What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-14 compared with 2026-05-15 · 134 added, 103 removed, 111 unchanged (68% of the section changed)

58 unchanged sentences

It also oversees a real estate investment trust (REIT) that acquires hospitals and care centers.

of operations for the three and three months ended March 31, 2026, as compared to the three months ended March 31,

of operations for the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025.

discussion should be read in conjunction with the financial statements and footnotes contained in this Quarterly Report and in our Annual

Report on Form 10-K for the year ended December 31, 2025.

Three months ended

Three months ended June 30, 2026

Three months ended June 30, 2025

Six months ended June 30, 2026

Six months ended June 30, 2025

Product Packaging

1 unchanged sentence

Biotechnology

the three months ended March 31, 2026, total revenue decreased 13% as compared to the three months ended March 31, 2025.

Printed Product

revenue increased approximately 4% is driven by new customer orders as well as existing customer orders exceeding their forecasts.

decreases in Securities revenue of approximately 83% is driven by decreases in rental income as a tenant at AMRE LifeCare Pittsburgh

facility vacated the location during the second half of 2025.

Additionally, the Company received approximately 90% less in commission

revenues associated with its Sentinel Brokers subsidiary during the three months ended March 31, 2026 as compared to March 31, 2025.The

decreases in Commercial lending income approximating 71% is due to a number of loans made going on non-accrual during 2025 as borrowers

have struggled to make expect payments.

Biotechnology revenue is driven by sales of the Company’s air purification Celios brand.

Three months ended

March 31, 2026

Three months ended

March 31, 2025

For the three and six months

ended June 30 2026, total revenue decreased 32% and 22%, as compared to the three and six months ended June 30, 2025, respectively.

decrease in Printed Product revenue of approximately 24% and 10% for the three and six months ended June 30, 2026 is driven by customer

orders from existing customers falling short of their forecasts as well as the anticipated second quarter onboarding of several new customers

being pushed out to the third and fourth quarters of 2026.

The decreases in Securities revenue of approximately 66% and 75% for the three

and six months ended June 30, 2026 is driven by an decrease in rental income at our AMRE LifeCare Pittsburgh facility.

Additionally, the

Company sold its AMRE Winterhaven and Ft Worth facilities during 2025, significantly reducing rental revenues in 2026.

Also, the Company

received approximately 67% and 77% less in commission revenues associated with its Sentinel Brokers subsidiary for the three and six months

ended June 30, 2026.

The Company decreases in Commercial lending revenue of approximating 63% for the three and six months ended June

30, 2026 is due to a number of loans made going on non-accrual as borrowers have struggled to make expect payments.

Biotechnology revenue

is driven by sales of the Company’s air purification Celios brand.

June 30, 2026

June 30, 2025

Cost of revenue

Printed products

Biotechnology

Sales, general and administrative

Commercial lending

Sales, general and administrative compensation

Professional fees

3 unchanged sentences

Research and development

operating expenses

Other operating expenses

costs and expenses

9 unchanged sentences

impairment of notes receivable for those amounts at risk of collection.

Total costs of revenue increased for the three months ended March

31, 2026 as compared to March 31, 2025 by approximately 7%.

Cost of revenue increased at our Printed products business line driven by

an increase in revenue year over year which was offset by decrease in cost of revenue within our REIT business driven by the sale of

the Fort Worth, Tx and Winter Haven, Fl facilities in December 2025 for which costs were incurred during the three months ended March 31, 2025 and not incurred during the three months

ended March 31, 2026.

general and administrative compensation costs, excluding stock-based compensation, decreased 15% for three months ended March 31,

2026 as compared to 2025 is primarily due to headcount reductions within our Securities segment.

fees increased for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 due to cost incurred

to expand the sales force at Premier Packaging as well as training for Premier’s operations staff.

Additionally, cost have increased

at Impact BioMedical as a result of due diligence and other professional fees in connection with potential mergers and/or acquisitions.

Total costs of revenue decreased for the three and six months

ended June 30, 2026 as compared to June 30, 2025 by approximately 18% and 6%, respectively, due primarily to the decrease in revenues

for each business line during these periods.

