 2021, allowing NOLs originating in 2019, 2020 and 2021 to be carried back

five years, enhanced interest deductibility, and retroactively clarifying the immediate recovery of qualified improvement property costs

rather than over a 39-year recovery period.

the year ended December 31, 2021, the Company was not able to benefit from these provisions.

The Company will continue to monitor

additional guidance issued and assess the impact that various provisions will have on its business.

December 31, 2021 and 2020, the Company has approximately $ 58.5

million and $ 56.7

million in federal net operating loss carryforwards

Net deferred tax liabilities

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.

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which could constitute a change of ownership as defined under Internal Revenue Code Section 382.

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 $2.9M available for use

which expire at various dates through 2038 and the residual which never expire.

Additionally, at December 31, 2021 and 2020,

the Company had approximately $ 6.4

million and $ 6.9

million, and $ 2.1

million and $ 2.2

million, of California and Illinois NOL carry-forwards,

respectively, which expire

through 2041 .

The NOL carry-forwards may be limited in certain circumstances, including ownership change and have been fully reserved via a valuation

valuation allowance for deferred tax assets increased approximately $ 2,739,000

in the year ended December 31, 2021

and decreased by $ 1,543,000 (net of $ 671,000 acquired with Impact BioMedical) in the year ended December 31, 2020.

The valuation allowance for deferred tax liability increased approximately $ 2,853,000 in the year ended December 31,2021 and

increased approximately $ 3,455,000 for the year ended December 31, 2020.

SCHEDULE OF CHANGES IN DEFERRED TAX LIABILITIES

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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Schedule of Effective Income Tax Rate Reconciliation

Statutory United States federal

Statutory United States federal rate

State income taxes net of federal benefit

Permanent differences

Non-controlling interest

Foreign taxes

PPP loan forgiveness

Stock based compensation

Executive compensation

Change in valuation

Change in valuation allowance

Effective rate

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During the years ended December

31, 2021 and 2020 the Company recognized no

interest and penalties.

31, 2023 and 2022 the Company recognized no interest and penalties.

Company files income tax returns in the U.S.

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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

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COMMITMENTS AND CONTINGENCIES

Company has operating leases predominantly for operating facilities.

As of December 31, 2021, 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, 2021.

expense for the year ended December 31, 2021 and December 31, 2020 was approximately $ 190,000

and $ 217,000

respectively.

minimum lease payments as of December 31,2021 are as follows:

SCHEDULE OF FUTURE MINIMUM PAYMENTS UNDER OPERATING LEASES

Total lease payments

Imputed Interest

value of remaining lease payments

Weighted-average remaining

lease term (years)

Weighted-average discount

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, 2021 and 2020, the Company

accrued approximately $ 7,276,000

and $ 4,300,000 ,

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, 2021, 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 report.

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

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

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

motion for leave to file a motion for reconsideration.

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

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

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

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

Apple, Federal Circuit Docket no.

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

Court affirmed the District Court’s judgment.

After considering all factors the Company has elected to not pursue any further appeals

on this matter.

Case 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.

This New York action seeks 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 seeks 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 claims

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 claims an interest in any recovery

in DSS Technology Management v.

Apple, Inc., Case No.

4:14-cf05330-HSG.

The court recently ordered Mr.

Ronaldi to produce several categories

of documents that he sought to withhold.

Discovery is ongoing.

Additionally,

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

of Monroe, Document Security Systems, Inc.

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.

Ronaldi filed a motion seeking to compel DSS to advance his legal fees to defend the action, which motion was fully briefed as of

June 30, 2020 and remains pending and undecided.

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

Ronaldi’s motion

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

On March 26, 2021 Mr.

Ronaldi applied

to the court for reimbursement of $ 160,896.25 in legal fees which was subsequently reduced to $ 159,771.25 .

A second application

was filed on November 12, 2021 seeking $ 121,672.51 in fees for a total demand of $ 281,443.76 .

The Company has objected to the size

of those bills as they were based on out-of-town billing rates and the result of an excessive number of hours spent on litigation.

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

Ronaldi’s fee applications.

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

Following mediation the Company moved to stay the

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

motion to stay was denied.

The Company intends to vigorously prosecute this action.

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.

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(“Decentralized”), HWH World, Inc.

(“HWH”), RBC Life International, Inc., RBC Life Sciences,

Inc (“RBC”)., Frank D.

