DSS, INC. 10-Q

ITEM 1 - FINANCIAL STATEMENTS DSS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets June 30, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 9,384,000 $ 11,431,000 Restricted cash 100,000 - Accounts receivable, net 2,688,000 3,068,000 Inventory, net 2,543,000 2,442,000 Marketable securities 2,974,000 2,442,000 Assets held for sale - 45,158,000 Current portion of notes receivable, net - 240,000 Current portion of notes receivable - related party, net 305,000 337,000 Current portion of notes receivable 305,000 337,000 Prepaid expenses and other current assets 889,000 1,141,000 Total current assets 18,883,000 66,695,000 Property, plant and equipment, net 5,141,000 5,381,000 Investments in real estate, net 35,446,000 - Other investments 500,000 500,000 Investment, equity method 124,000 129,000 Marketable securities 6,791,000 6,333,000 Notes receivable, net - 17,000 Notes receivable - related party, net - 112,000 Notes receivable - 112,000 Other assets 964,000 162,000 Right-of-use assets 6,135,000 6,465,000 Goodwill 1,769,000 1,769,000 Other intangible assets, net 17,640,000 18,890,000 Total assets $ 93,393,000 $ 106,453,000 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 2,506,000 $ 2,793,000 Accrued expenses and deferred revenue 2,616,000 2,651,000 Other current liabilities 4,537,000 4,193,000 Current portion of lease liability 593,000 606,000 Current portion of long-term debt, net 42,964,000 642,000 Current portion of long-term debt on assets held-for-sale, net - 53,534,000 Current portion of long-term debt - related party, net 616,000 609,000 Current portion of long-term debt 616,000 609,000 Total current liabilities 53,832,000 65,028,000 Long-term debt, net 6,172,000 2,398,000 Long term lease liability 6,011,000 6,311,000 Total liabilities 66,015,000 73,737,000 Commitments and contingencies (Note 12) - - Stockholders’ equity Preferred stock, $ .02 par value; 47,000 shares authorized, zero shares issued and outstanding ( zero on December 31, 2024); *Liquidation value $ 1,000 per share, zero aggregate. zero on December 31, 2024). - - Common stock, $ .02 par value; 200,000,000 shares authorized, 9,092,518 shares issued and outstanding on June 30, 2025 ( 8,092,518 on December 31, 2024) 182,000 161,000 Additional paid-in capital 325,488,000 323,150,000 Accumulated deficit ( 310,001,000 ) ( 303,072,000 ) Total stockholders’ equity of the Company 15,669,000 20,239,000 Non-controlling interest in subsidiaries 11,709,000 12,477,000 Total stockholders’ equity 27,378,000 32,716,000 Total liabilities and stockholders’ equity $ 93,393,000 $ 106,453,000 See accompanying notes to the condensed consolidated financial statements. 3 DSS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (unaudited) 2025 2024 2025 2024 For the Three Months Ended June 30, For the Six Months Ended June 30, 2025 2024 2025 2024 Revenue: Printed products $ 4,272,000 $ 3,527,000 $ 8,255,000 $ 6,599,000 Rental income 715,000 438,000 1,429,000 838,000 Net investment income 9,000 41,000 29,000 136,000 Commission revenue 282,000 204,000 503,000 507,000 Biotechnology retail sales 7,000 1,000 21,000 2,000 Total revenue 5,285,000 4,211,000 10,237,000 8,082,000 Costs and expenses: Cost of revenue 5,499,000 5,673,000 10,685,000 10,663,000 Selling, general and administrative (including stock based compensation) 3,211,000 3,473,000 6,703,000 7,035,000 Total costs and expenses 8,710,000 9,146,000 17,388,000 17,698,000 Operating loss ( 3,425,000 ) ( 4,935,000 ) ( 7,151,000 ) ( 9,616,000 ) Other income (expense): Interest income 25,000 195,000 33,000 302,000 Other income 1,000 12,000 10,000 38,000 Interest expense ( 123,000 ) ( 142,000 ) ( 156,000 ) ( 190,000 ) Foreign Currency Translation Adjustment 3,000 ( 9,000 ) - ( 14,000 ) (Loss)/gain on equity method investment ( 2,000 ) 8,000 ( 5,000 ) 7,000 Gain (loss) on investments 1,557,000 ( 383,000 ) 627,000 ( 572,000 ) Impairment of intangible assets ( 600,000 ) - ( 600,000 ) - Provision for loan losses - ( 53,000 ) - ( 346,000 ) (Loss)/gain on sale ( 43,000 ) 165,000 ( 727,000 ) 165,000 Loss from operations before income taxes ( 2,607,000 ) ( 5,142,000 ) ( 7,969,000 ) ( 10,226,000 ) Income tax benefit - 188,000 67,000 163,000 Net loss $ ( 2,607,000 ) $ ( 4,954,000 ) $ ( 7,902,000 ) $ ( 10,063,000 ) Loss from operations attributed to noncontrolling interest 455,000 271,000 973,000 1,309,000 Net loss attributable to DSS common stockholders $ ( 2,152,000 ) $ ( 4,683,000 ) $ ( 6,929,000 ) $ ( 8,754,000 ) Loss per common share attributable to common stockholders Basic $ ( 0.24 ) $ ( 0.66 ) $ ( 0.78 ) $ ( 1.24 ) Diluted $ ( 0.24 ) $ ( 0.66 ) $ ( 0.78 ) $ ( 1.24 ) Shares used in computing loss per common share: Basic 9,092,518 7,066,772 8,889,221 7,066,772 Diluted 9,092,518 7,066,772 8,889,221 7,066,772 See accompanying notes to the condensed consolidated financial statements. 4 DSS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows For the Six Months Ended June 30, (unaudited) 2025 2024 Cash flows from operating activities: Net loss $ ( 7,902,000 ) $ ( 10,063,000 ) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation and amortization 1,058,000 1,136,000 Issuance of common stock for bonus 870,000 - Stock based payments for professional services rendered 190,000 - Stock based payments 4,000 - (Loss)/gain on equity method investment 5,000 ( 7,000 ) Loss (gain) on investments 303,000 572,000 Change in ROU assets 330,000 369,000 Change in inventory obsolescence ( 21,000 ) - Accrued interest on notes payable 1,884,000 - Loss (Gain) on sale of assets 250,000 ( 165,000 ) Impairment of intangibles 600,000 - Provision for loan losses 235,000 815,000 Decrease (increase) in assets: Accounts receivable 380,000 1,679,000 Inventory ( 80,000 ) ( 753,000 ) Assets held for sale ( 38,000 ) - Prepaid expenses and other current assets 241,000 504,000 Other assets ( 802,000 ) ( 42,000 ) Increase (decrease) in liabilities: Accounts payable ( 287,000 ) ( 224,000 ) Accrued expenses ( 26,000 ) ( 529,000 ) ROU liabilities ( 313,000 ) ( 339,000 ) Other liabilities 3,549,000 1,473,000 Net cash provided (used) by operating activities 430,000 ( 5,574,000 ) Cash flows from investing activities: Purchase of property, plant and equipment ( 144,000 ) ( 29,000 ) Sale of real estate 9,500,000 - Purchase of marketable securities ( 1,000,000 ) - Purchase of investment - ( 379,000 ) Disposal of property, plant and equipment - 5,140,000 Sale of investment, related party 1,500,000 - Sale of marketable securities 116,000 - Payments received on notes receivable 163,000 4,044,000 Net cash provided by investing activities 10,135,000 8,776,000 Cash flows from financing activities: Payments of long-term debt ( 9,443,000 ) ( 1,269,000 ) Borrowings of long-term debt 109,000 2,171,000 Payments on margin loan ( 3,178,000 ) - Net cash (used) provided by financing activities ( 12,512,000 ) 902,000 Net increase (decrease) in cash ( 1,947,000 ) 4,104,000 Cash and cash equivalents at beginning of period 11,431,000 6,615,000 Cash and cash equivalents at end of period $ 9,484,000 $ 10,719,000 See accompanying notes to the condensed consolidated financial statements. 5 DSS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Changes in Stockholders’ Equity Shares Amount Shares Amount in Capital Deficit Equity Subsidiary Total Common Stock Preferred Stock Additional Paid- Accumulated Total DSS Non- controlling Interest in Shares Amount Shares Amount in Capital Deficit Equity Subsidiary Total Balance, December 31, 2023 7,067,772 $ 140,000 - $ - $ 319,963,000 $ ( 256,176,000 ) $ 63,927,000 $ 19,286,000 $ 83,213,000 - Net loss - - - - - ( 8,754,000 ) ( 8,754,000 ) ( 1,309,000 ) ( 10,063,000 ) Balance, June 30, 2024 (unaudited) 7,067,772 $ 140,000 - $ - $ 319,963,000 $ ( 264,930,000 ) $ 55,173,000 $ 17,977,000 $ 73,150,000 Balance, December 31, 2024 8,092,518 $ 161,000 - $ - $ 323,150,000 $ ( 303,072,000 ) $ 20,239,000 $ 12,477,000 $ 32,716,000 Balance 8,092,518 $ 161,000 - $ - $ 323,150,000 $ ( 303,072,000 ) $ 20,239,000 $ 12,477,000 $ 32,716,000 Issuance of common stock, net of expenses - Impact BioMedical, Inc. - 1,000 - - 1,294,000 - 1,295,000 205,000 1,500,000 Issuance of common stock for bonus 1,000,000 20,000 - - 850,000 - 870,000 - 870,000 Stock based payments for professional services rendered for Impact Bio - - - - 190,000 - 190,000 - 190,000 Stock based payments - - - - 4,000 - 4,000 - 4,000 Net loss - - - - - ( 6,929,000 ) ( 6,929,000 ) ( 973,000 ) ( 7,902,000 ) Balance, June 30, 2025 (unaudited) 9,092,518 $ 182,000 - $ - $ 325,488,000 $ ( 310,001,000 ) $ 15,669,000 $ 11,709,000 $ 27,378,000 Balance 9,092,518 $ 182,000 - $ - $ 325,488,000 $ ( 310,001,000 ) $ 15,669,000 $ 11,709,000 $ 27,378,000 See accompanying notes to the condensed consolidated financial statements. 6 DSS, INC. AND SUBSIDIARIES NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2025 (Unaudited) 1. Nature of Operations The 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. to DSS, Inc. This change became effective on September 30, 2021. DSS, Inc. maintained the same trading symbol “DSS”. DSS, Inc. (together with its consolidated subsidiaries, referred to herein as “DSS,” “we,” “us,” “our” or the “Company”) currently operates five (5) distinct business lines with operations and locations around the globe. These business lines are: (1) Product Packaging, (2) Biotechnology, (3) Commercial Lending, (4) Securities and Investment Management, (5) Direct Marketing. Our divisions, their business lines, subsidiaries, and operating territories: (1) Our Product Packaging line is led by Premier Packaging Corporation, Inc. (“Premier”), a New York corporation. 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. 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. 7 2. Basis of Presentation and Significant Accounting Policies Basis of Presentation - The accompanying condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments, unless otherwise indicated) necessary to present fairly our consolidated financial position as of June 30, 2025 and December 31, 2024, and the results of our consolidated operations for the interim periods presented. We follow the same accounting policies when preparing quarterly financial data as we use for preparing annual data. These statements should be read in conjunction with the consolidated financial statements and the notes included in our latest annual report on Form 10-K, for the fiscal year ended December 31, 2024 (“Form 10-K”), and our other reports on file with the Securities and Exchange Commission (the “SEC”). Principles of Consolidation - The consolidated financial statements include the accounts of DSS, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Use of Estimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires the Company to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, the Company evaluates its estimates, including those related to the accounts receivable, convertible notes receivable, inventory, fair values of investments, intangible assets and goodwill, useful lives of intangible assets and property and equipment, fair values of options and warrants to purchase the Company’s common stock, preferred stock, deferred revenue and income taxes, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Reclassifications - Cost associated with Professional fees approximating $ 121,000 and $ 254,000 for the three and six months ended June 30, 2024, respectively have been reclassified to Research and development to conform with current period presentation. Revision of prior period financial statements - During the second quarter of 2025, the Company identified and corrected an immaterial classification error in our previously reported consolidated balance sheet as of December 31, 2024. The correction of this error between current and non-current assets resulted in an increase in the current asset line item referred to as “Marketable securities” and a decrease in the noncurrent line-item referred to as “Marketable securities” by $2.8 million, respectively, from the previously reported amounts of $0 to $2.8 million, and $9.21 million to $6.3 million, respectively . The Company assessed the materiality of this change in presentation on prior period financial statements in accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” (ASC Topic 250, Accounting Changes and Error Corrections). Based on this assessment, the Company concluded that this classification error correction in its Balance Sheet is not material to any previously presented financial statements based upon overall considerations of both quantitative and qualitative factors. The correction had no effect on any previously reported amounts in our consolidated financial statements as of and for the year ended December 31, 2024 other than those previously mentioned. Cash Equivalents – All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents. Amounts included in cash equivalents in the accompanying consolidated balance sheets are money market funds whose adjusted costs approximate fair value. Accounts Receivable - The Company extends credit to its customers in the normal course of business. The Company performs ongoing credit evaluations and generally does not require collateral. Payment terms are generally 30 days but up to net 120 for certain customers. The Company carries its trade accounts receivable at invoice amounts and its rent receivables at contract amounts, less an allowance for credit losses. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for credit losses based upon management’s estimates that include a review of the history of past write-offs and collections and an analysis of current credit conditions. In estimating expected losses in the accounts receivable portfolio, customer-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 customers’ abilities to pay. At June 30, 2025, December 31, 2024, the Company established a reserve for credit losses of approximately $ 1,014,000 , $ 1,613,000 , respectively. Accounts receivable, net at June 30, 2025, December 31, 2024, and January 1, 2024 was $ 2,688,000 , $ 3,068,000 , and $ 3,994,000 , respectively. The Company does not accrue interest on past due accounts receivable. 8 Concentration of Credit Risk - The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits. The Company believes it is not exposed to any significant credit risk because of any non-performance by the financial institutions. As of June 30, 2025, one customer accounted for approximately 25 % of our consolidated revenue and three customers accounted for approximately 18 %, 15 %, and 11 % of our trade accounts receivable balance. As of June 30, 2024, one customer accounted for approximately 24 % of our consolidated revenue and one customer accounted for approximately 39 % of our trade accounts receivable balance. As of December 31, 2024, two customers accounted for approximately 22 % and 13 % of our consolidated revenue and 29 % and 20 % of our trade accounts receivable balance. For the six months ending June 30, 2025 and 2024, one vendor accounted for approximately 10 % and 12 %, respectively, of our cost of revenue. Notes receivable, unearned interest, and related recognition - The Company records all future payments of principal and interest on notes as notes receivable, which are then offset by the amount of any related unearned interest income. For financial statement purposes, the Company reports the net investment in the notes receivable on the consolidated balance sheet as current or long-term based on the maturity date of the underlying notes. Such net investment is comprised of the amount advanced on the loans, adjusting for net deferred loan fees or costs incurred at origination, amounts allocated to warrants received upon origination, and any payments received in advance. The unearned interest is recognized over the term of the notes and the income portion of each note payment is calculated so as to generate a constant rate of return on the net balance outstanding. Net deferred loan fees or costs, together with discounts recognized in connection with warrants acquired at origination, are accreted as an adjustment to yield over the term of the loan. Allowance For Loans Losses - ASC Topic 326 which requires an allowance for credit losses to be deducted from the amortized cost basis of financial assets to present the net carrying value at the amount that is expected to be collected over the contractual term of the asset considering relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. In estimating expected losses in the loan portfolio, borrower-specific financial data and macro-economic assumptions are utilized to project losses over a reasonable and supportable forecast period. Assumptions and judgment are applied to measure amounts and timing of expected future cash flows, collateral values and other factors used to determine the borrowers’ abilities to repay obligations. After the forecast period, the Company utilizes longer-term historical loss experience to estimate losses over the remaining contractual life of the loans. At June 30, 2025, December 31, 2024, the Company established a reserve for credit losses of approximately $ 7,670,000 , $ 9,406,000 , respectively. Investments – Investments in equity securities with a readily determinable fair value, not accounted for under the equity method, are recorded at fair value with unrealized gains and losses included in earnings. For equity securities without a readily determinable fair value, the investment is recorded at cost, less any impairment, plus or minus adjustments related to observable transactions for the same or similar securities, with unrealized gains and losses included in earnings. For equity method investments, the Company regularly reviews its investments to determine whether there is a decline in fair value below book value. If there is a decline that is other-than-temporary, the investment is written down to fair value. See Note 9 for further discussion on investments. Fair 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 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; and ● 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. 9 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. The fair value of investments where the fair value is not considered readily determinable, are carried at cost. Inventory – Inventories consist primarily of paper, pre-printed security paper, paperboard, fully prepared packaging, air filtration systems, and health and beauty products which and are stated at the lower of cost or net realizable value on the first-in, first-out (“FIFO”) method. Packaging work-in-process and finished goods included the cost of materials, direct labor and overhead. At the closing of each reporting period, the Company evaluates its inventory in order to adjust the inventory balance for obsolete and slow-moving items. An allowance for obsolescence of approximately $ 137,000 and $ 180,000 associated with the inventory at our Premier subsidiary for June 30, 2025, and December 31, 2024, respectively. Write-downs and write-offs are charged to cost of revenue. Investments in real estate, net – Acquisition of assets are recorded at their relative fair value based on total accumulated costs of the acquisition. Direct acquisition-related costs are capitalized as a component of the acquired assets. 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 similar to those used by independent appraisers and that use appropriate discount and/or capitalization rates and available market information. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. Depreciation, amortization, cost to maintain and secure the buildings as well as interest incurred on the loans to procure the real estate are included in Cost of revenue on the accompanying Condensed consolidated statement of operations. During 2023, the land and buildings related to AMRE LifeCare and AMRE Winter Haven were reclassified to Assets held for sale. During 2024, the land and buildings related to AMRE Shelton were reclassified to Assets held for sale. As of June 30, 2025, circumstances around the sale of these properties have changed and the Company does not believe the sale of these properties will be finalized within the 12 months from the filing of these quarterly financial statements and have reclassified these assets to Investment in real estate, net and will begin to depreciate these assets prospectively. Intangible Assets - The estimated fair values of acquired intangibles are generally determined based upon future economic benefits such as earnings and cash flows. Acquired identifiable intangible assets are recorded at fair value and are amortized over their estimated useful lives. Acquired intangible assets with an indefinite life are not amortized but are reviewed for impairment at least annually or more frequently whenever events or changes in circumstances indicate that the carrying amounts of those assets are below their estimated fair values. Impairment is tested under ASC 350. No circumstances or events have occurred since the most recent analysis that would indicate the need for an impairment is needed for the six months ended June 30, 2025. 10 Goodwill – Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is subject to impairment testing at least annually and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. FASB ASC Topic 350 provides an entity with the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after completing the assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company will proceed to a quantitative test. The Company may also elect to perform a quantitative test instead of a qualitative test for any or all of our reporting units. The test compares the fair value of an entity’s reporting units to the carrying value of those reporting units. This quantitative test requires various judgments and estimates. The Company estimates the fair value of the reporting unit using a market approach in combination with a discounted operating cash flow approach. Impairment of goodwill is measured as the excess of the carrying amount of goodwill over the fair values of recognized and unrecognized assets and liabilities of the reporting unit. The Company performed its annual goodwill impairment test as of December 31, 2024, and no impairment was deemed necessary for the goodwill associated with Premier Packaging Company of approximately $ 1,769,000 , however an impairment of Impact BioMedical goodwill was deemed necessary of approximately $ 25,093,000 . No circumstances or events have occurred since the most recent analysis that would indicate the need for an impairment is needed for the six months ended June 30, 2025. Impairment of Long-Lived Assets and Goodwill - The Company monitors the carrying value of long-lived assets for potential impairment and tests the recoverability of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. If a change in circumstance occurs, the Company performs a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. If cash flows cannot be separately and independently identified for a single asset, the Company will determine whether impairment has occurred for the group of assets for which the Company can identify the projected cash flows. If the carrying values are in excess of undiscounted expected future cash flows, the Company measures any impairment by comparing the fair value of the asset or asset group to its carrying value. At June 30, 2025, the Company determined to resign its position as the registered investment advisor (“RIA”) of the American First Mutual Funds and impaired the related asset acquired at the time the Company became the RIA in September 2021 in the amount of $ 600,000 . Business Combinations - Business combinations and non-controlling interests are recorded in accordance with FASB ASC 805 Business Combinations. Under the guidance, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition and all acquisition costs are expensed as incurred. The excess of the purchase price over the estimated fair values is recorded as goodwill. If the fair value of the assets acquired exceeds the purchase price and the liabilities assumed, then a gain on acquisition is recorded. The application of business combination accounting requires the use of significant estimates and assumptions. Loss Per Common Share - The Company presents basic and diluted (loss) earnings per share. Basic (loss) earnings per share reflect the actual weighted average of shares issued and outstanding during the period. Diluted (loss) earnings per share are computed including the number of additional shares from outstanding warrants, stock options and preferred stock that would have been outstanding if dilutive potential shares had been issued and is calculated utilizing the treasury stock method. In a loss period, the calculation for basic and diluted (loss) earnings per share is the same, as the impact of potential common shares is anti-dilutive. For the six months ended June 30, 2025 and 2024, there were no potential dilutive instruments issued and outstanding. 