Additionally, decreased in cost of revenue within our REIT business driven by the sale of

the Fort Worth, Tx and Winter Haven, Fl facilities in December 2025.

general and administrative compensation costs, excluding stock-based compensation, decreased for the three and six months

ended June 30, 2026 as compared to June 30, 2025 by approximately 7% and 36%, respectively due to headcount reductions within our Securities

Additionally, the decrease for the six months ended June 30, 2026 in comparison to the six months ended June 30, 2025 can be

attributed to bonus 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., for services rendered.

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

fees increased for the three and six months ended June 30, 2026 as compared to June 30, 2025 by approximately 27% and 8%,

respectively.

These increases are driven by costs associated with recruitment of technical personnel at Premier Packaging and

professional staff at DSS.

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

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

In January 2026, the Impact BioMedical granted and issued 3,200,000 shares of common stock, valued at approximately

$1,440,000, to various individuals including executives, board members, and audit committee members for services to be provided during

the first quarter of 2026.

On February 6, 2025, 1,000,000 shares of the Company’s common stock, valued at approximately $870,000,

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

Heng Fai Ambrose Chan, Director of DSS, Inc., for consulting services to be provided during the first quarter of 2025.

In January 2026, Impact BioMedical granted and issued 3,200,000 shares of common stock to various individuals

including executives, board members, audit committee members, etc.

Agreement included the individuals rescinding and cancelling any and

all unexercised stock options previously granted.

Impact Biomedical recorded stock-based compensation expense of approximately $1,440,000.

and marketing which include internet and trade publication advertising, travel and entertainment costs, sales-broker commissions,

and trade show participation expenses.

Sales and marketing decreased 6% during the three months ended March 31, 2026 as compared to 2025

due to decreases in marketing, and travel costs within our Printed Products division.

and utilities increased 5% during the three months ended March 31, 2026 as compared to 2025 primarily driven by increases in utilities

at our Premier Packaging facility.

and development represent costs consisting primarily of independent, third-party testing of the various properties of each technology

the Company owns, research on new technologies as well as costs to patent newly developed technologies and other related fees for the

development of new technologies.

Research and development decreased 81% for the three months ended March 31, 2026, as compared to the

three months ended March 31, 2025 due primarily to a decrease in spending on identifying new technologies as well as pausing the spend

on several in-development technologies at our Impact BioMedical subsidiary.

Sales and marketing decreased for the three and six months ended June 30, 2026 as compared to June 30, 2025 by approximately 16%

and 11%, respectively, due to decreases in marketing, and travel costs within our Printed Products division.

and utilities decreased for the three months ended June 30, 2026 as compared to June 30, 2025 by approximately 3% and

remained relatively flat for the six months ended June 30, 2026 as compared to June 30, 2025 as both rent and utilities at the

Company’s places of business remained flat.

and development costs represent costs consisting primarily of independent, third-party testing of the various properties of each

technology the Company owns possesses as well as research on new technologies.

Theses costs remained relatively flat for the three

months ended June 30, 2026 as compared to June 30, 2025 and decreased for the six months ended June 30, 2026 as compared to June 30,

The six month decrease is driven due primarily to a decrease in spending on identifying new technologies as well as pausing the

spend on several in-development technologies.

operating expenses consist primarily of equipment maintenance and repairs, office supplies, IT support, and insurance costs.

costs increased approximately 289% during the three months ended March 31, 2026 as compared to March 31, 2025, primarily due to collections

of previously written-off of accounts receivable associated with our AMRE LifeCare facilities of approximately $600,000.

These costs decreased for the three months ended June 30, 2026 as compared to June 30, 2025 by approximately 34% and increased by

approximately 16% for the six months ended June 30, 2026 as compared to June 30, 2025.

The decrease or the three months ended June

30, 2026 as compared to June 30, 2025 is due to efforts by management to control such costs.

The increase for the six months ended

June 30, 2026 as compared to June 30, 2025, primarily due to collections of previously written-off accounts receivable associated

with our AMRE LifeCare facilities of approximately $600,000 during the first quarter of 2025.