Heuszel (“Heuszel”), Steven E.

Brown, Clinton Howard, and Andrew Howard (collectively,

“Defendants”).

The lawsuit is currently pending in the United States District Court Northern District of Texas, Dallas Division,

and is styled and numbered Maiden Biosciences, Inc.

DSS, Inc., et al., Case No.

(“HWH”), RBC Life International, Inc.

(RBC International)

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

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

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

The lawsuit is currently pending in the United

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

Document Security

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

3:21-cv-00327.

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approximately $1,000,000.

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

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

Article 9 foreclosure or deed-in-lieu debt conveyances.

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

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

Maiden also seeks a judgment from the court declaring:

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

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

(2) Defendant Heuszel’s low bid

at the public foreclosure sale was invalid and void;

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

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

seeks to recover from Defendants:

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

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

(2) pre and post-judgment

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

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

9 foreclosure or deed-in-lieu debt conveyances.

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

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

and Corrupt Organizations Act (“RICO”).

Maiden also sought a judgment from the court declaring:

“(1) Defendants lacked

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

public foreclosure sale;

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

(3) the public foreclosure

sale was conducted in a commercially unreasonable manner;

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

Subsidiaries assets to Heuszel and HWH.” Maiden sought to recover from Defendants:

(1) treble damages or, alternatively, damages

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

less, plus punitive or exemplary damages;

(2) pre- and post-judgment interest;

and (3) attorneys’ fees and cost .

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

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

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

On August 9, 2021, the Court then

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

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

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

enrichment claim against DSS and RBC Life International, Inc.

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

RBC Life International, Inc.

The Court granted Maiden leave to file an amended complaint.

Maiden’s deadline to do so is Monday,

September 6, 2021.

The Company intends to vigorously defend its position.

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

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

Generally, Maiden is seeking the same relief

requested in its original complaint.

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

On September 17, 2021, the DSS Defendants

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

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

Further, the motion to dismiss

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

The DSS Defendants’ motion to dismiss the amended complaint

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

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

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

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

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

On August 9, 2021, the Court then entered an order

granting in part the motion to dismiss filed on behalf of DSS, Decentralized, HWH, RBC International, and Heuszel.

Among other things,

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

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

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

On September 3, 2021, Maiden filed its

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

Maiden sought the same relief requested in its original complaint.

Maiden, however, abandoned its request for treble damages.

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

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

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

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

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

However, the Court permitted Maiden to replead once again.

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

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

and expert witnesses.

The discovery period closed on August 9, 2022.

The DSS Defendants have engaged Stout Risius Ross, LLC (“Stout”)

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

trial in this matter began on December 12, 2022.

The Company vigorously defended its position that Maiden should recover nothing on its

The DSS Defendants’ experts at Stout provided expert opinions regarding the value of the assets at issue and the deficiencies

with Maiden’s designated expert’s opinions.

The jury returned a verdict in favor of Maiden, and the Court entered a judgment

on December 20, 2022.

The DSS Defendants filed post-judgment motions seeking reversal of the judgment for several reasons, including

(1) the evidence does not support Maiden’s claim against the Company;

(2) recovery of exemplary damages under TUFTA is unsupported;

and (3) the evidence established that the DSS Defendants are entitled to judgment in their favor on their affirmative defenses.

the DSS Defendants filed their post-judgment motions, the case was settled for $8.75 million, the Court’s December 20, 2022 judgment

was vacated, and the case was dismissed with prejudice .

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

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

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, 2021, 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, 2021, there are no contingent payments due.

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

DISCONTINUED OPERATIONS

August 14, 2020, the Company entered into a final Asset Purchase Agreement to sell substantially all of the assets of Plastic

Printing Professionals, Inc.

and the Company terminated its production and office personnel and maintained only a few employees to

assist in and facilitate the sale of its assets.

The financial results for these subsidiaries have been presented as discontinued

operations in the accompanying consolidated financial statements.

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

$ 683,000 and

an additional contingent earn-out payment of an aggregate amount of up to $ 517,000 based

on future quarterly gross revenue of the business to be conducted by the buyer with the sold assets.

Consistent with the

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

December 31, 2020, the Company had recognized $ 390,000 of

this earn out.

earnout was recognized during the year ended December 31, 2021.

The net effect of all assets disposed of resulted in a

net loss of $ 111,000 during the year ended December 31, 2020.

