What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-31 compared with 2025-03-31 · 1365 added, 1233 removed, 725 unchanged (78% of the section changed)

2 unchanged sentences

Reports of Independent Registered Public Accounting Firm (PCAOB ID:

Financial Statements:

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Consolidated Statements of Operations

Consolidated Statements of Cash Flows

Consolidated Statements of Changes in Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

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, 2024 and 2023, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the

two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

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

31, 2024 and 2023, 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.

the Board of Directors of and Stockholders of

on the Consolidated Financial Statements

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

and its subsidiaries (collectively, the “Company”)

as of December 31, 2025, and the related consolidated statement of operations, consolidated statement of changes in stockholders’

equity, and consolidated statement of cash flows for the year ended December 31, 2025, including the related notes (collectively referred

to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in

all material respects, the financial position of the Company as of December 31, 2025 and the results of its operations and its cash flows

for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America .

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note

2 to the financial statements, the Company has incurred net losses, losses from operations and negative cashflow from operations.

factors raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard

to this matter are also discussed in Note 2.

The financial statements do not include any adjustments that might result from the outcome

of this uncertainty.

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

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance

with the U.S.

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

conducted our 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 consolidated 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.

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 consolidated 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 consolidated 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 consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Company has significant transactions with related parties which are described in Notes 20 of the consolidated financial statements.

involving related parties cannot be presumed to be carried out on an arm’s length basis, as the requisite condition of competitive,

free market dealings may not exist.

Audit Matters

audit matters are matters arising from the current year audit of the consolidated financial statements that were communicated or required

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

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

The communication of critical audit matters does not alter

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

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

in Real Estate

disclosed in Note 2 and 9 to the consolidated financial statements, the Company owns real estate properties through their

subsidiaries with a net book value of approximately $16,612,000.

We identified the valuation of the real estate to be a critical audit

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

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

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

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

comparison, etc.

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

the Critical Audit Matter was addressed in the Audit

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

obtained management’s rollforward of investments in real estate from December 31, 2024,

to December 31, 2025 and tested any material additions or disposals by vouching to the supporting

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

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

engaged a valuation firm to review the valuation reports provided by management to determine

if the reports were reasonable and acceptable based on the methodologies used by management’s

third-party valuation firm.

We also assessed the qualifications and competence of the valuation

compared the net book value of the real estate properties to the fair values of the properties

per the third-party valuations to determine if the carrying value is less than fair value

and impairment was addressed properly.

assessed the sufficiency of the Company’s disclosure of its accounting for these real

estate properties included in Notes 2 and 9.

of Intangible Assets and Goodwill for Impairment

disclosed in Notes 2 and 10 to the consolidated financial statements, the Company holds Intangible Assets and Goodwill through its subsidiaries

with a net book value of approximately $17,034,000 and $1,769,000, respectively.

We identified the value of Intangible Assets and Goodwill

to be a critical audit matter.

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 analysis, which

is primarily due to the subjectivity of management’s qualitative assumptions.

The conclusion of the impairment analysis is sensitive

to changes in these key assumptions.

the Critical Audit Matter was addressed in the Audit

audit procedures related to the evaluation of the Intangible Assets and Goodwill for impairment included the following, among others:

obtained management’s rollforward of Intangible Assets from December 31, 2024, to December

31, 2025 and tested any material additions and disposals by vouching to the supporting documents.

obtained management’s qualitative analysis that assessed the Intangible Assets and

evaluated the reasonableness of management’s analysis of relevant events and circumstances,

such as macroeconomic conditions, industry considerations, and entity-specific financial

We independently validated key points in management’s assessment by comparing

their qualitative conclusions against internal financial trends and external market data

assessed the sufficiency of the Company’s disclosure of its accounting for Intangible

Assets and Goodwill included in Notes 3 and 11.

have served as the Company’s auditor since 2025

International, LLC

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders of

on the Consolidated Financial Statements

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

(the “Company”) as of December 31, 2024, and the related

consolidated statement of operations, stockholders’ equity, and cash flows for the year ended December 31, 2024, and the related

notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly,

in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash

flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

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

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

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

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

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

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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,

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

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Accordingly, we express no such opinion.

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

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

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 audits also included evaluating the accounting principles used and significant

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 audits

provide a reasonable basis for our opinion.

We believe that our audit provides

a reasonable basis for our opinion.

Audit Matters

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

obtained management’s rollforward of investments in real estate from December 31, 2023,

obtained management’s roll forward of investments in real estate from December 31, 2023,

to December 31, 2024 and tested any material additions by vouching to invoices and contracts.

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& Co., CPAs, P.C.

have served as the Company’s auditor since 2022.

served as the Company’s auditor from 2022 to 2025.

AND SUBSIDIARIES

Balance Sheets

of December 31,

Current assets:

Cash and cash equivalents

Accounts receivable, net of allowance for credit reserve of $ 1,613,000

Inventory, net

Restricted cash

Accounts receivable, net

Investment in trading securities

Assets held for sale

Current portion of notes receivable, net

Current portion of notes receivable - related part, net

Current portion of notes receivable - related party

Current portion of notes receivable

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Property, plant and equipment, net

Investment in real estate, net

Other investments

Investment, equity method

Marketable securities

Investments in real estate, net

Investments, cost method

Investments, equity method

Investment in equity securities

Notes receivable, net

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$ 106,453,000

$ 153,192,000

LIABILITIES AND STOCKHOLDERS’ EQUITY

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Other current liabilities

Accrued interest on long-term debt

Current portion of lease liability

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Current portion of long-term debt on assets held-for-sale, net

Convertible note payable - related party

Current portion of long-term debt - related party, net

Current portion of long-term debt, net

Current portion of long-term debt

Total current liabilities

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Long term lease liability

Total liabilities

Commitments and contingencies (Note 16)

Stockholders’ equity

Preferred stock, $ .02 par value;

47,000 shares authorized, zero shares issued and outstanding ( zero on December 31, 2023);

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

zero on December 31, 2023).

Stockholders’ equity (deficit)

Preferred stock, $ .02

47,000 shares authorized,

zero shares issued and outstanding

Common stock, $ .02 par value;

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$ 106,453,000

$ 153,192,000

accompanying notes.

accompanying notes to the consolidated financial statements.

AND SUBSIDIARIES

Statements of Operations

the Years Ended December 31,

For the year ended

Printed products

Rental income

Net investment income

Direct marketing

Commission revenue

Commercial lending

Biotechnology

Total revenue

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Cost of revenue

Selling, general and administrative (including stock-based

compensation)

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

Total costs and expenses

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Interest income

Interest income on notes receivable, related party

Interest income on note receivable, related party

Dividend income

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Foreign Currency Translation Adjustment

Gain/(loss) on equity method investment

Gain/(loss) on investments

( 4,967,000 )

Gain on extinguishment of debt

(Loss)/gain on equity method investment

(Loss) gain on investments

Impairment of investment

Impairment of intangible assets

( 7,418,000 )

Impairment of real estate assets

( 2,420,000 )

Impairment of investments

Impairment of assets upon deconsolidation of SHRG

( 7,288,000 )

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( 3,691,000 )

( 3,794,000 )

Gain/(loss) on sale of assets

( 1,300,000 )

Loss from continuing operations before income taxes

( 53,698,000 )

( 74,039,000 )

Income tax expense

Loss from continuing operations

( 53,706,000 )

( 74,043,000 )

Loss from discontinued operations, net of tax

( 3,481,000 )

( 53,706,000 )

( 77,524,000 )

Loss from continuing operations attributed to noncontrolling interest

Net loss attributable to common stockholders

(Loss)/gain on sale real estate assets

( 9,622,000 )

Loss from operations before income taxes

( 27,488,000 )

Amounts attributable to DSS stockholders

Loss from continuing operations net of taxes

( 53,698,000 )

Income tax benefit

$ ( 27,488,000 )

Loss from discontinued operations net of taxes

$ ( 53,706,000 )

Net loss attributable to DSS shareholders

Loss from operations attributed to noncontrolling interest

Net loss attributable to DSS common stockholders

$ ( 23,929,000 )

$ ( 46,896,000 )

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

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

Loss per common share attributable to common stockholders

Shares used in computing loss per common share:

accompanying notes.

AND SUBSIDIARIES

Statements of Cash Flows

For the Years Ended December 31,

Cash flows from operating activities:

( 53,706,000 )

( 77,524,000 )

Loss from discontinued operations

( 3,481,000 )

Loss from continuing operations

( 53,706,000 )

( 74,043,000 )

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

Depreciation and amortization

Stock based compensation

Loss (income) on equity method investment

Loss (gain) on investments

Change in ROU assets

Impairment of fixed assets

Impairment of real estate

Impairment of investments

(Gain) loss on sale of assets

Impairment of intangible assets

Impairment of accounts receivable

Impairment of notes receivable

Impairment of assets upon deconsolidation

Impairment of goodwill

Decrease (increase) in assets:

Accounts receivable

Prepaid expenses and other current assets

Increase (decrease) in liabilities:

Accounts payable

( 2,260,000 )

Accrued expenses and deferred revenue

( 15,646,000 )

Change in ROU liabilities

( 1,013,000 )

Other liabilities

Net cash used by operating activities - continuing operations

( 9,082,000 )

( 15,713,000 )

Net cash used by operating activities - discontinued operations

( 3,481,000 )

Net cash used by operating activities

( 9,082,000 )

( 19,194,000 )

Cash flows from investing activities:

Purchase of property, plant and equipment

Purchases of real estate assets

Purchase of investment

( 3,327,000 )

Disposal of property, plant and equipment

Asset acquired with Sentinel acquisition

Sale of marketable securities

Issuance of new notes receivable, net origination fees

( 1,046,000 )

Payments received on notes receivable

Payments received

on notes receivable, related party

Net cash provided by investing activities

Cash flows from financing activities:

Payments of long-term debt

( 2,626,000 )

( 4,246,000 )

Borrowings of long-term debt

Issuances of common stock, net of issuance costs

Net cash provided (used) by financing activities

( 2,417,000 )

Net increase (decrease) in cash - continuing operations

( 9,194,000 )

Net increase (decrease) in cash - discontinued operations

( 3,481,000 )

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

accompanying notes.

See accompanying notes to the consolidated financial

AND SUBSIDIARIES

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the Years Ended December 31,

Preferred Stock

Non- controlling

Balance, December 31, 2023

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$ ( 256,176,000 )

$ 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 Sharing Services Global Corporation

Net loss from continuing operations

Stock based payments

Issuance of common stock, net of expenses - Impact BioMedical, Inc.

( 46,896,000 )

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( 303,072,000 )

$ 319,963,000

$ ( 256,176,000 )

Issuance of common stock, net of expenses

Issuance of common stock, net of expenses - Impact BioMedical, Inc.

Stock based compensation - Impact Biomedical, Inc.

Issuance of common stock for award

Stock based payments for professional services rendered for Impact Bio

Stock based payments

( 23,929,000 )

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$ 325,987,000

accompanying notes.

$ ( 327,001,000 )

$ ( 832,000 )

See accompanying notes to the consolidated financial

AND SUBSIDIARIES

Statements of Cash Flows

flows from operating activities:

to reconcile net loss to net cash used by operating activities:

and amortization

Issuance of common stock for reward

Stock based payments for professional services rendered

Stock based payments to employees and directors

gain on equity method investment

loss (gain) on investment in marketable securities

of operating lease ROU assets

Write off of inventory

for inventory obsolescence

(gain) on sale of real estate assets

Impairment of fixed assets

of investments of investments at cost

Impairment of real estate

Impairment of intangibles

Provision for loan losses

Gain on extinguishment of debt

Impairment of goodwill

(increase) in assets:

expenses and other current assets

Investment in trading securities

(decrease) in liabilities:

ROU liabilities

Accrued interest on notes payable

cash used by operating activities

flows from investing activities:

Purchase of property, plant and equipment

Purchase of real estate

from sale of real estate

from sale of equity investments

from disposal of property, plant and equipment

from sale of investment, related party

Issuance of new notes receivable, net origination fees

Payments received on notes receivable

Payments received on notes receivable, related party

Net cash provided by investing activities

flows from financing activities:

of long-term debt

Borrowings of long-term debt, net

Borrowings of convertible note payable - related party

Issuances of common stock, net of issuance costs

cash provided (used) by financing activities

Net increase (decrease) in cash

Cash and cash equivalents at beginning of year

Cash and cash equivalents and restricted cash at end of period

Cash and cash equivalents

Restricted cash

Total cash and restricted cash

See accompanying notes to the consolidated financial

AND SUBSIDIARIES

TO THE CONSOLIDATED FINANCIAL STATEMENTS

DESCRIPTION OF BUSINESS

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.

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(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.

or the “Company”) currently operates four (4) distinct business lines with operations and locations around the globe.

business lines are:

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

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

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

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

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.

operates in the paper board and fiber based folding carton, consumer product packaging, and document security printing 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) Our Commercial Lending business division, driven by American Pacific Financial (“APF”),

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.

(4) 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.

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

(5) Direct Marketing, led by the holding

corporation, Decentralized Sharing Systems, Inc.

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

“Gig” business model of peer-to-peer decentralized sharing marketplaces.

Direct Marketing’s products include, among

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

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”).

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

of Previously Issued Financial Statements

Company has restated its 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.

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 a 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 also determined that Deconsolidation also required the recognition

of discontinued operations.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Summary of Significant Accounting Policies

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) Our Commercial Lending business division, driven by American Pacific Financial (“APF”), provides financing solutions

including commercial business lines of credit, land development financing, inventory financing, equipment financing, and third-party

loan servicing (4) 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.

June 21, 2025, Impact BioMedical Inc.

(“Impact”), Dr Ashleys Limited, a Cayman Islands exempted company limited by

shares (“PubCo”), Dr Ashleys Nevada Sub, Inc., a Nevada corporation and wholly-owned subsidiary of PubCo (“Merger

Sub”), Dr Ashleys Bio Labs Limited, a Cayman Islands exempted company limited by shares (“Dr Ashleys Cayman”), and

Kanans Visvanats (a.k.a.

Kannan Vishwanatth), a Latvian national, solely in his capacity as the sole shareholder of Dr Ashleys

(“Dr Ashleys Shareholder”) entered into a Merger and Share Exchange Agreement (the “Merger Agreement”).

Pursuant to the Merger Agreement and subject to the terms and conditions set forth therein, (i) Merger Sub shall be merged with and

into Impact with Impact being the surviving entity (the “Merger”), and (ii) simultaneous with or immediately following

the Merger, PubCo shall acquire all of the issued and outstanding ordinary shares of Dr Ashleys Cayman from the Dr Ashleys

Shareholder (the “Share Exchange”).

The closing date of the transaction is uncertain as of March 15, 2026, due to the

pending approval from regulatory authorities.

Both parties agreed to extend the closing date to July 1, 2026.

Management will

continue evaluating the status of this deal.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

- The accompanying consolidated financial statements have been prepared in conformity with U.S.

generally accepted accounting

principles (U.S.

Any reference in these notes to applicable guidance is meant to refer to U.S.

GAAP as found in the Accounting

Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB).

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

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intercompany balances and transactions have been eliminated in consolidation.

Deconsolidation

of Sharing Services Global Corporation - On May 4, 2023, the Company distributed approximately 280 million shares of SHRG beneficially

held by DSS and Decentralized Sharing Systems in the form of a dividend to the shareholders of DSS common stock.

Upon completion of this

distribution, DSS will retain an ownership interest in SHRG of approximately 7 %.

Immediately prior to this distribution, DSS owned approximately

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

As 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.

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 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.

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, the impairment of long-lived assets, fair values of options and warrants to purchase the Company’s common

stock, preferred stock, deferred revenue, and income taxes, 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.

Reclassifications

Costs associated with Professional fees for the years ended December 31, 2024, and 2023 have been reclassified to Research and

development to conform with current period presentation.

For the year ended December 31, 2023, Sales and marketing costs have been

reclassified from Other operating costs to Sales and marketing to conform with current period presentation.

Further the Current

portion of long-term debt, net, was reduced approximately $ 47,000,000 , the Current portion of long-term debt on assets held-for-sale was increased approximately $ 44,308,000 , and the current

portion of long-term debt – related party, net was increased approximately $ 2,678,000 on the Consolidated Balance Sheet for the

year ended December 31, 2023 have been reclassed to conform with current period presentation.

Additionally, Impairment of goodwill in

the amount of $ 30,978,000 for the year ended December 31, 2023 was reclassified to Selling, general and administration (inclusive of stock

based compensation) on the accompanying Consolidated statement of operations.

- Certain prior period amounts have been reclassified to conform to the current period presentation.

Such reclassifications had no effect

on previously reported net income, cash flows, total assets, total liabilities, or total stockholders’ equity.

Revision of prior period

financial statements - During 2025, the Company identified and corrected immaterial classification errors

in our previously reported Consolidated balance sheet as of December 31, 2024.

The correction of these error between current and noncurrent

assets resulted in an increase in the current asset line item referred to as “Investments in trading securities”

and a decrease in the noncurrent line-item referred to as Investment in equity securities by $2,878,000,

respectively, from the previously reported amounts of $0 to $2,878,000, and $9,211,000 to $6,333,000, respectively.

In addition, the Company reclassified $ 298,00 from additional paid-in

capital to noncontrolling interests within equity to correct an immaterial prior-period classification error The Company also reclassed $ 5,008,000 million from Current portion of long-term debt on assets-held-for sale, net to Accrued interest

on long-term debt.

This revision did not affect total current liabilities or total liabilities.

Additionally, the Company identified certain

immaterial errors in the classification of amounts reported in the consolidated statement of cash flows for the year ended December 31,

Specifically, $ 3,327,000 of cash outflows related to purchases of marketable securities, which were previously presented within

investing activities, should have been presented within operating activities, and $ 3,648,000 related to accrued interest, which was previously

presented within financing activities as part of borrowings of long-term debt, should have been presented within operating activities.

As a result of the revision, net cash used in operating activities for the year ended December 31, 2024 decreased from $ 9,082,000 to $ 8,761,000 ,

net cash provided by investing activities increased from $ 8,811,000 to $ 12,138,000 , and net cash provided by financing activities decreased

from $ 5,087,000 to $ 1,439,000 .

The Company assessed the

materiality of these change in presentation on prior period financial statements in accordance with SEC Staff Accounting Bulletin

99, “Materiality,” (ASC Topic 250, Accounting Changes and Error Corrections).

Based on this assessment, the Company

concluded that this classification error corrections in its Consolidated balance sheet and Consolidated statement of cash flows are

not material to any previously presented financial statements based upon overall considerations of both quantitative and qualitative

The correction had no effect on any previously reported amounts in our consolidated financial statements as of and for the

year ended December 31, 2024 other than those previously mentioned.

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

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adjusted costs approximate fair value.

Restricted cash

- Restricted cash consists of deposits and other cash balances that are restricted as to withdrawal or use under the terms of certain

contractual arrangements.

These amounts are generally maintained as collateral for letters of credit, lease-related security deposits,

or other business requirements.

The Company classifies restricted cash as a current assets on noncurrent asset on the Consolidated balance

sheets based on when the applicable restrictions are expected to lapse.

For purposes of the consolidated statements of cash flows, cash,

cash equivalents, and restricted cash are presented in total

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

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abilities to pay.

December 31, 2024, and December 31, 2023 the Company established a reserve for credit losses of approximately $ 1,613,000

and $ 2,494,000 ,

December 31, 2025, and December 31, 2024 the Company established a reserve for credit losses of approximately $ 1,014,000 and $ 1,613,000 ,

respectively.

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

Accounts receivable, net was $ 3,068,000 ,

and $ 3,994,000 for December 31, 2024, and December 31, 2023, respectively.

Accounts receivable, net was $ 2,254,000 , and $ 3,068,000

for December 31, 2025, and December 31, 2024, respectively.

Concentration

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

of December 31, 2024, two customers accounted for approximately 22 % and 13 % of our consolidated revenue and 29 % and 20 % 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.

of December 31, 2025, one customer accounted for approximately 29 % of our consolidated revenue.

As of December 31, 2024, one customer

accounted for approximately 22 % of our consolidated revenue and second customer accounted for approximately 13 % of our consolidated revenue

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

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

For Loans And Lease Losses - ASC Topic 326 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

For Loans And Lease Losses - ASC Topic 326 which requires an allowance for credit losses to be deducted from the amortized cost

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

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

the collectability of the reported amount.

In estimating expected losses in the loan and lease portfolio, borrower-specific financial

data and macro-economic assumptions are utilized to project losses over a reasonable and supportable forecast period.

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 obligations.

After the forecast period, the Company utilizes longer-term historical loss experience

to estimate losses over the remaining contractual life of the loans.

– 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

In estimating expected losses in the loan 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 obligations.

After the forecast period, the Company utilizes longer-term historical loss experience to estimate losses

over the remaining contractual life of the loans.

At December 31, 2025, and December 31, 2024, the Company established a reserve for

credit losses of approximately $ 7,478,000 , $ 9,406,000 , respectively

Investments –

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 other 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.

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 8 for further discussion on investments.

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

– Inventories consist primarily of paper,

pre-printed security paper, paperboard, fully prepared packaging, air filtration systems, and health and beauty products which and are

stated at the lower of cost or net realizable value on the first-in, first-out (“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.

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 $ 53,000

associated with the inventory at our Premier

subsidiary for December 31, 2024 and 2023, respectively.

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

and $ 180,000

associated with the inventory at our Premier subsidiary for December 31, 2025 and 2024, respectively.

Write- downs and write-offs

are charged to Cost of revenue.

During 2025, the Company wrote off approximately $ 419,000

of its Celios completed units of its air purification inventory, as management believes those inventory will not materially

generate future sales.

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

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

During 2023, the land and buildings related

to AMRE Shelton, AMRE LifeCare and AMRE Winter Haven were reclassified to Assets held for sale.

During 2024, the land and buildings related to AMRE Shelton, was reclassified to Assets held for sale.

Depreciation, amortization, cost to maintain

and secure the buildings as well as interest incurred on the loans to procure the real estate are included in Cost of revenue on the

accompanying Condensed consolidated statement of operations.

During 2023, the land and buildings related to AMRE LifeCare and AMRE Winter

Haven were reclassified to Assets held for sale.

During 2024, the land and buildings related to AMRE Shelton were reclassified to Assets

held for sale.

As of December 31, 2025, circumstances around the sale of these properties have changed and the Company does not believe

the sale of these properties will be finalized within the 12 months from the filing of these quarterly financial statements and have

reclassified these assets to Investment in real estate, net and will begin to depreciate these assets prospectively.

The Company’s policy is to obtain an independent third-party valuation

for each major project in the United States as part of our assessment of identifying potential triggering events for impairment.

may use the market comparison method to value the investments.

In addition to the annual assessment of potential triggering events in

accordance with ASC 360 – Property Plant and Equipment (“ASC 360”), the Company applies a fair value-based impairment

test to the net book value assets on an annual basis and on an interim basis if certain events or circumstances indicate that an impairment

loss may have occurred.

The Company recorded impairment on for the amount of $ 2,240,000 and $ 7,288,000 for the year ended December 31,

2025, and 2024, respectively.

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

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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 recoverable.

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

group to its undiscounted expected future cash flows.

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

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

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

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

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 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.

2025, the Company resigned its position as the registered investment advisor (“RIA”) that it assumed in September of

2021 of the American First Mutual Funds and impaired the related asset acquired in September

2021 in the amount of $ 600,000 .

held for sale – The Company has several buildings and associated land for sale as of December 31, 2024.

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.

As of December 31, 2024, the balance associated with AMRE LifeCare

was approximately $ 34,450,000 , AMRE Shelton was approximately $ 6,313,000 and AMRE Winter Haven was approximately $ 4,396,000 .

ASC 360 allows assets

held-for-sale to retain that classification if it does not sell within one year.

Each of the following facilities has been held-for-sale

for greater than one year and meet the requirements of ASC 360.

AMRE LifeCare has facilities in Plano, Tx., Fort Worth, Tx., and Pittsburgh,

The Plano facility was under contract at December 31, 2024 and the sale was finalized in March 2025.

The Forth Worth facility incurred

unforeseen damage to the property during 2024 that requires several repairs to be performed.

The facility is currently marketed to sale

The Pittsburgh facility was at 50% capacity through the majority of 2024 which made selling the facility difficult.

A tenant was found during the second half of 2024 and with the building at full capacity, it is expected to be under contract during

AMRE Winter Haven which has a facility in Winter Haven, Fla.

has generated significant interest and prospective buyers have requested

that tenants’ leases, which are short-term in nature, be extended.

The Company is currently negotiating long-term leases with the

existing tenants and the property is expected to be under contract in 2025.

– 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.

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

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.

The Company performed its

annual goodwill impairment test as of December 31, 2024, and no impairment was deemed necessary for the goodwill associated with Premier

Packaging Company of approximately $ 1,769,000 , however an impairment of Impact BioMedical goodwill was deemed necessary of approximately

$ 25,093,000 .

goodwill for APF, and Sentinel Co.

of approximately $ 29,744,000 ,

and $ 1,234,000

respectively,

were deemed impaired and written off at 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.

As of December 31, 2024, the balance associated

with AMRE LifeCare was approximately $ 34,450,000 , AMRE Shelton was approximately $ 6,313,000 and AMRE Winter Haven was approximately $ 4,396,000 .

As of December 31, 2025, circumstances around the sale of these properties have changed and the Company does not believe the sale of

these properties will be finalized within the 12 months from the filing of these quarterly financial statements and have reclassified

these assets to Investment in real estate, net and will begin to depreciate these assets prospectively.

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

assumed in a business combination.

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

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

FASB ASC Topic 350 provides

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

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

If, after completing

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

the Company will proceed to a quantitative test.

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

for any or all of our reporting units.

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

those reporting units.

This quantitative test requires various judgments and estimates.

The Company estimates the fair value of the reporting

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

Impairment of goodwill is measured as the

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

The Company performed its annual goodwill impairment test as of December 31, 2025, and no impairment was deemed necessary for the

goodwill associated with Premier Packaging Company of approximately $ 1,769,000 .

The Company performed a similar test for Impact BioMedical during 2024

and determined impairment was necessary.

Projected cash flows, evaluated using a 26.3% discount rate and 3.0% terminal growth, indicated

equity fair value far below the carrying amount, driven by limited historical revenues and sustained operating losses.

Additional working-capital

and related-party debt balance considerations further reduced equity value in the analysis.

Taken together, these factors constituted

triggering events and supported recording a goodwill impairment in the amount of $25,093,000 as of December 31, 2024.

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

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There was no impairment of intangible assets deemed necessary for 2025.

- 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.

Margin loan payable

- The Company utilizes margin loans to finance certain investments in marketable securities.

These loans are recorded as a liability

at the principal amount borrowed and are classified as other current liabilities on the Consolidated Balance Sheets, as they are generally

due on demand.

Interest expense is recognized as incurred within Interest expense on the Consolidated statement of operations.

securities purchased on margin are recorded at fair value within Investments in marketable securities, current on the Consolidated balance

As of December 31, 2025, the Company has a margin loan agreement with Apex Clearing Corp., which is used to finance additional

investments in equity securities.

The margin loan bears an annual interest rate of 8.95 % at December 31, 2025.

The loan is collateralized

by the securities purchased.

As of December 31, 2025, and 2024 the Company had an outstanding margin loan balance of $ 3,569,000 and $ 3,295,000 ,

respectively, and is included in Other current liabilities on the Consolidated balance sheet.

These securities serve as collateral for

the margin loan;

under the terms of the agreement, the Company is required to maintain a minimum equity balance.

If the fair value of

the collateral falls below this level, the Company may be required to deposit additional cash or sell securities to meet a margin call

Promissory Note -The Company accounts for convertible promissory notes in accordance with ASU 2020-06, and evaluates embedded

features under ASC 815, Derivatives and Hedging .

Upon issuance, convertible notes are recorded at their principal amount, net

of any original issue discount (“OID”) and debt issuance costs.

OID and issuance costs are presented as a direct deduction

from the carrying amount of the debt and are amortized to interest expense using the effective interest method over the contractual term

(ASC 835-30).

The Company assesses all terms and features of its convertible notes, including conversion options, redemption provisions,

make-whole or down-round adjustments, and default put/call rights, to determine whether any embedded features shall be bifurcated and

accounted for as derivatives at fair value with changes in fair value recognized in earnings (ASC 815 and ASC 820), or whether the convertible

note instrument could be qualified for simplified accounting per ASU 2020-06 and recorded at amortized cost as liability.

notes are classified as current or noncurrent liabilities based on contractual maturity and the Company’s intent and ability to

settle the obligation within twelve months of the balance sheet date.

Accrued interest and amortization of discounts and issuance costs

are included in interest and amortization expense, respectively.

For diluted earnings per share, the Company applies the if-converted

method to its convertible instruments in accordance with ASU 2020-06 (ASC 260).

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

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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.

of December 31, 2024 and 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

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.

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.

Commission revenues are generated when the Company buys and sells bond and

equity securities on behalf of its customers.

Each time a customer enters into a buy or sell transaction, the Company recognizes a

Commissions and related clearing expenses are recorded on the trade date.

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.

of December 31, 2025 and 2024, 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

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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.

sold in 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,

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.

The Company uses the Black-Scholes-Merton option pricing

model for determining the estimated fair value for stock-based awards.

The Black-Scholes-Merton model requires the use of subjective

assumptions which determine the fair value of stock-based awards, including the option’s expected term and the price

volatility of the underlying stock.

For equity instruments issued to consultants and vendors in exchange for goods and services the

Company determines the measurement date for the fair value of the equity instruments issued at the earlier of (i) the date at which

a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s

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 the estimated fair value for stock-based awards.

The Black-Scholes-Merton

model requires the use of subjective assumptions which determine the fair value of stock-based awards, including the option’s expected

term and the price volatility of the underlying stock.

For equity instruments issued to consultants and vendors in exchange for goods

and services the Company determines the measurement date for the fair value of the equity instruments issued at the earlier of (i) the

date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s

performance is complete.

In the case of equity instruments issued to consultants, the fair value of the equity instrument is

recognized over the term of the consulting agreement.

The Company record stock based compensation expense of approximately $ 19,000 for the year ended December 31, 2024 and is included in Sales, general and administrative compensation (inclusive of stock based compensation) on the accompanying Statement of Operations.

There were no stock-based payments made during the twelve months ended December 31, 2023.

In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized

over the term of the consulting agreement.

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, 2024 or 2023.

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, 2025

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

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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.

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

Per Common Share - The Company presents basic

and diluted (loss) earnings per share.

Basic (loss) earnings per share reflect the actual weighted average of shares issued and outstanding

during the period.

Diluted (loss) earnings per share are computed including the number of additional shares from outstanding warrants,

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

the treasury stock method.

In a loss period, the calculation for basic and diluted (loss) earnings per share is the same, as the impact

of potential common shares is anti-dilutive.

For the year ended December 31, 2024 and 2023, there were no potential dilutive instruments

issued and outstanding.

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.

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.

Income Taxes - The Company recognizes estimated income taxes payable or refundable on income tax returns

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

Measurement of

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

by available tax benefits not expected to be realized.

We recognize penalties and accrued interest related to unrecognized tax benefits

in income tax expense.

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

Basic (loss) earnings per share reflect

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

Diluted (loss) earnings per share are computed including

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

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

In a loss period, the calculation for basic and

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

For the year ended December

31, 2025 and 2024, there were no potential dilutive instruments issued and outstanding.

Combinations and Acquisitions - 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.

10 unchanged sentences

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 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 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 $ 11.4 million in cash, the Company has incurred

operating losses as well as negative cash flows from operating activities over the past two years.

Aside from its $ 11.4

million in cash as of December 31, 2024, the Company believes it can continue as a going concern, due to its ability to generate operating

cash through the sale of its $ 9.2 million of Marketable Securities.

Between March 24, 2025 and March 27, 2025, the Company sold a shares

of Impact BioMedical, a subsidiary, for approximately $ 1,969,000 .

Further, the Company has approximately 1,052,000 shares of Impact BioMedical

shares available to sell.

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.

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 $ 6.2 million in cash, the Company has incurred operating losses as well as negative cash flows from operating activities

over the past two years.

from its $ 6.2 million

in cash as of December 31, 2025, to continue as a going concern, the Company can generate operating cash through the sale of its $ 6.5

million of marketable securities.

To continue as a

going concern, Also, historically, the Company has been able to obtain equity via issuance of authorized shares of its common stock currently

not issued and/or debt-based financing to meet its working capital needs.

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

Accounting Standards - The Financial Accounting Standards Board (FASB) issues various Accounting Standards Updates relating to

13 unchanged sentences

disclosures for the year ended December 31, 2024.

The Company reports its segment information to reflect the manner in which the Company’s

chief operating decision maker (“CODM”) reviews and assesses performance.

The Company’s Interim Chief Executive Officer

has responsibilities as the CODM and review and assess the performance of the Company as a whole.

primary financial measures used by the CODM to evaluate performance and allocate resources are net income (loss) and operating income

The CODM uses net income (loss) and operating income (loss) to evaluate the performance of the Company’s ongoing operations

and as part of the Company’s internal planning and forecasting processes.

Information on Net loss and Operating loss is disclosed

in the Condensed Consolidated Statements of Operations.

Segment expenses and other segment items are provided to the CODM on the same

basis as disclosed in the Condensed Consolidated Statements of Operations.

CODM does not evaluate performance or allocate resources based on segment assets, and therefore such information is not presented in

the notes to the financial statements

December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures” which is intended to simplify various

aspects related to accounting for income taxes.

ASU 2023-09 removes certain exceptions to the general principles in Topic 740

and also clarifies and amends existing guidance to improve consistent application.

The amendments in ASU 2023-09 are effective

for public business entities for fiscal years beginning after December 15, 2024, including interim periods therein.

Early adoption of

the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued.

The Company is currently evaluating this ASU, but does not expect it to have material impact to its financial statements.

ASU 2023-09 removes certain exceptions to the general principles in Topic 740 and also

clarifies and amends existing guidance to improve consistent application.

The amendments in ASU 2023-09 are effective for public business

entities for fiscal years beginning after December 15, 2024, including interim periods therein.

Early adoption of the standard is permitted,

including adoption in interim or annual periods.

The adoption of this ASU did not have a material impact on the Consolidated

Financial Statements

November 2024, the FASB issued ASU No.

2024-03 (“ASU 2024-03”), Disaggregation of Income Statement Expenses (“DISE”) .

2024-03 requires disaggregated disclosure of income statement expenses for public business entities.

ASU 2024-03 does

not change the expense captions an entity presents on the face of the income statement;

rather, it requires disaggregation of certain

expense captions into specified categories in disclosures within the footnotes to the financial statements.

ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities.

ASU 2024-03 does not change

the expense captions an entity presents on the face of the income statement;

rather, it requires disaggregation of certain expense captions

into specified categories in disclosures within the footnotes to the financial statements.

As revised by ASU No.

Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, the provisions of ASU 2024-03 are

effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027,

with early adoption permitted.

With the exception of expanding disclosures to include more granular income statement expense categories,

we do not expect the adoption of ASU 2024-03 to have a material effect on our consolidated financial statements taken as a

2025-01, Income Statement—Reporting

Comprehensive Income—Expense Disaggregation Disclosures, the provisions of ASU 2024-03 are effective for fiscal years beginning

after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

the exception of expanding disclosures to include more granular income statement expense categories, we do not expect the adoption of

ASU 2024-03 to have a material effect on our consolidated financial statements taken as a whole.

In November 2024, the FASB issued ASU 2024-04 (“ASU 2024-04”),

Debt—Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments , which

clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced

conversions or as extinguishments.