Income (Expense)

Three months ended

Interest Income

1 unchanged sentence

Dividend Income

Other Income (expense)

Interest Expense

Loss on equity method investment

Loss on investments

Change in fair value of convertible bond investment – related party

Gain (loss) on investments

Impairment of intangible assets

Loss on sale of real estate

other income (expense)

$ (1,249,000 )

income is recognized on the Company’s money markets, and a portion of notes receivable, identified in Note 4.

in interest income is driven by several notes being put on non-accrual as the related borrowers have shown an inability to pay timely.

income on notes receivable, related party is recognized on the Company’s notes receivable with related parties identified in

Note 4 and remained flat year over year as outstanding principal balances remained flat year over year.

income for the three months ended March 31, 2026 represent dividends received on certain investments owned by the Company.

dividends were received the three months ended March 31, 2025.

income (expense) for the three months ended March 31, 2026 as compared to 2025 fluctuated due primarily to foreign exchange losses

for the three months ended March 31, 2026 of approximately $19,000 as compared to approximately $3,000 for the three months ended March

expenses increased 18% during the three months ended March 31, 2026, as compared to the same period in 202, due to additional debt

taken on during the fourth quarter of 2025.

on equity method investment is the Company’s prorated portion of earnings on its investments treated under the equity method

of account for the three months ended March 31, 2026 as compared to 2025.

on investments consists of net realized losses on marketable securities which are recognized as the difference between the purchase

price and sale price of the common stock investment, and net unrealized losses on marketable securities which are recognized on the change

in fair market value on our common stock investment.

The decrease in loss on investment for the three months ended March 31, 2026 as

compared to 2025 is driven by the performance of our stock portfolio.

Change in fair value of convertible

bond investment – related party represents the change in fair value of the convertible bond investment in True Partners from

the acquisition date of March 27, 2026 and March 31, 2026.

on sale of real estate is driven by the sale of the Company’s Plano, Texas facility.

Three months ended

$ (1,988,000 )

Interest income is

recognized on the Company’s money markets, and a portion of notes receivable, identified in Note 4.

The decrease in interest income

is driven by several notes being put on non-accrual as the related borrowers have shown an inability to pay timely.

Interest income on notes

receivable, related party is recognized on the Company’s notes receivable with related parties identified in Note 4 and remained

flat year over year as outstanding principal balances remained flat year over year.

Dividend income for

the three and six months ended June 30, 2026 represent dividends received on certain investments owned by the Company.

No such dividends

were received the three and six months ended June 30, 2025.

Other income increased

for the three ended June 30, 2026 as compared to June 30, 2025 by approximately 425% and decrease for the six months ended June 30, 2026

as compared to June 30, 2025 by approximately 30% driven by fluctuations in foreign exchange rates.

Interest expenses decreased

for the three and six months ended June 30, 2026 as compared to June 30, 2025 by approximately 28% and 18%, respectively, due primarily

to decrease in overall debt balances.

Loss on equity method investment

is the Company’s prorated portion of earnings on its investments treated under the equity method of account for the six months

ended June 30, 2026 as compared to 2025.

Gain (loss)on investments

consists of net realized losses on marketable securities which are recognized as the difference between the purchase price and sale

price of the common stock investment, and net unrealized losses on marketable securities which are recognized on the change in fair market

value on our common stock investment.

The fluctuation decreased for the three and six months ended June 30, 2026 as compared to June 30,

2025 by driven by the performance of our stock portfolio.

Impairment of intangible

assets is a result of the Company resigning its position as the registered investment advisor (“RIA”) of the American

First Mutual Funds.

The related asset was acquired at the time the Company became the RIA in September 2021.

Loss on sale of real estate

is driven by the sale of the Company’s Plano, Texas facility.

June 30, 2026

June 30, 2025

$ (5,035,000 )

the three months ended March 31, 2026 the Company recorded net losses of $6,354,000 as compared to net losses of $5,296,000 for the same

period in 2025.

The increase in net loss is driven by a decrease in total revenue of approximately 13% as well as stock-based compensation

of approximately $1,440,000 paid at our Impact BioMedical subsidiary during the first quarter of 2026.