These amounts are included in Loss from Discontinued Operations.

Included in its

Right-of-use assets is the lease of the Company’s facility in Brisbane, Ca.

In April 2021, the Company terminated this lease

with the landlord effective March 31, 2021, and therefore, wrote off the asset and corresponding liability associated with the lease

at March 31, 2021.

As of December 31, 2020, $ 744,000 was

record as non-current asset held for sale – discontinued operations on the consolidated balance sheet.

Also recorded was

current liabilities held for sale – discontinued operations and $ 505,000 of

non-current liabilities held for sale – discontinued operations.

The Company has incurred $ 204,000 of

cost associated with wind-down activities for the year ended December 31, 2021.

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

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

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

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

consisting of $ 3

million in cash;

million in potential earn-out if certain performance

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

of the closing;

million in trade credit or license fee rebates.

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

which did not occur during the twelve-months ended December 31, 2021.

Also, the Company has not utilized the $ 0.5

million trade credit as of December 31, 2021.

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.

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”)

and will be treated as discontinued operations on the face of our financial statements.

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 an impairment of assets due to the deconsolidation of SHRG approximately $ 6,220,000 which

is recorded as an impairment of assets due to the deconsolidation in our consolidated statements

of operations.

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.

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

AND SUBSIDIARIES

Balance Sheets– Assets and Liabilities Held for Sale

OF AND DISCONTINUED OPERATIONS

SCHEDULE OF MAJOR CLASSES OF ASSETS AND LIABILITIES HELD FOR SALE AND RESULTS OF OPERATIONS

Services Global Corporation

Sheets - Discontinued Operations

of December 31,

Current assets:

Cash and cash equivalents

Accounts receivable, net

Current portion of notes receivable

Prepaid expenses and other current assets

1 unchanged sentence

Property, plant and equipment, net

Other investments

Marketable securities

Right-of-use assets

Other intangible assets, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

Accrued expense

Accrued expenses and deferred revenue

Current portion of lease liability

Current portion of long-term debt, net

Total current liabilities

Long term lease liability

AND SUBSIDIARIES

Statements of Operations - Discontinued Operations

Services Global Corporation

of Operations Loss - Discontinued Operations

the Years Ended December 31,

For the Year Ended

Technology sales, services and licensing

Printed products

Direct marketing

Total revenue

Costs and expenses:

Cost of revenue, exclusive of depreciation and amortization

Selling, general and administrative (including stock based compensation)

Depreciation and amortization

Impairment of goodwill

Cost of revenue

Selling, general and administrative

Total costs and expenses

2 unchanged sentences

Other income (expense):

Interest expense

Gain on extinguishment of debt

Gain on disposition of business

Income (loss) before income taxes

Income tax expense

Income (loss) from discontinued operations

Other income (expense)

Interest income

Gain (loss) on investments

( 9,501,000 )

Impairment of assets

( 2,843,000 )

Loss from discontinued operations before income taxes

( 3,481,000 )

( 26,752,000 )

Income tax benefit/(loss)

Loss from discontinued operations

( 3,481,000 )

( 26,752,000 )

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

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

of APB net assets

Common A Shares issued for prepaid marketing services

Common A Shares issued for Impact BioMedical

Non-controlling interest related to Impact BioMedical

Series A Preferred Shares issued for Impact BioMedical

Notes receivable settled for assets in lieu of cash

Right of use asset

Shares issued in lieu of bonus cash

Purchase of notes receivable with company stock

Purchase of marketable security with Company stock

Third party Note receivable received in lieu of cash

SEGMENT INFORMATION

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

operating segments.

One of these operating segments,

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

Segment Information

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

One of these operating

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

Product Packaging operates in the paper board folding

10 unchanged sentences

Biotechnology is also targeting unmet, urgent medical needs.

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

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

Further, Securities, in partnership with recognized global leaders

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

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

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

ITO, PPO, STO and UTO listings on a primary market(s), asset digitization/tokenization (securities, currency and cryptocurrency), and

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

Also in this segment is the Company’s

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

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

single operator under a triple-net lease.

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

medical real estate.

The fourth segment, Direct, provides services to assist companies in the emerging growth gig business model

of peer-to-peer decentralized sharing marketplaces.

It specializes in marketing and distributing its products and services through its

subsidiary and partner network, using the popular gig economic marketing strategy as a form of direct marketing.

Direct marketing products

include, among other things, nutritional and personal care products sold throughout North America, Asia Pacific and Eastern Europe.

fifth business line, Commercial Banking, is organized for the purposes of being a financial network holding company, focused providing

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

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

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

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

raising services.

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

shall include commercial business lines of credit, land development financing, inventory financing, third party loan servicing, and services

that address the financial needs of the world Gig Economy.

segment structure presented below represents a change from the prior year for the inclusion of our Biotechnology, Securities, and Commercial Lending segments and the removal of our Plastics segment, Digital Group and IP Technology Management segment as the Plastics segment

A third operating

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

in the securities trading and/or funds management arena.

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

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

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

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

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

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

Also in this segment is the Company’s real

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

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

under a triple-net lease.

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

The fourth segment, Direct, provides services to assist companies in the emerging growth gig business model of peer-to-peer decentralized

sharing marketplaces.

It specializes in marketing and distributing its products and services through its subsidiary and partner network,

using the popular gig economic marketing strategy as a form of direct marketing.

Direct marketing products include, among other things,

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

The fifth business line, Commercial

Banking, is organized for the purposes of being a financial network holding company, focused providing commercial loans and on acquiring

equity positions in (i) undervalued commercial bank(s), bank holding companies and nonbanking licensed financial companies operating

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

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

equipment leasing, problem asset management, SPAC (special purpose acquisition company) consulting, and advisory capital raising services.

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

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

financial needs of the world Gig Economy.

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

Lending segments and the removal of our Plastics segment, Digital Group and IP Technology Management segment as the Plastics segment

was discontinued in 2020, DSS Digital was sold and discontinued in May 2021 and activities surrounding our IP Technology Management segment

2 unchanged sentences

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

information concerning the Company’s operations by reportable segment for the years ended December 31, 2021, and 2020 is as follows.

The Company relies on intersegment cooperation and management does not represent that these segments, if operated independently, would

report the results contained herein:

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

1 unchanged sentence

Product Packaging

(as restated)

Commercial Lending

Biotechnology

(as restated)

Assets held for sale

Depreciation and amortization

Cost of revenue

Interest expense

Interest Income

Stock based compensation

Income tax benefit

Net income (loss) from continuing operations

4 unchanged sentences

( 6,513,000 )

( 74,043,000 )

Capital expenditures

1 unchanged sentence

Year Ended December 31,2022

Commercial Lending

Biotechnology

Depreciation and amortization

Cost of revenue

Interest expense

Stock based compensation

Income tax benefit

Net income (loss) from continuing operations

( 1,234,000 )

( 13,429,000 )

( 7,462,000 )

( 8,238,000 )

( 12,084,000 )

( 42,909,000 )

Capital expenditures

3 unchanged sentences

comprised 7.0 % of total revenue for 2023 ( 11.0 % - 2022).

Revenue is allocated to individual countries by customer based on where

the product is shipped.

Revenue is allocated to individual countries by customer based on where the

product is shipped.

The Company had no long-lived assets in any country other than the United States for any period presented.

23 unchanged sentences

Twelve months ended December 31, 2023

Commission income

Total commission income

Twelve months ended December 31, 2022

Commission income

Total commission income

months ended December 31, 2023

Management fee income

Total Management fee income

Twelve months ended December 31, 2022

1 unchanged sentence

Total Management fee income

Net Investment Income

Investment Income

Twelve months ended December 31, 2023

4 unchanged sentences

Total Net Investment Income

Related Party Transactions

Company owns 127,179,291 shares or approximately 4 % of the outstanding shares of Alset International Limited (“Alset Intl”),

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

This investment is classified as a marketable

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

investments for a period of at least one year.

The Chairman of the Company, Mr.

Heng Fai Ambrose Chan, is the Executive Director and

Chief Executive Officer of Alset Intl.

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

The fair value of the marketable security as of 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.

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”

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

(“Seller”), a related party, to

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

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

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

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

The Sellers largest shareholder is Mr.

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

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

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

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.

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.

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 $ 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 $ 8,805,000 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

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.

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

International, Inc.

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

HWH is affiliated with Heng Fai Ambrose Chan, who

became a Director of the Company in April 2020.

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

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

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

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

the Holder is entitled to certain financing rights.

If the Company enters into more favorable transactions with a third-party investor,

it must notify the Holder and may have to amend and restate the Note and the detachable stock warrant to be identical.

On August 9, 2022,

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

the principal plus accrued interest.

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

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

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

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

(“Alset EHome”), a related party.

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

owner of the outstanding shares of Alset EHome.

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

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

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

February 25, 2022, DSS, Inc.

(the “Company”) entered into an assignment and assumption agreement (the “Assumption Agreement”)

with Alset International Limited a Republic of Singapore limited company (“AIL”), pursuant to which DSS has agreed to

purchase a convertible promissory note from AIL (the “ Note ”).

The Note has a principal amount of $ 8,350,000 and accrued

but unpaid interest of $ 415,000 through May 15, 2022 .

The Note was issued to American Medical REIT, Inc., a Maryland corporation, pursuant

to a subscription agreement, dated as of October 29, 2021 between AIL and American Medical REIT, Inc.

The consideration to be paid for

the Note will be 21,366,177 shares of DSS’s common stock.

The number of DSS shares to be issued as consideration was calculated

by dividing $ 8,765,000 , the aggregate of the principal amount and the accrued but unpaid interest under the Note, by $ 0.408 per

The number of shares of DSS common stock to be issued as consideration may be adjusted based on the accrued interest if the parties

should agree to close this transaction on a date other than the anticipated date of May 15, 2022.

The closing of the Assumption Agreement

and the issuance of the DSS shares described above will be subject to the approval of the NYSE American and DSS’s shareholders.

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

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

January 25, 2022 (the “SPA”).

Pursuant to the SPA, AEI had agreed to purchase 44,619,423 shares of the Company’s common

stock for a purchase price of $ 0.3810 per share, for an aggregate purchase price of $ 17,000,000 .

Pursuant to the Amendment, the number

of shares of the common stock of the Company that the AEI will purchase has been reduced to 3,986,877 shares for an aggregate purchase

price of $ 1,519,000 .

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

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

February 28, 2022, the Company entered into a Stock Purchase Agreement with Alset EHome International Inc.

(the “True Partner Revised

Stock Purchase Agreement”), pursuant to which AEI has agreed to sell a subsidiary holding 62,122,908 shares of stock of True Partner

Capital Holding Limited exchange for 17,570,948 shares of common stock of the Company (the “DSS Shares”).

the Company and AEI were parties to an agreement dated as of January 18, 2022 for the sale of 62,122,908 shares of stock of True Partner

International Limited;

such agreement has been terminated.

AEI and its various subsidiaries are collectively the largest stockholder

of the Company.

The Company’s Executive Chairman and a significant stockholder, Heng

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

issuance of the DSS Shares will be subject to the approval of the NYSE American and the Company’s s hareholders .

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 15 and noted no subsequent events requiring financial statement recognition or disclosure.

9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

December 2, 2021, Freed Maxick CPAs, P.C.

(the “Former Accountant”) resigned as our independent registered public accounting

firm, and on December 3, 2021, we engaged Turner, Stone & Company, L.L.P.

(the “New Accountant”) as our independent registered

public accounting firm, subject to completion of Turner Stone’s standard client acceptance

process and execution of an engagement letter .

The engagement of the New Accountant was recommended and approved by the Audit

Committee of our Board of Directors.

Former Accountant’s audit report on our financial statements for the years ended December 31, 2020 and 2019 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, 2020 and 2019, and through the interim period ended December 2, 2021, there were no “disagreements”

(as such term is defined in Item 304 of Regulation S-K) with the Former Accountant on any matter of accounting principles or practices,

financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of the Former

Accountant, would have caused them to make reference thereto in their reports on the financial statements for such periods.

the years ended December 31, 2020 and 2019, and through the interim period ended December 2, 2021, there was 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

for the year ended December 31, 2020, the Company’s management determined that the Company’s internal controls over financial

reporting were not effective as of the end of such period.

June 29, 2022, the Company’s Board of Directors (the “Board”) approved replacing Turner, Stone & Company, LLP (the

“Former Accountant”) as our independent registered public accounting firm, with Grassi & Co.

Accountant”) as our independent registered public accounting firm, effective July 1, 2022.

The engagement of the New Accountant

was recommended and approved by the Board.

Former Accountant’s audit report 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 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 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

principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the

satisfaction of the Former Accountant or Previous Accountant, would have caused them to make reference thereto in their reports on the

financial statements for such periods.

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/A

Item 8. Financial Statements and Supplementary Data