11 Income Taxes - The Company recognizes estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income items is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized. We recognize penalties and accrued interest related to unrecognized tax benefits in income tax expense. The Company adopted Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Accounting for Income Taxes, effective for the fiscal year beginning January 1, 2025. The Company applied the updated guidance during the interim period for the quarter ended March 31, 2025, in accordance with the modified retrospective approach. ASU 2023-09 enhances guidance on income tax accounting, with a focus on tax law changes, the allocation of tax credits, and the treatment of uncertain tax positions. Due to the Company’s ongoing operating losses and significant net operating loss (NOL) carry forwards, the Company does not perform quarterly tax provisions. As a result, the adoption of ASU 2023-09 did not result in any immediate material impact on the Company’s consolidated financial statements. The Company has continued to evaluate its deferred tax asset position, with the full utilization of its NOL carryforwards remaining dependent on the availability of future taxable income. Since no taxable income has been generated, and in light of the continued operating losses, there was no adjustment recorded to retained earnings upon the adoption of ASU 2023-09. The Company will continue to monitor its tax positions and NOL utilization, making adjustments to its deferred tax asset valuation allowance as needed in future periods. Going Concern – The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments to the specific amounts and classifications of assets and liabilities, which might be necessary should we be unable to continue as a going concern. While the Company has approximately $ 9.4 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. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. Aside from its $ 9.4 million in cash as of June 30, 2025, to continue as a going concern, the Company can generate operating cash through the sale of its $ 9.8 million of Marketable Securities. To continue as a going concern, The Company has also taken steps to sell its real estate holdings assets of AMRE LifeCare, Winter Haven, and Shelton located in Texas, Pennsylvania, Florida, and Connecticut. These properties approximate $ 35.4 million in assets and are identified on the accompanying balance sheet as Investments in real estate, net. Also, historically, the Company has been able to obtain equity and/or debt-based financing to meet its working capital needs. In addition, the Company has taken steps, and will continue to take measures, to materially reduce the expenses and cash burn at all corporate and business line levels. Related Party Transactions - Transactions with affiliates and other parties that meet the definition of a related party under ASC 850, Related Party Disclosures are reflected in the accompanying condensed consolidated financial statements. All related-party balances are recorded at the exchange amounts established and agreed to by the parties. All material transaction not in the normal course of business operations are approved by the Audit Committee of the Board of Directors. Recently Issued Accounting Pronouncements — The Financial Accounting Standards Board (FASB) issues various Accounting Standards Updates relating to the treatment and recording of certain accounting transactions. There are several new accounting pronouncements issued by FASB which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company. The Company adopted ASC Topic 280, Segment Reporting , as part of the updates to the segment reporting requirements under GAAP. The new guidance requires the identification of operating segments and their aggregation based on similar economic characteristics, and for those segments to be reported consistent with the internal management reporting structure used by the chief operating decision maker (CODM). As a result of this adoption, the Company has assessed its operating segments and has realigned its segment reporting to more accurately reflect how its management team evaluates performance and makes strategic decisions. The adoption of Topic 280 did not result in a change to the Company’s segment structure or to the method used to allocate resources among segments. In November 2024, the FASB issued ASU No. 2024-03 (“ASU 2024-03”), Disaggregation of Income Statement Expenses (“DISE”) . ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. As revised by ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, the provisions of ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. With the exception of expanding disclosures to include more granular income statement expense categories, we do not expect the adoption of ASU 2024-03 to have a material effect on our consolidated financial statements taken as a whole. 3. Revenue The Company recognizes its revenue based on when the title passes to the customer or when the service is completed and accepted by the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for shipped product or 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 and management fees related to loans managed for third parties owed to the Company occurs. The Company generates revenue from its direct marketing line of business primarily through internet sales and recognizes revenue as items are shipped. As of June 30, 2025, 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. 12 Costs of revenue Costs of revenue includes all direct cost of the Company’s packaging, commercial and security printing sales, primarily, paper, inks, dies, and other consumables, and direct labor, transportation, amortization, deprecation, and manufacturing facility costs. In addition, this category includes all direct costs associated with the manufacturing and procurement of the products sold in the Company’s Direct Marketing line of business as well as with the Company’s technology sales, services and licensing including hardware and software that is resold, third-party fees, and fees paid to inventors or others as a result of technology licenses or settlements, if any. Cost of revenue for our REIT line of business includes all direct cost associated with the maintenance and upkeep of the related facilities, depreciation, amortization and the costs to acquire the facilities. Our Commercial Lending operating segment has costs of revenue associated with the impairment of notes receivable for those amounts at risk of collection. Costs of revenue do not include expenses related to product development, integration, and support. These costs are included in research and development, which is a component of selling, general and administrative expenses on the consolidated statement of operations. Legal costs are included in selling, general and administrative. Sales Commissions Sales commissions are expensed as incurred for contracts with an expected duration of one year or less. There were no sales commissions capitalized as of June 30, 2025 or June 30, 2024. Shipping and Handling Costs Costs incurred by the Company related to shipping and handling are included in cost of products sold. Amounts charged to customers relating to these costs are reflected as revenue. See Note 15 for disaggregated revenue information. 4. Inventory Inventory consisted of the following as of: Schedule of Inventory June 30, 2025 December 31, 2024 Finished Goods $ 1,719,000 $ 1,857,000 Work in Process 100,000 345,000 Raw Materials 861,000 420,000 Inventory gross $ 2,680,000 2,622,000 Less allowance for obsolescence ( 137,000 ) ( 180,000 ) Inventory net $ 2,543,000 $ 2,442,000 5. Notes Receivable Note 1 On May 14, 2021, DSS Pure Air, Inc. a subsidiary of the Company entered a convertible promissory note (“Note 1”) with Puradigm, Inc. (“Puradigm”), a company registered in the state of Texas. Note 1 has an aggregate principal balance up to $ 5,000,000 , to be funded at the request of Puradigm. Note 1, which incurs interest at a rate of 6.65 % due quarterly, had a maturity date of May 1, 2023. Note 1 contains an optional conversion clause that allows the Company to convert all, or a portion of all, into newly issued member units of Puradigm with the maximum principal amount equal to 18% of the total equity position of Puradigm at conversion. The outstanding principal and interest as of June 30, 2025 and December 31, 2024, approximated $ 5,544,000 . As of June 30, 2025 and December 31, 2024 this note is in default and the Company has a reserve of $ 5,544,000 against the principal and interest outstanding. Note 2 On September 23, 2021, APB entered into refunding bond anticipatory note (“Note 2”) with Southeast Regional Management District (“SERMD”), which operates as a conservation and reclamation district pursuant to Chapter 3891, Texas Special District Local Laws Code, Chapter 375, Texas Local Government Code; and Chapter 49, Texas Water Code. The District Note was in the sum of $ 3,500,000 and incurs interest at a rate of 5.59 % per annum. Principal and interest was due in full on September 22, 2022, and later amended to extend the maturity date to September 19, 2024 . Note 2 was repaid in full during March 2024. Note 3 On October 25, 2021, APF entered into a loan agreement (“Note 3”) with Asili, LLC. (“Asili”), a company registered in the state of Utah. Note 3 has an initial aggregate principal balance up to $ 1,000,000 , to be funded at the request of Asili, with an option to increase the maximum principal borrowing to $ 3,000,000 . Note 3, which incurs interest at a rate of 8.0 % with principal and interest due at the maturity date of October 25, 2022 . This note contains an optional conversion feature allowing APF to convert the outstanding principal to a 10 % membership interest. APF, as holder of Note 3, has the right to elect one member to the Board of Managers. This note is in default and the outstanding principal and interest of approximately $ 884,000 is fully reserved for as of June 30, 2025 and December 31, 2024. Note 4, related party On December 28, 2021, APF entered into a promissory note (“Note 4”) with WestPark Capital Group, LLC. (“WestPark”), a company registered in the state of California. Note 4 has a principal balance of $ 700,000 . Note 4, which incurs interest at a rate of 12.0 % with principal and interest due at the maturity date of December 28, 2022 . On December 29, 2022, the maturity date of this note was extended to May 31, 2023 . On November 27, 2023, the parties to Note 4 agreed to modify the payment terms of the note to be monthly payments of $ 50,000 until the outstanding principal and interest are paid in full. The outstanding principal and interest was paid in full during 2024. 