$ (2,607,000 )

$ (11,262,000 )

$ (7,902,000 )

For the six months ended June

30, 2026 the Company recorded net losses of $11,262,000 as compared to net losses of $7,902,000 for the same period in 2025.

in net loss is driven by a decrease in total revenue of approximately 22% as well as stock-based compensation of approximately $1,440,000

paid at our Impact BioMedical subsidiary during the first quarter of 2026.

AND CAPITAL RESOURCES

Company has historically met its liquidity and capital requirements primarily through the sale of its equity securities and debt financing.

As of March 31, 2026 the Company had cash of approximately $4,936,000.

As of March 31, 2026, the Company believes that it will have

access to sources of capital from the sale of its equity securities and debt financing, and thus believes that it has sufficient cash

to meet its cash requirements for at least the next 12 months from the filing date of this Quarterly Report.

Flow from Operating Activities

cash used by operating activities was $133,000 for the three months ended March 31, 2026 as compared to cash provided by $1,168,000

for three months ended March 31, 2025.

As of June 30, 2026, the Company

had approximately $4.1 million in cash, $2.8 million in marketable securities, and negative working capital of approximately $39.9 million.

The Company has funded its liquidity needs through equity and debt financing and expects to pursue additional liquidity through potential

asset sales, financing activities, and continued reductions in operating expenses and cash burn.

However, there can be no assurance that

the Company will successfully complete asset sales, obtain additional financing on acceptable terms, or achieve the anticipated cost reductions.

Accordingly, substantial doubt remains regarding the Company’s ability to continue as a going concern.

Flow from Continuing Operating Activities

cash used by operating activities was $1,985,000 for the six months ended June 30, 2026 as compared to cash provided by operating activities of $454,000 for

six months ended June 30, 2025.

This fluctuation is driven by increases in net loss, after reconciling items, approximating $2,932,000.

$752,000, an increases in inventory of approximately $211,000 offset by accounts receivable decrease by approximately $229,000 and accounts payable of approximately $789,000.

Flow from Investing Activities

cash used by investing activities was $2,639,000 for the three months ended March 31, 2026 as compared to net cash provided by

investing activities of $10,070,000 for the three months ended March 31, 2025.

This fluctuation is driven by the cash outflow for

the purchase of a convertible bond – related party of approximately $2,450,000 during the first quarter of 2026.

During the first quart of 2025, there was a cash inflows for the sale of real estate

approximating $9,500,000, and the sale of related party investments

of approximately $1,500,000, offset by the purchase of marketable securities of approximately $1,000,000.

cash used by investing activities was $2,707,000 for the six months ended June 30, 2026 as compared to net cash provided by investing

activities of $11,019,000 for the six months ended June 30, 2025.

This fluctuation is driven by the sale of real estate approximating

$9,500,000, and the sale of related party investments of approximately $1,500,000 during the six months ended June 30, 2025, offset by

the purchase of a convertible bond of $2,450,000 during 2026.

Flow from Financing Activities

cash provided by financing activities was $1,394,000 for the three months

ended March 31, 2026 as compared to net cash used by financing activities of $11,694,000 for the three months ended March 31, 2025.

variance is driven by payments toward long term debt of $284,000, payments on margin loans of $1,548,000 offset by borrowings of convertible

note payable – related party of $2,450,000 during the first quarter of 2025 versus payments toward long term debt of $8,997,000

and payments on margin loans of $2,806,000 during the first quarter of 2025.

cash provided by financing activities was $2,446,000 for the six months ended June 30, 2026 as compared to cash used by financing

activities of $12,512,000 for the six months ended June 30, 2025.

This variance is driven by payments toward long term debt of

$628,000 in 2026 versus $9,443,000 in 2025.

Also, payments on margin loans of $1,152,000 were made in 2026 as compared to payments

on margin loans of $3,178,000 in 2025.

Additionally, the Company had borrowings of $3,450,000 from related parties in 2026 and had

no such borrowings in 2025.

Sheet Arrangements

8 unchanged sentences

There have been

no material changes to such critical accounting policies as of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.

no material changes to such critical accounting policies as of the Quarterly Report on Form 10-Q for the quarter ended June 30, 2026.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis