What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-05-15 compared with 2024-11-13 · 243 added, 290 removed, 74 unchanged (88% of the section changed)

10 unchanged sentences

in the forward-looking statements.

Company, incorporated in the state of New York in May 1984 has conducted business in the name of Document Security Systems, Inc.

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 name change from Document Security Systems, Inc.

change became effective on September 30, 2021.

maintained the same trading symbol “DSS” and updated its CUSIP number

to 26253C 102.

Company, incorporated in the state of New York in May 1984 has conducted business in the name of DSS, 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 name change from Document Security Systems, Inc.

This change became

effective on September 30, 2021.

maintained the same trading symbol “DSS”.

(together with its consolidated subsidiaries, referred to herein as “DSS,” “we,” “us,” “our”

1 unchanged sentence

business lines are:

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

(6) Alternative Trading (7) Digital Transformation (discontinued in 2023), (8) Secure Living (discontinued in 2023), and (9) Alternative

Energy (discontinued in 2023).

Each of these business lines are in different stages of development, growth, and income generation.

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

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

2 unchanged sentences

(“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) The Biotechnology business line was created to invest in or

acquire companies in the BioHealth and BioMedical fields, including businesses focused on the advancement of drug discovery and

prevention, inhibition, and treatment of neurological, oncological, and immune related diseases.

This division is also targeting

unmet, urgent medical needs, and is developing open-air defense initiatives, which curb transmission of air-borne infectious

diseases, such as tuberculosis and influenza.

(3) Direct Marketing, led by the holding corporation, Decentralized Sharing Systems,

(“Decentralized”) provides services to assist companies in the emerging growth “Gig” business model of

peer-to-peer decentralized sharing marketplaces.

Direct Marketing’s products include, among other things, nutritional and

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

(4) Our Commercial Lending

business division, driven by American Pacific Financial, Inc.

(“APF”, formally American Pacific Bancorp, Inc.

“APB”), is organized for the purposes of being a financial network holding company, focused on acquiring equity

positions in (i) undervalued commercial bank(s), bank holding companies and nonbanking licensed financial companies operating in the

United States, South East Asia, Taiwan, Japan and South Korea, and (ii) companies engaged in—nonbanking activities closely

related to banking, including loan syndication services, mortgage banking, trust and escrow services, banking technology, loan

servicing, equipment leasing, problem asset management, SPAC (special purpose acquisition company) consulting services, and advisory

capital raising services.

(5) Securities and Investment Management was established to develop and/or acquire assets in the

securities trading or management arena, and to pursue, among other product and service lines, broker dealers, and mutual funds

Also in this segment is the Company’s real estate investment trusts (“REIT”), organized for the

purposes of acquiring hospitals and other acute or post-acute care centers from leading clinical operators with dominant market

Premier operates in the paper board and fiber based folding carton,

consumer product packaging, and document security printing markets.

It markets, manufactures, and sells sophisticated custom folding

cartons, mailers, photo sleeves and complex 3-dimensional direct mail solutions.

Premier is currently located in its new facility in

Rochester, NY, and primarily serves the US market.

(2) The Biotechnology business line was created to invest in or acquire companies

in the BioHealth and BioMedical fields, including businesses focused on the advancement of drug discovery and prevention, inhibition,

and treatment of neurological, oncological, and immune related diseases.

This division is also targeting unmet, urgent medical needs,

and is developing open-air defense initiatives, which curb transmission of air-borne infectious diseases, such as tuberculosis and influenza.

(3) Our Commercial Lending business division, driven by American Pacific Financial (“APF”), is organized for the purposes

of being a financial network holding company, focused on acquiring equity positions in (i) undervalued commercial bank(s), bank holding

companies and nonbanking licensed financial companies operating in the United States, South East Asia, Taiwan, Japan and South Korea,

and (ii) companies engaged in—nonbanking activities closely related to banking, including loan syndication services, mortgage banking,

trust and escrow services, banking technology, loan servicing, equipment leasing, problem asset management, SPAC (special purpose acquisition

company) consulting services, and advisory capital raising services.

(4) Securities and Investment Management was established to develop

and/or acquire assets in the securities trading or management arena, and to pursue, among other product and service lines, broker dealers,

and mutual funds management.

Also in this segment is the Company’s real estate investment trusts (“REIT”), organized

for the purposes of acquiring hospitals and other acute or post-acute care centers from leading clinical operators with dominant market

share in secondary and tertiary markets, and leasing each property to a single operator under a triple-net lease.

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

(6) Alternative Trading was

established to develop and/or acquire assets and investments in the securities trading and/or funds management arena.

Trading, in partnership with recognized global leaders in alternative trading systems, intends to own and operate in the US a single

or multiple vertical digital asset exchanges for securities, tokenized assets, utility tokens, and cryptocurrency via an alternative

trading platform using blockchain technology.

The scope of services within this section is planned to include asset issuance and

allocation (securities and cryptocurrency), FPO, IPO, ITO, PPO, and UTO listings on a primary market(s), asset

digitization/tokenization (securities, currency, and cryptocurrency), and the listing and trading of digital assets (securities and

cryptocurrency) on a secondary market(s).

(7) Digital Transformation was established to be a Preferred Technology Partner and

Application Development Solution for mid cap brands in various industries including the direct selling and affiliate marketing

Digital improves marketing, communications and operations processes with custom software development and implementation

(discontinued in 2023).

(8) The Secure Living division has developed a plan for fully sustainable, secure, connected, and healthy

living communities with homes incorporating advanced technology, energy efficiency, and quality of life living environments both for

new construction and renovations for single and multi-family residential housing (discontinued in 2023).

(9) The Alternative Energy

group was established to help lead the Company’s future in the clean energy business that focuses on environmentally

responsible and sustainable measures.

Alset Energy, Inc, the holding company for this group, and its wholly owned subsidiary, Alset

Solar, Inc., pursue utility-scale solar farms to serve US regional power grids and to provide underutilized properties with small

microgrids for independent energy (discontinued in 2023).

December 23, 2021, DSS purchased 50,000,000 shares at $0.06 per share of Sharing Services Global Corporation (“SHRG”) via

a private placement.

With this purchase, DSS increased its ownership of voting shares from approximately 47% of SHRG to approximately

On January 24, 2022, the Company exercised 50,000,000 warrants received as part of a consulting agreement with SHRG at the exercise

price of $0.0001, bring its ownership percentage of voting shares to approximately 65%.

SHRG aims to build shareholder value by developing

or acquiring businesses that increase the Company’s product and services portfolio, business competencies and geographic reach.

Currently, the Company, through its subsidiaries, markets and distributes its health and wellness and other products primarily in the

United States, Canada, and the Asia Pacific region using a direct selling business model.

The Company markets its products and services

through its independent sales force, using its proprietary websites, including:

www.elevacity.com and www.thehappyco.com.

headquartered in Plano, Texas, was incorporated in the State of Nevada on April 24, 2015, and is an emerging growth company.

The Company’s

Common Stock is traded, under the symbol “SHRG,” in the OTCQB Market, an over-the-counter trading platforms market operated

by OTC Markets Group Inc.

On May 4, 2023, the Company distributed approximately 280 million shares of SHRG beneficially held by DSS and

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

Upon completion of this distribution,

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

Immediately prior to this distribution, DSS owned approximately 81%

of the issued and outstanding common shares of SHRG.

As a result, SHRG, whose operations represented a significant portion of our Direct

Marketing segment, was deconsolidated from our consolidated financial statements effective as of May 1, 2023 (the “Deconsolidation”).

The consolidated statement of operations for the fiscal quarter ended September 30, 2023, therefore includes one month of activity related

to SHRG prior to the Deconsolidation.

Subsequent to April 30, 2023 the assets and liabilities of SHRG are no longer included within our

consolidated balance sheets.

Any discussions related to results, operations, and accounting policies associated with SHRG refer to the

periods prior to the Deconsolidation.

the REIT was formed

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

(5) Direct Marketing, led by the holding

corporation, Decentralized Sharing Systems, Inc.

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

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

Direct Marketing’s products include,

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

five reporting segments are as follows:

8 unchanged sentences

printing, brand protection, consumer engagement and related technologies.

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

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.

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.

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

represents our banking and 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”) Impact BioMedical, Inc.

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

Impact 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, Impact BioMedical provides advances in drug discovery

for the prevention, inhibition, and treatment of neurological, oncology and immuno-related diseases.

Other technologies include a breakthrough

alternative sugar aimed to combat diabetes and functional fragrance formulations aimed at the industrial and medical industry.

business model of BioHealth and Impact BioMedical revolves around two methodologies – Licensing and Sales Distribution.

Impact develops valuable and unique patented technologies which will be licensed to pharmaceutical, large consumer package goods

companies and venture capitalists in exchange for usage licensing and royalties.

Impact utilizes the DSS ecosystem to leverage its sister companies that have in place distribution networks on a global scale.

will engage in branded and private labelling of certain products for sales generation through these channels.

This global distribution

model will give direct access to end users of Impact’s nutraceutical and health related products.

(“Biotech”) targets unmet, urgent medical needs and expands the borders of medical and pharmaceutical science.

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.

has several important and valuable products, technology or compounds that are in continuing development and/or licensing stages:

Multi-faceted therapeutic platform for metabolic, neurologic, cancer, and infectious diseases.

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.

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.

Applications as food additive, and natural preservative for beauty and person care products as well as natural food preservative.

Food preservative booster made up of polyphenols that extend the shelf life.

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,

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 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.

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.

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.

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.

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

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

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.

and Investment Management:

2 unchanged sentences

mutual funds management.

This business sector has already established the following business lines and associated products and services:

This business sector has already established the following business lines/investments and associated products

and services:

Management Fund:

3 unchanged sentences

and critical care businesses.

Brokers Company, Inc.:

Sentinel primarily operates as a financial intermediary, facilitating institutional trading of municipal

and corporate bonds as well as preferred stock, and accelerates the trajectory of the DSS digital securities business.

AmericaFirst:

DSS AmericaFirst is a suite of mutual funds managed by DSS Wealth Management.

DSS AmericaFirst expects to expand

into numerous investment platforms including additional mutual funds, exchange-traded funds, unit investment trusts, and closed-end

DSS AmericaFirst currently consists of four mutual funds that seek to outperform their respective benchmark indices by applying

a quantitative rules-based approach to security selection.

(“Direct”) Through its holding company, Decentralized Sharing Systems, Inc.

and its subsidiaries and partners,

provide an array of products and services which include, among other things, nutritional and personal care products sold throughout North

America, Asia Pacific and Eastern Europe, through licensing agreements.

of operations for the three and nine months ended September 30, 2024, as compared to the three and nine months ended September 30, 2023.

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 primarily operates as a financial intermediary, facilitating institutional trading of municipal and corporate bonds

as well as preferred stock, and accelerates the trajectory of the DSS digital securities business.

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.

Wealth Management:

AmericaFirst is a suite of mutual funds managed by DSS Wealth Management.

AmericaFirst expects to expand into

numerous investment platforms including additional mutual funds and exchange-traded funds.

AmericaFirst currently consists of four

mutual funds that seek to outperform their respective benchmark indices by applying top-down, fundamental research, quantitative

and technical analysis to stock selection and portfolio management.

Marketing Segment :

provides services to assist companies in the emerging growth gig business model of peer-to-peer decentralized

sharing marketplaces.

It specializes in marketing and distributing its products and services through its subsidiary and partner network,

using the popular gig economic marketing strategy as a form of direct marketing.

Direct marketing products include, among other things,

nutritional and personal care products sold throughout North America, Asia Pacific and Eastern Europe.

of operations for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.

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/A for the year ended December 31, 2023.

September 30,

(as restated)

Printed products

Rental income

Net investment income

Commission revenue

Direct marketing

Total Revenue

For the three months ended September

30, 2024, total revenue increased 34% as compared to the three months ended September 30, 2023.

The increase in Printed Product revenue

of approximately 46% is driven by new customer orders.

The increases in Rental income of 110% is driven by new tenants at AMRE LifeCare

Pittsburg facility being making rental payments in 2024.

The decreases in Net investment income approximating 58% is due to a

number of loans made going on non-accrual as borrowers have struggled to make expect payments.

The Company’s Direct Marketing revenues

decreased 100% as the change in business plan from maintaining its own sales force to licensing its products has been slow to generate

For the nine months ended September

30, 2024, total revenue decreased 28% as compared to the nine months ended September 30, 2023.

Revenues from the sale of Printed products

decreased 12% 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.

The decreases in Rental income of 61% is driven by the tenants at AMRE LifeCare

being unable to make rental payments in 2024.

The decreases in Net investment income approximating 57% is due to a number of loans made

going on non-accrual as borrowers have struggled to make expect payments.

The Company’s Direct Marketing revenues decreased 100%

as the change in business plan from maintaining its own sales force to licensing its products has been slow to generate revenue.

September 30,

(as restated)

Report on Form 10-K for the year ended December 31, 2024.

March 31, 2025

March 31, 2024

Product Packaging

Commercial Lending

Biotechnology

the three months ended March 31 2025, total revenue increased 28% as compared to the three months ended March 31, 2024.

in Printed Product revenue of approximately 30% is driven by new customer orders as well as existing customer orders exceeding their

The increases in Rental income of 79% is driven by new tenants at AMRE LifeCare Pittsburg facility beginning to making rental

payments in the second half of 2024.

The decreases in Net investment income approximating 78% is due to a number of loans made going

on non-accrual as borrowers have struggled to make expect payments.

Commission revenue, associated with Sentinel Brokers Company subsidiary,

decrease 27% 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.

This revenue stream has begun to ramp up during the first quarter of 2025.

March 31, 2025

March 31, 2024

Cost of revenue

Printed products

Product Packaging

Biotechnology

Commercial lending

Direct marketing

Commercial Lending

Sales, general and administrative compensation

Professional fees

Stock based compensation

Sales and marketing

3 unchanged sentences

Total costs and expenses

of revenue include 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 Securities

operating segments is comprised mainly of our REIT line of business and 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 5% for nine months ended September 30, 2024 as compared to 2023 is primarily related 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.

Sales, general and administrative

compensation costs, excluding stock-based compensation, decreased 18% for nine months ended September 30, 2024 as compared to 2023

is 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 products.

Professional fees decreased

32% for nine months ended September 30, 2024 as compared to 2023 due primarily to primarily due to efforts taken to decrease these cost

primarily at the Company’s Impact Bio subsidiary in anticipation of its IPO.

Sales and marketing which

include internet and trade publication advertising, travel and entertainment costs, sales-broker commissions, and trade show participation

Sales and marketing remained flat during the nine months ended September 30, 2024 as compared to 2023 due as the decrease in

such cost associated with our Direct marketing business segment were offset by increases in our Printed Products and Biotechnology business

Rent and utilities decreased

15% during the nine months ended September 30, 2024 as compared to 2023 primarily due to end of the lease in Tennessee for AMRE office

space and California for the Company’s DSS Wealth Management subsidiary.

Research 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.

These costs decreased 93% the nine months ended September 30, 2024 as compared

to September 30, 2023, due primarily to the cessation of the Company’s research and development contract with GRDG at the end of

Other operating expenses consist

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

These costs decrease approximately 56%

during the nine months ended September 30, 2024 as compared to September 30, 2023, due primarily to the write-off of accounts receivable

associated with our AMRE LifeCare facilities of approximately $3,023,000 in 2023 as the tenant was unable to pay rent.

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 increased 4% in 2025 as compared to 2024,

primarily due to the increase in revenue associated with our Printed product business line.

general and administrative compensation costs, excluding stock-based compensation, increased 67% for three months ended March 31,

2025 as compared to 2024 is primarily due 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, 2025.

fees decreased 49% for three months ended March 31, 2025 as compared to 2024 due primarily to efforts taken to decrease these costs

as the Company continues to drive savings in non-essential areas.

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.

These types of awards were not used prior

to the Company’s IPO in September 2024.

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 19% during the three months ended March 31, 2025 as compared to

2024 due to decreases in marketing, and travel costs within our Printed Products division quarter over quarter.

and utilities decreased 7% during the three months ended March 31, 2025 as compared to 2024 primarily due to end of the lease in

office space in California for the Company’s DSS Wealth Management subsidiary.

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.

These costs increased 372% the three months ended March

31, 2025 as compared to March 31, 2024, due primarily to increased efforts in this area post Impact Bio’s IPO in September 2024.

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

These costs decreased approximately 73% during the three months ended March 31, 2025 as compared to March 31, 2024, primarily due to

collections of previously written-off of accounts receivable associated with our AMRE LifeCare facilities of approximately

Income (Expense)

September 30,

(as restated)

March 31, 2025

March 31, 2024

Interest Income

Dividend Income

Other Income (expense)

Interest Expense

Foreign Currency Translation Adjustment

(Loss) gain on equity method investment

(Loss) gain on investments

$ (1,021,000 )

$ (2,471,000 )

Impairment of assets upon deconsolidation

$ (6,220,000 )

Loss on equity method investment

Loss on investments

Provision for loan losses

$ (4,936,000 )

Gain (loss) on sale

$ (1,281,000 )

Total other income

$ (1,030,000 )

$ (1,577,000 )

$ (1,638,000 )

Loss on sale of real estate

Total other expense

$ (1,637,000 )

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.

(expense) for the nine months ended September 30, 2024 as compared to 2023 decreased 72% due primarily to income incurred in

2023 regarding the Company’s distribution agreement with BioMed Technologies.

Interest expenses decreased

45% during the nine months ended September 30, 2024, as compared to the same period in 2023, due to decreasing debt balances.

(Loss) gain 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 September 30, 2024 as compared to 2023.

(Loss) gain 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 nine months ended September

30, 2024 as compared to 2023 is driven by better performance of our stock portfolio.

Impairment of assets upon deconsolidation

represents the impairment of assets recognized due to the deconsolidation of SHRG approximately

$6,220,000 which is recorded as an impairment of assets due to the deconsolidation in

our consolidated statements of operations.

September 30,

Nine months ended

September 30, 2023

(as restated)

Loss from continuing operations

$ (5,701,000 )

$ (6,680,000 )

$ (15,762,000 )

$ (29,580,000 )

Income (loss) from discontinued operations, net of tax

$ (5,701,000 )

$ (6,680,000 )

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 three months ended March 31, 2025 as compared to 2024 decreased 81% due primarily to income incurred in

2024 regarding the Company’s distribution agreement with BioMed Technologies that did not reoccur in 2025.

expenses decreased 31% during the three months ended March 31, 2025, as compared to the same period in 2024, due to decreasing debt

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, 2025 as compared to 2024.

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, 2025 as

compared to 2024 is driven by the performance of our stock portfolio.

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

During the three months ended March

31, 2025, the Company reviewed the entire loan portfolio and determined no additional provisions for loan losses was necessary.

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

March 31, 2025

March 31, 2024

$ (5,296,000 )

$ (5,109,000 )

For the nine months ended September

30, 2024 the Company recorded net losses of $15,762,000 as compared to net losses of $33,061,000 for the same period in 2023.

in net loss is driven by decreases in the Provision for loan losses, impairment of assets upon deconsolidation, the improved performance

of our stock portfolio as well as the deconsolidation of SHRG.

the three months ended March 31, 2025 the Company recorded net losses of $5,296,000 as compared to net losses of $5,109,000 for the same

period in 2024.

The increase in net loss is driven by the bonus paid to Heng Fai Holdings Limited of approximately $871,000 during the

first quarter of 2025 as well as an approximate loss of $683,000 on the sale of the Company’s Plano, Tx facility.

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 September 30, 2024 the Company had cash of approximately $11.6 million.

As of September 30, 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 Quarterly Report.

In addition, the Company

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

The deconsolidation

of SHRG and sale of HWH Holdings, Inc, two companies with historical losses, also is expected to improve future cash flows.

As of March 31, 2025 the Company had cash of approximately $11.0 million.

As of March 31, 2025, 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 Continuing Operating Activities

cash used by operating activities was $9,181,000 for the nine months ended September 30, 2024 as compared to $21,035,000 for nine months ended

September, 2023.

This fluctuation is driven by decreases in net loss, after reconciling items, approximating $371,000.

Also, the Company paid

litigation losses during the 1 st quarter of 2023 of approximately $8,750,000.

cash used by operating activities was $1,638,000 for the three months ended March 31, 2025 as compared to $2,150,000 for three months

ended March 31, 2024.

This fluctuation is driven by decreases in net loss, after reconciling items, approximating $1,816,000 offset by

the paydown of various liabilities approximating $1,121,000.

Flow from Investing Activities

cash provided by investing activities was $9,916,000 for the nine months ended September 30, 2024 as compared to net cash provided by investing

activities of $11,885,000 for the nine months ended September 30, 2023.

This fluctuation is driven by the sale of marketable securities approximating

$11,330,000 during 2023 versus a sale of $3,029,000 during 2024.

This is offset by receipts on Notes receivable of $4,039,000 in 2024

versus $1,419,000 in 2023.

cash provided by investing activities was $12,876,000 for the three months ended March 31, 2025 as compared to net cash provided by

investing activities of $5,097,000 for the three months ended March 31, 2024.

This fluctuation is driven by the sale of real estate

approximating $9,500,000, the sale of marketable securities of approximately $2,806,000, and the sale of related party investments

of approximately $1,500,000, offset by the purchase of marketable securities of approximately $1,000,000 during 2025 versus a sale of

marketable securities of $1,160,000 during 2024.

This is offset by receipts on Notes receivable of $3,971,000 in 2024 versus

$122,000 in 2025.

Flow from Financing Activities

cash provided by financing activities was $4,281,000 for the nine months ended September 30, 2024 as compared to net cash used by financing activities

of $3,243,000 for the nine months ended September 30, 2023.

This variance is driven by payments toward long term debt of $1,492,000 in 2024

versus $4,056,000 in 2023.

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

activities of $310,000 for the three months ended March 31, 2024.

This variance is driven by payments toward long term debt of

$8,997,000 and payments on margin loans of $2,806,000 in 2025 versus payments toward long term debt of $1,062,000 in

2024 and no payments on margin loans during 2024.

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 September 30, 2024.

no material changes to such critical accounting policies as of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2025.

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