13 Note 5 On January 24, 2022, APF and an individual entered into a promissory note (“Note 5”) in the principal sum of $ 100,000 with interest of 6 %, due annually, and maturing in January 2024 . The outstanding principal and interest at December 31, 2024 approximated $ 17,000 and was included in Current portion of notes receivable on the accompanying consolidate balance sheet. As of June 30, 2025, the outstanding principal and interest approximating $ 18,000 were written-off. Note 6 On March 2, 2022, APF and WUURII Commerce, Inc. (“WUURII”), a corporation organized under the laws of the Republic of Korea entered into a promissory note (“Note 6”). Under the terms of Note 6, APF at its discretion, may lend up to the principal sum of $ 893,000 with an interest rate of 8 %, and matured in March 2024 and was extended to April 2025, with interest payable quarterly. The outstanding principal and interest at June 30, 2025, and December 31, 2024 is $ 465,000 and $ 468,000 , respectively. This loan is currently in default and as of June 30, 2025 the Company has a reserve of $ 465,000 against the principal and interest outstanding. Note 7 On May 9, 2022, DSS PureAir and Puradigm entered into a promissory note (“Note 7”) in the principal sum of $ 210,000 with interest of 10 %, is due in three quarterly installments beginning on August 9, 2022, with the first two payment consisting of interest only. All unpaid principal and interest are due on February 9, 2023 . This loan is currently in default. The outstanding principal and interest at June 30, 2025 and December 31, 2024 approximates $ 224,000 . This note was fully reserved for as of June 30, 2025 and December 31, 2024. Note 8, related party On August 29, 2022, DSS Financial Management Inc and BMI Capital, Inc. (“BMIC”), a related party, entered into a promissory note (“Note 8”) in the principal sum of $ 100,000 with interest of 8 %, is due in three quarterly installments beginning on September 14, 2022. All unpaid principal and interest is due on August 29, 2025 . The outstanding principal and interest at June 30, 2025, and December 31, 2024 approximated $ 83,000 , and was fully reserved for as of June 30, 2025 and December 31, 2024. DSS owns 24.9 % of the outstanding common shares of BMIC. Note 9, related party On May 8, 2023, DSS Financial Management Inc and BMIC entered into a promissory note (“Note 9”) in the principal sum of $ 102,000 with interest at the prime rate plus 2 % with a maturity date of May 7, 2026 . The outstanding principal and interest at June 30, 2025, and December 31, 2024 approximated $ 110,000 , and was fully reserved for as of June 30, 2025 and December 31, 2024. DSS owns 24.9 % of the outstanding common shares of BMIC. Note 10, related party On July 26, 2022, APF and VEII, Inc. (“VEII”) entered into a promissory note (“Note 10”) in the principal sum of $ 1,000,000 with interest of 8 % with all unpaid principal and interest due on July 26, 2024 . This note was amended so that all unpaid principal and interest is due July 26, 2025. The outstanding principal and interest as of June 30, 2025 and December 31, 2024 approximates $ 917,000 . This note was fully reserved for as of June 30, 2025 and December 31, 2024. Heng Fai Ambrose Chan, the Chairman of DSS, Inc is also the on the board of directors of VEII. 14 Note 11 On February 19, 2021, Impact BioMedical, Inc, entered into a promissory note with an individual. The Company loaned the principal sum of $ 206,000 , with interest at a rate of 6.5 %, and maturity date of August 19, 2022 later amended to February 19, 2026. Monthly payments are due on the twenty-first day of each month and continuing each month thereafter until February 19, 2026. This note is secured by certain real property situated in Collier County, Florida. The outstanding principal and interest as of June 30, 2025, and December 31, 2024 was approximately $ 200,000 and $ 201,000 , respectively. As of June 30, 2025, approximately $ 200,000 is classified in Current notes receivable. As of December 31, 2024, $ 184,000 is classified in Current notes receivable and the remaining $ 17,000 is classified as Notes receivable on the accompanying consolidated balance sheet. Note 12 On June 27, 2023, Decentralized Sharing Systems, Inc. and Stemtech Corporation (“Stemtech”) entered into a convertible promissory note (“Note 12”) in the principal sum of $ 1,400,000 with a discount of $ 300,000 and interest rate of 10 % and maturity date of September 1, 2024 . The outstanding principal, interest, and associated discount was fully reserved for as of December 31, 2024 and written off as of June 30, 2025 Note 13 On March 31,2023, DSS Biohealth Security, Inc and an individual entered into a promissory note (“Note 13”) in the principal sum of $ 140,000 and interest rate floating daily to Wall Street Journal Prime rate per annum with the total outstanding principal and interest due at the maturity date of March 31, 2025 . As of June 30, 2025 and December 31, 2024, the outstanding principal and interest approximated $ 135,000 . This balance was fully reserved for as of June 30, 2025 and December 31, 2024. Note 14 On August 29, 2024, APF entered into a promissory note (“Note 14”) with WestPark. Note 14 has a principal balance of $ 459,000 . Note 14, which incurs interest at a rate of 10.0 % with principal and interest due at the maturity date of April 27, 2026 . On November 1, 2024, monthly payments of approximately $ 28,000 are due with any unpaid interest and principal due at maturity. As of June 30, 2025, the outstanding principal and interest approximates $ 304,000 , which is classified as Current notes receivable on the accompanying consolidated balance sheet. As of December 31, 2024, the outstanding principal and interest approximates $ 450,000 , of which $ 337,000 is classified as Current notes receivable and the remaining $ 113,000 is classified as Notes receivable on the accompanying consolidated balance sheet. 15 6. Financial Instruments Cash, Cash Equivalents, Restricted Cash and Marketable Securities The following tables show the Company’s cash, cash equivalents, restricted cash, and marketable securities by significant investment category as of: Schedule of Cash and Marketable Securities by Significant Investment Category June 30, 2025 cost Unrealized Gain/(Loss) Fair Value Cash and Cash Equivalents Marketable Securities Cash $ 8,151,000 $ - $ 8,151,000 $ 8,151,000 $ - Restricted Cash 100,000 - 100,000 100,000 - Level 1 Money Market Funds 1,233,000 - 1,233,000 1,233,000 - Marketable Securities 27,816,000 ( 18,051,000 ) $ 9,765,000 - 9,765,000 Total $ 37,300,000 $ ( 18,051,000 ) $ 19,249,000 $ 9,484,000 $ 9,765,000 December 31, 2024 Adjusted Cost Unrealized Gain/(Loss) Fair Value Cash and Cash Equivalents Marketable Securities Cash $ 11,369,000 $ - $ 11,369,000 $ 11,369,000 $ - Level 1 $ - Money Market Funds $ 62,000 $ - $ 62,000 $ 62,000 $ - Marketable Securities $ 25,933,000 $ ( 16,722,000 ) $ 9,211,000 $ - $ 9,211,000 Total $ 37,364,000 $ ( 16,722,000 ) $ 20,642,000 $ 11,431,000 $ 9,211,000 The Company typically invests with the primary objective of minimizing the potential risk of principal loss. The Company’s investment policy generally requires securities to be investment grade and limits the amount of credit exposure to any one issuer. Fair values were determined for each individual security in the investment portfolio. 16 7. Provision for Credit Losses ASC Topic 326 for the measurement of credit losses on financial instruments and other financial assets. That guidance requires an allowance for credit losses to be deducted from the amortized cost basis of financial assets to present the net carrying value that is expected to be collected over the contractual term of the assets considering relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The guidance replaced the previous incurred loss model for determining the allowance for credit losses. Accounts receivable are stated at the amount owed by the customer. The Company maintains an allowance for credit losses for accounts receivable and unbilled receivables, based on expected credit losses resulting from the inability of our customers to make required payments. The allowance for credit losses is estimated based on historical experience, current economic conditions and the creditworthiness of customers. Receivables are charged to the allowance when determined to be no longer collectible. The Company regularly monitors and assesses its risk of not collecting amounts owed by customers and records its allowance for credit losses based on the results of this analysis. As of June 30, 2025 and December 31, 2024, we have reviewed the entire loan portfolio as well as all financial assets of the Company for the purpose of evaluating the loan portfolio and the loan balances, including a review of individual and collective portfolio loan quality, loan(s) performance, including past due status and covenant defaults, assessment of the ability of the borrower to repay the loan on the loan terms, whether any loans should be placed on nonaccrual or returned to accrual, any concentrations in any single borrower and/or industry that we might need to further manage, and if any specific or general loan loss reserve should be established for the entire loan portfolio or for any specific loan. We analyzed the loan loss reserve from three basis: general loan portfolio reserves; industry portfolio reserves, and specific loan loss reserves. For the six months ended June 30, 2025, June 30, 2024 and year ended December 31, 2024, the Company recorded a Loan loss reserve of approximately $ 233,000 , $ 346,000 and $ 9,406,000 , respectively. General Loan Portfolio Reserve - Based upon the review of our loan portfolio, we do not believe that a substantial general loan portfolio reserve is due at this time. However, we do recognize that some inherent risks are in all loan portfolios, thus we recorded a general contingent portfolio reserve of $ 192,000 and $ 196,000 of the loan portfolio loan balance as of June 30, 2025 and December 31, 2024, respectively. Industry Portfolio Reserves - Given the relatively young loan portfolio and a diversification of the portfolio over several different loan products, the risk is reduced. Accordingly, we have not recorded a discretionary reserve as of June 30, 2025 and December 31, 2024. Specific Loan Reserves - Previously, we had identified credit weaknesses and borrower repayment weakness with Asili, which has a current principal and interest balance of $ 884,000 and have recorded a loan loss reserve for the full balance due the Company as of December 31, 2024. The Company had also previously identified credit weakness in Puradigm and has placed a reserve approximating $ 5,768,000 against the outstanding principal and interest as of December 31, 2024 of their two loans. Previously, the Company identified credit weakness in Stemtech and has placed a reserve approximating $ 1,045,000 against the outstanding principal and interest as of December 31, 2024. During the first quarter of 2024, the Company identified credit weakness in VEII and an individual and has placed a reserve approximating $ 959,000 against the outstanding principal and interest as of March 31, 2024. There has been no change to this amount. Also, during the first quarter of 2024, the Company identified credit weakness in BMIC, a related party, and has placed a reserve approximating $ 211,000 against the outstanding principal and interest as of March 31, 2024, later adjusted to $ 196,000 as of September 30, 2024. The Company identified credit weakness with WUURII and has placed a $ 234,000 reserve against the outstanding principal and interest as of December 31, 2024 and reserved for the remaining outstanding balance of approximately $ 233,000 as of June 30, 2025. The Company has also identified credit weakness with an individual and has placed a $ 135,000 reserve against the outstanding principal and interest as of December 31, 2024, and reserved for an approximate $ 17,000 against the outstanding principal and interest for another individual as of June 30, 2025. No additional reserves were deemed necessary as of June 30, 2025. 8. Disposal of assets On March 27, 2025, the Company finalized the sale of its Plano, Tx. Facility for a gross sales price of $ 9,500,000 . The associated asset was previously classified as held for sale in the amount of $ 9,750,000 , resulting in a loss on the sale of approximately $ 727,000 after related expenses. 17 9. Investments Alset International Limited , related party The Company owns 127,179,291 shares or approximately 4 % of the outstanding shares of Alset International Limited (“Alset Intl”), a company incorporated in Singapore and publicly listed on the Singapore Exchange Limited. This investment is classified as a marketable security and is classified as long-term assets on the consolidated balance sheets as the Company has the intent and ability to hold the investments for a period of at least one year. The Chairman of the Company, Mr. Heng Fai Ambrose Chan, is the Executive Director and Chief Executive Officer of Alset Intl. Mr. Chan is also the majority shareholder of Alset Intl as well as the largest shareholder of the Company. The fair value of the marketable security as of June 30, 2025 and December 31, 2024, was approximately $ 2,098,000 and $ 2,518,000 , respectively. During the six months ended June 30, 2025 and 2024, the Company recorded unrealized loss of approximately $ 420,000 and $ 356,000 , respectively. True Partners Capital Holding Limited The Company owns 81,836,908 shares of True Partners Capital Holding Limited (“True Partners”), a publicly listed company on the Hong Kong Stock Exchange. On February 28, 2022, the Company entered into a Stock Purchase Agreement with Alset EHome International Inc. (“AEI”), pursuant to which AEI has agreed to sell a subsidiary holding 62,336,908 shares of stock of True Partner Capital Holding Limited exchange for 17,570,948 shares of common stock of the Company (the “DSS Shares”). The Company’s Executive Chairman and a significant stockholder, Heng Fai Ambrose Chan is the Chairman, Chief Executive Officer and largest shareholder of AEI. Further, on February 20, 2025, the Company acquired an additional 19,500,000 shares of True Partners. The fair value of the marketable security as of June 30, 2025 and December 31, 2024, was approximately $ 4,689,000 and $ 3,815,000 , respectively. During the six months ended June 30, 2025 and 2024, the Company recorded unrealized loss of approximately $ 126,000 and a gain of approximately $ 11,000 , respectively. WestPark Capital Group, LLC. On December 30, 2020, the Company signed a binding letter of intent with WestPark Capital Group, LLC. (“WestPark”) and Century TBD, Inc. (“TBD”) where the parties agreed to prepare a note and stock exchange agreement whereby DSS will assign the TBD Note to WestPark and WestPark shall issue to DSS a stock certificate reflecting 7.5 % of the issued and outstanding shares of West Park. This note and stock exchange agreement was finalized during the first quarter 2022 and valued at approximately $ 500,000 and is included in Investments on the consolidated balance sheet on June 30, 2025 December 31, 2024. BMI Capital International LLC, related party On September 10, 2020, the Company’s wholly owned subsidiary DSS Securities, Inc. entered into membership interest purchase agreement with BMI Financial Group, Inc. a Delaware corporation (“BMIF”) and BMI Capital International LLC, a Texas limited liability company (“BMIC”) whereas DSS Securities, Inc. purchased 14.9 % membership interests in BMIC for $ 100,000 . DSS Securities also had the option to purchase an additional 10 % of the outstanding membership interest which it exercised for $ 100,000 in January of 2021 and increased its ownership to 24.9 %. The Company is currently accounting for this investment under the equity method of accounting per ASC 323. The Company’s portion of net loss in BMIC during the three months ended June 30, 2025 and 2024, approximated $ 5,000 and $ 7,000 , respectively. BMIC is a broker-dealer registered with the Securities and Exchange Commission, is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”), and is a member of the Securities Investor Protection Corporation (“SIPC”). The Company’s chairman of the board and another independent board member of the Company also have ownership interest in BMIC. BioMed Technologies Asia Pacific Holdings Limited On December 19, 2020, Impact BioMedical, a wholly owned subsidiary of the Company, entered into a subscription agreement (the “Subscription Agreement”) with BioMed Technologies Asia Pacific Holdings Limited (“BioMed”), a limited liability company incorporated in the British Virgin Islands, pursuant to which the Company agreed to purchase 525 ordinary shares or 4.99 % of BioMed at a purchase price of approximately $ 632,000 . The Subscription Agreement provides, among other things, the Company has the right to appoint a new director to the board of BioMed. With respect to an issuance of shares to a third party by BioMed, the Company will have the right of first refusal to purchase such shares, as well as customary tag-along rights. In connection with the Subscription Agreement, Impact Biomedical entered into an exclusive distribution agreement (the “Distribution Agreement”) with BioMed, to directly market, advertise, promote, distribute, and sell certain BioMed products, which focus on manufacturing natural probiotics, to resellers. This investment was impaired in full at December 31, 2024 as it does not have a readily determined fair value. 18 Under the terms of the Distribution Agreement, the Company will have exclusive rights to distribute the products within the United States, Canada, Singapore, Malaysia, and South Korea and non-exclusive distribution rights in all other countries. In exchange, the Company agreed to certain obligations, including mutual marketing obligations to promote sales of the products. This agreement is for ten years with a one year auto-renewal feature. 10. Short-Term and Long-Term Debt Promissory Notes - On May 20, 2021, Premier Packaging entered into master loan and security agreement (“BOA Note”) with Bank of America, N.A. (“BOA”) to secure financing approximating $ 3,710,000 to purchase and use as collateral, a new Heidelberg XL 106-7+L printing press. The aggregate principal balance outstanding under the BOA Note shall bear interest at a variable rate on or before the loan closing. As of June 30, 2025, and December 31, 2024, the outstanding principal on the BOA Note was $ 2,179,000 and $ 1,647,000 , respectively and had an interest rate of 4.63 %. As of June 30, 2025, $ 532,000 was included in the Current portion of long-term debt, net, and the remaining balance of approximately $ 1,783,000 is recorded as Long-term debt. As of December 31, 2024, $ 520,000 was included in the current portion of long-term debt, net, and the remaining balance of approximately $ 1,916,000 recorded as long-term debt. This note matures in April of 2029 . Interest expense for the six months ended June 30, 2025 and 2024 approximated $ 54,000 and $ 66,000 , respectively. The BOA Note contains certain covenants that are analyzed annually. As of June 30, 2025, Premier is in compliance with these covenants. On August 1, 2021, AMRE Shelton, LLC., (“AMRE Shelton”) a subsidiary of AMRE, entered into a loan agreement (“Shelton Agreement”) with Patriot Bank, N.A. (“Patriot Bank”) in an amount up to $ 6,155,000 , with the amount financed approximating $ 5,105,000 . The Shelton Agreement contains monthly payments of principal and an initial interest of 4.25 %. The interest will be adjusted commencing on July 1, 2026 and continuing for the next succeeding 5-year period shall be determined one month prior to the change date and shall be an interest rate equal to two hundred fifty (250) basis points above the Federal Home Loan Bank Boston 5-Year/25-Year amortizing advance rate, but in no event less than 4.25 % for the term of 120 months with a balloon payment approximating $ 2,829,000 due at term end. The funds borrowed were used to purchase a 40,000 square foot, 2.0 story, Class A+ multi-tenant medical office building located on a 13.62-acre site, which serves as collateral for the Shelton Agreement. The purchase price has been allocated as $ 4,640,000 , $ 1,600,000 , and $ 325,000 for the facility, land, and tenant improvements, respectively. Also included in the value of the property is $ 585,000 of intangible assets with an estimated useful life of approximating 3 years. The net book value of these assets as of June 30, 2025, and December 31, 2024, approximated $ 6,332,000 . As of June 30, 2025, the outstanding principal and interest of approximately $ 4,328,000 , net of $ 12,000 in deferred financing costs. As of June 30, 2025, approximately $ 221,000 is classified as Current portion of long-term debt on assets held -for-sale, net with the remaining $ 4,107,000 classified as Non-current liabilities held for sale assets on the consolidated balance sheet. Interest expense for the six months ended June 30, 2025 and 2024 approximated $ 93,000 and $ 98,000 , respectively. As of December 31, 2024, the outstanding principal and interest of approximately $ 4,424,000 , net of $ 27,000 in deferred financing costs, is classified as Current portion of long-term debt on assets held-for-sale, net on the consolidated balance sheet. This agreement matures in July of 2031. On October 13, 2021, LVAM entered into loan agreement with BMIC (“BMIC Loan”), a related party, whereas LVAM borrowed the principal amount of $ 3,000,000 , with interest to be charged at a variable rate to be adjusted at the maturity date. The BMIC loan contains an auto renewal period of three months, with a current maturity date of July 2025. As of June 30, 2025, and December 31, 2024, the outstanding principal and interest of approximately $ 464,000 and $ 463,000 , respectively, are included in Current portion of long-term debt – related party, net on the consolidated balance sheet. On October 13, 2021, LVAM entered into a loan agreement with Lee Wilson Tsz Kin (“Wilson Loan”), a related party, whereas LVAM borrowed the principal amount of $ 3,000,000 , with interest to be charged at a variable rate to be calculated at the maturity date. The Wilson Loan matures on October 12, 2022 , and contains an auto renewal period of three months with a current maturity date of July 2025. As of March 31, 2025, and December 31, 2024, the outstanding principal and interest of approximately $ 145,000 and $ 145,000 , respectively, are included in Current portion of long-term debt – related party, net on the consolidated balance sheet. On November 2, 2021, AMRE LifeCare entered into a loan agreement (“LifeCare Agreement”) with Pinnacle Bank, (“Pinnacle Bank”) in the amount of $ 40,300,000 . The LifeCare Agreement supported the acquisition of three medical facilities located in Fort Worth, Texas, Plano, Texas (sold in March 2025), and Pittsburgh, Pennsylvania for a purchase price of $ 62,000,000 . These assets are classified as investments, real estate on the consolidated balance sheet, and serves as collateral for the LifeCare Agreement. The purchase price has been allocated as $ 32,100,000 , $ 12,100,000 , and $ 1,500,000 for the facility, land and site improvements, respectively. Also included in the value of the property is $ 15,901,000 of intangible assets with estimated useful lives ranging from 1 to 11 years. The net book value of the assets acquired as of June 30, 2025 is approximately $ 24,722,000 . The LifeCare Agreement calls for the principal amount of the in equal, consecutive monthly instalments based upon a twenty-five (25) year amortization of the original principal amount of the LifeCare Agreement at an initial rate of interest equal to the interest rate determined in accordance as of July 29, 2022 provided, however, such rate of interest shall not be less than 4.28 %, with the first such instalment being payable on August 29, 2022 and subsequent instalments being payable on the first day of each succeeding month thereafter until the maturity date, at which time any outstanding principal and interest is due in full. The affective interest rate at June 30, 2025 was 7.9 %. As of June 30, 2025, and December 31, 2024, the outstanding principal and interest of the LifeCare agreement approximates $ 39,034,000 and $ 46,069,000 , respectively, and is included in Current portion of long-term debt on assets held-for-sale, net on the consolidated balance sheet. Interest expense for the six months ended June 30, 2025 and 2024 approximated $ 1,572,000 and $ 1,954,000 , respectively. This note is in default and demand was made for final payment to be made by December 22, 2023. As of June 30, 2025, this amount is past due. 19 On March 17, 2022, AMRE Winter Haven, LLC (“AMRE Winter Haven”) and Pinnacle Bank (“Pinnacle”) entered into a term loan (“Pinnacle Loan”) whereas Pinnacle lent to AMRE Winter Haven the principal sum of $ 2,990,000 , maturing on March 7, 2024 (later extended to July 7, 2024) to acquire a medical facility located in Winter Haven, Florida for a purchase price of $ 4,500,000 . The assets acquired are classified as investments, real estate on the consolidated balance sheet, and serves as collateral for the Pinnacle Loan. The purchase price has been allocated as $ 3,200,000 , $ 1,000,000 , and $ 222,000 for the facility, land and site and tenant improvements, respectively. Also included in the value of the property is $ 29,000 of intangible assets with an estimated useful life of approximately 5 years. The net book value of the assets acquired as of June 30, 2025 is approximately $ 4,396,000 . Payments are to be made in equal, consecutive installments based on a 25 -year amortization period with interest at 4.28 %. The first installment is due January 1, 2023. This AMRE Winter Haven note is currently due and has an effective interest rate of 9.6 %. The outstanding principal and interest, approximates $ 3,051,000 and is included in Current portion of long-term debt on assets held-for-sale, net long-term debt, net on the accompanying consolidated balance sheet at June 30, 2025. The outstanding principal and interest, approximates $ 3,040,000 and is included in Current portion of long-term debt on assets held-for-sale, net long-term debt, net on the accompanying consolidated balance sheet at December 31, 2024. Interest expense approximates $ 142,000 and $ 148,000 for the six months ended June 30, 2025 and 2024, respectively. This note was assumed by SMS Financial on August 15, 2024. This note is in default and demand was made for final payment to be made by December 22, 2023. As of June 30, 2025, this amount is past due. On March 30, 2023, Premier Packaging, a subsidiary of the Company entered into a loan and security agreement with Union Bank & Trust Company for the principal amount of $ 790,000 and shall accrued interest at the rate of 7.44 %. Principal and interest shall be repaid in the approximate amount of $ 14,000 through March 2029. This loan is collateralized by a Bobst Model Novacut and is guaranteed by DSS, Inc. As of June 30, 2025, the outstanding principal and interest approximates $ 544,000 of which $ 127,000 was included in the current portion of long-term debt, net, and the remaining balance of approximately $ 417,000 recorded as long-term debt. As of December 31, 2024, the outstanding principal and interest approximates $ 605,000 of which $ 123,000 was included in the current portion of long-term debt, net, and the remaining balance of approximately $ 482,000 recorded as long-term debt. Interest expense for the six months ended June 30, 2025 and 2024 approximated $ 22,000 and $ 25,000 , respectively. A summary of scheduled principal payments of long-term debt, not including revolving lines of credit, subsequent to June 30, 2025, are as follows: Schedule of Notes Payable and Long-term Debt Year Notes payable Notes payable - related party Total 2025 $ 36,717,000 $ 616,000 $ 37,333,000 2026 902,000 - 902,000 2027 947,000 - 947,000 2028 995,000 - 995,000 2029 494,000 - 494,000 Thereafter 3,206,000 - 3,206,000 Total $ 43,261,000 $ 616,000 $ 43,877,000 11. Lease Liability The Company has operating leases predominantly for operating facilities. As of June 30, 2025, the remaining lease terms on our operating leases range from less than 1 one to nine years . Renewal options to extend our leases have not been exercised due to uncertainty. Termination options are not reasonably certain of exercise by the Company. There is no transfer of title or option to purchase the leased assets upon expiration. There are no residual value guarantees or material restrictive covenants. There are no significant finance leases as of June 30, 2025. 20 Future minimum lease payments as of June 30, 2025 are as follows: Maturity of Lease Liability: Schedule of Future Minimum Lease Payments Totals 2025 $ 421,000 2026 839,000 2027 808,000 2028 824,000 2029 840,000 Thereafter 4,074,000 Total lease payments 7,806,000 Less: Imputed Interest ( 1,202,000 ) Present value of remaining lease payments $ 6,604,000 Current $ 593,000 Noncurrent $ 6,011,000 Weighted-average remaining lease term (years) 9.1 Weighted-average discount rate 3.8 % Total cash paid for leases during the six months ended June 30, 2025 and 2024 approximated $ 440,000 and $ 498,000 , respectively. 12. Commitments and Contingencies License Agreement – On March 19, 2022, Impact BioMedical entered into a License Agreement (“Equivir License”) with a third-party (“Licensee”) where the Licensor is granted the right, amongst other things, to develop, commercialize, and sell the Company’s Equivir technology. In exchange, the Licensee shall pay the Company a royalty of 5.5 % of net sales. Under the terms of the Equivir Agreement, the Company shall reimburse the Licensee for 50 % of the development costs provided that the development costs shall not exceed $ 1,250,000 . As of June 30, 2025 and December 31, 2024, a liability of $ 0 has been recorded in relation to the Equivir License . Royalty Agreement - On August 15, 2018, the Impact BioMedical entered into Royalty Agreement with Chemia Corporation (“Chemia”) pursuant to which Chemia transferred to the Company all of its right to 3F (Functional Fragrance Formulation). This agreement has a 20-year term and auto renews for a period of 1 year unless mutually agreed upon by both parties. 3F consists of 3F Mosquito Repellant and 3F Anti-Viral formulations. Based on the Royalty Agreement, the Company should cover all the costs to prepare and finalize necessary patent application and other intellectual property related to 3F. Chemia agreed to support the Company in efforts leading to development of 3F intellectual property and it is licensing. Based on Royalty Agreement any payments received from development, sales, licensing or transfer of 3F technology will be paid 50% to the Company and 50% to Chemia. On November 27, 2018, Company and Chemia signed an Addendum to Royalty Agreement (“Addendum”), according to which the Company granted Chemia a royalty-based limited license for purposes of making and selling fragrances embodying the 3F technology. Based on the Addendum, Chemia should pay the Company 5% of net sales in royalty. On November 8, 2019, both companies entered into Amendment no.1 to Royalty Agreement, based on which certain expenses borne by the Company towards patent application and licensing should be reimbursed to the Company before any royalty payments are made. For the six months ended June 30, 2025 and 2024, there were no reimbursements or royalties paid to the Company and the Company cannot be assured that Chemia’s efforts will end up in any future sales of the technology. 21 13. Stockholders’ Equity DSS, Inc. Equity transactions - On January 4, 2024 the Company effected a reverse stock split of 1 for 20 . As of December 31, 2023 there were 140,264,240 shares of our Common Stock issued and outstanding, which was converted to 7,066,772 . On December 10, 2024, DSS entered into a securities purchase agreement with Alset Inc., a related party, pursuant to which the Company agreed to sell and issue in a private placement an aggregate of 820,597 shares of the Company’s common stock for approximately $ 803,000 . On December 10, 2024, DSS entered into a securities purchase agreement with Heng Fai Ambrose Chan, the Chaiman of the Board of Directors and a related party, pursuant to which the Company agreed to sell and issue in a private placement an aggregate of 205,149 shares of the Company’s common stock for approximately $ 197,000 . On February 6, 2025, as a bonus for compensation awarded to Heng Fai Holdings Limited (“HFHL”), a Hong Kong Company, which is beneficially owned by Mr. Heng Fai Ambrose Chan, Director of DSS, Inc., and pursuant to DSS, Inc’s. 2020 Employee, Director and Consultant Equity Incentive Plan (the “Plan”), HFHL was awarded 1,000,000 shares of the Company’s common stock, approximating $ 870,000 , under the Plan, for services rendered. The issuance was approved by the board of directors on January 31, 2025. On March 21, 2025, DSS, the parent company of Impact Biomedical, Inc. completed the sale of 499,800 shares of Impact Biomedical common stock. These shares were acquired by DSS during Impact’s initial public offering on September 16, 2024. The sale of these shares, which were previously held by DSS as part of its ownership interest in Impact, was completed for a total value of $ 1,500,000 , which represents the consideration received from the transaction. With this sale, the shares are now publicly held and are no longer held by DSS. On April 4, 2025, DSS, the parent company of Impact Biomedical, Inc. completed the sale of 890,800 shares of Impact Biomedical common stock. These shares were acquired by DSS during Impact’s initial public offering on September 16, 2024. The sale of these shares, which were previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $ 845,000 , which represents the consideration received from the transaction. With this sale, the shares are now publicly held and are no longer held by DSS. On April 4, 2025, DSS, the parent company of Impact Biomedical, Inc. completed the sale of 115,600 shares of Impact Biomedical common stock. These shares were acquired by DSS during Impact’s initial public offering on September 16, 2024. The sale of these shares, which were previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $ 63,000 , which represents the consideration received from the transaction. With this sale, the shares are now publicly held and are no longer held by DSS. Stock-Based Compensation - The Company records stock-based payment expense related to options and warrants based on the grant date fair value in accordance with FASB ASC 718. Stock-based compensation includes expense charges for all stock-based awards to employees, directors, and consultants. Such awards include option grants, warrant grants, and restricted stock awards. During the six months ended June 30, 2025 and 2024, there were none . 22 Impact BioMedical, Inc. Equity Transactions - On May 10, 2023, the Company, the Company’s Board of Directors approved an amendment to the Articles of Incorporation of the Company to increase the total number of shares of Common Stock to 4,000,000,000 shares with a par value of $ 0.001 . Each share of Common Stock when issued, shall have one (1) vote on all matters presented to the stockholders. Our Amended and Restated Articles of Incorporation also authorized 100,000,000 shares of preferred stock, par value $ 0.001 per share. On May 11, 2023, the Company effected a forward split. As a result, there were 3,877,282,251 shares of our Common Stock and no shares of preferred stock issued and outstanding. Prior to the split, there were 125,073,621 shares of our Common Stock and no shares of preferred stock issued and outstanding. On October 31, 2023, the Company effected a reverse stock split of 1 for 55 . Also on October 31, 2023, DSS BioHealth Securities, Inc., the Company’s largest shareholder converted 60,496,041 shares of Common Stock into 60,496,041 shares of Series A Convertible Preferred Shares, reducing its ownership of the Company’s Common Stock from approximately 88 % to approximately 12 %. As of September 30, 2024 and December 31, 2023, there were 11,503,955 and 10,000,000 , respectively, shares of our Common Stock and 60,496,041 shares of preferred stock issued and outstanding. On August 8, 2023 DSS, the Company’s largest shareholder, distributed to its shareholders of record on July 10, 2023 4 shares of Impact Bio’s stock for 1 share they owned. Each share of Impact BioMedical distributed as part of the distribution will not be eligible for resale until 180 days from the date Impact BioMedical’s initial public offering becomes effective under the Securities Act, subject to the discretion of the Company to lift the restriction sooner. On October 31, 2023, the Company effected a reverse stock split of 1 for 55 . As of December 31, 2023, and December 31, 2022, there were 3,877,282,251 shares of our Common Stock issued and outstanding which was converted to 70,496,041 shares. Also on October 31, 2023, DSS BioHealth Securities, Inc., the Company’s largest shareholder converted 60,496,041 shares of Common Stock into 60,496,041 shares of Series A Convertible Preferred Shares, reducing its ownership of the Company’s Common Stock from approximately 88 % to approximately 12 %. On September 16, 2024, Impact Biomedical Inc., entered into an underwriting agreement (the “Underwriting Agreement”) with Revere Securities, LLC., as representative (the “Representative”) of the underwriters named therein (the “Underwriters”), pursuant to which the Company agreed to sell to the Underwriters in a firm commitment initial public offering (the “Offering”) an aggregate of 1,500,000 of the Company’s shares of common stock, par value $ 0.001 per share at a public offering price of $ 3.00 per share. On September 17, 2024, the Company closed the Offering, and as of September 30, 2024 there were 11,497,703 shares of common stock issued and outstanding. The total net proceeds to the Company from the Offering, after deducting discounts, expenses allowance and expenses, was approximately $ 3,726,000 (inclusive of approximately $ 1.5 million contributed by DSS). A final prospectus relating to this Offering was filed with the Commission on September 16, 2024. The shares of Common Stock were approved to list on the NYSE American under the symbol “IBO” and began trading there on September 16, 2024. The Company also issued warrants to the Representative and its affiliates (the “Representative’s Warrants”) warrants to purchase the number of shares of Common Stock in the aggregate equal to 5% of the Common Stock to be issued and sold in this offering (including any Shares of Common Stock sold upon exercise of the over-allotment option, if applicable). The Representative’s Warrants are exercisable for a price per share equal to 125% of the public offering price. The warrants are exercisable at any time, in whole or in part, commencing nine (9) months from the date of commencement of sales of the offering and ending on the third anniversary thereof . As of September 30, 2024, only the 1,500,000 shares included in the Offering are freely tradable on the NYSE. The remaining outstanding common shares of Impact Biomedical of 9,997,703 are restricted from trading for 180 days from the Offering date. 23 On February 25, 2025, the Company completed the acquisition of certain assets owned by DSS Pure Air, Inc. (DSS PureAir”), a related party, for $ 1,150,000 to be paid by 545,024 shares of the Company’s common stock calculated on a 10-day VWAP. Assets acquired included accounts receivable, inventory and intellectual property of the Celios air purification system. On February 26, 2025, the Company issued 36,433 shares of the Company’s common stock as payment of legal fees incurred associated with the Company’s IPO, registration of shares associated with its equity incentive plan as well as other related services. On June 30, 2025, the Company issued 100,000 shares of the Company’s common stock as payment of legal fees incurred associated with the Company’s merger and share exchange agreement with Dr. Ashleys Limited. Stock-Based Compensation – The Company records stock-based payment expense related to options and warrants based on the grant date fair value in accordance with FASB ASC 718. Stock-based compensation includes expense charges for all stock-based awards to employees, directors and consultants. Such awards include option grants, warrant grants, and restricted stock awards. On October 1, 2024, 880,000 option grants with a purchase price of $ 3.00 per share were awarded to certain officers, directors and consultants of the Company. These options have various vesting periods, and all expire on October 31, 2031. Potential proceeds of these grants is $ 2,640,000 and are fair valued using a Black-Scholes model at approximately $ 50,000 . The Company record stock based compensation expense of approximately $ 4,000 and $ 19,000 for the six month and year ended June 30, 2025 and the year ended December 31, 2024, respectively, and is included in Sales, general and administrative compensation (inclusive of stock based compensation) on the accompanying Statement of Operations. 14. Supplemental Cash Flow Information The following table summarizes supplemental cash flows for the six months ended June 30, 2025 and 2024: Schedule of Supplemental Cash Flow Information 2025 2024 Cash paid for interest $ 1,963,000 $ 501,000 Non-cash investing and financing activities: Shares issued in lieu of bonus cash $ 870,000 $ - Shares issued in lieu of cash as payment for legal services $ 190,000 $ - Stock based compensation $ 4,000 $ - 24 15. Segment Information The Company’s businesses lines are organized, managed, and internally reported as five operating segments. One of these operating segments, Product Packaging, is the Company’s packaging and printing group. Product Packaging operates in the paper board folding carton, smart packaging, and document security printing markets. It markets, manufactures, and sells mailers, photo sleeves, sophisticated custom folding cartons, and complex 3-dimensional direct mail solutions. These products are designed to provide functionality and marketability while also providing counterfeit protection. A second, Biotechnology, invests in, or acquires companies in the biohealth and biomedical fields, including businesses focused on the advancement of drug discovery and prevention, inhibition, and treatment of neurological, oncological, and immune related diseases. This division is also developing open-air defense initiatives, which curb transmission of air-borne infectious diseases, such as tuberculosis and influenza. Biotechnology is also targeting unmet, urgent medical needs. A third operating segment, Securities and Investment Management (“Securities”) was established to develop and/or acquire assets and investments in the securities trading and/or funds management arena. Further, Securities, in partnership with recognized global leaders in alternative trading systems, intends to own and operate in the US a single or multiple vertical digital asset exchanges for securities, tokenized assets, utility tokens, stable coins and cryptocurrency via a digital asset trading platform using blockchain technology. The scope of services within this section is planned to include asset issuance and allocation (securities and cryptocurrency), FPO, IPO, ITO, PPO, STO and UTO listings on a primary market(s), asset digitization/tokenization (securities, currency, and cryptocurrency), and the listing and trading of digital assets (securities and cryptocurrency) on a secondary market(s). Also in this segment is the Company’s real estate investment trust (“REIT”), organized for the purposes of acquiring hospitals and other acute or post-acute care centers from leading clinical operators with dominant market share in secondary and tertiary markets, and leasing each property to a single operator under a triple-net lease. the REIT was formed to originate, acquire, and lease a credit-centric portfolio of licensed medical real estate. The fourth segment, Direct, provides services to assist companies in the emerging growth gig business model of peer-to-peer decentralized sharing marketplaces. It specializes in marketing and distributing its products and services through its subsidiary and partner network, using the popular gig economic marketing strategy as a form of direct marketing. Direct marketing products include, among other things, nutritional and personal care products sold throughout North America, Asia Pacific and Eastern Europe. The fifth business line, Commercial Banking, is organized for the purposes of being a financial network holding company, focused providing commercial loans and on acquiring equity positions in (i) undervalued commercial bank(s), bank holding companies and nonbanking licensed financial companies operating in the United States, South East Asia, Taiwan, Japan and South Korea, and (ii) companies engaged in—nonbanking activities closely related to banking, including loan syndication services, mortgage banking, trust and escrow services, banking technology, loan servicing, equipment leasing, problem asset management, SPAC (special purpose acquisition company) consulting, and advisory capital raising services. From this financial platform, the Company shall provide an integrated suite of financial services for businesses that shall include commercial business lines of credit, land development financing, inventory financing, third party loan servicing, and services that address the financial needs of the world Gig Economy. Approximate information concerning the Company’s operations by reportable segment for the three and six months ended June 30, 2025 and 2024 is as follows. The Company relies on intersegment cooperation and management does not represent that these segments, if operated independently, would report the results contained herein: Schedule of Operations by Reportable Segment Three Months Ended June 30, 2025 Product Packaging Commercial Lending Direct Marketing Biotechnology Securities Corporate Total Revenue $ 4,288,000 $ 9,000 $ - $ 7,000 $ 981,000 $ - $ 5,285,000 Cost of revenue 4,094,000 234,000 ( 7,000 ) 13,000 1,165,000 - 5,499,000 Gross profit (loss) 194,000 ( 225,000 ) 7,000 ( 6,000 ) ( 184,000 ) - ( 214,000 ) Operating expense 754,000 75,000 34,000 1,024,000 737,000 426,000 3,050,000 Operating income (loss) ( 560,000 ) ( 300,000 ) ( 27,000 ) ( 1,030,000 ) ( 921,000 ) ( 426,000 ) ( 3,264,000 ) Other income (expense) ( 37,000 ) ( 170,000 ) ( 7,000 ) 3,000 107,000 922,000 818,000 Net income (loss) from continuing operations before taxes ( 597,000 ) ( 470,000 ) ( 35,000 ) ( 1,027,000 ) ( 814,000 ) 496,000 ( 2,607,000 ) Three Months Ended June 30, 2024 Product Packaging Commercial Lending Direct Marketing Biotechnology Securities Corporate Total Revenue $ 3,539,000 $ 44,000 $ 3,000 $ 1,000 $ 624,000 $ - $ 4,211,000 Cost of revenue 3,598,000 - - 9,000 2,066,000 - 5,673,000 Gross profit (loss) ( 59,000 ) 44,000 3,000 ( 8,000 ) ( 1,442,000 ) - ( 1,462,000 ) Operating expense 823,000 120,000 94,000 663,000 998,000 775,000 3,473,000 Operating income (loss) ( 882,000 ) ( 76,000 ) ( 91,000 ) ( 671,000 ) ( 2,440,000 ) ( 775,000 ) ( 4,935,000 ) Other income (expense) ( 29,000 ) 578,000 195,000 3,000 ( 127,000 ) ( 827,000 ) ( 207,000 ) Net income (loss) from continuing operations before taxes ( 911,000 ) 502,000 104,000 ( 668,000 ) ( 2,567,000 ) ( 1,602,000 ) ( 5,142,000 ) Six Months Ended June 30, 2025 Product Packaging Commercial Lending Direct Marketing Biotechnology Securities Corporate Total Revenue $ 8,286,000 $ 30,000 $ - $ 21,000 $ 1,900,000 $ - $ 10,237,000 Cost of Revenue 7,895,000 212,000 ( 7,000 ) 24,000 2,561,000 - 10,685,000 Gross profit (loss) 391,000 ( 182,000 ) 7,000 ( 3,000 ) ( 661,000 ) - ( 448,000 ) Operating expense 1,464,000 140,000 68,000 2,080,000 899,000 1,891,000 6,542,000 Operating income (loss) ( 1,073,000 ) ( 322,000 ) ( 61,000 ) ( 2,083,000 ) ( 1,560,000 ) ( 1,891,000 ) ( 6,990,000 ) Other income (expense) ( 75,000 ) ( 416,000 ) ( 1,000 ) 46,000 ( 970,000 ) 598,000 ( 818,000 ) Net loss from continuing operations ( 1,148,000 ) ( 738,000 ) ( 62,000 ) ( 2,037,000 ) ( 2,530,000 ) ( 1,293,000 ) ( 7,969,000 ) Six Months Ended June 30, 2024 Product Packaging Commercial Lending Direct Marketing Biotechnology Securities Corporate Total Revenue $ 6,620,000 $ 146,000 $ 3,000 $ 2,000 $ 1,311,000 $ - $ 8,082,000 Cost of revenue 6,365,000 469,000 - 19,000 3,810,000 - 10,663,000 Gross profit (loss) 255,000 ( 323,000 ) 3,000 ( 17,000 ) ( 2,499,000 ) - ( 2,581,000 ) Operating expense 1,547,000 234,000 154,000 1,467,000 2,122,000 1,511,000 7,035,000 Operating income (loss) ( 1,292,000 ) ( 557,000 ) ( 151,000 ) ( 1,484,000 ) ( 4,621,000 ) ( 1,511,000 ) ( 9,616,000 ) Other income (expense) ( 75,000 ) ( 324,000 ) 186,000 ( 126,000 ) ( 284,000 ) 13,000 ( 610,000 ) Net income (loss) from continuing operations ( 1,367,000 ) ( 881,000 ) 35,000 ( 1,610,000 ) ( 4,905,000 ) ( 1,498,000 ) ( 10,226,000 ) 25 The following tables disaggregate our business segment revenues by major source: Schedule of Disaggregation of Revenue Printed Products Revenue Information: Three months ended June 30, 2025 Packaging Printing and Fabrication $ 4,150,000 Commercial and Security Printing 122,000 Real Property Rental Income 16,000 Total Printed Products $ 4,288,000 Three months ended June 30, 2024 Packaging Printing and Fabrication $ 3,434,000 Commercial and Security Printing 87,000 Real Property Rental Income 18,000 Total Printed Products $ 3,539,000 Six months ended June 30, 2025 Packaging Printing and Fabrication $ 7,966,000 Commercial and Security Printing 257,000 Real Property Rental Income 32,000 Total Printed Products $ 8,255,000 Six months ended June 30, 2024 Packaging Printing and Fabrication $ 6,287,000 Commercial and Security Printing 278,000 Real Property Rental Income 34,000 Total Printed Products $ 6,599,000 Biotechnology Three months ended June 30, 2025 Retail internet sales $ 7,000 Total Biotechnology $ 7,000 Three months ended June 30, 2024 Retail internet sales $ 1,000 Total Biotechnology $ 1,000 Six months ended June 30, 2025 Retail internet sales $ 21,000 Total Direct Marketing $ 21,000 Six months ended June 30, 2024 Retail internet sales $ 2,000 Total Direct Marketing $ 2,000 Securities Revenue Information Three months ended June 30, 2025 Rental income $ 699,000 Commission income $ 282,000 Total Rental Income $ 981,000 Three months ended June 30, 2024 Rental income $ 420,000 Commission income $ 204,000 Total Rental Income $ 624,000 Six months ended June 30, 2025 Rental income $ 1,429,000 Total Rental Income $ 1,429,000 Six months ended June 30, 2024 Rental income $ 838,000 Total Rental Income $ 838,000 Commercial Lending Revenue Information: Three months ended June 30, 2025 Net Investment Income $ 9,000 Total Investment Income $ 9,000 Three months ended June 30, 2024 Net Investment Income $ 44,000 Total Rental Income $ 44,000 Six months ended June 30, 2025 Net investment income $ 29,000 Total Management fee income $ 29,000 Six months ended June 30, 2024 Net Investment Income $ 136,000 Total Management fee income $ 136,000 26 16. Related Party Transactions The Company owns 127,179,291 shares or approximately 4 % of the outstanding shares of Alset International Limited (“Alset Intl”), a company incorporated in Singapore and publicly listed on the Singapore Exchange Limited. This investment is classified as a marketable security and is classified as long-term assets on the consolidated balance sheets as the Company has the intent and ability to hold the investments for a period of at least one year. The Chairman of the Company, Mr. Heng Fai Ambrose Chan, is the Executive Director and Chief Executive Officer of Alset Intl. Mr. Chan is also the majority shareholder of Alset Intl as well as the largest shareholder of the Company. The fair value of the marketable security as of June 30, 2025 and December 31, 2024, was approximately $ 2,098,000 and $ 2,518,000 , respectively. During the six months ended June 30, 2025 and 2024, the Company recorded unrealized loss of approximately $ 420,000 and $ 356,000 , respectively. On September 10, 2020, the Company’s wholly owned subsidiary DSS Securities, Inc. entered into membership interest purchase agreement with BMI Financial Group, Inc. a Delaware corporation (“BMIF”) and BMI Capital International LLC, a Texas limited liability company (“BMIC”) whereas DSS Securities, Inc. purchased 14.9 % membership interests in BMIC for $ 100,000 . DSS Securities also had the option to purchase an additional 10 % of the outstanding membership interest which it exercised for $ 100,000 in January of 2021 and increased its ownership to 24.9 %. The Company is currently accounting for this investment under the equity method of accounting per ASC 323. The Company’s portion of net loss in BMIC during the three months ended June 30, 2025 and 2024, approximated $ 5,000 and $ 7,000 , respectively. BMIC is a broker-dealer registered with the Securities and Exchange Commission, is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”), and is a member of the Securities Investor Protection Corporation (“SIPC”). The Company’s chairman of the board and another independent board member of the Company also have ownership interest in BMIC. On February 28, 2022, the Company entered into a Stock Purchase Agreement with Alset EHome International Inc. (“AEI”), pursuant to which AEI has agreed to sell a subsidiary holding 62,336,908 shares of stock of True Partner Capital Holding Limited exchange for 17,570,948 shares of common stock of the Company (the “DSS Shares”). The Company’s Executive Chairman and a significant stockholder, Heng Fai Ambrose Chan is the Chairman, Chief Executive Officer and largest shareholder of AEI. On August 29, 2022, DSS Financial Management Inc and BMI Capital, Inc. (“BMIC”), a related party, entered into a promissory note (“Note 8”) in the principal sum of $ 100,000 with interest of 8 %, is due in three quarterly instalments beginning on September 14, 2022. All unpaid principal and interest is due on August 29, 2025 . The outstanding principal and interest at June 30, 2025, and December 31, 2024 approximated $ 83,000 , and was fully reserved for as of June 30, 2025 and December 31, 2024. DSS owns 24.9 % of the outstanding common shares of BMIC. On May 8, 2023, DSS Financial Management Inc and BMIC entered into a promissory note (“Note 9”) in the principal sum of $ 102,000 with interest at the prime rate plus 2 % ( 10.5 % at September 30, 2024 and December 31, 2023) with a maturity date of May 7, 2026 . . The outstanding principal and interest at June 30, 2025, and December 31, 2024 approximated $ 110,000 , and was fully reserved for as of June 30, 2025 and December 31, 2024. DSS owns 24.9 % of the outstanding common shares of BMIC. On July 26, 2022, APF and VEII, Inc. (“VEII”) entered into a promissory note (“Note 10”) in the principal sum of $ 1,000,000 with interest of 8 % with all unpaid principal and interest due on July 26, 2024 . This note was amended so that all unpaid principal and interest is due July 26, 2025. The outstanding principal and interest as of June 30, 2025 and December 31, 2024 approximates $ 959,000 . Approximately $ 959,000 of this note was reserved for as of December 31, 2024. The outstanding principal and interest on December 31, 2023, approximates $ 939,000 , net of $ 20,000 of unamortized origination fees and is included in notes receivable on the accompanying consolidate balance sheet. Heng Fai Ambrose Chan, the Chairman of DSS, Inc is also the on the board of directors of VEII. On October 13, 2021, LVAM entered into loan agreement with BMIC (“BMIC Loan”), a related party, whereas LVAM borrowed the principal amount of $ 3,000,000 , with interest to be charged at a variable rate to be adjusted at the maturity date. The BMIC loan contains an auto renewal period of three months, with a current maturity date of July 2025. As of June 30, 2025, and December 31, 2024, the outstanding principal and interest of approximately $ 464,000 and $ 463,000 , respectively, are included in Current portion of long-term debt – related party, net on the consolidated balance sheet. On October 13, 2021, LVAM entered into a loan agreement with Lee Wilson Tsz Kin (“Wilson Loan”), a related party, whereas LVAM borrowed the principal amount of $ 3,000,000 , with interest to be charged at a variable rate to be calculated at the maturity date. The Wilson Loan matures on October 12, 2022 , and contains an auto renewal period of three months with a current maturity date of July 2025. As of March 31, 2025, and December 31, 2024, the outstanding principal and interest of approximately $ 145,000 and $ 145,000 , respectively, are included in Current portion of long-term debt – related party, net on the consolidated balance sheet. On February 6, 2025, as a bonus for compensation awarded to Heng Fai Holdings Limited (“HFHL”), a Hong Kong Company, which is beneficially owned by Mr. Heng Fai Ambrose Chan, Director of DSS, Inc., and pursuant to DSS, Inc’s. 2020 Employee, Director and Consultant Equity Incentive Plan (the “Plan”), HFHL was awarded 1,000,000 shares of the Company’s common stock under the Plan, for services rendered. The issuance was approved by the board of directors on January 31, 2025. 17. Subsequent Events The Company has evaluated all subsequent events and transactions through August 14, 2025 the date that the condensed consolidated financial statements were available to be issued and noted no subsequent events requiring financial statement recognition or disclosure other than noted below: On June 21, 2025, Impact BioMedical Inc. (“Impact”), Dr Ashleys Limited, a Cayman Islands exempted company limited by shares (“PubCo”), Dr Ashleys Nevada Sub, Inc., a Nevada corporation and wholly-owned subsidiary of PubCo (“Merger Sub”), Dr Ashleys Bio Labs Limited, a Cayman Islands exempted company limited by shares (“Dr Ashleys Cayman”), and Kanans Visvanats (a.k.a. Kannan Vishwanatth), a Latvian national, solely in his capacity as the sole shareholder of Dr Ashleys (“Dr Ashleys Shareholder”) entered into a Merger and Share Exchange Agreement (the “Merger Agreement”). Pursuant to the Merger Agreement and subject to the terms and conditions set forth therein, (i) Merger Sub shall be merged with and into Impact with Impact being the surviving entity (the “Merger”), and (ii) simultaneous with or immediately following the Merger, PubCo shall acquire all of the issued and outstanding ordinary shares of Dr Ashleys Cayman from the Dr Ashleys Shareholder (the “Share Exchange”). This transaction is expected to close during the fourth quarter of 2025. 27