The amendments in ASU 2024-04 are effective for annual reporting periods beginning after December 15,

2025, and interim reporting periods within those annual reporting periods.

Early adoption is permitted for entities that have adopted

The Company is currently evaluating the effect of adopting ASU 2024-04 on its consolidated financial statements and related

The Company does not currently expect the adoption of this standard to have a material impact on its consolidated financial

consisted of the following as of December 31:

7 unchanged sentences

May 14, 2021, DSS Pure Air, Inc.

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

Puradigm, Inc.

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

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

Note 1 has an aggregate principal balance up to $ 5,000,000 ,

$ 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 December 31, 2024 and December 31, 2023, approximated $ 5,544,000 As

of December 31, 2024 and December 31, 2023, the Company has a reserve of $ 5,544,000 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, 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 5.59 %

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

The outstanding principal and interest of $ 3,910,000

was included in the current portion of notes receivable on the consolidated balance sheet at December 31, 2023.

Note 2 was repaid in

full during March 2024.

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

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 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, 2025 and December 31, 2024, approximated $ 5,544,000 .

As of December 31, 2025 and December 31,

2024 this note is in default and the Company has a reserve of $ 5,544,000 against the principal and interest outstanding.

October 25, 2021, APF entered into a loan agreement (“Note 2”) 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 25, 2022 .

This note contains an optional conversion feature allowing APF to convert the outstanding principal

to a 10 % membership interest.

(“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 2, 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 APF to convert the

outstanding principal to a 10 % membership interest.

APF, as holder of Note 2, 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 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 .

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.

31, 2023 outstanding principal and interest of $ 253,000 is included in the Current portion of notes receivable on the consolidated balance

On 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 December 31, 2023 approximates $ 103,000 and

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

Note 5 was paid in full during

October 2024.

The outstanding principal and interest at December 31, 2024 approximated $ 17,000 .

On 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

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 December 31, 2024 and

December 31, 2023 is $ 468,000 and $ 446,000 , respectively.

The Company placed a reserve in the amount of $ 234,000 against this note.

note has been extended to March 2025.

On 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.

All unpaid principal and interest

are due on February 9, 2023 .

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

The outstanding principal

and interest at December 31, 2024 and December 31, 2023 approximates $ 224,000 of which $ 145,000 and $ 112,000 has been reserved for as of

December 31, 2024 and December 31, 2023, respectively, and is included in Current portions of notes receivable on the accompanying consolidate

balance sheet.

This note is in default and the outstanding principal and interest of approximately $ 884,000 is fully reserved for as of December 31,

2025 and December 31, 2024.

January 24, 2022, APF and an individual entered into a promissory note (“Note 3”) 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, 2024 approximated $ 17,000 and

was included in Current portion of notes receivable on the accompanying consolidate balance sheet.

As of December 31, 2025, the outstanding

principal and interest approximating $ 18,000 were written-off.

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 4”).

Under the terms of Note 4, 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 and was extended to April 2025 , with interest payable quarterly.

The outstanding principal and interest at December 31, 2025, and December 31, 2024 is $ 465,000 and $ 468,000 , respectively.

is currently in default and as of December 31, 2025 the Company has a reserve of $ 465,000 against the principal and interest outstanding.

May 9, 2022, DSS PureAir and Puradigm entered into a promissory note (“Note 5”) 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 9, 2023 .

This loan is currently in default.

The outstanding principal and interest

at December 31, 2025 and December 31, 2024 approximates $ 224,000 .

This note was fully reserved for as of December 31, 2025 and December

6, related party

On 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 29, 2025 .

The outstanding principal and interest at December 31, 2024 approximated $ 86,000 , and was fully

reserved for as of December 31, 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.

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

(“BMIC LLC”), a related party, entered

into a promissory note (“Note 6”) 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 was due on August

The outstanding principal and interest at December 31, 2025, and December 31, 2024 approximated $ 86,000 ,

and was fully reserved for as of December 31, 2025 and December 31, 2024.

DSS owns 24.9 %

of the outstanding common shares of BMIC LLC.

7, related party

On 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 December 31, 2024 approximated $ 110,000 , and was fully reserved for as of December 31, 2024.

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.

DSS owns 24.9 % of the outstanding

common shares of BMIC.

May 8, 2023, DSS Financial Management Inc and BMIC LLC entered into a promissory note (“Note 7”) in the principal sum of

with interest at the prime rate plus 2 %

with a maturity date of May

The outstanding principal and interest at December 31, 2025, and December 31, 2024 approximated $ 110,000 ,

and was fully reserved for as of December 31, 2025 and December 31, 2024.

DSS owns 24.9 %

of the outstanding common shares of BMIC LLC.

8, related party

On July 26, 2022, APF and

July 26, 2022, APF and Value Exchange International, Inc.

(“VEII”) entered into a promissory note (“Note 8”) in the principal sum of

with interest of 8 %

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.

Approximately $ 959,000

of this note was reserved for as of December 31, 2024.

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

net of $ 20,000

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 VEII.

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, 2026.

Monthly payments are due on the twenty-first day of each month

and continuing each month thereafter until February 19, 2026.

This note is secured by certain real property situated in Collier County,

The outstanding principal and

interest as of December 31, 2024 and December 31, 2023, was approximately $ 201,000 and $ 203,000 , respectively.

As of December 31, 2024,

$ 184,000 is classified in Current notes receivable and the remaining $ 17,000 is classified as Notes receivable on the accompanying consolidated

balance sheet.

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.

On 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 1, 2024 .

The outstanding

principal, interest, and associated discount was fully reserved for as of December 31, 2024 and 2023.

On 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 ( 8.5 % at 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 .

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 December 31, 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.

$ 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 as of December 31, 2025 and December 31, 2024 approximates

This note was fully reserved for as of December 31, 2025 and December 31, 2024.

Heng Fai Ambrose 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.

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, 2026.

Monthly payments

are due on the twenty-first day of each month and continuing each month thereafter until February 19, 2026.

This note is secured by certain

real property situated in Collier County, Florida.

The outstanding principal and interest as of December 31, 2025, and December 31, 2024

was approximately $ 198,000 and $ 201,000 , respectively.

As of December 31, 2025, approximately $ 198,000 is classified in Current notes

As of December 31, 2024, $ 184,000 is classified in Current notes receivable and the remaining $ 17,000 is classified as Notes

receivable on the accompanying consolidated balance sheet.

The maturity date is currently being renegotiated.

June 27, 2023, Decentralized Sharing Systems, Inc.

and Stemtech Corporation (“Stemtech”) entered into a convertible

promissory note (“Note 10”) 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, 2024

and written off as of December 31, 2025

March 31, 2023, DSS Biohealth Security, Inc and an individual entered into a promissory note (“Note 11”) in the principal

sum of $ 140,000 and interest rate floating daily to Wall Street Journal Prime rate per annum with the total outstanding principal and

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

As of December 31, 2025 and December 31, 2024, the outstanding principal and interest

approximated $ 135,000 .

This balance was fully reserved for as of December 31, 2025 and December 31, 2024.

August 29, 2024, APF entered into a promissory note (“Note 12”) with WestPark.

Note 12 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.

Note 12, which incurs interest at a rate of 10.0 % with principal and interest due at the maturity date of April 27, 2026 .

1, 2024, monthly payments of approximately $ 28,000 are due with any unpaid interest and principal due at maturity.

As of December 31,

2025, the outstanding principal and interest approximates $ 237,000 , which is classified as Current notes receivable on the accompanying

consolidated balance sheet.

As of December 31, 2024, the outstanding principal and interest approximates $ 450,000 , of which $ 337,000

is classified as Current notes receivable and the remaining $ 113,000 is classified as Notes receivable on the accompanying consolidated

balance sheet.

is classified as Current notes receivable and the remaining $ 113,000 is classified as Non-current notes receivable on the accompanying

consolidated balance sheet.

PROVISION FOR CREDIT LOSSES

ASC Topic 326 for the measurement of credit losses on financial instruments and other

financial assets.

That guidance requires an allowance for credit losses to be deducted from the amortized cost basis of financial

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

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

of the reported amount.

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

Topic 326 for the measurement of credit losses on financial instruments and other financial assets.

That guidance requires an allowance

for credit losses to be deducted from the amortized cost basis of financial assets to present the net carrying value that is expected

to be collected over the contractual term of the assets considering relevant information about past events, current conditions, and reasonable

and supportable forecasts that affect the collectability of the reported amount.

The guidance replaced the previous incurred loss model

for determining the allowance for credit losses.

receivable are stated at the amount owed by the customer.

16 unchanged sentences

and $ 9,406,000 , 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 $ 196,000 for December 31, 2024 and $ 194,000

for December 31, 2023 or approximately ¼ of 1% of the loan portfolio loan balance.

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 $ 0 and $ 196,000 of the loan portfolio loan balance as of December 31, 2025 and December 31, 2024, respectively.

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

1 unchanged sentence

Accordingly, we have not recorded a discretionary reserve as of December 31, 2025 and December 31,

Loan Reserves - P reviously, 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, 2024 and December 31, 2023.

The Company had also previously identified credit weakness in Puradigm and has placed a reserve approximating

$ 5,544,000 and $ 2,884,000 against the outstanding principal and interest as of December 31, 2024 and 2023, respectively.

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, 2024 and 2023.

During the first quarter of 2024, the Company identified credit weakness in VEII and an

individual and has placed a reserve approximating $ 959,000 against the outstanding principal and interest as of March 31, 2024.

has been no change to this amount.

Also, during the first quarter of 2024, the 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.

The Company identified credit weakness with WUURII and has placed a $ 234,000 reserve against the outstanding

principal and interest as of December 31, 2024.

The Company has also identified credit weakness with an individual and has placed a $ 135,000

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

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, 2024.

The Company had also previously identified credit weakness in Puradigm and has placed a reserve approximating $ 5,768,000 against the

outstanding principal and interest as of December 31, 2024 of their two loans.

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, 2024.

the first quarter of 2024, the Company identified credit weakness in VEII and an individual and has placed a reserve approximating $ 959,000

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

There has been no change to this amount.

Also, during the first

quarter of 2024, the 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 December 31, 2024.

The Company identified

credit weakness with WUURII and has placed a $ 234,000 reserve against the outstanding principal and interest as of December 31, 2024

and reserved for the remaining outstanding balance of approximately $ 233,000 as of December 31, 2025.

The Company has also identified

credit weakness with an individual and has placed a $ 135,000 reserve against the outstanding principal and interest as of December 31,

2024, and reserved for an approximate $ 17,000 against the outstanding principal and interest for another individual as of December 31,

No additional reserves were deemed necessary as of December 31, 2025.

5 unchanged sentences

OF ALLOWANCE FOR DOUBTFUL ACCOUNTS AND LOAN LOSS RESERVE

Allowance for

credit losses

Allowance for credit losses

Loan loss reserve

Balance at December 31, 2024

3 unchanged sentences

Balance at December 31, 2025

Credit loss expense

Balance at December 31, 2024

FINANCIAL INSTRUMENTS

Financial Instruments

Cash Equivalents and Marketable Securities

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

of Cash and Marketable Securities by Significant Investment Category

SCHEDULE OF CASH AND MARKETABLE SECURITIES BY SIGNIFICANT INVESTMENT CATEGORY

Restricted Cash

Money Market Funds

2 unchanged sentences

$ ( 17,172,000 )

Cash And Cash Equivalents

Marketable Securities

Money Market Funds

8 unchanged sentences

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

7 unchanged sentences

DISPOSAL OF ASSETS

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

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.

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 transaction.

This transaction was later amended during the third quarter of 2023 to assign the purchase of HWHH

from SHRG to Ascend Management Pte., Ltd.

(“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.

A net 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.

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

On March 27, 2025, the Company

finalized the sale of its Plano, Tx.

Facility for a gross sales price of $ 9,500,000 .

The associated asset was previously classified as

held for sale in the amount of $ 9,750,000 , resulting in a loss on the sale of approximately $ 727,000 after related expenses.

December 17, 2025 AMRE Winter Haven, LLC., a majority owned subsidiary of the Company, sold its property located in Winter Haven FL.

The contract price of $ 4,600,000 .

The carrying value of the asset was approximately $ 4,324,000 , resulting in a loss on the sale of property

of approximately $ 292,000 after payment of related expenses.

December 22, 2025 AMRE Lifecare, LLC., a majority owned subsidiary of the Company, sold its property located in Fort Worth TX.

price of $ 3,100,000 .

The carrying value of the asset was approximately $ 11,406,000 , resulting in a loss on the sale of property of approximately

$ 8,591,000 after payment of related expenses.

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

Investment in marketable securities, noncurrent 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, 2024, and December 31, 2023, was approximately $ 2,518,000 and

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, 2025, and December 31, 2024, was

approximately $ 2,277,000

and $ 2,518,000

respectively.

During the year ended December 31, 2024 and December 31, 2023, the Company recorded unrealized loss on this

investment of approximately $ 750,000 and unrealized loss of $ 50,000 , respectively.

During the year ended December 31, 2025 and December 31, 2024, the Company recorded unrealized loss on this investment

of approximately $ 242,000

and unrealized loss of $ 750,000 ,

respectively.

Partners Capital Holding Limited

Company owns 81,836,908 shares of True Partners Capital Holding Limited (“True Partners”), a publicly listed company on the

Hong Kong Stock Exchange.

On February 28, 2022, the Company entered into a Stock Purchase Agreement with Alset EHome International Inc.

(“AEI”), pursuant to which AEI has agreed to sell a subsidiary holding 62,336,908 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’s Executive

Chairman and a significant stockholder, Heng Fai Ambrose Chan is the Chairman, Chief Executive Officer and largest shareholder of AEI.

Further, on February 20, 2025, the Company acquired an additional 19,500,000 shares of True Partners.

The fair value of the marketable

security as of December 31, 2025 and December 31, 2024, was approximately $ 4,206,000 and $ 3,815,000 , respectively.

During the year ended

December 31, 2025 and December 31, 2024, the Company recorded unrealized loss on this investment of approximately $ 609,000 and unrealized

loss of $ 590,000 , respectively.

Park Capital, Inc.

4 unchanged sentences

included in Investments on the consolidated balance sheet on December 31, 2025 and as of December 31, 2024.

No circumstances or events have occurred to indicate the need for an impairment

on this asset.

For the years ended December 31, 2025 and 2024, no impairment was recorded.

Capital International LLC

3 unchanged sentences

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

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

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

DSS Securities also

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

and increased its ownership to 24.9 %.

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

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

The Company’s portion

of net loss in BMIC during the year ended December 31, 2024, approximated $ 1,000 and $ 34,000 for year ended December 31, 2023.

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.

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

purchased 14.9 %

membership interests in BMIC LLC for $ 100,000 .

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

of the outstanding membership interest which it exercised for $ 100,000

in January of 2021 and increased its ownership to 24.9 %.

Upon achieving greater than 20 %

ownership in BMIC LLC 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 LLC during the year ended December 31, 2025,

approximated $ 16,000

for year ended December 31, 2024.

No circumstances or

events have occurred since the most recent analysis that would indicate the need for an impairment is needed for the years ended December

31, 2025 or 2024.

Technologies Asia Pacific Holdings Limited

12 unchanged sentences

is impaired in full at December 31, 2025 as it does not have a readily determined fair value.

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

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

In exchange, the Company agreed

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

This agreement is for ten years with

a one year auto-renewal feature.

PROPERTY PLANT AND EQUIPMENT AND INVESTMENT IN REAL ESTATE, NET

Property Plant and Equipment and Investment in Real Estate, Net

PROPERTY PLANT AND EQUIPMENT AND INVESTMENT IN REAL ESTATE

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

of Property, Plant and Equipment

SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT

Machinery and equipment

2 unchanged sentences

Software and websites

Construction in progress

accumulated depreciation

1 unchanged sentence

expense for the years ended December 31, 2025 and 2024 was $ 803,000 and $ 878,000 respectively.

Estate consisted of the following at December 31:

in real estate consisted of the following at December 31:

OF INVESTMENT IN REAL ESTATE

1 unchanged sentence

accumulated depreciation

Investment in real estate

Real estate, net

expense for the years ended December 31, 2025 and 2024 was $ 698,000 and $ 98,000 respectively.

INTANGIBLE ASSETS

Intangible Assets

assets are comprised of the following as of December 31:

10 unchanged sentences

Patent application costs

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

December 31, 2024, the weighted average remaining useful life of these assets in service was approximately 1.7 years.

Patent application costs are amortized over their expected

useful life which is generally the remaining legal life of the patent.

As of December 31, 2025, the weighted average remaining useful

life of these assets in service was approximately .7 years

amortized for the year ended December 31, 2025 and 2024 was approximately $ 1,140,000 and $ 1,361,000 , respectively.

2 unchanged sentences

ACCRUED EXPENSES AND DEFERRED REVENUE

Accrued Expenses and Deferred Revenue

expenses and deferred revenue consist of the following for the year ended December 31:

8 unchanged sentences

SHORT TERM AND LONG-TERM DEBT

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 a new Heidelberg XL 106-7+L printing

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 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, 2024, the outstanding principal on the BOA Note was $ 2,932,000

and $ 2,436,000 ,

respectively and had an interest rate of 4.63 %.

As of December 31, 2025, and December 31, 2024, the outstanding principal on the BOA Note was $ 1,916,000 and $ 2,436,000 , respectively

and had an interest rate of 4.63 %.

As of December 31, 2025, $ 544,000 was included in the current portion of long-term debt, net, and

the remaining balance of approximately $ 1,372,000 recorded as long-term debt.

As of December 31, 2024, $ 520,000 was included in the current portion of long-term debt, net, and the remaining balance of

approximately $ 1,916,000 recorded as long-term debt.

Interest expense for the years ended December 31, 2025 and 2024 approximated

$ 102,000 and $ 125,000 , respectively.

The BOA Note contains certain covenants that are analyzed annually.

As of December

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, 2024, $ 520,000 was included in the current portion of

long-term debt, net, and the remaining balance of approximately $ 1,916,000 recorded as long-term debt, The BOA Note contains certain covenants

that are analyzed annually.

As of December 31, 2024, Premier is in compliance with these covenants.

31, 2025, 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

3 unchanged sentences

The Shelton Agreement contains monthly payments of principal and an initial interest of 4.25 %.

interest will be adjusted commencing on July 1, 2026 and continuing for the next succeeding 5-year period shall be determined one month

prior to the change date and shall be an interest rate equal to two hundred fifty (250) basis points above the Federal Home Loan Bank

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

a balloon payment approximating $ 2,829,000

interest will be adjusted commencing on July 1, 2026 and continuing for the next succeeding 5-year period shall be determined one

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

Loan Bank Boston 5-Year/25-Year amortizing advance rate, but in no event less than 4.25 %

for the term of 120 months with a balloon payment approximating $ 2,829,000

due at term end.

The affective interest rate

at December 31, 2022 was 4.25 %.

The affective interest rate at December 31, 2022 was 4.25 %.

The funds borrowed were used to purchase a 40,000

square foot, 2.0 story, Class A+ multi-tenant

medical office building located on a 13.62-acre site.

The purchase price has been allocated as $ 4,640,000 ,

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.

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

The net book value of these assets as

of December 31, 2023 approximated $ 6,729,00 .

of intangible assets with an estimated useful life of approximating 3

The net book value of these assets as of December 31, 2025 approximated $ 6,231,00 .

Of the total financed, approximately $ 226,000

of principal and accrued interest is classified

as current portion of long-term debt, net, and the remaining balance of approximately $ 4,402,000

of principal and accrued interest is classified as current portion of long-term debt, net, and the remaining balance of

approximately $ 4,001,000

recorded as long-term debt, net of $ 4,000

in deferred financing costs, The net book value

of these assets as of December 31, 2024 approximated $ 6,313,000 .

As of December 31, 2024 the outstanding principal and interest of approximately $ 4,424,000 , net of $ 27,000 in deferred financing costs,

is classified as Current portion of long-term debt on assets held=fir-sale, net on the consolidated balance sheet.

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, 2024 and December 31, 2023, $ 463,000 and $ 547,000 ,

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

in deferred financing costs.

As of December 31, 2024 the outstanding principal and interest of approximately $ 4,424,000 ,

net of $ 27,000

in deferred financing costs, is classified as Current portion of long-term debt on assets held-for-sale, net on the consolidated

balance sheet.

Interest expense for the years ended December 31, 2025 and 2024 approximated $ 186,000 and $ 196,000 , respectively.

October 13, 2021, LVAM entered into loan agreement with BMIC International (“BMIC International 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 International Loan contains an auto

renewal period of three months, with a maturity date of January

2026 as of December 31, 2025.

As of December 31 2025, and December 31, 2024, the outstanding principal and interest of

approximately $ 33,000

and $ 463,000 ,

respectively, are included in Current portion of long-term debt – related party, net on the consolidated balance

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, 2024 $ 145,000 is included in the Current portion of long-term debt, net on the consolidated balance sheet.

December 31, 2023 $ 2,131,000 is included in the 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 .

Wilson Loan contains an auto renewal period of three months, with a maturity date of January 2026 as of December 31, 2025.

As of December

31, 2025, and December 31, 2024, the outstanding principal and interest of approximately $ 145,000 and $ 145,000 , respectively, are included

in Current portion of long-term debt – related party, 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.

1 unchanged sentence

$ 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.

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.

December 31, 2024, the outstanding principal and interest of the LifeCare agreement approximates $ 46,069,000

and is included in Current portion of long-term debt on assets held-for-sale, net on the consolidated balance sheet.

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

and is included in Current portion of long-term debt on assets held-for-sale, net on the Consolidated Balance Sheet.

Interest expense for the year-ended

December 31, 2024 and 2023 approximated $ 3,861,000 and

$ 3,773,000 ,

respectively.

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

This amount is past

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

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 December 31, 2025 was 8.1 %.

As of December 31, 2025, the outstanding principal and interest of the LifeCare agreement approximates

$ 37,401,000 and is included Current portion of long-term debt, net on the accompanying balance sheet.

As of December 31, 2024 the outstanding

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

Interest expense for the years ended December 31, 2025 and 2024 approximated $ 2,952,000 and $ 3,861,000 , respectively.

This note is in

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

As of December 31, 2025, this amount is past due.

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

1 unchanged sentence

maturing on March

7, 2024 to acquire a medical facility

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

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.

2 unchanged sentences

$ 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.

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

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

amortization period with interest at 4.28 %.

The first installment was due January 1, 2023.

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

AMRE note is currently due.

The outstanding principal and interest, approximates $ 3,040,000

and is included in Current portion of long-term debt on assets held-for-sale, net long-term debt, net on the accompanying consolidated balance sheet at

December 31, 2024.

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

approximates $ 2,977,000 and

is included in in Current portion of long-term debt on assets held-for-sale, net on the accompanying consolidated balance sheet at December 31, 2023.

Interest expense equaled

$ 251,000 for

year ended December 31, 2024 and $ 281,000 for

year ended December 31, 2023.

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

This note was assumed by SMS Financial on August 15, 2024, in the amount of $2,960,000 and refinanced with American Savings Life

Insurance Company (“American Savings Note”) on August 29, 2025 in the amount of $ 3,250,000 .

This note has an annual interest rate of 7.99 %

and requires monthly installments of principal and interest of approximately $ 22,000

beginning on October 1, 2025 with a ballon payment at maturity on September 1, 2026.

The outstanding principal and interest,

approximates $ 3,040,000

and is included in Current portion of long-term debt, net on the accompanying consolidated balance sheet at December 31, 2024.

Interest expense for the years ended December 31, 2025 and 2024 approximated $ 322,000

and $ 251,000 ,

respectively.

This property located in Winter Haven FL was sold during December of 2025 and this note was repaid in full as of

December 31st 2025.

March 30, 2023, Premier Packaging, a subsidiary of the Company entered into a loan and security agreement with Bank of America for the principal amount of $ 790,000

and shall accrued interest at the rate of 7.44 %.

3 unchanged sentences

As of December 31, 2025, the

outstanding principal and interest approximates $ 605,000 of which $ 123,000 was included in the current portion of long-term debt,

net, and the remaining balance of approximately $ 482,000 recorded as long-term debt.

As of December 31, 2023, the outstanding

principal and interest approximates $ 719,000

outstanding principal and interest approximates $ 482,000

of which $ 132,000

1 unchanged sentence

recorded as long-term debt.

As of December 31, 2024, the outstanding principal and interest approximates $ 605,000

of which $ 123,000

was included in the current portion of long-term debt, net, and the remaining balance of approximately $ 607,000

recorded as long-term debt.

Interest expense for the years ended December 31, 2025 and 2024 approximated $ 41,000 and $ 50,000 , respectively.

August of 2025, DSS issued a $ 500,000 convertible promissory note to Alset, Inc.

(“holder”), the Company’s largest

shareholder and a related party, bearing interest at Prime ( 6.75 % at December 31, 2025).

The first 12 months’ interest is to be

paid in shares of the Company;

thereafter, interest is prepaid annually in cash or shares at the holder’s election.

convertible at the holder’s option at a fixed $ 0.86 per share, is payable on demand (or July 31, 2028 if not demanded) and may

be redeemed by the Company on or after the first anniversary.

The Company is required to reserve sufficient authorized shares and maintain

the listing/quotation of its common stock.

Under ASU 2020-06 and ASC 815-40, the debt host’s embedded conversion feature is indexed

to the Company’s own stock and is equity-classified;

accordingly, no embedded derivative is bifurcated and the instrument is accounted

for as single-unit debt using the effective interest method.

Interest is recognized in interest expense;

when settled in shares, a credit

to APIC is recorded at the fair value of shares on settlement, and any prepaid interest is recorded as a discount/prepaid and amortized

to expense over the related period.

The outstanding principal and interest, approximates $ 512,000 and is included in Convertible note

payable, related party on the accompanying consolidated balance sheet at December 31, 2025.

summary of scheduled principal payments of long-term debt, not including revolving lines of credit, subsequent to December 31, 2025 are

of Notes Payable and Long-term Debt

SCHEDULE OF NOTES PAYABLE AND LONG-TERM DEBT

Notes payable

Notes payable - related party

Notes payable - assets held-for-sale

Convertible note payable

- related party

Notes payable

- related party

LEASE LIABILITIES

Company has operating leases predominantly for operating facilities.

As of December 31, 2025, the remaining lease terms on our operating

leases range from less than one to twelve years .

leases range from less than one 1 to eleven years .

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

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of Lease Liability:

of Future Minimum Lease Payments

MINIMUM LEASE PAYMENTS

Total lease payments

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( 1,082,000 )

Present value of remaining lease payments

Weighted-average remaining lease term (years)

Weighted-average discount rate

cash paid during the years ended December 31, 2024 and 2023 approximated $ 956,000

and $ 917,000 ,

respectively.

STOCKHOLDERS’ EQUITY

value of remaining lease payments

Weighted average remaining

lease term (years)

Weighted average discount

Cash payments made YTD

cash paid during the years ended December 31, 2025 and 2024 approximated $ 861,000 and $ 956,000 , respectively.

STOCKHOLDERS’ EQUITY

transactions –

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 for 20 .

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,

Equity transactions – On January 4, 2024 the Company effected a reverse stock split of 1

As of December 31, 2024 and December

31, 2023, 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.

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the Company’s common stock for approximately $ 197,000 .

On February 6, 2025, as a bonus

for compensation awarded to Heng Fai Holdings Limited (“HFHL”), a Hong Kong Company, which is beneficially owned by Mr.

Fai Ambrose Chan, Director of DSS, Inc.

HFHL was awarded 1,000,000

shares of the Company’s common stock, approximating $ 870,000 .

The issuance was approved by the board of directors on January 31, 2025.

On March 21, 2025, DSS, the parent

company of Impact Biomedical, Inc.

completed the sale of 499,800 shares of Impact Biomedical common stock.

These shares were acquired

by DSS during Impact’s initial public offering on September 16, 2024.

The sale of these shares, which were previously held by DSS

as part of its ownership interest in Impact, was completed for a total value of $ 1,500,000 , which represents the consideration received

from the transaction.

With this sale, the shares are now publicly held and are no longer held by DSS.

On April 4, 2025, DSS, the parent

company of Impact Biomedical, Inc.

completed the sale of 890,800 shares of Impact Biomedical common stock.

The sale of these shares, which

were previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $ 845,000 , which

represents the consideration received from the transaction.

With this sale, the shares are now publicly held and are no longer held by

On May 22, 2025, DSS, the parent

company of Impact Biomedical, Inc.

completed the sale of 115,600 shares of Impact Biomedical common stock.

The sale of these shares, which

were previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $ 63,000 , which

represents the consideration received from the transaction.

With this sale, the shares are now publicly held and are no longer held by

On May 23, 2025, DSS, the parent

company of Impact Biomedical, completed the sale of 45,400 shares of Impact Biomedical common stock.

The sale of these shares, which were

previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $ 24,000 , which represents

the consideration received from the transaction.

With this sale, the shares are now publicly held and are no longer held by DSS.

Incentive Plan – 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.

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, 2024, there are 814,184

shares available under this 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”).

year ended December 31, 2024, 5,333 options were forfeited.

As of December 31, 2024, 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, 2025, there

are 673,436 shares available under this plan.

Compensation – The Company records stock-based payment expense related to options and warrants based on the grant date

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31, 2025, and 2024 the Company’s stock compensation approximated $ 0 .

The Company did not issue any warrants in 2024 or 2023, nor did it have any outstanding warrants as of December 31, 2024 and 2023.

The Company did not issue any warrants in 2025 or 2024, nor

did it have any outstanding warrants as of December 31, 2025 and 2024.

BioMedical, Inc.

Equity Transactions –

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.

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

The Preferred Shares are voting shares and convertible.

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 per share.

On September 17, 2024,

the Company closed the Offering.

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

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

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

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.

The Company 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).

The 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

As of September 30, 2024, the Representative had not exercised any of these warrants.

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

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

The remaining 9,997,703 are restricted from trading for 180 days from

the Offering date.

Equity Transactions – 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.

The total net proceeds to the Company from the Offering, after deducting discounts, expenses allowance and expenses, was approximately

$ 3,726,000 .

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.

The Company 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).

The 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.

These warrants were not exercised and expired in September 2025.

On February 26, 2025, IBO issued

36,433 shares of the Company’s common stock as payment of legal fees incurred associated with IBO’s IPO, registration of shares

associated with its equity incentive plan as well as other related services.

The legal fees received were valued at approximately $ 29,000 .

On June 23, 2025, IBO issued 100,000 shares of IBO’s common stock

as payment of legal fees incurred associated with IBO’s merger and share exchange agreement with Dr.

Ashleys Limited.

fees received were valued at approximately $ 161,000 .

Incentive Plan – During 2023, the Company’s shareholders adopted the 2023 Employee, Director and Consultant Equity

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As of December 31, 2025, there are 18,037,079 shares available under this plan.

Compensation – The Company records stock-based payment expense related to options and warrants based on the grant date fair

value in accordance with FASB ASC 718.

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

and consultants.

Compensation – The Company records stock-based payment expense related to options and warrants based on the grant date

fair value in accordance with FASB ASC 718.

Stock-based compensation includes expense charges for all stock-based awards to

employees, directors and consultants.

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

On October 1, 2024, 880,000 option grants

with a purchase price of $ 3.00 per share were awarded to certain officers, directors and consultants of the Company.

These options have

various vesting periods, and all expire on October 31, 2031.

Potential proceeds of these grants is $ 2,640,000 and are fair valued using

a Black-Scholes model at approximately $ 50,000 .

The Company record stock based compensation expense of approximately $ 19,000 for the year

ended December 31, 2024 and is included in Sales, general and administrative compensation (inclusive of stock based compensation) on the

accompanying Statement of Operations.

On October 1,

2024, 880,000 option grants with a purchase price of $ 3.00 per share were awarded to certain officers, directors and consultants of

These options have various vesting periods, and all expire on October 31, 2031.

Potential proceeds of these grants is

$ 2,640,000 and are fair valued using a Black-Scholes model at approximately $ 50,000 .

The Company record stock based compensation

expense of approximately $ 19,000 for the year ended December 31, 2025 and is included in Sales, general and administrative

compensation (inclusive of stock based compensation) on the accompanying Statement of Operations.

These options were forfeited and

replaced by stock grants to the Officers and Directors of Impact Biomedical totaling 3,200,000 shares.

These shares became vested

in January of 2026.

There were no stock-based payments made during the twelve months ended December 31, 2024.

Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the

financial reporting and tax basis of assets and liabilities.

Deferred tax assets are reduced, if deemed necessary, by a valuation allowance

for the amount of tax benefits which are not expected to be realized.

The Company accounts for income

taxes in accordance with Accounting Standards Codification (“ASC”) Topic 740, Income Taxes , using the asset and liability

Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences

between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for operating

loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years

in which those temporary differences are expected to reverse or such carryforwards are expected to be utilized.

The Company recognizes deferred

tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis

of assets and liabilities.

Deferred tax assets are reduced, if deemed necessary, by a valuation allowance for the amount of tax benefits

which are not expected to be realized.

following is a summary of the components giving rise to the income tax provision (benefit) for the years ended December 31:

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Right to Use Asset

Investment in pass-through entity

Gross deferred tax liabilities

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Net deferred tax assets (liabilities)

December 31, 2024 and 2023, the Company has approximately $ 126.2

million and $ 138.9

million in federal net operating loss carry forwards (“NOLs”), respectively, available to reduce future taxable income.

Under the provisions of the Internal Revenue Code, the net operating losses are subject to review and possible adjustment by the

Internal Revenue Service and state tax authorities.

Certain tax attributes are subject to an annual limitation as a result of

certain cumulative changes in ownership interest of significant shareholders which could constitute a change of ownership as defined

under Internal Revenue Code Section 382.

For the year ended December 31, 2021, the Company has completed a full analysis of

historical ownership changes and determined that a portion of the net operating losses have a limitation on future deductibility.

Approximately $ 43.8 million of net

operating losses incurred prior to 2020 will be unable to offset future taxable income and have been reserved via a valuation

allowance to reduce the deferred tax asset to the expected realizable amount, leaving $ 2.9 million

available for use which expire at various dates through 2038 and the residual which never expire.

Additionally, at December 31, 2024

and 2023, the Company had approximately $ 20.7

million and $ 20.7

of California and Illinois NOL carry-forwards, respectively, which expire

through 2043 .

December 31, 2025 and 2024, the Company has approximately $ 154.0 million and $ 126.2 million in federal net operating loss carry forwards

(“NOLs”), respectively, available to reduce future taxable income.

Under the provisions of the Internal Revenue Code, the

net operating losses are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities.

tax attributes are subject to an annual limitation as a result of certain cumulative changes in ownership interest of significant shareholders

which could constitute a change of ownership as defined under Internal Revenue Code Section 382.

For the year ended December 31, 2021,

the Company has completed a full analysis of historical ownership changes and determined that a portion of the net operating losses have

a limitation on future deductibility.

Approximately $ 43.8 million of net operating losses incurred prior to 2020 will be unable to offset

future taxable income and have been reserved via a valuation allowance to reduce the deferred tax asset to the expected realizable amount,

leaving $ 2.9 million available for use which expire at various dates through 2038 and the residual which never expire.

Additionally,

at December 31, 2025 and 2024, the Company had approximately $ 20.7 million and $ 20.7 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 decreased approximately $ 2.2 million for the year ended December 31, 2024 and increased

approximately $ 5.5 for

the year ended December 31, 2023, The valuation allowance for deferred tax liability decreased approximately $ 2.3 million

in the year ended December 31, 2024 and increased approximately $ 1.1 million

for the year ended December 31, 2023.

valuation allowance for deferred tax assets decreased approximately $ 4.6 million for the year ended December 31, 2025 and increased approximately

$ 2.2 for the year ended December 31, 2024, The valuation allowance for deferred tax liability increased approximately $ 1.3 million in

the year ended December 31, 2025 and decreased approximately $ 2.3 million for the year ended December 31, 2024.

differences between the United States statutory federal income tax rate and the effective income tax rate in the accompanying consolidated

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Statutory United States federal rate

$ ( 5,766,000 )

( 11,276,000 )

State income taxes net of federal benefit

Permanent differences

Foreign taxes

Change in valuation allowance

Effective rate

NOL DTA Write-off

Change in valuation reserves

Effective tax rate

Company recognizes interest accrued and penalties related to unrecognized tax benefits in tax expense.

During the years ended December

31, 2024 and 2023 the Company recognized no interest and penalties.

During the years ended

December 31, 2025 and 2024 the Company recognized no

interest and penalties.

The Company has taken no uncertain tax positions as of December 31, 2025 and 2024.

Accordingly, the Company

has recorded no liability for unrecognized tax benefits as of such dates, and no interest or penalties related to uncertain tax

positions were recognized for the years then ended.

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

Commitments and Contingencies

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

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costs shall not exceed $ 1,250,000 .

As of December 31, 2024 and December 31, 2023, $ 200,000 , and $ 200,000 , respectively, have been recorded

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

Agreements – As of December 31, 2024, DSS has no employment or severance agreements with members of its management

As of December 31, 2025 and December 31, 2024, a liability of $ 0 has been recorded in relation to the Equivir License.

Agreements – As of December 31, 2025, DSS has no employment or severance agreements with members of its management team.

Its subsidiary Impact BioMedical has an employment agreement with it CEO Frank Heuszel in which Mr.

agreement contains a mandatory bonus clause of $ 150,000 for the first year of the employment term, $ 100,000 for the second year of the

employment term, and $ 100,000 for the third year of the employment term.

As of December 31, 2024, approximately $ 38,000 is accrued for

year one of Mr.

Heuszel’s agreement contains

a mandatory bonus clause of $ 150,000 for the first year of the employment term, $ 100,000 for the second year of the employment term,

and $ 100,000 for the third year of the employment term.

As of December 31, 2024, approximately $ 38,000 is accrued for year one of Mr.

Heuszel’s bonus.

As of December 31, 2025, approximately $ 96,000 is accrued for year one of Mr.

Heuszel’s bonus and $ 25,000 for

the second year of Mr.

Heuszel’s bonus

Litigation Payments – The Company retains the services of professional service providers, including law firms that specialize

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As of December 31, 2025 and 2024, there are no contingent payments due.

DISCONTINUED OPERATIONS

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.

As 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:

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

Services Global Corporation

of Operations Loss - Discontinued Operations

the Years Ended December 31,

For the Year Ended

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

Supplemental Cash Flow Information

cash flow information for the years ended December 31:

of Supplemental Cash Flow Information

following table summarizes supplemental cash flows for the years ended December 31, 2025 and 2024:

SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid for interest

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Non-cash investing and financing activities:

Shares issued in lieu of bonus cash

Third party Note receivable received in lieu of cash

SEGMENT INFORMATION

Shares awarded in lieu of cash award

Shares issued in lieu of cash as payment for legal services

Extinguishment of debt

Stock based compensation

SEGMENT INFORMATION

Company’s 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

carton, smart packaging, and document security printing markets.

It markets, manufactures, and sells mailers, photo sleeves, sophisticated

custom folding cartons, and complex 3-dimensional direct mail solutions.

These products are designed to provide functionality and marketability

while also providing counterfeit protection.

A second, Biotechnology, invests in, or acquires companies in the biohealth and biomedical

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

oncological, and immune related diseases.

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

infectious diseases, such as tuberculosis and influenza.

Biotechnology is also targeting unmet, urgent medical needs.

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.

information concerning the Company’s operations by reportable segment for the twelve months ended December 31, 2024 and 2023 is

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

would report the results contained herein:

of Operations by Reportable Segment

Year Ended December 31, 2024

Product Packaging

Commercial Lending

Direct Marketing

The Company reports its

segment information to reflect the manner in which the Company’s chief operating decision maker (“CODM”) reviews

and assesses performance.

The Company’s Interim Chief Executive Officer has responsibilities as the CODM and reviews and

assess the performance of the Company as a whole.

The primary financial measures used by the CODM to evaluate performance and

allocate resources are net income (loss) and operating income (loss).

The CODM uses net income (loss) and operating income (loss) to

evaluate the performance of the Company’s ongoing operations and as part of the Company’s internal planning and

forecasting processes.

Information on Net income (loss) and Operating income (loss) is disclosed in the Consolidated Statements of

Segment expenses and other segment items are provided to the CODM on the same basis as disclosed in the Consolidated

Statements of Operations.

The CODM does not evaluate performance or allocate resources based on segment assets, and therefore such

information is not presented in the notes to the financial statements.

During the fourth quarter of 2025, we realigned our internal

reporting to better reflect how management reviews operating results and allocates resources.

As a result of this CODM realignment,

Direct Marketing is no longer a reportable segment and is now reported within Corporate and Other or the year ended December 31, 2025.

This change did not impact

consolidated revenue, consolidated net income (loss), total assets, or cash flows for any period presented;

it only impacted the

presentation of segment information.

Segment information for prior periods presented has been recast to conform to the

current-period segment presentation.

Our four reporting segments are:

(“Premier”) Premier Packaging Corporation provides custom packaging services and serves clients in the

pharmaceutical, nutraceutical, consumer goods, beverage, specialty foods, confections, photo packaging and direct marketing industries,

among others.

The group also provides active and intelligent packaging and document security printing services for end-user customers.

In addition, the division produces a wide array of printed materials, such as folding cartons and paperboard packaging, security paper,

vital records, prescription paper, birth certificates, receipts, identification materials, entertainment tickets, secure coupons and parts

tracking forms.

The division also provides resources and production equipment for our ongoing research and development of security printing,

brand protection, consumer engagement and related technologies.

(“Commercial Lending”) through its operating company, American Pacific Financial, Inc.

represents our financing business line.

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.

Biotechnology:

Cost of revenue

Gross profit (loss)

( 4,786,000 )

targets unmet, urgent medical needs and expands the borders of medical and pharmaceutical science.

Biotech drives mission-oriented research,

development, and commercialization of solutions for medical advances in human wellness and healthcare.

By leveraging technology and new

science with strategic partnerships, Biotech provides advances in drug discovery for the prevention, inhibition, and treatment of neurological,

oncology and immuno-related diseases.

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

functional fragrance formulations aimed at the industrial and medical industry.

Securities and Investment

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

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

information concerning the Company’s operations by reportable segment for the twelve months ended December 31, 2025 and 2024

is as follows.

Segment information for prior periods presented has been recast to conform to the current-period segment

presentation.

The Company relies on intersegment cooperation and management does no t represent that these segments, if operated

independently, would report the results contained herein:

SCHEDULE OF OPERATIONS BY REPORTABLE SEGMENT

Ended December 31, 2025

Biotechnology

profit (loss)

( 3,320,000 )

Operating expense

Operating income (loss)

( 2,169,000 )

income (loss)

( 1,829,000 )

2 unchanged sentences

( 2,294,000 )

Other income (expense)

( 14,434,000 )

income (expense)

( 11,904,000 )

1 unchanged sentence

( 13,054,000 )

Net income (loss) from continuing operations before taxes

income (loss) from operations before taxes

$ ( 1,972,000 )

4 unchanged sentences

$ ( 27,488,000 )

Year Ended December 31,2023

Product Packaging

Commercial Lending

Ended December 31, 2024

Direct Marketing

Biotechnology

Cost of revenue

Gross profit (loss)

( 2,786,000 )

Operating expense

Operating income (loss)

( 30,876,000 )

( 2,299,000 )

profit (loss)

( 4,786,000 )

( 4,442,000 )

income (loss)

( 2,152,000 )

( 28,971,000 )

Other income (expense)

( 7,545,000 )

( 42,596,000 )

income (expense)

( 1,186,000 )

1 unchanged sentence

( 6,822,000 )

Net income (loss) from continuing operations before taxes

( 11,102,000 )

income (loss) from operations before taxes

( 2,311,000 )

3 unchanged sentences

( 53,698,000 )

International

revenue, which consists of sales to customers with operations in Canada, Latin comprised less

than 1.0 % of total revenue for 2024 ( 7.0 %

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.

following tables disaggregate our business segment revenues by major source:

of Disaggregation of Revenue

SCHEDULE OF DISAGGREGATION OF REVENUE

Products Revenue Information:

Twelve months ended December 31, 2024

Packaging Printing and Fabrication

months ended December 31, 2025

Packaging Printing

and Fabrication

Commercial and Security Printing

Total Printed Products Revenue

Twelve months ended December 31, 2023

Packaging Printing and Fabrication

Property Rental Income

Printed Products Revenue

months ended December 31, 2024

Packaging Printing

and Fabrication

Commercial and Security Printing

Total Printed Products Revenue

Commercial Lending Revenue Information:

Twelve months ended December 31, 2024

Net investment Revenue

Total Commercial Lending Revenue

Twelve months ended December 31, 2023

Net Investment Revenue

Total Commercial Lending Revenue

Direct Marketing Revenue Information:

Twelve months ended December 31, 2024

Direct Marketing Internet Sales

Total Direct Marketing Revenue

Twelve months ended December 31, 2023

Direct Marketing Internet Sales

Total Direct Marketing Revenue

Securities Revenue Information:

Twelve months ended December 31, 2024

Rental Revenue

Commisions Revenue

Total Securities revenue

Twelve months ended December 31, 2023

Rental Revenue

Commission Revenue

Total Securities revenue

Property Rental Income

Printed Products Revenue

Lending Revenue Information:

months ended December 31, 2025

Commercial lending

Commercial Lending Revenue

months ended December 31, 2024

Commercial lending

Commercial Lending Revenue

Biotechnology

Revenue Information:

months ended December 31, 2025

internet sales

Biotechnology Revenue

months ended December 31, 2024

internet sales

Biotechnology Revenue

Revenue Information:

months ended December 31, 2025

Securities Revenue

months ended December 31, 2024

Securities Revenue

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 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

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, 2024, and December 31, 2023, was approximately $ 2,518,000 and

$ 3,269,000 respectively.

During the year ended December 31, 2024 and December 31, 2023, the Company recorded unrealized loss on this

investment of approximately $ 750,000 and unrealized loss of $ 50,000 , respectively.

On 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 29, 2025 .

The outstanding principal and interest at December 31, 2024 approximated $ 86,000 , and was fully

reserved for as of December 31, 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.

On 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 December 31, 2024 approximated $ 110,000 , and was fully reserved for as of December 31, 2024.

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.

DSS owns 24.9 % of the outstanding

common shares of BMIC.

On July 26, 2022, APF and VEII,

(“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

The outstanding principal and interest on September 30, 2024 approximates $ 959,000 , and is included in notes receivable on the

accompanying consolidate balance sheet.

Approximately $ 480,000 of Note 10 was reserved for as of March 31, 2024.

No additional reserve

was deemed necessary as of December 31, 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.

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

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, 2025, and December 31, 2024, was approximately $ 2,277,000 and $ 2,518,000 respectively.

During the year ended

December 31, 2025 and December 31, 2024, the Company recorded unrealized loss on this investment of approximately $ 242,000 and unrealized

loss of $ 750,000 , respectively.

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, 2024 and December 31, 2023, $ 463,000 and $ 547,000 , respectively, are included

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

into loan agreement with BMIC International (“BMIC International 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 International Loan

contains an auto renewal period of three months, with a maturity date of January 2026 as of December 31, 2025.

As of December 31 2025,

and December 31, 2024, the outstanding principal and interest of approximately $ 33,000 and $ 463,000 , respectively, are included in Current

portion of long-term debt – related party, net on the consolidated balance sheet.

On October 13, 2021, LVAM entered

1 unchanged sentence

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, 2024 $ 145,000

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

As of December 31, 2023 $ 2,131,000 is included

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

10, 2024, DSS entered into a securities purchase agreement with Alset Inc., a related party, pursuant to which the Company agreed to sell

and issue in a private placement an aggregate of 820,597 shares of the Company’s common stock for approximately $ 803,000 .

10, 2024, DSS entered into a securities purchase agreement with Heng Fai Ambrose Chan, the Chaiman of the Board of Directors and a related

party, pursuant to which the Company agreed to sell and issue in a private placement an aggregate of 205,149 shares of the Company’s

common stock for approximately $ 197,000 .

SUBSEQUENT EVENTS

The Wilson Loan contains an auto

renewal period of three months, with a maturity date of January 2026 as of December 31, 2025.

As of December 31, 2025, and December 31,

2024, the outstanding principal and interest of approximately $ 145,000 and $ 145,000 , respectively, are included in Current portion of

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

The Company owns 81,836,908 shares

of True Partners Capital Holding Limited (“True Partners”), a publicly listed company on the Hong Kong Stock Exchange.

February 28, 2022, the Company entered into a Stock Purchase Agreement with Alset EHome International Inc.

(“AEI”), pursuant

to which AEI has agreed to sell a subsidiary holding 62,336,908 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’s Executive Chairman and a significant stockholder,

Heng Fai Ambrose Chan is the Chairman, Chief Executive Officer and largest shareholder of AEI.

Further, on February 20, 2025, the Company

acquired an additional 19,500,000 shares of True Partners.

The fair value of the marketable security as of December 31, 2025 and December

31, 2024, was approximately $ 4,206,000 and $ 3,815,000 , respectively.

During the year ended December 31, 2025 and December 31, 2024, the

Company recorded unrealized loss on this investment of approximately $ 609,000 and unrealized loss of $ 590,000 , respectively.

On July 26, 2022, APF and VEII entered into a promissory note (“Note 8”) 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

The outstanding principal and interest as of December 31, 2025 and December 31, 2024 approximates $ 917,000 .

This note was fully

reserved for as of December 31, 2025 and December 31, 2024.

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

directors of VEII.

On August 29, 2022, DSS

Financial Management Inc and BMIC LLC, a related party, entered into a promissory note (“Note 6”)

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 was due on August 29, 2025 .

The outstanding principal and interest at December 31, 2025, and December 31, 2024

approximated $ 86,000 , and was fully reserved for as of December 31, 2025 and December 31, 2024.

DSS owns 24.9 % of the outstanding common

shares of BMIC LLC.

On August 29, 2024, APF entered

into a promissory note with WestPark.

This note has a principal balance of $ 459,000 , 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 December 31, 2025, the outstanding principal and interest approximates $ 237,000 ,

which is classified as Current notes receivable on the accompanying consolidated balance sheet.

As of December 31, 2024, the outstanding

principal and interest approximates $ 450,000 , of which $ 337,000 is classified as Current notes receivable and the remaining $ 113,000 is

classified as Non-current notes receivable – related party on the accompanying consolidated balance sheet.

On May 8, 2023, DSS

Financial Management Inc and BMIC LLC entered into a promissory note (“Note 7”) in the principal sum of $ 102,000

with interest at the prime rate plus 2 %

with a maturity date of May 7, 2026 .

The outstanding principal and interest at December 31, 2025, and December 31, 2024 approximated $ 110,000 ,

and was fully reserved for as of December 31, 2025 and December 31, 2024.

DSS owns 24.9 %

of the outstanding common shares of BMIC LLC.

December 10, 2024, DSS entered into a securities purchase agreement with Alset Inc., a related party, pursuant to which the Company agreed

to sell and issue in a private placement an aggregate of 820,597 shares of the Company’s common stock for approximately $ 803,000 .

December 10, 2024, DSS entered into a securities purchase agreement with Heng Fai Ambrose Chan, the Chaiman of the Board of Directors

and a related party, pursuant to which the Company agreed to sell and issue in a private placement an aggregate of 205,149 shares of

the Company’s common stock for approximately $ 197,000 .

In August of 2025, DSS issued

a $ 500,000 convertible promissory note to Alset, Inc.

(“holder”), the Company’s largest shareholder and a related party,

bearing interest at Prime ( 6.75 % at December 31, 2025).

The first 12 months’ interest is to be paid in shares of the Company;

interest is prepaid annually in cash or shares at the holder’s election.

The note is convertible at the holder’s option at

a fixed $ 0.86 per share, is payable on demand (or July 31, 2028 if not demanded) and may be redeemed by the Company on or after the first

The Company is required to reserve sufficient authorized shares and maintain the listing/quotation of its common stock.

ASU 2020-06 and ASC 815-40, the debt host’s embedded conversion feature is indexed to the Company’s own stock and is equity-classified;

accordingly, no embedded derivative is bifurcated and the instrument is accounted for as single-unit debt using the effective interest

Interest is recognized in interest expense;

when settled in shares, a credit to APIC is recorded at the fair value of shares on

settlement, and any prepaid interest is recorded as a discount/prepaid and amortized to expense over the related period.

The outstanding

principal and interest, approximates $ 512,000 and is included in Convertible note payable, related party on the accompanying consolidated

balance sheet at December 31, 2025.

On February 6, 2025, as a bonus

for compensation awarded to Heng Fai Holdings Limited (“HFHL”), a Hong Kong Company, which is beneficially owned by Mr.

Fai Ambrose Chan, Director of DSS, Inc., HFHL was awarded 1,000,000 shares of the Company’s common stock, approximating $ 870,000 .

The issuance was approved by the board of

directors on January 31, 2025.

On March 21, 2025, DSS, the parent

company of Impact Biomedical, Inc.

completed the sale of 499,800 shares of Impact Biomedical common stock.

These shares were acquired

by DSS during Impact’s initial public offering on September 16, 2024.

The sale of these shares, which were previously held by DSS

as part of its ownership interest in Impact, was completed for a total value of $ 1,500,000 , which represents the consideration received

from the transaction.

With this sale, the shares are now publicly held and are no longer held by DSS.

On April 4, 2025, DSS, the parent

company of Impact Biomedical, Inc.

completed the sale of 890,800 shares of Impact Biomedical common stock.

The sale of these shares, which

were previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $ 845,000 , which

represents the consideration received from the transaction.

With this sale, the shares are now publicly held and are no longer held by

On May 22, 2025, DSS, the parent

company of Impact Biomedical, Inc.

completed the sale of 115,600 shares of Impact Biomedical common stock.

The sale of these shares, which

were previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $ 63,000 , which

represents the consideration received from the transaction.

With this sale, the shares are now publicly held and are no longer held by

On May 23, 2025, DSS, the parent

company of Impact Biomedical, completed the sale of 45,400 shares of Impact Biomedical common stock.

The sale of these shares, which were

previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $ 24,000 , which represents

the consideration received from the transaction.

With this sale, the shares are now publicly held and are no longer held by DSS.

SUBSEQUENT EVENTS

Company has evaluated all subsequent events and transactions through March 31, 2025, the date that the consolidated financial statements

were available to be issued and have identified the below transactions:

December 27, 2024, True Partner International Limited, a wholly owned subsidiary of DSS Financial Management, Inc.

entered into a share

subscription agreement, in which they invested approximately $ 1,000,000 in True Partner Capital Holding Limited in exchange for 19,500,000

This transaction was concluded in February 2025.

February 6, 2025, as a bonus for compensation awarded to Heng Fai Holdings Limited (“HFHL”), a Hong Kong Company, which is

beneficially owned by Mr.

Heng Fai Ambrose Chan, Director of DSS, Inc., and pursuant to DSS, Inc’s.

2020 Employee, Director and

Consultant Equity Incentive Plan (the “Plan”), HFHL was awarded 1,000,000 shares of the Company’s common stock under

the Plan, for services rendered.

The issuance was approved by the board of directors on January 31, 2025.

March 21, 2025, the Company via its subsidiaries DSS Blockchain Security, DSS BioHealth Security and DSS Securities, each sold 499,800

shares of Impact BioMedical for net proceeds of approximately $ 1,616,428 .

Further, on March 26, 2025, the Company sold an additional 122,285 shares

of Impact BioMedical.

The total grossed for these transactions was approximately $ 1,969,000 .

Company and its subsidiary Impact BioMedical have agreed to settle a portion of the outstanding indebtedness that Impact BioMedical owes

to the Company under the Promissory Note in the amount of $ 8,697,142.80 through the issuance of 2,415,873 shares of the Company’s

common stock, at a conversion ratio of $ 3.60 per share, which was equal to the closing market price of the Company’s common stock

on March 24, 2025.

March 27, 2025, the Company finalized the sale of its Plano, Tx.

Facility for a gross sales price of $ 9,500,000 .

The Company has evaluated all

subsequent events and transactions through March 31, 2026 the date that the condensed consolidated financial statements were available

to be issued and noted no subsequent events requiring financial statement recognition or disclosure other than noted below:

February 4, 2026, DSS entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp.

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

offering of 900,000 shares of the Company’s common stock.

Subject to the terms and conditions contained in the Underwriting Agreement,

the shares were sold at a public offering price of $ 1.00 per share, less certain underwriting discounts and commissions.

closed on February 5, 2026 and the Company received approximately $ 700,000 , net of expenses.

asserted U.S.

6,879,040, directed to surface-mountable electronic devices used in LED products, against Nichia Corporation

and Nichia America Corporation in the United States District Court for the Central District of California.

In March 2026, the United States

Court of Appeals for the Federal Circuit affirmed the district court’s dismissal of the action on the ground that the asserted patent

claims are invalid as indefinite under 35 U.S.C.

§ 112, effectively concluding the litigation.

As such, the Company at December 31,

2025, released an accrual of approximately $ 897,000 associated with potential fees for this case.

March 26, 2026, Alset International Limited (“AIL”), a majority-owned subsidiary of Alset Inc.

(the “Company”)

entered into a securities purchase agreement (the “SPA”) with DSS pursuant to which AIL will loan DSS $ 2,450,000 , in exchange

for a convertible promissory note (the “Note”) and warrants to purchase 16,554,055 shares of DSS common stock (the “Warrants”).

The Note, SPA, and Warrants are collectively referred to herein as the “Transaction Documents.” The Note will bear a simple

interest rate of 3 % per annum.

Under the terms of the Note, AIL may convert any outstanding principal and interest into shares of DSS

common stock at $ 0.74 per share upon notice prior to maturity of the Note five ( 5 ) years from the date of thereof.

The Warrants to be

issued to AIL are to purchase up to 16,554,055 shares of DSS common stock at an exercise price of $ 0.93 per share.

The Warrants expire

on their fifth anniversary.

9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

June 27, 2025, the Audit Committee of the Board of Directors of DSS approved the dismissal of Grassi & Co., CPAs, P.C.

as the Company’s independent registered public accounting firm and the engagement of HTL International, LLC.

as the Company’s new independent registered public accounting firm.

of Grassi on the Company’s consolidated financial statements for the fiscal years ended December 31, 2024 and 2023 did not contain

an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles.

fiscal years ended December 31, 2024 and 2023, and through June 27, 2025, there were no disagreements with Grassi on any matter of accounting

principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction

of Grassi, would have caused Grassi to make reference thereto in its reports on the Company’s consolidated financial statements.

fiscal years ended December 31, 2024 and 2023, and through June 27, 2025, there were no “reportable events” as that term is

defined in Item 304(a)(1)(v) of Regulation S-K.

fiscal years ended December 31, 2024 and 2023, and through the date of engagement, neither the Company nor anyone on its behalf consulted

with HTL regarding (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type

of audit opinion that might be rendered on the Company’s consolidated financial statements, and no written report or oral advice

was provided to the Company by HTL that HTL concluded was an important factor considered by the Company in reaching a decision as to any

accounting, auditing, or financial reporting issue, or (ii) any matter that was either the subject of a disagreement, as defined in Item

304(a)(1)(iv) of Regulation S-K, or a reportable event under Item 304(a)(1)(v) of Regulation S-K.

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data