What changed in this filing

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Item 1. Financial Statements

2024-11-13 compared with 2024-08-13 · 707 added, 388 removed, 899 unchanged (55% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

June 30, 2024

September 30, 2024

December 31, 2023

26 unchanged sentences

Long term lease liability

Total liabilities

Commitments and contingencies (Note 12)

10 unchanged sentences

( 256,176,000 )

Total stockholders’ equity

Total DSS stockholders’ equity

Non-controlling interest in subsidiaries

6 unchanged sentences

Consolidated Statements of Operations

the Three Months Ended

the Six Months Ended

For the Three Months Ended

September 30,

For the Nine Months Ended

September 30,

Printed products

4 unchanged sentences

Total revenue

Costs and expenses:

Cost of revenue

Selling, general and administrative

Selling, general and administrative (including stock based compensation)

Total costs and expenses

Operating loss

( 4,671,000 )

2 unchanged sentences

( 15,567,000 )

Other income (expense):

Interest income

2 unchanged sentences

Interest expense

Foreign Currency Translation

Gain/(loss) on equity method

Loss on investments

Foreign Currency Translation Adjustment

(Loss) gain on equity method investment

(Loss) gain on investments

( 1,021,000 )

( 2,471,000 )

Impairment of assets upon deconsolidation

( 6,220,000 )

Provision for loan losses

1 unchanged sentence

( 4,936,000 )

Gain on sale of assets

from continuing operations before income taxes

(Loss) gain on sale of asset

( 1,281,000 )

Loss from continuing operations before income taxes

( 5,701,000 )

( 6,681,000 )

Income tax benefit

( 15,925,000 )

( 29,571,000 )

Income tax benefit (expense)

Loss from continuing operations

( 5,701,000 )

( 6,681,000 )

(gain) from continuing operations attributed to noncontrolling interest

attributable to common stockholders

( 15,762,000 )

( 29,580,000 )

Loss from discontinued operations, net of tax

( 3,481,000 )

$ ( 5,701,000 )

Loss per common share:

used in computing loss per common share:

$ ( 6,681,000 )

$ ( 15,762,000 )

$ ( 33,061,000 )

Loss attributed to noncontrolling interest

Net loss attributable to common stockholders

$ ( 5,283,000 )

$ ( 4,342,000 )

$ ( 14,034,000 )

$ ( 30,325,000 )

Amounts attributable to DSS stockholders

Loss from continuing operations net of taxes

( 5,283,000 )

( 4,342,000 )

( 14,034,000 )

( 27,033,000 )

Loss from discontinued operations net of taxes

( 3,292,000 )

Net loss attributable to DSS shareholders

$ ( 5,283,000 )

$ ( 4,342,000

$ ( 14,034,000

$ ( 30,325,000 )

Loss per common share attributable to common stock holders - continuing operations

Loss per common share attributable to common stock holders - discontinued operations

Shares used in computing loss per common share:

accompanying notes to the condensed consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

the Six Months Ended June 30,

the Nine Months Ended September 30,

2023 (restated)

Cash flows from operating activities:

$ ( 15,762,000

$ ( 33,061,000

Loss from discontinued operations

Loss from continuing operations

1 unchanged sentence

$ ( 29,580,000 )

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

Adjustments to reconcile net loss to net cash used by

operating activities:

Depreciation and amortization

Stock based compensation

Loss (income) on equity method investment

Gain on investments

Loss on investments

Change in ROU assets

Gain on sale of assets

(Loss) gain on sale of assets

Impairment of assets upon deconsolidation

Provision for loan losses

7 unchanged sentences

( 15,549,000 )

ROU liabilities

( 1,052,000 )

Change in ROU liabilities

Other liabilities

2 unchanged sentences

( 17,554,000 )

Net cash used by operating activities - held for sale

Net cash used by operating activities - discontinued operations

( 3,481,000 )

5 unchanged sentences

Purchase of investment

( 1,861,000 )

Disposal of property, plant and equipment

Sale of marketable securities

Issuance of new notes receivable, net origination fees

Payments received on notes receivable

5 unchanged sentences

Borrowings of long-term debt

Issuances of common stock, net of issuance costs

Net cash provided (used) by financing activities

2 unchanged sentences

( 8,912,000 )

Net increase (decrease) in cash - held for sale

Net increase (decrease) in cash - discontinued operations

( 3,481,000 )

4 unchanged sentences

Consolidated Statements of Changes in Stockholders’ Equity

in Subsidiary

Non-controlling

Balance, December

4 unchanged sentences

Stock based payments

Dividend in kind - Deconsolidation

of Sharing Services Global Corporation

( 1,206,000 )

Deconsolidation of Sharing

2 unchanged sentences

( 2,736,000 )

Balance, June 30, 2023

( 33,061,000 )

September 30, 2023

$ 320,033,000

$ ( 225,874,000 )

$ 127,746,000

Balance, December 31, 2023

1 unchanged sentence

$ ( 256,176,000 )

Initial public offering of

Impact BioMedical

( 14,034,000 )

2 unchanged sentences

( 15,762,000 )

Balance, June 30, 2024

September 30, 2024

$ 322,189,000

39 unchanged sentences

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

(4) Our Commercial Lending business division, driven by American Pacific Financial, Inc.

(“APF”, formally American

Pacific Bancorp, Inc.

“APB”), 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,

31 unchanged sentences

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

otherwise indicated) necessary to present fairly our consolidated financial position as of June 30, 2024 and December 31, 2023, and the

results of our consolidated operations for the interim periods presented.

We follow the same accounting policies when preparing quarterly

financial data as we use for preparing annual data.

These statements should be read in conjunction with the consolidated financial statements

and the notes included in our latest annual report on Form 10-K, for the fiscal year ended December 31, 2023 (“Form 10-K”),

and our other reports on file with the Securities and Exchange Commission (the “SEC”).

otherwise indicated) necessary to present fairly our consolidated financial position as of September 30, 2024 and December 31, 2023,

and the results of our consolidated operations for the interim periods presented.

We follow the same accounting policies when preparing

quarterly financial data as we use for preparing annual data.

These statements should be read in conjunction with the consolidated financial

statements and the notes included in our latest annual report on Form 10-K/A, for the fiscal year ended December 31, 2023 (“Form

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

of Consolidation - The consolidated financial statements include the accounts of DSS, Inc.

17 unchanged sentences

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

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

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

Subsequent to the Deconsolidation,

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

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.

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

8 unchanged sentences

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

Reclassifications

- Cost associated with Professional fees for the three

and nine months ended September 30, 2023 and the nine months September 30, 2024 have been reclassified to Research and development to

conform with current period presentation.

