What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-31 compared with 2024-03-27 · 315 added, 354 removed, 50 unchanged (93% of the section changed)

1 unchanged sentence

FORWARD-LOOKING

Certain statements

contained herein this report constitute “forward-looking statements” within the meaning of the Private Securities Litigation

Reform Act of 1995 (the “1995 Reform Act”).

Except for the historical information contained herein, this report contains

forward-looking statements (identified by words such as “estimate”, “project”, “anticipate”, “plan”,

“expect”, “intend”, “believe”, “hope”, “strategy” and similar expressions),

which are based on our current expectations and speak only as of the date made.

These forward-looking statements are subject to various

risks, uncertainties, and factors, that could cause actual results to differ materially from the results anticipated in the forward-looking

which was incorporated in the state of New York in May 1984, previously conducted its business under the name of Document Security Systems,

Inc On September 16, 2021, our board of

directors approved an agreement and plan of merger with a wholly owned subsidiary, DSS, Inc.

subsidiary, incorporated in August 2020, was created for the sole purpose of facilitating a transformational name change from

statements contained herein this report constitute “forward-looking statements” within the meaning of the Private Securities

Litigation Reform Act of 1995 (the “1995 Reform Act”).

Except for the historical information contained herein, this report

contains forward-looking statements (identified by words such as “estimate”, “project”, “anticipate”,

“plan”, “expect”, “intend”, “believe”, “hope”, “strategy” and

similar expressions), which are based on our current expectations and speak only as of the date made.

These forward-looking statements

are subject to various risks, uncertainties, and factors, that could cause actual results to differ materially from the results anticipated

in the forward-looking statements.

Company, which was incorporated in the state of New York in May 1984, previously conducted its business under the name of Document Security

Systems, Inc On September 16, 2021, our board of directors approved an agreement and plan of merger with a wholly owned subsidiary, DSS,

This subsidiary, incorporated in August 2020, was created for the sole purpose of facilitating a transformational name change from

Document Security Systems, Inc.

This significant shift in our identity became official on September 30, 2021.

name change, DSS, Inc.

With the name

change, DSS, Inc.

retained its trading symbol, “DSS,” and is currently trading under its CUSIP number to 26253C 201.

This change reflects not only our evolution as a company but also our commitment to adapting and growing in an ever-changing

business landscape.

(referred to herein as “DSS,” “we,” “us,” or “our”)

now operates across five distinct business lines, each with its own unique scope and presence on a global scale.

These business

lines encompass a wide range of industries and sectors, including:

Product Packaging:

Our involvement in product packaging represents our dedication to delivering innovative and sustainable packaging solutions that meet

the evolving needs of various markets.

change reflects not only our evolution as a company but also our commitment to adapting and growing in an ever-changing business landscape.

(referred to herein as “DSS,” “we,” “us,” or “our”) now operates across five

distinct business lines, each with its own unique scope and presence on a global scale.

These business lines encompass a wide range of

industries and sectors, including:

Our involvement in product packaging represents our dedication to delivering innovative and sustainable packaging solutions

that meet the evolving needs of various markets.

Biotechnology:

the field of biotechnology, we are focused on pioneering scientific advancements and technologies that have the potential to transform

In the field of biotechnology, we are focused on pioneering scientific advancements and technologies that have the potential to transform

human healthcare and wellness.

Direct Marketing:

Our direct marketing endeavors involve strategic efforts to engage with customers and clients, providing tailored solutions and services

that enhance their experiences.

Commercial Lending:

We are actively engaged in commercial lending, offering a suite of financial services that cater to the unique needs of businesses, ranging

from commercial lines of credit to land development financing.

Securities and Investment Management:

In the world of securities and investment management, we aim to provide expertise and guidance to help our clients navigate the complexities

of the financial markets and achieve their investment goals.

Each of these business lines is at a

different stage of development, growth, and income generation, reflecting the diversity of our operations.

This multi-faceted approach

allows us to adapt to changing market conditions and explore new opportunities for expansion and success.

We are committed to our continued

evolution and to delivering value to our stakeholders across these diverse business lines.

The Company, initially incorporated in

the state of New York in May 1984, had historically conducted its business under the name Document Security Systems, Inc.

September 16, 2021, our board of directors approved an agreement and plan of merger with a

wholly owned subsidiary, DSS, Inc.

Our direct marketing endeavors involve strategic efforts to engage with customers and clients, providing tailored solutions

and services that enhance their experiences.

We are actively engaged in commercial lending, offering a suite of financial services that cater to the unique needs of businesses,

ranging from commercial lines of credit to land development financing.

and Investment Management:

In the world of securities and investment management, we aim to provide expertise and guidance to help our

clients navigate the complexities of the financial markets and achieve their investment goals.

of these business lines is at a different stage of development, growth, and income generation, reflecting the diversity of our operations.

This multi-faceted approach allows us to adapt to changing market conditions and explore new opportunities for expansion and success.

We are committed to our continued evolution and to delivering value to our stakeholders across these diverse business lines.

Company, initially incorporated in the state of New York in May 1984, had historically conducted its business under the name Document

Security Systems, Inc.

However, on September 16, 2021, our board of directors approved an agreement and plan of merger with a wholly

owned subsidiary, DSS, Inc.

(incorporated in August 2020).

The primary purpose of this merger was to affect a name change from

Document Security Systems, Inc.

The primary purpose of this merger was to affect a name change from Document

Security Systems, Inc.

to DSS, Inc., which officially took effect on September 30, 2021.

This change did not affect

our trading symbol, which remained as “DSS,” and is currently trading under its CUSIP number to 26253C 201.

This change did not affect our trading symbol,

which remained as “DSS,” and is currently trading under its CUSIP number to 26253C 201.

Business Lines and Global Presence:

Under the banner of DSS, Inc., we have

diversified our operations into nine distinct business lines, each with its own unique scope and geographical footprint.

These business

lines include:

Product Packaging:

Led by Premier Packaging

Corporation, Inc.

(“Premier”), a New York corporation, this segment specializes in paperboard and fiber-based folding carton

manufacturing, consumer product packaging, and document security printing.

Premier is headquartered in its newly established facility

in Rochester, NY, primarily serving the US market.

the banner of DSS, Inc., we have diversified our operations into five distinct business lines, each with its own unique scope and geographical

These business lines include:

Led by Premier Packaging Corporation, Inc.

(“Premier”), a New York corporation, this segment specializes in paperboard

and fiber-based folding carton manufacturing, consumer product packaging, and document security printing.

Premier is headquartered in

its newly established facility in Rochester, NY, primarily serving the US market.

Biotechnology:

This business line is

dedicated to investing in or acquiring companies in the BioHealth and BioMedical fields, focusing on drug discovery, prevention, treatment

of various diseases, and open-air defense initiatives against infectious diseases.

Direct Marketing:

Operating under the

umbrella of Decentralized Sharing Systems, Inc.

(“Decentralized”), this division provides services to companies in the emerging

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

It specializes in marketing and distributing

products and services across North America, Asia Pacific, Middle East, and Eastern Europe.

Commercial Lending:

American Pacific

Bancorp, Inc.

(“APB”) represents our banking and financing business line.

During 2023, APB issued more than $14 million in

new loans, and over $4 million in renewal loan to customers with strong credit quality across a diverse portfolio of businesses.

ahead, to better meet the needs of the current financial market, the company is looking to transition away form certain industries like

direct marketing and focus more on growing its inventory / equipment loan portfolio as well as engaging in more specialized areas of

This business line is dedicated to investing in or acquiring companies in the BioHealth and BioMedical fields, focusing on drug discovery,

prevention, treatment of various diseases, and open-air defense initiatives against infectious diseases.

Operating under the umbrella of Decentralized Sharing Systems, Inc.

(“Decentralized”), this division provides

services to companies in the emerging growth “Gig” business model of peer-to-peer decentralized sharing marketplaces.

specializes in marketing and distributing products and services across North America, Asia Pacific, Middle East, and Eastern Europe.

American Pacific Financial, Inc.

(“APF”) represents our banking and financing business line.

Looking ahead, to

better meet the needs of the current financial market, the company is looking to transition away form certain industries like direct

marketing and focus more on growing its inventory / equipment loan portfolio as well as engaging in more specialized areas of

lending like broker/dealer loans.

We will continue to monitor our managed loan portfolio of more than $6 million, which earns 1.25%

We will continue to monitor our managed loan portfolio, which earns 1.25%

annually in service charges, and explore future opportunities.

Importantly, the equity portfolio as a bank holding company is anticipated

to remain relatively stable, regardless of stock market fluctuations.

Securities and Investment Management:

This division focuses on acquiring assets in the securities trading and management arena, including broker-dealers and mutual funds management.

Importantly, the equity portfolio as a bank holding company is

anticipated to remain relatively stable, regardless of stock market fluctuations.

and Investment Management:

This division focuses on acquiring assets in the securities trading and management arena, including broker-dealers

and mutual funds management.

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

Alternative Trading:

Established to acquire

assets and investments in the securities trading and funds management arena, this segment, in partnership with recognized global leaders,

intends to operate a blockchain-based Alternative Trading System (“ATS”) for digital asset securities, exempt from registration.

The ATS aims to provide T+0 settlement and foster liquidity for middle-market companies.

Digital Transformation:

This division

serves as a Preferred Technology Partner and Application Development Solution for mid-cap brands, enhancing marketing, communications,

and operational processes through custom software development.

Digital Transformation was headquartered in Hong Kong until its discontinuation

Secure Living:

Focused on creating fully

sustainable, secure, connected, and healthy living communities, this division designs advanced technology-infused, energy-efficient homes

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

Secure Living was headquartered in Houston, Texas, until it was wound down

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

farms to serve regional power grids and provide microgrids for independent energy.

The group is dedicated to environmentally

responsible and sustainable energy solutions.

Alset Energy was headquarters in Houston, Texas until its discontinuation

OF OPERATIONS FOR THE FISCAL YEARS ENDED DECEMBER 31,

December 31, 2023

December 31, 2022

Printed products

Rental income

Management fee income

Net investment income

Commission Revenue

Commercial lending

Direct marketing

Total Revenue

- For the year ended December 31, 2023, revenue decreased 36% to approximately $30.3 million as compared to revenues

of approximately $47.3 million for the year ended December 31, 2022.

- For the year ended December 31, 2024, revenue decreased 26% to approximately $19.1 million as compared to revenues of

approximately $25.9 million for the year ended December 31, 2023.

Printed products sales, which include sales of packaging and

printing products, increased 3% in 2023 as compared to 2022.

The increases in sales were due primarily to the addition of several

new customers during 2023 as well as key customers returned to pre-Covid 19 pandemic numbers.

Net investment income of $385,000 as

of December 31, 2023 decreased 39% from $630,000 as of December 31, 2022 due to a number of notes receivable deemed uncollectible

and impaired during 2023.

printing products, decreased 13% in 2024 as compared to 2023.

The decrease is due primarily to orders expected to ship during the

4 th quarter 2022 being pushed to the 1st quarter 2023 as well as decrease in orders from two existing customers during

Rental income decreased 51% due a tenant at our AMRE LifeCare subsidiary not making rent payments.

Company’s Direct Marketing revenues decreased 72% in 2023 as compared to 2022 primarily to due to the deconsolidation of SHRG

financial in April 2023.

Commission revenue, associated with Sentinel Brokers Company subsidiary, increase 458% due to consolidating

a full year of result in 2023 versus 1 month in 2022.

December 31, 2023

December 31, 2022

Cost of revenue - printed products

Cost of revenue - securities

Cost of revenue – Biotechnology

Cost of revenue – commercial lending

Cost of revenue – Direct Marketing

Cost of revenue – other

Sales, general and administrative compensation

Professional fees

Stock based compensation

Sales and marketing

Rent and utilities

Research and development

Other operating expenses

Total costs and expenses

of revenue includes all direct costs of the Company’s printed products, including its packaging and printing sales

and its direct marketing sales, materials, direct labor, transportation, and manufacturing facility costs.

In addition, this

category includes all direct costs associated with the Company’s technology sales, services and licensing including hardware

and software that are resold, third-party fees, and fees paid to inventors or others because of technology licenses or settlements,

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.

Total costs of revenue

decreased 34% in 2023 as compared to 2022, primarily due to the deconsolidation of SHRG financial results beginning in April

2023, offset by the increase price of labor, paper and other raw materials associated with our printing and packaging

division as well as cost associated with direct marketing product manufacturing and procurement.

general and administrative compensation costs, decreased 68% in 2023 as compared to 2022, primarily due to the deconsolidation

of SHRG financial results beginning in April 2023.

fees decreased 60% in 2023 as compared to 2022, primarily due to a decrease in legal fees associated with the direct marketing

segment, accounting fees, and due diligence fees related to potential acquisitions.

Net investment income of

$226,000 as of December 31, 2024 decreased 41% from $385,000 as of December 31, 2023 due to a number of notes receivable deemed

uncollectible and impaired during 2024.

The Company’s Direct Marketing revenues decreased 100% in 2024 as compared to 2023 as

the change in business plan from maintaining its own sales force to licensing its products at our subsidiary HWH World has been slow

to generate revenue.

Commission revenue, associated with Sentinel Brokers Company subsidiary, decrease 41% due to decreases in

commissions on equity trading resulting from a change in clearing houses which required such transactions to be put on hold during

the transition.

Biotechnology

general and administrative compensation

based compensation

and marketing

and utilities

and development

of fixed assets

operating expenses

costs and expenses

of revenue includes all direct costs of the Company’s printed products, including its packaging and printing sales and its

direct marketing sales, materials, direct labor, transportation, and manufacturing facility costs.

In addition, this category includes

all direct costs associated with the Company’s technology sales, services and licensing including hardware and software that are

resold, third-party fees, and fees paid to inventors or others because 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.

Total costs of revenue decreased 7% in 2024 as compared to 2023,

primarily due to the decrease in revenue associate with the change in the Direct marketing business plan that has been slow to generate

revenue as well as decrease in revenues from our Printed product business line.

general and administrative compensation costs, decreased 19% in 2024 as compared to 2023, primarily related the decrease in head

count as the change in business plan from maintaining our own sales force for the Direct marketing business segment to licensing its

fees decreased 16% in 2024 as compared to 2023, primarily due to a decrease in legal fees associated with the direct marketing segment,

accounting fees, and due diligence fees related to potential acquisitions.

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

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

There was no stock based compensation during the year ended

December 31, 2023.

and marketing costs, which includes internet and trade publication advertising, travel and entertainment costs,

sales-broker commissions, and trade show participation expenses, decreased 64% during 2023 as compared to 2022, primarily due to

decreased direct marketing distributor commissions due to the deconsolidation of SHRG financial results beginning in April 2023 as

well as the sale of our HWH World Holdings subsidiary in June 2023.

and utilities decreased 19% during the year ended December 31, 2023, as compared to the same period in 2022 respectively,

primarily due to end of the lease in Tennessee for AMRE office space and California for the Company’s DSS Wealth Management

subsidiary as well as the deconsolidation of SHRG.

The Company rented additional space at our facility leased in Houston, Texas started during the 2022 as well as Premier

Packaging’s leased facility beginning in March 2022.

Such awards include

option grants, warrant grants, and restricted stock awards.

Stock based compensation during the year ended December 31, 2024, is associated

with such awards given to officers, directors and consultants of Impact BioMedical.

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

and trade show participation expenses, increased 3% during 2024 as compared to 2023, primarily due to increases in our Printed Products

and Biotechnology business segments offset by the decrease in such cost associated with our Direct marketing business segment,

and utilities decreased 14% during the year ended December 31, 2024, as compared to the same period in 2023 respectively, primarily

due to end of the lease in Tennessee for AMRE office space and California for the Company’s DSS Wealth Management subsidiary.

and development costs consist primarily of third-party research costs and consulting costs.

During the year ended December 31, 2024,

Research and development costs decreased 9% as compared to the same period in 2022 primarily due to decrease in such activities

at our Impact Biomedical, Inc.

Research and development costs decreased 84% as compared to the same period in 2023 primarily due to decrease in such activities at our

Impact Biomedical, Inc.

of goodwill during the 4 th quarter of 2023, the Company performed qualitative and quantitative assessments of the goodwill

value associated with its APF and Sentinel subsidiaries and determined that as of December 31, 2023 both assets required impairment.

At December 31, 2023, the Company fully impaired the value of APF and Sentinel goodwill of approximately $29,744,000 and $1,234,000,

respectively.

Similarly, the Company performed a similar evaluation during the year ended December 31, 2024 and deemed an full

impairment of the Impact BioMedical goodwill was necessary in the amount of $25,093,000.

of fixed assets is the impairment of marketing assets in development that the Company decided to forego completion.

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

During the year ended December 31, 2023, other operating expenses increased 65% as compared to the same period in 2022, due primarily

to the reserves put against rent receivables at our AMRE subsidiary approximating $2.4 million.

the year ended December 31, 2024, other operating expenses decreased 68% compared to the same period in 2023, due primarily to the reserves

put against rent receivables at our AMRE subsidiary approximating $3.0 million in 2023 as the tenant was unable to pay rent.

Income and Expense

December 31, 2023

December 31, 2022

Interest income

Interest expense

Dividend Income

Loss on investments

(32,986,000 )

(10,697,000 )

Loss from equity method investment

Impairment of fixed assets

Impairment of real estate investments

Impairment of investment

Litigation loss

Impairment of goodwill

(30,978,000 )

Provision for loan losses

Gain on extinguishment of debt

Loss on sale of assets

Total other expense

$ (76,038,000 )

$ (23,019,000 )

income on notes receivable, related party

currency translation adjustment

on equity method investment

Gain/(loss) on investments

of intangible assets

of real estate assets

of assets upon deconsolidation of SHRG

Impairment of investments

for loan losses

on sale of assets

other expense

income is recognized on the Company’s money markets, and notes receivable identified in Note 5.

expense increased 339% year-over-year primarily due to the increase in debt at Premier Packaging during 2023 as well an increase

in interest rate associated with the debt at LVAM.

Dividend income

for the years ended December 31, 2023 and 2022 represent

dividends received on certain marketable securities owned by the Company.

income decreased 85% during the year 2023 as compared to 2022 and is driven by origination fees, and tax benefits

at SHRG associated with 2022.

on investments consists of net realized and unrealized losses on marketable securities which are recognized as the difference

The decrease of 79% year

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

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

The decrease of 40% year over year 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 for the year ended December 31, 2023 represent dividends received on certain marketable securities owned by the Company.

such dividends were received in 2024.

income decreased 59% during the year 2024 as compared to 2023 due primarily to income incurred in 2023 regarding the Company’s

distribution agreement with BioMed Technologies.

expense decreased 49% year-over-year primarily due to the increase in debt at Premier Packaging and LVAM during 2024.

(loss) from equity method investment represents the Company’s prorated portion of earnings for its investments accounted for

under the equity method for the year ended December 31, 2024, and 2023.

The transition from a loss of $34,000 in 2023 to a gain of $1,000 in 2024 is indicative of the related companies

financial performance improving year over year.

Gain/(loss) on investments consists of net realized and unrealized 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.

Also included is a loss approximating $29.2 million associated

with the Deconsolidation of SHRG (see Note 2).

of investments is driven by the Company impairment of its investment in Vivacitas approximately $4,100,000 as of December

(loss) from equity method investment represents the Company’s prorated portion of earnings for its investments accounted

for under the equity method for the year ended December 31, 2023, and 2022.

Impairment of fixed assets

as of December 31, 2022 is associated with the write down of fair value of SHRG’s Lindon, Utah property.

of investments in real estate At

December 31, 2023, the Company performed an assessment of the fair value of its AMRE LifeCare and AMRE Winter Haven properties and

determined an impairment was necessary.

loss represents the Company’s cost to settle its litigation with Maiden Biosciences litigation, which was settled, and

the Court’s December 20, 2022 judgment was vacated, and the case was dismissed with prejudice (see Note 17).

of goodwill during the 4 th quarter of 2023, the Company performed qualitative and quantitative assessments of the

goodwill value associated with its APB and Sentinel subsidiaries and determined that as of December 31, 2023 both assets required

At December 31, 2023, the Company fully impaired the value of APB and Sentinel goodwill of approximately $29,744,000 and

$1,234,000, respectively.

for loan losses during the year ended December 31, 2023, the Company reviewed the entire loan portfolio and determined specific loans

required an allowance for credit losses.

on extinguishment of debt During the three months ended June 30, 2022, AAMI $110,000 SBA Paycheck Protection Program

was forgiven in full.

on sale of assets is driven by the Company’s loss on the sale of equity of HWH Holdings Inc and loss on sale of assets

of HWH World as identified in Note 7.

The improvement in our marketable securities year over year is driven by an improved performance in our True Partners

Capital Holdings Limited investment which incurred an approximate loss in fair value of $3,224,000 in 2023 as compared to gain in fair

value of approximately $591,000 in 2024.

of intangible assets represents the impairment of certain intangible assets associated with our AMRE LifeCare properties that during

2023 were deemed unrecoverable.

of real estate represents a write-down of real estate assets associated with our AMRE LifeCare properties during 2023 based on a

fair value analysis performed as of December 31, 2023.

A fair value analysis was performed during 2024 which resulted in a $2,973,000

impairment of the AMRE LifeCare Pittsburgh and Fort Worth locations.

Further, the Company executed a purchase agreement for its AMRE

LifeCare Plano location with a sale price at approximately $4,250,000 below its 2023 fair value.

This transaction closed on March 26,

of investments the Company determined an impairment of

its investments in Nano9 and BioMed Technologies was necessary in the amounts of $150,000 and $632,000, respectively, at December 31,

of assets upon deconsolidation is driven by the Company’s distribution of approximately 280 million shares of SHRG in May 2023

which resulted in a decrease in its ownership percentage of SHRG’s common stock from approximately 81% to 7%.

for loan losses represents a reserve put against certain notes receivable deemed uncollectible.

During the year ended December

31, 2024, the Company reviewed the entire loan portfolio and determined specific loans required an allowance for credit losses.

on sale of assets the gain in 2024 is driven by the sale of its Linden, Ut facility while, the loss in 2023 is driven by the

Company’s loss on the sale of equity of HWH Holdings Inc and loss on sale of assets of HWH World as identified in Note 8.

and Capital Resources

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

and debt financing.

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

As of December 31, 2024, the Company had cash of approximately $11.4 million.

As of December 31, 2023, the Company

believes that it has sufficient cash to meet its cash requirements for at least the next 12 months from the filing date of this Annual

In addition, the Company believes that it will have access to sources of capital from the sale of its equity securities and debt

As of December 31, 2024, the Company believes that it has

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

the Company believes that it will have access to sources of capital from the sale of its equity securities and debt financing.

Flow from Operating Activities

1 unchanged sentence

million for the year ended December 31, 2023.

This decrease is driven by a decrease in net loss from operations with

adjustments to reconcile net loss from operations to net

cash used by operating activities of approximately $30.8 million year over year, offset by increase in payments of accrued

expenses of approximately $20.1 million and accounts payable of $1.8 million year over year.

This decrease is driven by a decrease in payments of accrued expenses of approximately

$15.8 million, accounts payable of $1.4 million year over year as well as an increase other liabilities incurred, not paid of approximately $3.2 million.

Flow from Investing Activities

cash provided by investing activities was approximately $8.9 million for year ended December 31, 2023 as compared to net cash used

approximately $18.0 million for the year ended December 31, 2022.

During the year ended December 31, 2022, we purchased $2.3 million

in property, plant, and equipment, $14.9 million of marketable securities, and issued $3.6 million in new notes receivable.

comparison, the Company sold $9.5 million in marketable securities and issued $1.0 million in new notes receivable for the year

ended December 31, 2023.

cash provided by investing activities was approximately $8.8 million for the year ended December 31, 2024 and $8.9 million for year ended

December 31, 2023.

The year ended December 31, 2024 included $5.6 million in cash provided by the sale of our Lindon, UT

facility, $3.0 million of cash provided by the sale of marketable securities, as well as $4.2 million received from notes receivable

offset by the $3.3 million purchases of investments.

In comparison, the Company sold $9.5 million in marketable securities and

issued $1.0 million in new notes receivable for the year ended December 31, 2023.

Flow from Financing Activities

cash used by financing activities was approximately $2.4 million for the year ended December 31, 2023 as compared to net cash provided $7.6 million

for the year ended December 31, 2022.

During the year ended December 31, 2022, we borrowed $9.6 million of long-term debt as compared

to $1.8 million during the year ended December 31, 2023.

cash provided by financing activities for the year ended December 31, 2024 was $5.1 million due to $4.5 million of additional

borrowings on long-term debt as well as $3.2 million of proceeds received from Impact BioMedical’s IPO offset by $2.6 million

of payments toward long-term debt.

Net cash used by financing activities was approximately $2.4 million for the year ended December

31, 2023 driven by payments toward long-term debt of $4.2 million offset by borrowings of long-term debt of $1.8 million.

Operations and Going Concern

5 unchanged sentences

While the Company has approximately $11.4 million in cash, the Company

has incurred operating losses as well as negative cash flows from operating and investing activities over the past two years.

from its $6.6 million in cash as of December 31, 2023, the Company believes it can continue as a going concern, due to its ability

to generate operating cash through the sale of its $10.0 million of Marketable Securities, and the anticipated receipts of principal

and interest on its Notes receivable of approximately $8.8 million through December 31, 2024.

The Company has also taken steps to

sell its real estate holdings in Utah, Texas, Pennsylvania, and Florida.

These properties approximate $51.6 million in assets and

are identified on the accompanying balance sheet as Held for sale.

In addition, the Company has taken steps, and will continue to

take measures, to materially reduce the expenses and cash burn at all corporate and business line levels.

Although there are no

assurances, we believe the above would allow us to fund our nine business lines current and planned operations for the twelve months

from the filing date of this Annual Report.

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

continue as a going concern has been alleviated.

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

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.

Sheet Arrangements

We do not have any

off-balance sheet arrangements that have, or are reasonably likely to have, an effect on our financial condition, financial statements,

revenues or expenses.

Although our operations

are influenced by general economic conditions, we do not believe that inflation had a material effect on our results of operations during

2023 or 2022 as we are generally able to pass the increase in our material and labor costs to our customers or absorb them as we improve

the efficiency of our operations.

do not have any off-balance sheet arrangements that have, or are reasonably likely to have, an effect on our financial condition, financial

statements, revenues or expenses.

our operations are influenced by general economic conditions, we do not believe that inflation had a material effect on our results of

operations during 2024 or 2023 as we are generally able to pass the increase in our material and labor costs to our customers or absorb

them as we improve the efficiency of our operations.

Accounting Policies

The preparation of

financial statements and related disclosures in conformity with U.S.

GAAP requires management to make judgments, assumptions and estimates

that affect the amounts reported in our financial statements and accompanying notes.

preparation of financial statements and related disclosures in conformity with U.S.

GAAP requires management to make judgments, assumptions

and estimates that affect the amounts reported in our financial statements and accompanying notes.

The financial statements as of December

31, 2024, describe the significant accounting policies and methods used in the preparation of the financial statements.

There have been no material

changes to such critical accounting policies as of the Annual Report on Form 10-K for the year ended December 31, 2022.

There have been

no material changes to such critical accounting policies as of the Annual Report on Form 10-K/A for the year ended December 31, 2023.

For Loans and Lease Losses

On January 1, 2022,

the Company adopted amended accounting guidance “ ASU

No.2016-13 – Credit Losses” which requires an allowance for credit losses to be deducted from the amortized cost

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

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

the collectability of the reported 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.

Prior to 2022, the allowance for credit losses represented the amount

that in management’s judgment reflected incurred credit losses inherent in the loan and lease portfolio as of the balance sheet

The Company adopted amended accounting

guidance 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

In estimating expected losses in the loan and lease portfolio, borrower-specific financial data and macro-economic assumptions

are utilized to project losses over a reasonable and supportable forecast period.

Assumptions and judgment are applied to measure amounts

and timing of expected future cash flows, collateral values and other factors used to determine the borrowers’ abilities to repay

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

contractual life of the loans.

Value of Financial Instruments

Fair value is defined

as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants

at the measurement date.

The Fair Value Measurement Topic of the Financial Accounting Standards Board (“FASB”) Accounting

Standards Codification (“ASC”) establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities

(Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between

market participants at the measurement date.

The Fair Value Measurement Topic of the Financial Accounting Standards Board (“FASB”)

Accounting Standards Codification (“ASC”) establishes a three-tier fair value hierarchy which prioritizes the inputs used

in measuring fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets

or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

These tiers include:

● Level 1, defined as observable

inputs such as quoted prices for identical instruments in active markets.

● Level 2, defined as inputs other

than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments

in active markets or quoted prices for identical or similar instruments in markets that are not active;

● Level 3, defined as unobservable

inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived

from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The carrying amounts

reported in the consolidated balance sheet of cash and cash equivalents, accounts receivable, prepaids, accounts payable and accrued

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

Marketable securities

classify as a Level 1 fair value financial instrument.

The fair value of notes receivable approximates their carrying value as the stated

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

The fair value of revolving credit lines notes payable and

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

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

Investments in equity

securities with a readily determinable fair value, not accounted for under the equity method, are recorded at that value with unrealized

gains and losses included in earnings.

For equity securities without a readily determinable fair value, the investment is recorded at

cost, less any impairment, plus or minus adjustments related to observable transactions for the same or similar securities, with unrealized

gains and losses included in earnings.

For equity method

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

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.

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.

measured as the amount of consideration the Company expects to receive in exchange for shipped product or service provided.

other taxes billed and collected from customers are excluded from revenue.

The Company recognizes rental income associated with its REIT,

net of amortization of favorable/unfavorable lease terms relative to market and includes rental abatements and contractual fixed increases

attributable to operating leases, where collection has been considered probable, on a straight-line basis over the term of the related

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

The Company generates revenue from its direct marketing line of business primarily through internet sales and recognizes revenue as items

As of December 31,

2023, the Company had no unsatisfied performance obligations for contracts with an original expected duration of greater than one year.

Pursuant to Topic 606, the Company has applied the practical expedient with respect to disclosure of the deferral and future expected

timing of revenue recognition for transaction price allocated to remaining performance obligations.

The Company elected the practical

expedient allowing it to not recognize as a contract asset the commission paid to its salesforce on the sale of its products as an incremental

cost of obtaining a contract with a customer but rather recognize such commission as expense when incurred as the amortization period

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

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

Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets.

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted

prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,

such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

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

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

securities classify as a Level 1 fair value financial instrument.

The fair value of notes receivable approximates their carrying value

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

The fair value of revolving credit lines notes

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

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

in equity securities with a readily determinable fair value, not accounted for under the equity method, are recorded at that value with

unrealized gains and losses included in earnings.

For equity securities without a readily determinable fair value, the investment is

recorded at cost, less any impairment, plus or minus adjustments related to observable transactions for the same or similar securities,

with unrealized gains and losses included in earnings.

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

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

See Note 9 for further

discussion on investments.

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

Revenue is measured as the amount of consideration the Company expects to receive in exchange for shipped product or service provided.

Sales and other taxes billed and collected from customers are excluded from revenue.

The Company recognizes rental income associated

with its REIT, net of amortization of favorable/unfavorable lease terms relative to market and includes rental abatements and contractual

fixed increases attributable to operating leases, where collection has been considered probable, on a straight-line basis over the term

of the related lease.

The Company recognizes net investment income from its investment banking line of business as interest 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, 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.

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.

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

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.

Accordingly, the Company has

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

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

Discontinued Operations.

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.

Acquisition of assets are recorded

at their relative fair value based on total accumulated costs of the acquisition.

Direct acquisition-related costs are expensed as incurred.

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.

of assets are recorded at their relative fair value based on total accumulated costs of the acquisition.

Direct acquisition-related costs

are expensed as incurred.

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

The allocation of the purchase price is an area

that requires judgment and significant estimates.

Tangible and intangible assets include land, building and improvements, furniture,

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

Acquisition-date fair values

of assets and assumed liabilities are determined based on replacement costs, appraised values, and estimated fair values using methods

like those used by independent appraisers and that use appropriate discount and/or capitalization rates and available market information.

The allocation of the

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

Tangible and intangible assets include land, building and

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

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

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

available market information.

November 2023, the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”)

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure

through enhanced disclosures about significant segment expenses.

The amendment is effective for fiscal years beginning after December

15, 2023 and for interim periods within fiscal years beginning after December 15, 2024 and early adoption is permitted.

The amendments

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

The Company has adopted the enhanced segment

disclosures for the year ended December 31, 2024.

7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

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 7. Management’s Discussion and Analysis