Item 1. Business
ITEM
1 - BUSINESS
Overview
DSS,
Inc. together with its consolidated subsidiaries (unless the context otherwise requires), referred to herein as “DSS,” “we,”
“us,” “our” or the “Company”, currently operates four distinct business lines operate around the
globe with primary operations in North America and Asia. The four divisions are:
1.
Product
Packaging,
2.
Biotechnology,
3.
Commercial
Lending,
4.
Securities
and Investment Management
Each
of these business lines are in various stages of development, growth, and income generation. Due to these variations in the business
cycle, including differences in revenue and assets acquired, the Company is currently reporting financial information for four of these
operating segments:
1.
Product
Packaging,
2.
Biotechnology,
3.
Commercial
Lending,
4.
Securities
and Investment Management
As
the other divisions grow and start generating material operations and revenue, those operating segments may be added to our financial
segmental reporting .
Our
divisions, their business lines, subsidiaries, and operating territories:
1.
Product
Packaging: The Company’s consumer packaging and security printing business is led by its wholly owned subsidiary, Premier
Packaging Corporation, Inc. (“Premier”), a New York corporation. Premier operates in the paper board and fiber based
folding carton, consumer product packaging, and document security printing markets. It markets, manufactures, and sells sophisticated
custom folding cartons, mailers, photo sleeves and complex 3-dimensional direct mail solutions. Premier is currently located in its
new facility in Rochester, NY, and primarily serves the US market.
2.
Biotechnology:
(“Biotech”) Biotechnology, a science-driven industry sector that uses living organisms and molecular biology to produce
healthcare-related products. This division is committed to both funding research and developing intellectual property portfolio.
It is currently focused on research in three main areas: (i) development of a universal therapeutic drug platform; (ii) a new sugar
substitute; and (iii) a multi-use fragrance. Biotech discovers, confirms, and patents unique science and technologies which can be
developed into new offerings in human healthcare and wellness in collaboration with external partners through licensing, co-development,
joint ventures, and other relationships. By leveraging technology and new science with strategic partnerships, we provide advances
in biopharmaceuticals and over the counter direct to consumer wellness offerings, and drug discovery for the prevention, inhibition,
and treatment of neurological, oncology and immuno-related diseases. Assets of this group are organized under the holding company,
DSS BioHealth Security, Inc. Its subsidiaries are currently operating in Houston, TX and Rochester, NY.
3.
Commercial
Lending: American Pacific Financial, Inc. (“APF”) represents our Company’s commercial lending business line.
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: The Securities and Investment Management segment was established to develop and/or acquire assets
in the securities trading and management arena and includes broker-dealer activities, investment advisory operations, and real estate-related
investment entities. This segment includes DSS Securities, Inc., as well as affiliated broker-dealers and investment management platforms.
It also includes real estate investment entities formed to acquire and lease healthcare-related properties. In April 2025, thew Company’s
majority owned subsidiary Sentinel Brokers Company, Inc., a FINRA-registered broker-dealer subsidiary of the Company, received FINRA
approval to act as an underwriter and selling group member for corporate securities offerings.
3
2025
RECAP
The
following is a summary of the DSS reported transactions and investments since January 2025 that reflect the active advancements and investments
in these business lines:
February
3, 2025 – DSS, Inc. issued a Letter to Shareholders outlining management’s strategic priorities for 2025, including operational
efficiency, portfolio optimization, capital discipline, and long-term value creation initiatives.
February
26, 2025 – DSS, Inc. announced the sale of its Celios® air purification asset to Impact BioMedical Inc. in an all-equity
transaction valued at approximately $1.15 million. The transaction was completed as part of the Company’s portfolio streamlining
efforts.
April
24, 2025 – Sentinel Brokers Company, Inc., a FINRA-registered broker-dealer subsidiary of DSS, Inc., announced that it received
FINRA approval to act as an underwriter and selling group member for corporate securities offerings, including IPOs and follow-on offerings.
May
22, 2025 – DSS, Inc. reported financial results for the first quarter ended March 31, 2025. The Company reported year-over-year
revenue growth, increased printed product sales within the Product Packaging segment, increased rental income within its real estate
portfolio, and the completion of the sale of its Plano, Texas facility for $9.5 million. The Company disclosed that a portion of the
proceeds was used to reduce outstanding debt.
June
24, 2025 – DSS, Inc.’s subsidiary, Impact BioMedical Inc., announced that it entered into a definitive merger agreement
with Dr. Ashleys Limited. The transaction was structured as a reverse merger and, if consummated, is expected to result in a combined
public entity listed on the NYSE American.
August
18, 2025 – Impact BioMedical Inc. announced the issuance of a United States patent related to its 3F™ intellectual
property portfolio, further expanding the Company’s patent protection in insect repellent and antimicrobial applications.
STRATEGIC
BUSINESS PLAN AND PROGRESSION
Here
we highlight three specific developments:
As
DSS, Inc. enters a new chapter, our strategic focus is to optimize operational efficiencies, realign resources, and position the Company
for sustainable long-term growth. This approach has already yielded meaningful results, as demonstrated in our most recent earnings report.
Below, we outline our key initiatives moving forward:
Strategic
Focus for Revenue Growth and Operational Excellence
●
Expansion
of High-Impact Business Lines : We are strategically expanding key business units, such as Premier Packaging, to drive growth
and contribute to long-term revenue generation.
●
Exploration
of Untapped Markets : DSS, Inc. is committed to identifying and investing in high-growth markets, with a focus on creating scalable
and recurring revenue streams across multiple sectors.
●
Enhancing
Accountability Across Business Units : To ensure consistent execution of high-priority opportunities, we are implementing metrics-driven
accountability systems across all business units.
Cost
Structure Optimization and Operational Efficiency
●
Comprehensive
Business Unit Review : We are conducting an extensive evaluation of all business units to identify underperforming segments. Our
goal is to restructure, streamline, or divest from non-core areas to bolster our core strengths.
●
Process
and Technology Optimization : To improve productivity and reduce inefficiencies, DSS will introduce new operational tools and
processes aimed at reducing waste in procurement, production, and logistics.
●
Targeted
Cost Reduction : We have set a target to reduce costs by 15-20% in the upcoming fiscal year, which will significantly improve
profitability and strengthen our financial position.
Driving
Innovation for Competitive Advantage
●
Advancing
Research and Development (R&D) : DSS is leveraging its R&D capabilities to develop cutting-edge solutions in emerging
sectors, such as biomedical technologies and sustainable packaging, ensuring our leadership in innovation.
●
Cultivating
Strategic Partnerships : We are actively building partnerships with key industry players to accelerate the market introduction
of innovative products and solutions, enhancing our competitive advantage.
●
Pilot
Program Launches : Targeted pilot programs will be deployed in select regions or sectors to validate new initiatives, which, once
proven, will be scaled company-wide.
Maximizing
Shareholder Value Through Disciplined Growth
●
Disciplined
Financial Stewardship : DSS remains steadfast in our commitment to delivering consistent growth, profitability, and returns for
shareholders, ensuring long-term value creation.
●
Commitment
to Transparency : We will provide regular updates on our progress, milestones, and strategic objectives, ensuring stakeholders
remain well-informed of our activities.
●
Exploring
Shareholder Rewards : We are exploring initiatives to directly reward our shareholders for their continued trust and support,
reinforcing our commitment to shareholder value.
Three-Stage
Development for Exponential Growth
For
every completed acquisition, and taking into consideration market conditions and other constraints, we adhere to a well-structured three-stage
development process with the goal of maximizing value creation and propelling our growth by expanding our capabilities, strength, and
scale.
Stage
1: Asset Acquisition and Organizational Development. In this initial phase, our focus lies in identifying and acquiring assets, vehicles,
asset structures, and assembling the necessary talent and organizations. This strategic step serves as the strong foundation upon which
we build future growth.
4
Stage
2: Revenue Generation and Operational Excellence. Our second stage revolves around driving revenue through diverse channels, including
revenue streams, licensing, and other scalable sources. Our primary objective during this phase is the creation of efficient and well-operating
businesses that excel in operational performance.
Stage
3: Profitability and Positive EBITDA The third and final stage focuses on achieving positive EBITDA (Earnings Before Interest, Taxes,
Depreciation, and Amortization) and profitability. This is realized through the optimization of business operations, capitalizing on
scale and efficiency to generate sustained profits.
Growth
Strategies
IPOs
as a Growth Strategy: Our company has plans to pursue Initial Public Offerings (IPOs) as a means to share its success with shareholders.
We aim to take our businesses public once they reach an optimal point for effective leverage and meet internal goals and expectations.
Decentralized
Sharing Model: We firmly believe in our unique decentralized sharing model, combined with the three-stage development process, to create
substantial shareholder value. This model involves distributing dividends from potential IPOs directly to benefit shareholders.
In
summary, our strategy delineates a methodical approach encompassing asset acquisition, revenue generation, operational efficiency, profitability,
and ultimately, taking businesses public through IPOs to reward our shareholders. We place a strong emphasis on our decentralized sharing
model, ensuring that the benefits of our success are shared directly with our valued shareholders.
Premier
Packaging Strategic Update and Progression
Premier
Packaging Corp. is focusing on its core competencies and growth areas for 2025 and 2026, with a strong emphasis on expanding into targeted
markets while enhancing internal capabilities. Here’s an update on the Company’s focus areas and plans:
Focus
Areas & Growth Markets
1.
Key
Growth Markets
○
Medical
Device : Targeting the growing need for safe, compliant, and sustainable packaging solutions for medical products. This sector
presents high-margin opportunities, especially for custom paperboard packaging that aligns with regulatory standards (cGMP certifications).
○
Food
& Beverage : With increasing demand for sustainable packaging, Premier Packaging is targeting secondary food packaging. The
company is exploring the potential for obtaining SQF (Safe Quality Food) certification, addressing the growing concern for food safety
and sustainability in packaging.
○
Health
& Beauty : The company is also focusing on providing cost-effective, sustainable packaging solutions for health and beauty
products, particularly where companies are overpaying for high-end packaging.
○
Mailers :
Although not currently investing heavily in this category, the company continues to monitor the opportunity for growth in this space.
2.
Sustainability
Initiatives Premier is working towards aggressive sustainability certification and exploring green solutions across its offerings,
ensuring that their products meet the growing demand for environmentally friendly packaging.
Key
Strategic Initiatives for 2026
1.
Sales
Team Development and Specialization : We will prioritize investment in comprehensive, specialized training programs tailored to
the unique needs of our key sectors—Food & Beverage, Medical Devices, and Health & Beauty. By equipping our sales force
with sector-specific knowledge and customer insights, we aim to drive deeper client relationships, accelerate revenue growth, and
position our team as experts in delivering high-value, tailored packaging solutions.
2.
Capital
Infrastructure and Technological Advancements : A critical component of our growth strategy for 2026 will be the strategic acquisition
and installation of key capital assets. These investments will focus on advanced production technologies and equipment upgrades,
including the procurement of glue systems, hot melt units, and enhanced press systems. These actions are expected to significantly
expand production capacity, streamline operations, and improve product quality, contributing to both operational efficiency and customer
satisfaction.
3.
Optimization
of the Quotation Process : To improve our operational efficiency and market competitiveness, we will undertake a comprehensive
review and optimization of our quoting process. By leveraging automation tools and advanced analytics, we aim to reduce lead times,
enhance the accuracy of cost estimates, and improve our responsiveness to customer inquiries, thereby increasing overall sales conversion
rates and strengthening our market position.
4.
Targeted
Marketing and Brand Positioning : We will execute a focused marketing strategy designed to enhance brand visibility and reinforce
our commitment to sustainability. This will include the development of impactful campaigns that highlight our leadership in eco-friendly
packaging, showcase relevant case studies, and promote our ability to solve specific customer pain points. Additionally, we will
strengthen our customer engagement initiatives, utilizing digital marketing channels, lead generation tactics, and thought leadership
content to increase market penetration and foster long-term customer loyalty.
These
strategic initiatives will be instrumental in positioning the company for sustained growth, profitability, and shareholder value in 2026
and beyond.
5
Impact
BioMedical, Inc. IPO: A Key Milestone for DSS, Inc.
In
2024, Impact BioMedical, Inc., a subsidiary of DSS, Inc., achieved a significant milestone with the successful completion of its initial
public offering (IPO). This event marks a pivotal moment in the strategic evolution of DSS, Inc., reflecting our commitment to creating
long-term shareholder value and providing a solid foundation for continued growth within the biotechnology and biomedical sectors.
IPO
Overview
Impact
BioMedical’s IPO, which was finalized in the latter half of 2024, resulted in the company being listed on a recognized public exchange.
This public offering raised substantial capital, enabling Impact BioMedical to further accelerate its expansion into cutting-edge biomedical
technologies, which align with the growing demand for advanced healthcare solutions. The funds raised from the IPO will be allocated
to advancing R&D initiatives, scaling production capabilities, and enhancing market penetration.
Strategic
Importance for DSS, Inc.
The
successful IPO of Impact BioMedical is not only a significant achievement for the subsidiary but also serves as a key strategic move
for DSS, Inc. By spinning off Impact BioMedical and enabling it to operate as an independent public company, DSS has effectively unlocked
the value inherent in this high-potential subsidiary, providing both entities with the flexibility to pursue their respective growth
trajectories. The IPO also enhances DSS’s ability to focus on its core operations while benefiting from any future financial or
strategic synergies with Impact BioMedical.
Financial
and Market Impact
The
completion of Impact BioMedical’s IPO reflects a robust market appetite for innovative biotech companies with strong growth prospects.
For DSS, Inc., the IPO has led to increased market visibility and raised investor confidence in our broader portfolio. The capital infusion
into Impact BioMedical, combined with the increased operational independence of the subsidiary, positions both DSS, Inc. and Impact BioMedical
for sustainable growth in the rapidly evolving biomedical sector.
Sentinel
Brokers Company
Sentinel
Brokers Company (“Sentinel Brokers” or “Sentinel”), a majority owned subsidiary of the Company, operates as
a registered broker-dealer and is subject to regulation by the Financial Industry Regulatory Authority (“FINRA”) and the
U.S. Securities and Exchange Commission (“SEC”). During the year ended December 31, 2025, Sentinel Brokers continued to
maintain its regulatory standing and focused on compliance infrastructure, supervisory controls, and operational readiness. The
Company evaluated strategic opportunities to expand broker-dealer activities, including capital markets transactions, including IPOs
and follow on offerings, and related advisory services, consistent with applicable regulatory requirements.
2026
Strategic Focus
For
2026, Sentinel Brokers intends to:
● Maintain
regulatory compliance and supervisory controls
● Evaluate
expansion of transactional capabilities, subject to regulatory approval
● Assess
potential capital markets engagements and advisory opportunities
● Explore
strategic partnerships where commercially appropriate
6
Reporting
Operating Segments:
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 Operations. 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. 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.
As
we have reported above, we financially report business operating results on four operating segments, which we believe will certainly
increase and transition as the newer lines of business develop and mature. DSS’s operating segments in 2025 highlight the Company’s
ongoing commitment to innovation and diversification. Each segment is strategically positioned for growth, with Premier Packaging and
Commercial Lending continuing to evolve and adapt to market demands. The Securities and Investment Management segment remains a key pillar
of our growth strategy, with expanding initiatives that include real estate investment, digital securities, and wealth management solutions.
As DSS continues to evolve and execute its strategic objectives, it is well-positioned to deliver sustained value to its shareholders
and customers across these key business lines. The four business segments that we are reporting on in 2025 are as follows:
Product
Packaging: Our wholly-owned subsidiary Premier Packaging Corporation (“Premier”), 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: (“Commercial Lending”) through its operating company, American Pacific Financial, Inc. (“APF”)
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:
(“Biotech”) 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.
7
Biotech
has several important and valuable products, technology or compounds that are in continuing development and/or licensing stages:
●
LineBacker:
Multi-faceted therapeutic platform for metabolic, neurologic, cancer, and infectious diseases.
●
Equivir:
A polyphenol compound that is believed to be successful in antiviral infection treatments. Equivir/Nemovir technology is a novel
blend of FDA Generally Recognized as Safe (“GRAS”) eligible polyphenols ( e.g., Myricetin, Hesperetin, Piperine)
which have demonstrated antiviral effects with additional potential application as health supplements or medication. Polyphenols
are sourced from fruits, vegetables, and other natural substances. Myricetin is a member of the flavonoid class of polyphenolic compounds
with antioxidant properties. Hesperitin is a flavanone and Piperine is an alkaloid, commonly found in black pepper.
●
Procombin:
Applications as food additive, and natural preservative for beauty and person care products as well as natural food preservative.
●
VanXin:
Food preservative booster made up of polyphenols that extend the shelf life.
●
Bioplastics:
Advanced bio-compatible plastics that mitigate accumulation of plastics in oceans and landfills and provide UVA and UVB protection
for many types of material for including containers, hard surfaces, and fibers for clothing. The technology is presently in development
and testing antimicrobial plastics for consumer products that control the spread of active pathogens such as SARS-CoV-2, Influenza,
E. coli, Staph, and Rhinovirus, by exploiting key strategies found in the biological realm. These new plastics are specifically focused
on solutions for common products such as cups, plates, utensils, plastic bags, and countertops. The first prototypes are currently
undergoing antimicrobial resistance testing.
●
Laetose:
Laetose technology is derived from a unique combination of sugar and inositol, which demonstrates the ability to inhibit the inflammatory
and metabolic response of sugar alone. A sugar alternative which is believed to lower human glycemic indexes and is believed to be
a breakthrough alternative sugar aimed to combat diabetes. The use of Laetose in a daily diet, compared to sugar, could result in
30% lower sugar consumption and lower glycemic index/load.
●
3F:
A botanical compound believed to serve as an insect repellent and anti-microbial agent. 3F is a unique formulation of specialized
ingredients ( e.g. terpenes) from botanical sources with demonstrated effect as an insect repellent and an antimicrobial.
●
3F
Mosquito Repellent: 3F repellent contains botanical ingredients that mosquitos avoid. These ingredients are scientifically proven1
to affect the mosquito’s receptors, essentially making the insect blind to a human’s presence. This can be utilized as
a stand-alone repellent or as an additive in detergents, lotions, shampoo, and other substances to provide mosquito protection.
●
3F
Antimicrobial: 3F antimicrobial contains botanical ingredients known to kill viruses. These ingredients are scientifically proven
to inhibit viral replication. This can be utilized as a stand-alone antimicrobial or as an additive in detergents, lotions, shampoo,
fabrics, and other substances.
●
Quantum:
The solution to the Patent Cliff accomplished by creating a new class of medicinal chemistry that uses advanced methods to increase
effectiveness and persistence of natural compounds and existing drugs. The safety attributes of the original molecules are maintained.
Typically, drug discovery processes modify functional groups. Quantum’s new techniques alter behavior of molecules at the sub-molecular
level. It is estimated that 65% of the World Health Organization Essential Medicines List can be improved and re-patented using Quantum
and these methods can be used to enhance and patent natural compounds including many substances used in traditional medicines around
the world.
●
Bio
Med (license): A probiotic gut health product that helps to regulate many physiological functions, ranging from energy regulation
and cognitive processes to toxin neutralization and immunity against pathogens.
8
Securities
and Investment Management: (“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 management. This business sector has already established the following business lines/investments and associated products
and services:
●
REIT
Management Fund: In March 2020, DSS Securities formed AMRE (“American Medical REIT”) and its management company AAMI
(“AMRE Asset Management, Inc.) Through AAMI/AMRE, a medical real estate investment trust, fulfills community needs for quality
healthcare facilities while enabling care providers to allocate their capital to growth and investment in their contemporary clinical
and critical care businesses. Urban and suburban communities are in need of modern healthcare facilities that provide a range of
medical outpatient services. The funds ultimate product is an investor opportunity in a managed medical real estate investment trust.
●
Sentinel:
Sentinel is a broker-dealer operating primarily as a fiduciary intermediary, facilitating intuitional trading of municipal and corporate
bonds as well as preferred stock, and is registered with the Securities and Exchange Commission, is a member of the Financial Industry
Regulatory Authority, Inc. (“FINRA”), and is a member of the Securities Investor Protection Corporation (“SIPC”).
●
BMI
Capital International, LLC. (“BMIC”): is a private investment bank specializing in corporate finance advising, raising
equity, and venture services, providing a global “one-stop” corporate consultancy to listed companies. From corporate
finance to professional valuation, corporate communications to event management, BMIC services companies in the US, Hong Kong, Singapore,
Taiwan, Japan, Canada, and Australia .
Intellectual
Property
We
strive to protect the intellectual property that we believe is important to our business, including seeking and maintaining patent protection
intended to cover the composition of matter of our product candidates, their methods of use, their methods of production, related technologies
and other inventions. In addition to patent protection, we also rely on trade secrets to protect aspects of our business that are not
amenable to, or that we do not consider appropriate for, patent protection, including certain aspects of technical know-how.
Patents
Impact
Biomedical Inc. has nine (9) patents issued, and over forty (40) patents pending worldwide with expiration of US patents between 2029
and 2040. Pending patents could extend this exclusivity period in all regions.
The
issued and allowed patents include composition and method of application for Linebacker, Equivir, 3F (Functional Fragrance), and Laetose.
Trademarks
We
have several trademarks related to our DSS, Inc. businesses, which support the protection of our brand and products in various markets.
These trademarks are critical to maintaining the distinctiveness and recognition of our offerings.
Websites:
The
primary corporate website we maintain is www.dssworld.com . Our other sites are:
Premier
Packaging: https://www.premiercustompkg.com
Impact
Biomedical: https://www.impactbiomedinc.com
DSS
PureAir, Inc.: https://dsspureair.com/
In
addition to the active websites, the Company is building multiple new sites and owns several other domain names reserved for future use
or for strategic competitive reasons. Information on our websites or any other website does not constitute a part of this annual report.
9
Markets
and Competition
Product
Packaging: In our packaging division, we face competition from a wide range of national and regional companies, many of which operate
independently and are privately held. The competition is primarily concentrated in the consumer-packaged goods and health and beauty
sectors, with major players including prominent integrated paper companies such as WestRock Company and Graphic Packaging Holding Company.
Competition is based on pricing, quality, service, regulatory compliance, sustainability, and turnaround time.
Commercial
Lending: American Pacific Financial, our commercial lending company, offers a comprehensive range of financial services tailored to businesses.
Our services encompass commercial business lines of credit, land development financing, inventory financing, third-party loan servicing,
and solutions designed to meet the diverse financial requirements of various business sectors. In this competitive landscape, APF competes
with a wide array of traditional commercial banks and investment banking firms.
Biotechnology:
This segment is dedicated to the discovery, confirmation, and patenting of unique scientific advancements and technologies, which lead
to innovative solutions in the realm of human healthcare and wellness. It collaborates closely with licensing partners, engages in co-development
initiatives, forms joint ventures, and nurtures other valuable relationships to effectively introduce these groundbreaking solutions
to the market. Within this competitive landscape, we face competition from other biotechnology firms and research institutions that are
also pursuing cutting-edge advancements in healthcare, wellness, and related technologies.
Securities
and Investment Management: Was established to develop and/or acquire assets in the securities trading or management arena. This business
unit faces competition from individual money managers, established financial institutions, and organizations that engage in securities
trading and management, including Broker-Dealers. Additionally, the division competes with Real Estate Investment Trusts (REITs), private
equity firms, and other personal investment companies that offer similar investment opportunities and financial products to individual
and institutional clients.
Customers
As
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.
Securities
and Investment Management: Our Securities and Investment Management division has a mixture of retail and institutional investors.
Raw
Materials
Product
Packaging: The primary raw materials used in our packaging business are paper, paperboard, and ink. We work closely with leading suppliers
to maximize purchasing efficiencies, utilizing a diverse range of paper grades, formats, ink formulations, and colors to meet the needs
of our products. Sustainability in procurement is a critical focus for the Company. We not only ensure that our suppliers meet rigorous
sustainability standards, but we are also committed to continuous internal improvements in sustainability practices. We are proactively
setting high standards for sustainability and working with our supply chain partners to ensure these standards are met, contributing
to the overall progress and compliance within the industry.
Environmental
Compliance
The
Company is committed to conducting its operations in full compliance with all applicable environmental laws, regulations, and other requirements.
While the potential impact of future environmental matters, including remediation efforts and compliance initiatives, cannot be predicted
with certainty, management believes that adherence to current environmental protection laws, excluding any potential recoveries from
third parties, will not have a material adverse effect on the Company’s consolidated results of operations, financial position,
or cash flows. The Company remains focused on maintaining environmental responsibility while managing any future environmental liabilities
in a prudent and cost-effective manner.
10
Government
Regulation
Our
biotechnology business is faced with potential government regulations. If new legislation, regulations, or rules are implemented either
by Congress, the U.S. Patent and Trademark Office (the “USPTO”), or the courts that impact the patent application process,
the patent enforcement process or the rights of patent holders, these changes could negatively affect our patent monetization efforts
and, in turn, our assets, expenses and revenue. United States patent laws have been amended by the Leahy-Smith America Invents Act. The
America Invents Act includes several significant changes to U.S. patent law. In general, the legislation attempts to address issues surrounding
the enforceability of patents and the increase in patent litigation by, among other things, establishing new procedures for patent litigation.
For example, the America Invents Act changes the way that parties may be joined in patent infringement actions, increasing the likelihood
that such actions will need to be brought against individual parties allegedly infringing by their respective individual actions or activities.
In addition, the U.S. Department of Justice (“DOJ”) has conducted reviews of the patent system to evaluate the impact of
patent assertion entities, such as our Company, on industries in which those patents relate. It is possible that the findings and recommendations
of the DOJ could adversely impact our ability to effectively license and enforce standards-essential patents and could increase the uncertainties
and costs surrounding the enforcement of any such patented technologies.
Moreover,
new rules regarding the burden of proof in patent enforcement actions could significantly increase the cost of our enforcement actions,
and new standards or limitations on liability for patent infringement could negatively impact our revenue derived from such enforcement
actions.
Corporate
History
The
Company, incorporated in the state of New York in May 1984 has formally conducted business in the name of Document Security Systems,
Inc. On September 16, 2021, the board of directors approved an agreement and plan of merger with a wholly owned subsidiary, DSS, Inc.
(a New York corporation, incorporated in August 2020), for the sole purpose of effecting a rebranding from Document Security Systems,
Inc. to DSS, Inc. This change became effective on September 30, 2021. DSS, Inc. maintained the same trading symbol “DSS”
and updated its CUSIP number to 26253C-102. In January 2024, in conjunction with a reverse split, DSS now operates under the CUSIP 26253C
201. See the “Overview” section above for further details about our acquisitions.
Human
Capital Resources
As
of December 31, 2025, DSS, Inc. had 102 employees. We continue to retain and attract qualified management and technical personnel. Our
employees are not covered by any collective bargaining agreement, and we believe that our relations with our employees are in good standing.
Available
information
Our
website address is www.dssworld.com . Information on our website is not incorporated herein by reference. We make available
free of charge through our website our press releases, Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K and all amendments to those reports as soon as reasonably practicable after electronically filed with or furnished to the
Securities and Exchange Commission.