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

17 unchanged sentences

abilities to pay.

June 30, 2024, and December 31, 2023, the Company established a reserve for credit losses of approximately $ 2,500,000 and $ 2,494,000 ,

September 30, 2024, and December 31, 2023, the Company established a reserve for credit losses of approximately $ 2,497,000 and $ 2,494,000 ,

respectively.

3 unchanged sentences

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

of June 30, 2024, one customers accounted for approximately 24 % of our consolidated revenue and one customers accounted for approximately

39 % of our trade accounts receivable balance.

of June 30, 2023, two customers accounted for approximately 19 % and 5 % of our consolidated revenue and these two customers accounted

for approximately 55 % and 14 % of our consolidated trade accounts receivable balance.

of September 30, 2024, two customers accounted for approximately 20 % and 10 % of our consolidated revenue and two customers accounted for

approximately 26 % and 23 % of our trade accounts receivable balance.

of September 30, 2023, one customer accounted for approximately 21 % of our consolidated revenue and two customers accounted for approximately

32 % and 15 % of our consolidated trade accounts receivable balance.

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.

the six months ended of June 30, 2024 one vendor accounted for approximately 12 %

of our cost of revenue and for the six months ended June 30, 2023, another vendor accounted for approximately 14 % of our cost of revenue.

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

19 unchanged sentences

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

37 unchanged sentences

An allowance for obsolescence of approximately $ 45,000 and $ 18,000 associated with the inventory at our Premier subsidiary

for June 30, 2024, and December 31, 2023, respectively.

for September 30, 2024, and December 31, 2023, respectively.

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

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

accumulated costs of the acquisition.

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

of the acquisition.

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

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.

held for sale – The Company has several buildings and the associated land they occupy for sale as of June 30, 2024 and

December 31, 2023.

These consist of primarily of retail space in Lindon, Utah approximating $ 5,593,000 (sale of this building was finalized

during Q2 2024) and the medical facilities associated with AMRE LifeCare of approximately $ 41,570,000 and AMRE Winter Haven of approximately

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

This includes all costs related

to finding, analyzing and negotiating a transaction.

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

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

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

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.

held for sale – The Company has several buildings and the associated land they occupy for sale as of September 30, 2024

and December 31, 2023.

These consist of primarily of retail space in Lindon, Utah approximating $ 5,593,000 (sale of this building was

finalized during Q2 2024) and the medical facilities associated with AMRE LifeCare of approximately $ 41,610,000 and AMRE Winter Haven

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

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

8 unchanged sentences

No circumstances or events have occurred since the most recent analysis that

would indicate the need for an impairment is needed for the six months ended June 30, 2024.

would indicate the need for an impairment is needed for the nine months ended September 30, 2024.

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

23 unchanged sentences

No circumstances or events have occurred since the most recent analysis that would indicate the need for an impairment is needed

for the six months ended June 30, 2024.

for the nine months ended September 30, 2024.

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

13 unchanged sentences

Per Common Share - The Company presents basic and diluted (loss) earnings per share.

Basic (loss) earnings per share reflect

the actual weighted average of shares issued and outstanding during the period.

Diluted (loss) earnings per share are computed including

the number of additional shares from outstanding warrants, stock options and preferred stock that would have been outstanding if dilutive

potential shares had been issued and is calculated utilizing the treasury stock method.

In a loss period, the calculation for basic and

diluted (loss) earnings per share is the same, as the impact of potential common shares is anti-dilutive.

For the three months ended

June 30, 2023, potential dilutive instruments included options of 3,333 .

For the three months ended June 30, 2024, potential dilutive

instruments was 0 .

Basic (loss) earnings per share

reflect the actual weighted average of shares issued and outstanding during the period.

Diluted (loss) earnings per share are

computed including the number of additional shares from outstanding warrants, stock options and preferred stock that would have been

outstanding if dilutive potential shares had been issued and is calculated utilizing the treasury stock method.

In a loss period,

the calculation for basic and diluted (loss) earnings per share is the same, as the impact of potential common shares is

anti-dilutive.

For the three and nine months ended September 30, 2023, potential dilutive instruments was 0 .

For the three and nine months ended September 30, 2024, potential dilutive instruments was 0 .

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

12 unchanged sentences

the past two years.

from its $ 10.7 million in cash as of June 30, 2024, the Company believes it can continue as a going concern, due to its ability to generate

operating cash through the sale of its $ 9.6 million of Marketable Securities.

The Company has also taken steps to sell its real estate

holdings assets of AMRE LifeCare and Winter Haven located in Texas, Pennsylvania, and Florida.

These properties approximate $ 46.0 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.

Issued Accounting Pronouncements — In November 2023, the Financial Accounting

Standards Board (“FASB”), issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure through enhanced disclosures about significant

segment expenses.

The amendment is effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal

years beginning after December 15, 2024 and early adoption is permitted.

The amendments should be applied retrospectively to all prior

periods presented in the financial statements.

The Company is currently evaluating the impact of adopting this ASU on its disclosures.

from its $ 11.6 million in cash as of September 30, 2024, the Company believes it can continue as a going concern, due to its ability

to generate operating cash through the sale of its $ 4.1 million of Marketable Securities.

The Company has also taken steps to sell its

real estate holdings assets of AMRE LifeCare and Winter Haven located in Texas, Pennsylvania, and Florida.

These properties approximate

$ 46.1 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.

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 Quarterly Report.

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

continue as a going concern has been alleviated.

Issued Accounting Pronouncements — In November 2023, the Financial Accounting Standards Board (“FASB”), issued

Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,

which improves reportable segment disclosure through enhanced disclosures about significant segment expenses.

The amendment is effective

for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024 and

early adoption is permitted.

The amendments should be applied retrospectively to all prior periods presented in the financial statements.

The Company has adopted the enhanced segment disclosures of the quarter ending September 30, 2024.

Restatement of previously issued financial statements

Company has restated the financial statements for the year ended December 31, 2023 along with certain notes to such restated financial

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

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 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, was required.

following tables summarize the effect of the restatement on each financial statement line items as of the September 30, 2023:

of Restatement

of Previously Issued Financial Statements

As Previously Reported

Consolidated Statements of Operations Income (Loss) for the nine months ended September 30, 2023

Direct marketing revenue

( 4,325,000 )

Total revenue

( 4,325,000 )

Cost of revenue

( 1,258,000 )

Selling, general and administrative (including stock based compensation)

( 4,728,000 )

Total costs and expenses

( 5,986,000 )

Operating loss

$ ( 17,228,000 )

( 1,661,000 )

$ ( 15,567,000 )

Other income (expense)

Loss on investment

$ ( 30,490,000 )

( 28,019,000 )

$ ( 2,471,000 )

Impairment of assets due to deconsolidation

$ ( 6,220,000 )

Loss from continuing operations before income taxes

$ ( 53,030,000 )

( 23,459,000 )

$ ( 29,571,000 )

Loss from continuing operations

$ ( 53,030,000

$ ( 29,580,000

(Loss) from discontinued operations, net of tax

$ ( 3,481,000 )

$ ( 53,039,000

( 19,978,000 )

$ ( 33,061,000 )

Net loss attributable to common stockholders

$ ( 50,303,000 )

( 19,978,000 )

$ ( 30,325,000 )

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 nine months ended September 30, 2023

$ ( 53,039,000 )

( 19,978,000 )

$ ( 33,061,000 )

Loss from discontinued operations

( 3,481,000 )

$ ( 3,481,000 )

Loss from continuing operations

( 29,580,000 )

$ ( 29,580,000 )

Loss (gain) on investments

( 26,198,000 )

Impairment of assets

Net cash used by operating activities - continuing operations

( 17,554,000 )

$ ( 17,554,000 )

Net cash used by operating activities - discontinued operations

( 3,481,000 )

$ ( 3,481,000 )

Net increase (decrease) in cash - continuing operations

( 8,912,000 )

$ ( 8,912,000 )

Net increase (decrease) in cash - discontinued operations

( 3,481,000 )

$ ( 3,481,000 )

Consolidated Statements of Changes in Stockholders’ Equity for the nine months ended September 30, 2023

Dividend in kind - Deconsolidation of Sharing Services Global Corporation

( 1,206,000 )

$ ( 1,206,000 )

Deconsolidation of Sharing

Services Global Corp

$ ( 50,303,000 )

( 19,978,000 )

$ ( 30,325,000 )

Accumulated deficit

$ ( 225,873,000 )

$ ( 225,874,000 )

Total stockholders’ equity

$ 127,747,000

$ 127,746,000

Company recognizes its revenue based on when the title passes to the customer or when the service is completed and accepted by the customer.

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

of June 30, 2024, the Company had no unsatisfied performance obligations for contracts with an original expected duration of greater

of September 30, 2024, the Company had no unsatisfied performance obligations for contracts with an original expected duration of greater

than one year.

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

Sales Commissions

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

There were no sales commissions capitalized

as of June 30, 2024 or June 30, 2023.

as of September 30, 2024 or September 30, 2023.

and Handling Costs

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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 1.

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 June 30, 2024 and December 31, 2023, approximated $ 5,544,000 which is included in current notes receivable on the accompanying

consolidated balance sheet.

As of June 30, 2024 and December 31, 2023, the Company has a reserve of $ 2,772,000 and $ 2,772,000 , respectively,

against the principal and interest outstanding.

September 23, 2021, APB entered into refunding bond anticipatory note (“Note 2”) with Borrower 2, which operates as a conservation

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

Puradigm, Inc.

(“Puradigm”), 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 Puradigm.

Note 1, which incurs interest at a rate of 6.65 %

due quarterly, has a maturity date of May 1, 2023.

1 contains an optional conversion clause that allows the Company to convert all, or a portion of all, into newly issued member units

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

outstanding principal and interest as of September 30, 2024 and December 31, 2023, approximated $ 5,544,000

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

As of September 30, 2024 and December

31, 2023, the Company has a reserve of $ 3,326,000

and $ 2,772,000 ,

respectively, against the principal and interest outstanding.

September 23, 2021, APB entered into refunding bond anticipatory note (“Note 2”) with Southeast Regional Management District (“SERMD”), which operates as a conservation

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

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Note 2 was repaid in full during March 2024.

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 25, 2022 .

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.

December 28, 2021, APB entered into a promissory note (“Note 4”) with Borrower 4, a company registered in the state of California.

October 25, 2021, APF entered into a loan agreement (“Note 3”) with Asili, LLC.

(“Asili”), 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 Asili, 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 APF to convert the outstanding principal to a 10 %membership

APF, 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.

December 28, 2021, APF entered into a promissory note (“Note 4”) with WestPark Capital Group, LLC.

(“WestPark”),

a company registered in the state of California.

Note 4 has a principal balance of $ 700,000 .

Note 4, 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 4 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 $ 58,000 and $ 253,000 is included in the Current portion of notes

receivable on the consolidated balance sheet at June 30, 2024 and December 31, 2023, respectively.

January 24, 2022, APB and Borrower 5 entered into a promissory note (“Note 5”) in the principal sum of $ 100,000 with interest

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

The outstanding principal and interest at June 30, 2024 and December 31, 2023 approximates

$ 111,000 and $ 103,000 , respectively, and is included in Current portion of notes receivable on the accompanying consolidate balance sheet.

The terms of this note are currently being renegotiated.

March 2, 2022, APB and Borrower 6, a corporation organized under the laws of the Republic of Korea entered into a promissory note (“Note

Under the terms of Note 6, APB at its discretion, may lend up to the principal sum of $ 893,000 with an interest rate of 8 %,

Note 4, 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

On November 27, 2023, the parties to

Note 4 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 was paid in full as of September 30, 2024.

At December 31, 2023 outstanding

principal and interest of $ 253,000

is included in the Current portion of notes receivable on the consolidated balance

January 24, 2022, APF and an individual entered into a promissory note (“Note 5”) in the principal sum of $ 100,000 with

interest of 6 %,

due annually, and maturing in January

The outstanding principal and interest

at September 30, 2024 and December 31, 2023 approximates $ 116,000 and

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

was paid in full during October 2024.

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

(“WUURII”), a corporation organized under the laws of the Republic of Korea entered into a promissory note (“Note

Under the terms of Note 6, APF at its discretion, may lend up to the principal sum of $ 893,000 with an interest rate of 8 %,

and matured in March 2024 , with interest payable quarterly.

The outstanding principal and interest at June 30, 2024 and December 31,

The outstanding principal and interest at September 30, 2024 and December 31,

2023 is $ 484,000 and $ 446,000 , respectively.

This note has been extended to March 2025.

May 9, 2022, DSS PureAir and Borrower 1 entered into a promissory note (“Note 7”) 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.

May 9, 2022, DSS PureAir and Puradigm entered into a promissory note (“Note 7”) in the principal sum of $ 210,000

with interest of 10 %,

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

unpaid principal and interest are due on February

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

The outstanding principal and interest at June 30, 2024 and 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 September 30, 2024 and December 31, 2023 approximates $ 224,000

of which $ 134,00 and $ 112,000

has been reserved for as of September 30, 2024 and December 31, 2023, respectively, and is included in Current portions of notes

receivable on the accompanying consolidate balance sheet.

8, related party

August 29, 2022, DSS Financial Management Inc and Borrower 8, a related party, entered into a promissory note (“Note 8”)

in the principal sum of $ 100,000

August 29, 2022, DSS Financial Management Inc and BMI Capital, Inc.

(“BMIC”), a related party, entered into a promissory

note (“Note 8”) in the principal sum of $ 100,000

with interest of 8 %,

1 unchanged sentence

All unpaid principal and interest is due on August

The outstanding principal and interest at June 30, 2024 approximated $ 101,000 ,

and was fully reserved for as of June 30, 2024.

The outstanding principal and interest at September 30, 2024 approximated $ 86,000 ,

and was fully reserved for as of September 30, 2024.

At December 31, 2023, the balance approximated $ 100,000

3 unchanged sentences

DSS owns 24.9 %

of the outstanding common shares of Borrower 8.

of the outstanding common shares of BMIC.

9, related party

May 8, 2023, DSS Financial Management Inc and Borrower 8 entered into a promissory note (“Note 9”) in the principal sum of

$ 102,000 with interest at the prime rate plus 2 % ( 10.5 % at June 30, 2024 and December 31, 2023) with a maturity date of May 7, 2026 .

The outstanding principal and interest at June 30, 2024 approximated $ 110,000 , and was fully reserved for as of June 30, 2024.

May 8, 2023, DSS Financial Management Inc and BMIC entered into a promissory note (“Note 9”) in the principal sum of

$ 102,000 with interest at the prime rate plus 2 % ( 10.5 % at September 30, 2024 and December 31, 2023) with a maturity date of May 7, 2026 .

The outstanding principal and interest at September 30, 2024 approximated $ 110,000 , and was fully reserved for as of September 30, 2024.

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.

owns 24.9 % of the outstanding common shares of Borrower 8.

owns 24.9 % of the outstanding common shares of BMIC.

10, related party

July 26, 2022, APB and Borrower 10 entered into a promissory note (“Note 10”) in the principal sum of $ 1,000,000

July 26, 2022, APF and VEII, Inc.

(“VEII”) entered into a promissory note (“Note 10”) in the principal sum

of $ 1,000,000

with interest of 8 %

All unpaid principal and interest due on July

The outstanding principal and interest on June 30, 2024 approximates $ 959,000 ,

with all unpaid principal and interest due on July

This note was amended so that all unpaid principal and interest is due July 26, 2025.

The outstanding principal and

interest on September 30, 2024 approximates $ 959,000 ,

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

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of Note 10 was reserved for as of March 31, 2024.

For the three months ended June 30, 2024, no additional reserve was deemed

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

No additional reserve was deemed necessary as of September 30, 2024.

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

net of $ 20,000

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Heng Fai Ambrose

Chan, the Chairman of DSS, Inc is also the on the board of directors of Borrower 10.

Chan, the Chairman of DSS, Inc is also the on the board of directors of VEII.

February 19, 2021, Impact BioMedical, Inc, entered into a promissory note with an individual.

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real property situated in Collier County, Florida.

The outstanding principal and interest as of June

30, 2024 and December 31, 2023, was approximately $ 202,000 and $ 203,000 , respectively, of which $ 135,000 is classified in Current notes

receivable and the remaining $ 67,000 is classified as Notes receivable on the accompanying consolidated balance sheets.

June 27, 2023, DSS and Borrower 12 entered into a convertible promissory note (“Note 12”) 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.

March 31,2023, DSS Biohealth Security, Inc and Borrower 13 entered into a promissory note (“Note 13”) in the principal sum

of $ 140,000 and interest rate floating daily to Wall Street Journal Prime rate per annum ( 8.5 % at June 30, 2024 and December 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 at December 31, 2023.

As of June 30, 2024, the outstanding balance sheet approximating $ 135,000 was fully

reserved for.

outstanding principal and interest as of September 30, 2024 and December 31, 2023, was approximately $ 202,000 and $ 203,000 , respectively,

of which $ 143,000 is classified in Current notes receivable and the remaining $ 59,000 is classified as Notes receivable on the accompanying

consolidated balance sheet as of September 30, 2024.

The outstanding principal and interest as of December 31, 2023 of approximately $ 203,000

is classified in Current notes receivable on the accompanying consolidated balance sheets.

June 27, 2023, Decentralized Sharing Systems, Inc.

and Stemtech Corporation (“Stemtech”) entered into a convertible promissory note (“Note 12”) in

the principal sum of $ 1,400,000 with

a discount of $ 300,000 and

interest rate of 10 %

and maturity date of September

The outstanding principal,

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

March 31,2023, DSS Biohealth Security, Inc and an individual entered into a promissory note (“Note 13”) in the principal

sum of $ 140,000 and

interest rate floating daily to Wall Street Journal Prime rate per annum ( 8.0 %

at September 30, 2024 and 8.5 % at December 31, 2023) with the total outstanding principal and interest due at the maturity date of March

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

recorded as Notes receivable on the accompanying consolidated balance sheet at December 31, 2023.

As of September 30, 2024, the

outstanding balance sheet approximating $ 135,000 was

fully reserved for.

On August 29, 2024, APF entered

into a promissory note (“Note 14”) with WestPark.

Note 14 has a principal balance of $ 459,000 .

Note 14, which incurs interest

at a rate of 10.0 % with principal and interest due at the maturity date of April 27, 2026 .

On November 1, 2024, monthly payments of approximately

$28,000 are due with any unpaid interest and principal due at maturity.

As of September 30,2024, the outstanding principal and interest

approximates $ 464,000 , of which $ 305,000 is classified as Current notes receivable and the remaining $ 159,000 is classified as Notes receivable

on the accompanying consolidated balance sheet.

Financial Instruments

3 unchanged sentences

of Cash and Marketable Securities by Significant Investment Category

June 30, 2024

September 30, 2024

Money Market Funds

28 unchanged sentences

risk of not collecting amounts owed by customers and records its allowance for credit losses based on the results of this analysis.

of June 30, 2024 and December 31, 2023, we have reviewed the entire loan portfolio as well as all financial assets of the Company for

of September 30, 2024 and 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,

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industry portfolio reserves, and specific loan loss

For the six months ended June 30, 2024 and 2023, the Company recorded a Loan loss reserve of approximately $ 346,000 and $ 3,757,000 ,

For the nine months ended September 30, 2024, and 2023, the Company recorded a Loan loss reserve of approximately $ 1,627,000 and $ 1,179 ,000,

respectively.

Loan Portfolio Reserve - Based upon a relatively young loan portfolio that are relatively new loans, 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 $ 182,000 and $ 194,000 of the loan portfolio loan balance as of June 30, 2024 and

December 31, 2023, respectively.

Loan Portfolio Reserve - Based upon the review of our loan portfolio, 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 $ 192,000

and $ 194,000

of the loan portfolio loan balance as of September 30, 2024 and December 31, 2023, respectively.

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 June 30, 2024 and December 31, 2023.

Loan Reserves - Previously, we had identified credit weaknesses and borrower repayment weakness with Borrower 3, which has a

current principal and interest balance of $ 884,000

and have recorded a loan loss reserve for the full balance due the Company as of December 31, 2023 and June 30, 2024.

had also previously identified credit weakness in Borrower 1 and has placed a reserve approximating $ 2,884,000

against the outstanding principal and interest as of December 31, 2023 and June 30, 2024.

Previously, the Company identified credit

weakness in Borrower 12 and has placed a reserve approximating $ 1,045,000

against the outstanding principal and interest as of December 31, 2023 and June 30, 2024.

Accordingly, we have not recorded a discretionary reserve as of September 30, 2024 and December 31, 2023.

Loan Reserves - Previously, we had identified credit weaknesses and borrower repayment weakness with Asili, which has a current

principal and interest balance of $ 884,000

and have recorded a loan loss reserve for the full balance due the Company as of December 31, 2023 and September 30, 2024.

Company had also previously identified credit weakness in Puradigm and has placed a reserve approximating $ 2,884,000

and $ 3,461,000 against the outstanding principal and interest as of December 31, 2023 and September 30, 2024, respectively.

Previously, the Company identified credit weakness in Stemtech and has placed a reserve approximating $ 1,045,000

against the outstanding principal and interest as of December 31, 2023 and September 30, 2024.

During the first quarter of 2024, the

Company identified credit weakness in Borrower 10 and 13 and has placed a reserve approximating $ 479,000

Company identified credit weakness in VEII and an individual and has placed a reserve approximating $ 479,000

and $ 135,000 ,

1 unchanged sentence

Also during the first quarter of 2024, the

Company identified credit weakness in Borrower 8, a related party, and has placed a reserve approximating $ 211,000

against the outstanding principal and interest as of March 31, 2024.

No additional reserves were deemed necessary during the three months ended June 30, 2024.

Company identified credit weakness in BMIC, a related party, and has placed a reserve approximating $ 211,000

against the outstanding principal and interest as of March 31, 2024, later adjusted to $ 196,000 as of September 30, 2024.

No additional reserves were deemed necessary as of September 30, 2024.

Disposal of assets

28 unchanged sentences

in Loss/Gain on sale of assets on the consolidated statement of operations.

On June 13, 2024, the Company

sold its retail space in Lindon, Utah for the sales price, net of expenses, of approximately $5,758,000.

The associated asset was previously

classified as Held for sale in the amount of $5,593,000, resulting in a gain on the sale of approximately $165,000.

June 13, 2024, the Company sold its retail space in Lindon, Utah for the sales price, net of expenses, of approximately $ 5,758,000 .

associated asset was previously classified as Held for sale in the amount of $ 5,593,000 , resulting in a gain on the sale of approximately

International Limited , related party

Company owns 127,179,291 shares or approximately 4 % of the outstanding shares of Alset International Limited (“Alset Intl”),

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

This investment is classified as a marketable

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

investments for a period of at least one year.

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 June 30, 2024 and December 31, 2023, was approximately $ 2,912,000 and $ 3,269,000 ,

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

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

The fair value of the marketable security

as of September 30, 2024 and December 31, 2023, was approximately $ 3,167,000

and $ 3,269,000 ,

respectively.

During the six month ended June 30, 2024 and 2023, the Company recorded unrealized loss of approximately $ 356,000 and

During the nine months ended September 30, 2024 and 2023, the Company recorded unrealized loss of approximately $ 102,000

and $ 407,000 ,

respectively.

Park Capital, Inc.

December 30, 2020, the Company signed a binding letter of intent with West Park Capital, Inc (“West Park”) and TBD where

the parties agreed to prepare a note and stock exchange agreement whereby DSS will assign the TBD Note to West Park and West Park shall

issue to DSS a stock certificate reflecting 7.5 % of the issued and outstanding shares of West Park.

This note and stock exchange agreement

was finalized during the first quarter 2022 and valued at approximately $ 500,000 and is included in Investments on the consolidated balance

sheet on December 31, 2023 and as of June 30, 2024.

Capital Group, LLC.

December 30, 2020, the Company signed a binding letter of intent with WestPark Capital Group, LLC.

(“WestPark”) and

Century TBD, Inc.

(“TBD”) where the parties agreed to prepare a note and stock exchange agreement whereby DSS will assign the TBD Note to WestPark and WestPark 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, 2023 and as of September 30, 2024.

Capital International LLC, related party

9 unchanged sentences

The Company is currently accounting for this investment under the equity method of accounting per

The Company’s portion of net gain and loss in BMIC during the six months ended June 30, 2024 and 2023, approximated $ 7,000

The Company’s portion of net loss in BMIC during the nine months ended September 30, 2024 and 2023, approximated $ 3,000

and $ 28,000 , respectively.

24 unchanged sentences

Short-Term and Long-Term Debt

Notes - On 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 $ 3,710,000 to purchase and use as collateral, 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 June 30, 2024, and December 31, 2023, the outstanding principal on the BOA Note was $ 2,687,000 and $ 2,932,000 ,

Notes - On 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 $ 3,710,000

to purchase and use as collateral, 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 September 30, 2024, and December 31, 2023, the

outstanding principal on the BOA Note was $ 2,562,000

and $ 2,932,000 ,

respectively and had an interest rate of 4.63 %.

As of June 30, 2024, $ 508,000 was included in the Current portion of long-term debt,

net, and the remaining balance of approximately $ 2,179,000 is recorded as Long-term debt.

As 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.

expense equaled $ 66,000 and $ 0 for the six months ended June 30, 2024 and 2023, respectively.

The BOA Note contains certain covenants

that are analyzed annually.

As of June 30, 2024, Premier is in compliance with these covenants.

As of September 30, 2024, $ 514,000

was included in the Current portion of long-term debt, net, and the remaining balance of approximately $ 2,049,000

is recorded as Long-term debt.

As 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.

Interest expense equaled $ 96,000

for the nine months ended September 30, 2024 and 2023, respectively.

The BOA Note contains certain covenants that are analyzed

As of September 30, 2024, Premier is in compliance with these covenants.

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

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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

The affective interest rate at June 30, 2024 was 4.25 %.

The affective interest rate at September 30, 2024 was 4.25 %.

The funds borrowed were used to purchase a 40,000 square foot, 2.0 story,

2 unchanged sentences

Also included in the value of the property is $ 585,000 of intangible assets with an estimated useful life of approximating 3 years.

net book value of these assets as of June 30, 2024 approximated $ 6,226,000 .

net book value of these assets as of September 30, 2024 approximated $ 6,199,000 .

Of the total financed, approximately $ 213,000 of principal

1 unchanged sentence

as long-term debt, net of $ 33,000 in deferred financing costs.

Interest expense for the six months ended June 30, 2024 and 2023 approximated

Interest expense for the nine months ended September 30, 2024 and 2023 approximated

$ 147,000 and $ 153,000 , respectively.

3 unchanged sentences

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

As of June 30, 2024 and December 31, 2023, $ 461,000 and $ 547,000 , respectively,

As of September 30, 2024 and December 31, 2023, $ 464,000 and $ 547,000 , respectively,

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

2 unchanged sentences

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

As of June 30, 2024, $ 1,064,000 is included

As of September 30, 2024, $ 1,070,000 is included

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

1 unchanged sentence

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

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

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

The LifeCare Agreement 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, and serves as collateral for the LifeCare Agreement.

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 to 11 years.

The net book value of the assets

acquired as of June 30, 2024 is approximately $ 41,570,000 .

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 affective interest rate at June 30, 2024 was 9.6 %.

As of December 31, 2023, the outstanding principal and interested

approximates $ 41,331,000 and is included in current portion of long-term debt, on the consolidated balance sheet.

As of June 30, 2024,

the outstanding principal and interested approximates $ 43,776,000 and is included in current portion of long-term debt, on the consolidated

balance sheet.

Interest expense for the six months ended June 30, 2024 and 2023 approximated $ 1,954,000 and $ 1,484,000 , respectively.

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

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

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

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

These assets are classified as investments, real estate on the consolidated balance sheet, and serves as collateral for the LifeCare

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 to 11 years.

The net book value of the assets acquired as of September 30, 2024 is approximately $ 41,570,000 .

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

The affective interest rate at

September 30, 2024 was 9.5 %.

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

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

As of September 30, 2024, the outstanding

principal and interested approximates $ 45,147,000 and

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

Interest expense for the nine months ended September

30, 2024 and 2023 approximated $ 2,939,000 and

$ 2,632,000 ,

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.

This amount is past

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

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maturing on March

7, 2024 (later extended to July 7, 2024) to

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

7, 2024 (later extended to July 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, and serves as collateral for the

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$ 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 years.

The net book value of the assets acquired as of June 30, 2024 is approximately $ 4,380,000 .

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 September 30, 2024 is approximately $ 4,380,000 .

Payments are to be made in equal, consecutive installments based on a 25 -year

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The first installment is due January 1, 2023.

This AMRE note is currently due, and has an effective interest rate of 9.6 %The

outstanding principal and interest, net of debt issuance costs of $ 17,000 ,

approximates $ 2,977,000 and

is included in the current portion of long-term debt, net on the accompanying consolidated balance sheet at December 31, 2023.

outstanding principal and interest, approximates $ 2,992,000 and

is included in current portion of long-term debt, net on the accompanying consolidated balance sheet at June 30, 2024.

expense equaled $ 148,000 and

$ 113,000 for

the six months ended June 30, 2024 and 2023, respectively.

This note is in default and demand was made for final payment to

be made by December 22, 2023.

This AMRE Winter Haven note is currently due, and has an effective interest rate of 9.6 %.

The outstanding principal and interest, net of debt issuance costs of $ 17,000 ,

approximates $ 2,977,000

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

The outstanding principal and interest, approximates $ 2,968,000

and is included in current portion of long-term debt, net on the accompanying consolidated balance sheet at September 30, 2024.

Interest expense equaled $ 179,000

and $ 185,000

for the nine months ended September 30, 2024 and 2023, respectively.

This note was assumed by SMS Financial on August 15, 2024.

note is in default and demand was made for final payment to be made by December 22, 2023.

This amount is past due.

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

As of June 30, 2024, the outstanding principal and interest approximates $ 663,000 of which $ 118,000 was included in the current

As of September 30, 2024, the outstanding principal and interest approximates $ 634,000 of which $ 121,000 was included in the current

portion of long-term debt, net, and the remaining balance of approximately $ 513,000 recorded as long-term debt.

3 unchanged sentences

Interest expense equaled $ 38,000 and $ 0 for the

six months ended June 30, 2024 and 2023, respectively.

summary of scheduled principal payments of long-term debt, not including revolving lines of credit, subsequent to June 30, 2024, are

nine months ended September 30, 2024 and

summary of scheduled principal payments of long-term debt, not including revolving lines of credit, subsequent to September 30, 2024,

are as follows:

Schedule of Notes Payable and Long-term Debt

1 unchanged sentence

Company has operating leases predominantly for operating facilities.

As of June 30, 2024, the remaining lease terms on our operating

As of September 30, 2024, the remaining lease terms on our operating

leases range from less than one to twelve years .

5 unchanged sentences

There are no significant finance leases as

of June 30, 2024.

minimum lease payments as of June 30, 2024 are as follows:

of September 30, 2024.

minimum lease payments as of September 30, 2024 are as follows:

of Lease Liability:

6 unchanged sentences

Weighted-average discount rate

cash paid for leases during the six months ended June 30, 2024 and 2023 approximated $ 498,000 and $ 513,000 , respectively.

cash paid for leases during the nine months ended September 30, 2024 and 2023 approximated $ 786,000 and $ 931,000 , respectively.

Commitments and Contingencies

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costs shall not exceed $1,250,000.

As of June 30, 2024 and December 31, 2023, $ 152,000 and $ 200,000 , respectively, has been accrued for

As of September 30, 2024 and December 31, 2023, $ 13,000 and $ 200,000 , respectively, has been accrued for

in relation to the Equivir License as development of the Equivir technology.

8 unchanged sentences

Compensation –

Company records stock-based payment expense related to options and warrants based on the grant date fair value in accordance with

FASB ASC 718.

Company records stock-based payment expense related to options and warrants based on the grant date fair value in accordance with FASB

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

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

During the six months ended June 30, 2024, there

During the six months ended June 30, 2023, the Company’s did not have stock compensation associated with these

items, and 2,000 options were forfeited.

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

During the nine months ended September 30, 2024, there were none .

During the nine months ended September 30, 2023, the Company’s did not have stock compensation associated with these items, and 5,333

options were forfeited.

BioMedical, Inc.

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its ownership of the Company’s Common Stock from approximately 88 % to approximately 12 %.

As of June 30, 2024 and December 31, 2023,

there were 10,000,000 shares of our Common Stock and 60,496,041 shares of preferred stock issued and outstanding .

As of September 30, 2024 and December 31, 2023,

there were 11,503,955 and 10,000,000 , respectively, shares of our Common Stock and 60,496,041 shares of preferred stock issued and outstanding.

August 8, 2023 DSS, the Company’s largest shareholder, distributed to its shareholders of record on July 10, 2023 4 shares of Impact

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subject to the discretion of the Company to lift the restriction sooner.

On October 31, 2023, the Company

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 %.

On September 16, 2024,

Impact Biomedical Inc., entered into an underwriting agreement (the “Underwriting Agreement”) with Revere Securities,

LLC., as representative (the “Representative”) of the underwriters named therein (the “Underwriters”),

pursuant to which the Company agreed to sell to the Underwriters in a firm commitment initial public offering (the

“Offering”) an aggregate of 1,500,000

of the Company’s shares of common stock, par value $ 0.001

per share at a public offering price of $ 3.00

On September 17, 2024, the Company closed the Offering, and as of September 30, 2024 there were 11,497,703

shares of common stock issued and outstanding.

The total net proceeds to the Company from the Offering, after deducting discounts,

expenses allowance and expenses, was approximately $ 3,726,000

(inclusive of approximately $ 1.5 million contributed by DSS).

final prospectus relating to this Offering was filed with the Commission on September 16, 2024.

The shares of Common Stock were

approved to list on the NYSE American under the symbol “IBO” and began trading there on September 16, 2024.

also issued warrants to the Representative and its affiliates (the “Representative’s Warrants”) warrants to

purchase the number of shares of Common Stock in the aggregate equal to 5% of the Common Stock to be issued and sold in this

offering (including any Shares of Common Stock sold upon exercise of the over-allotment option, if applicable).

Representative’s Warrants are exercisable for a price per share equal to 125% of the public offering price.

The warrants are

exercisable at any time, in whole or in part, commencing nine (9) months from the date of commencement of sales of the offering and

ending on the third anniversary thereof.

As of September 30, 2024, only the 1,500,000

shares included in the Offering are freely tradable on the NYSE.

The remaining outstanding common shares of Impact Biomedical of 9,997,703

are restricted from trading for 180 days from the Offering date.

Discontinued 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 results of operations of the discontinued operation:

Schedule of Major Classes of Assets and Liabilities Held for Sale and Results of Operations

Services Global Corporation

of Operations Loss - Discontinued Operations

the Nine Months Ended September 30,

Direct marketing

Total revenue

Costs and expenses:

Cost of revenue

Selling, general and administrative

Total costs and expenses

Operating loss

Other income (expense):

Other income (expense)

Interest income

Gain (loss) on investments

Impairment of assets

Loss from discontinued operations before income taxes

( 3,481,000 )

Income tax benefit/(loss)

Loss from discontinued operations

( 3,481,000 )

Supplemental Cash Flow Information

following table summarizes supplemental cash flows for the six months ended June 30, 2024 and 2023:

following table summarizes supplemental cash flows for the six months ended September 30, 2024 and 2023:

Schedule of Supplemental Cash Flow Information

Cash paid for interest

Shares issued in lieu of cash bonus

Segment Information

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inventory financing, third party loan servicing, and services that address the financial needs of the world Gig Economy.

information concerning the Company’s operations by reportable segment for the three and six months ended June 30, 2024 and 2023

information concerning the Company’s operations by reportable segment for the three and nine months ended September 30, 2024 and

2023 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:

The Company relies on intersegment cooperation and management does not represent that these segments, if operated

independently, would report the results contained herein:

Schedule of Operations by Reportable Segment

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Product Packaging

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Cost of revenue

Gross profit (loss)

( 1,286,000 )

Depreciation and amortization

Interest expense

Interest income

Net income (loss) from continuing operations

( 1,004,000 )

Operating expense

Operating income (loss)

( 1,178,000 )

( 2,187,000 )

Capital expenditures

Identifiable assets

Assets held for sale

Three Months Ended June 30,2023

( 4,671,000 )

Other income (expense)

( 1,030,000 )

Net income (loss) from continuing operations before taxes

( 1,751,000 )

( 1,851,000 )

( 1,603,000 )

( 5,701,000 )

Three Months Ended September 30,2023

Product Packaging

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Cost of revenue

Depreciation and amortization

Interest expense

Interest income

Net income (loss) from continuing operations

Gross profit (loss)

( 1,753,000 )

( 1,890,000 )

Operating expense

Operating income (loss)

( 1,140,000 )

1 unchanged sentence

( 2,105,000 )

Capital expenditures

Identifiable assets

Assets held for sale

Six Months Ended June 30, 2024

( 5,103,000 )

Other income (expense)

( 1,208,000 )

( 1,577,000 )

Net income (loss) from continuing operations before taxes

( 1,283,000 )

( 1,011,000 )

( 1,152,000 )

( 2,155,000 )

( 1,055,000 )

( 6,680,000 )

Nine Months Ended September 30, 2024

Product Packaging

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Cost of Revenue

Gross profit (loss)

( 3,786,000 )

Depreciation and amortization

Interest expense

Interest income

Net income (loss) from continuing operations

( 3,585,000 )

Operating expense

Operating income (loss)

( 1,562,000 )

2 unchanged sentences

( 2,164,000 )

Capital expenditures

Total Identifiable assets

Assets held for sale

Six Months Ended June 30,2023

( 14,287,000 )

Other income (expense)

( 1,638,000 )

Net loss from continuing operations

( 1,680,000 )

( 3,364,000 )

( 6,757,000 )

( 3,098,000 )

( 15,925,000 )

Nine Months Ended September 30,2023

Product Packaging

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Cost of revenue

Depreciation and amortization

Interest expense

Interest income

Net income (loss) from continuing operations

Gross profit (loss)

( 2,662,000 )

Operating expense

Operating income (loss)

( 1,573,000 )

3 unchanged sentences

( 15,567,000 )

Capital expenditures

Identifiable assets

Assets held for sale

Other income (expense)

( 1,943,000 )

( 7,238,000 )

( 2,640,000 )

( 2,062,000 )

( 14,004,000 )

Net loss from continuing operations

( 1,800,000 )

( 8,811,000 )

( 5,934,000 )

( 8,592,000 )

( 4,338,000 )

( 29,571,000 )

following tables disaggregate our business segment revenues by major source:

1 unchanged sentence

Schedule of Disaggregation of Revenue

Three months ended June 30, 2024

Three months ended September 30, 2024

Packaging Printing and Fabrication

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Total Printed Products

Three months ended June 30, 2023

Three months ended September 30, 2023

Packaging Printing and Fabrication

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Total Printed Products

Six months ended June 30, 2024

Nine months ended September 30, 2024

Packaging Printing and Fabrication

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Total Printed Products

Six months ended June 30, 2023

Nine months ended September 30, 2023

Packaging Printing and Fabrication

2 unchanged sentences

Direct Marketing

Three months ended June 30, 2024

Three months ended September 30, 2024

Direct Marketing Internet Sales

Total Direct Marketing

Three months ended June 30, 2023

Three months ended September 30, 2023

Direct Marketing Internet Sales

Total Direct Marketing

Six months ended June 30, 2024

Nine months ended September 30, 2024

Direct Marketing Internet Sales

Total Direct Marketing

Six months ended June 30, 2023

Nine months ended September 30, 2023 (as restated)

Direct Marketing Internet Sales

1 unchanged sentence

Rental Income

Three months ended June 30, 2024

Three months ended September 30, 2024

Rental income

Total Rental Income

Three months ended June 30, 2023

Three months ended September 30, 2023

Rental income

Total Rental Income

Six months ended June 30, 2024

Nine months ended September 30, 2024

Rental income

Total Rental Income

Six months ended June 30, 2023

Nine months ended September 30, 2023

Rental income

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Commission Income

Three months ended June 30, 2024

Three months ended September 30, 2024

Commission income

Total commission income

Three months ended June 30, 2023

Three months ended September 30, 2023

Commission income

Total commission income

Six months ended June 30, 2024

Nine months ended September 30, 2024

Commission income

Total commission income

Six months ended June 30, 2023

Nine months ended September 30, 2023

Commission income

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Net Investment Income

Three months ended June 30, 2024

Three months ended September 30, 2024

Net Investment Income

Total Investment Income

Three months ended June 30, 2023

Three months ended September 30, 2023

Net Investment Income

Total Rental Income

Six months ended June 30, 2024

Nine months ended September 30, 2024

Net investment income

Total Management fee income

Six months ended June 30, 2023

Nine months ended September 30, 2023

Net Investment Income

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

The fair value of the marketable security as of June 30, 2024 and December 31, 2023, was approximately $ 2,912,000 and $ 3,269,000 ,

fair value of the marketable security as of September 30, 2024 and December 31, 2023, was approximately $ 3,167,000

and $ 3,269,000 ,

respectively.

During the six month ended June 30, 2024 and 2023, the Company recorded unrealized loss of approximately $ 356,000 and

During the nine month ended September 30, 2024 and 2023, the Company recorded unrealized loss of approximately $ 102,000

and $ 407,000 ,

respectively.

9 unchanged sentences

The Company is currently accounting for this investment under the equity method of accounting per

The Company’s portion of net gain and loss in BMIC during the six months ended June 30, 2024 and 2023, approximated $ 7,000

The Company’s portion of net loss in BMIC during the nine months ended September 30, 2024 and 2023, approximated $ 3,000

and $ 28,000 , respectively.

3 unchanged sentences

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

As of June 30, 2024 and December 31, 2023, $ 461,000 and $ 547,000 , respectively,

As of September 30, 2024 and December 31, 2023, $ 464,000 and $ 547,000 , respectively,

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

2 unchanged sentences

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

As of June 30, 2024, $ 1,064,000 is included

As of September 30, 2024, $ 1,070,000 is included

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

1 unchanged sentence

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

August 29, 2022, DSS Financial Management Inc and Borrower 8, a related party, entered into a promissory note (“Note 8”)

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

principal and interest is due on August 29, 2025 .

The outstanding principal and interest at June 30, 2024 approximated $ 101,000 , and

was fully reserved for as of June 30, 2024.At December 31, 2023, the balance approximated $ 100,000 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.

DSS owns 24.9 % of the outstanding

common shares of Borrower 8.

May 8, 2023, DSS Financial Management Inc and Borrower 8 entered into a promissory note (“Note 9”) in the principal sum of

$ 102,000 with interest at the prime rate plus 2 % ( 10.5 % at June 30, 2024 and December 31, 2023) with a maturity date of May 7, 2026 .

The outstanding principal and interest at June 30, 2024 approximated $ 110,000 , and was fully reserved for as of June 30, 2024.

August 29, 2022, DSS Financial Management Inc and BMI Capital, Inc.

(“BMIC”), a related party, entered into a promissory

note (“Note 8”) 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

The outstanding principal and interest at September 30, 2024 approximated $ 86,000 ,

and was fully reserved for as of September 30, 2024.

At December 31, 2023, the balance approximated $ 100,000

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.

DSS owns 24.9 %

of the outstanding common shares of BMIC.

May 8, 2023, DSS Financial Management Inc and BMIC entered into a promissory note (“Note 9”) in the principal sum of

$ 102,000 with interest at the prime rate plus 2 % ( 10.5 % at September 30, 2024 and December 31, 2023) with a maturity date of May 7, 2026 .

The outstanding principal and interest at September 30, 2024 approximated $ 110,000 , and was fully reserved for as of September 30, 2024.

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.

owns 24.9 % of the outstanding common shares of Borrower 8.

July 26, 2022, APB and Borrower 10 entered into a promissory note (“Note 10”) in the principal sum of $ 1,000,000

with interest of 8 %.

All unpaid principal and interest due on July

The outstanding principal and interest on June 30, 2024 approximates $ 959,000 ,

owns 24.9 % of the outstanding common shares of BMIC.

July 26, 2022, APF and VEII, Inc.

(“VEII”) entered into a promissory note (“Note 10”) in the principal sum

of $1,000,000 with interest of 8% with all unpaid principal and interest due on July 26, 2024.

This note was amended so that all

unpaid principal and interest is due July 26, 2025.

The outstanding principal and interest on September 30, 2024 approximates $ 959,000 ,

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

1 unchanged sentence

of Note 10 was reserved for as of March 31, 2024.

For the three months ended June 30, 2024, no additional reserve was deemed

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

No additional reserve was deemed necessary as of September 30, 2024.

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

net of $ 20,000

1 unchanged sentence

Heng Fai Ambrose

Chan, the Chairman of DSS, Inc is also the on the board of directors of Borrower 10.

Chan, the Chairman of DSS, Inc is also the on the board of directors of VEII.

Subsequent Events

Company has evaluated all subsequent events and transactions through August 13, 2024, the date that the condensed consolidated financial

Company has evaluated all subsequent events and transactions through November 13, 2024, the date that the condensed consolidated financial

statements were available to be issued and noted no subsequent events requiring financial statement recognition or disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements