IMPACT BIOMEDICAL INC. 10-K

ITEM 9A - CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures An evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934 as of December 31, 2023. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2023, to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there were resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Management’s Annual Report on Internal Control over Financial Reporting Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023. In making this assessment, management used the framework established in “Internal Control—Integrated Framework” promulgated by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, commonly referred to as the “COSO” criteria. Based on our assessment, we concluded that, as of December 31, 2023, our internal control over financial reporting was not effective based on those criteria. 43 In connection with management’s assessment of our internal control over financial reporting described above, the following weakness has been identified in the Company’s internal control over financial reporting as of December 31, 2023: 1. The Company did not maintain a sufficient complement of qualified accounting personnel and controls associated with segregation of duties over complex transactions. 2. There was no systematic method of documenting that timely and complete monthly reconciliation and closing procedures take place. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report. Changes in Internal Control over Financial Reporting Remediation of the Material Weaknesses Management believes it has taken significant steps during 2022, and in 2023, to strengthen our overall internal controls and eliminate the material weakness of those controls. During the 2024 fiscal year, the Company will document and test the remediations put in place. Such remediation includes the following: ● The Company hired a Controller, Director of External Reporting, Senior Accountant and Cost Accountant in 2022. The Company has re-assigned responsibilities of other staff members to assist in the Company’s financial reporting as well as segregating duties to serve as a check and balance on employees’ integrity and to maintain the best control system possible. ● The Company has centralized its accounting functions across all divisions. The goal of this process is to support the segregation of duties and to allow the Chief Financial Officer to focus on ensuring reporting packages, reconciliations, and other financial reports are accurate and timely reported. ● A monthly operations and financial review is performed with key members of the management team, executive committee, and accounting team which has enhanced the timeliness, formality and rigor of our financial statement preparation, review and reporting process. ● Routine account reconciliations for all key balance sheet accounts have been initiated. These account reconciliations are reviewed timely by an independent person. ● Procedures have been enhanced and count sheets modified to ensure accuracy of physical inventory counts. The Company is committed to maintaining a strong internal control environment and believes that these remediation efforts will represent significant improvements in our controls. The Company has started to implement these steps, however, some of these steps will take time to be fully integrated and confirmed to be effective and sustainable. Additional controls may also be required over time. Changes in Internal Control over Financial Reporting While changes in the Company’s internal control over financial reporting occurred during the year ended December 31, 2023 as the Company continued to implement the remediation steps described above, we have not been able to fully document and test these controls to ensure their effectiveness over financial reporting during the year ended December 31, 2023, and thus cannot conclude that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. ITEM 9B – OTHER INFORMATION None. 44 PART III ITEM 10 - DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The following table sets forth the name, age and position of each of our executive officers, key employees and directors. Name Age Position Heng Fai Ambrose Chan 78 Chairman of the Board Frank D. Heuszel 65 Chief Executive Officer and Director Mark Suseck 62 Chief Operating Officer Todd D. Macko 51 Chief Financial Officer Dr. Elise Brownell 70 Director Melissa Sims 54 Director David Keene 66 Director Christian Zimmerman 45 Director Castel Hibbert 64 Director Biographical and certain other information concerning the Company’s officers and directors is set forth below. There are no familial relationships among any of our directors. Except as indicated below, none of our directors is a director in any other reporting companies. None of our directors has been affiliated with any company that has filed for bankruptcy within the last ten years. We are not aware of any proceedings to which any of our directors, or any associate of any such director is a party adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries. Each executive officer serves at the pleasure of the Board of Directors. Heng Fai Ambrose Chan , 78, has served as an executive director of DSS, Inc. (NYSE: DSS) (formerly known as Document Security Systems, Inc.) since January 2017 and as Executive Chairman of the Board since March 2019. Mr. Chan founded Alset EHome International, Inc. and has served as Chairman of the Board and Chief Executive Officer since inception in March 2018. Mr. Chan has extensive experience in banking and finance, with 45 years of experience in these industries. He has restructured numerous companies in various industries and countries during the past 40 years. Mr. Chan has served as the Chief Executive Officer of Alset EHome International Inc.’s subsidiary Alset International Limited (“Alset”) (SGX: 40V) since April 2014. Mr. Chan joined the Board of Directors of Alset in May 2013. Mr. Chan has served as the Director of Sharing Services Global Corporation since April 2020. Mr. Chan has served as a director of Alset’s 99.69%-owned subsidiary GigWorld Inc. since October 2014. He also served as a director of Alset’s indirect subsidiary LiquidValue Development Inc. since January 2017. Mr. Chan has also appointed as Chairman and Chief Executive Officer of Alset Capital Acquisition Corp, a New York Stock Exchange listed company, since October 2021. In addition, Mr. Chan has been as a board member of Value Exchange International, Inc. since December 2021. 45 Frank D. Heuszel , 64, has served as a Director of the Company since August 2020. From August 2020 to August 2023, Mr. Heuszel served as President of the Company. Since April 2023, Mr. Heuszel has also served as Chief Executive Officer of the Company. Since April 11, 2019, Mr. Heuszel has served as the Chief Executive Officer of DSS since April 11, 2019, DSS’s Interim Chief Financial Officer from April 2019 to October 2020, and a director of DSS since July 30, 2018. Mr. Heuszel has extensive experience in a wide array of strategic, business, turnaround, and regulatory matters across several industries as a result of his executive management, educational, and operational experience. Prior to joining DSS, Mr. Heuszel had a very successful career in commercial banking. For over 35 years, Mr. Heuszel served in many senior executive roles with major US and international banking organizations. As a banker Mr. Heuszel has served as General Counsel, Director of Special Assets, Credit Officer, Chief Financial Officer and Auditor. Mr. Heuszel also operated a successful law practice focused on the litigation, corporate restructures, and merger and acquisitions, and collections. In addition to being an attorney and executive manager, Mr. Heuszel is also a Certified Public Accountant (retired), and a Certified Internal Auditor. Mr. Heuszel holds an undergraduate degree in Business Administration from The University of Texas at Austin and a J.D. degree from The South Texas College of Law, Houston. Mark Suseck , 62, has served as Chief Operating Officer of the Company since August 2023. Mr. Suseck served as the chief operating officer of DSS BioHealth Holdings Inc., a subsidiary of DSS, Inc., from 2020-2023, where he leads company strategy, operations, licensing, acquisitions and commercialization. From 2021 to 2022, Mr. Suseck served as the chief executive officer of Vivacitas Oncology Inc., where he led company strategy, clinical development, operations and financing. From 2018-2019, Mr. Suseck was vice president of global sales and marketing at Helius Medical Technologies Inc. Mr. Suseck received his undergraduate degree in economics from Rutgers University, with minors in education and philosophy. He completed the Executive Management Program in residence at the University of Michigan Business School. Todd D. Macko , 51, has been Secretary and Treasurer of the Company since January 2021 and in May 2023 became Chief Financial Officer of the Company. Mr. Macko has served as the Chief Financial Officer of DSS since August 16, 2021. Mr. Macko previously served as the Vice President of Finance of DSS. As the Vice President of Finance, Mr. Macko’s responsibilities included assisting DSS’s Interim Chief Financial Officer in all aspects of financial and regulatory reporting. In addition, his responsibilities included the day-to-day management of the Company’s Accounting and Finance team and the financial leadership in the directing and improving of the accounting, reporting, audit, and tax activities. Prior to his role as Vice President of Finance for the Company, Mr. Macko joined the wholly owned subsidiary of DSS, Premier Packaging Corporation in January 2019, as its Vice President of Finance. Mr. Macko is a Certified Public Accountant with over 25 years of public and corporate financial management, business leadership and corporate strategy. Mr. Macko brings a wealth of experience with strengths in financial planning and analysis, business process re-engineering, budgeting, merger and acquisitions, financial reporting systems, project evaluation and treasury and capital management. Prior to joining the Company, Mr. Macko served as the Corporate Controller for Baldwin Richardson Foods, a leading custom ingredients manufacturer for the food and beverage industry from November 2015 until January 2019. Prior to that, Mr. Macko served as the Controller for The Outdoor Group, LLC., Genesis Vision, Inc., Complemar Partners, Inc., and Level 3 Communications, Inc. Mr. Macko obtained his Bachelor of Science degree in Accounting from Rochester Institute of Technology. Dr. Elise Brownell , 70, has served as a director of the Company since January 2021. Dr. Brownell has more than 20 years of biotechnology and pharmaceutical project management experience with a proven track record of advancing programs through clinical development. She serves as a Life Sciences entrepreneurial advisor for ASTIA, the nation’s premier entrepreneurial organization focused on women-led businesses. Dr. Brownell is also a member of the Editorial Advisory Board for Contract Pharma Magazine, and previous Chair of the Leaders Network program of Women in Consulting. She is the co-founder of ZephyrBiotech, LLC, a project management firm dedicated to advancing therapeutic candidates through development to key inflection points for clients. Earlier, Dr. Brownell was a founding member, head of project management and senior director of Aerovance, Inc., a venture-backed biotechnology company spun out from Bayer Healthcare, where she created and managed effective team processes to bring product candidates into full scale clinical Phase 1 and 2 developments. Prior to Aerovance, Dr. Brownell acted as head of project management for Bayer’s Biotechnology Unit, where she integrated project strategies to meet therapeutic and market needs. Other roles included building and negotiating partnerships with third parties to support development programs, leading research teams through early bench-to-clinic development phases, as well as entrepreneurial investment experience with Angel’s Forum. Dr. Brownell received her M.S., M.Phil. and Ph.D. degrees in biology from Yale University and her B.S. degree in biology from Allegheny College. 46 Melissa Sims , 54, has served as a director of the Company since May 2023. Ms. Sims is an Illinois licensed attorney having practiced law since 1995. Following graduation from Northern Illinois University College of Law, Ms. Sims started the general practice of law representing clients in banking, health care, real estate, criminal, dissolution, municipal and probate matters in state and appellate courts. In 2006, she represented the Village of DePue, Illinois regarding legacy pollution from a Superfund site and set national precedent before the Court of Appeals for the Seventh Circuit. In 2021, the United States Supreme Court cited the Village of DePue v. ExxonMobil as precedent in the Atlantic Richfield v. Christian case. Starting in August of 2017, Ms. Sims has been employed with the international law firm, Milberg Coleman Bryson Phillps Grossman, PLLC and recently represented clients in the National Opioid multidistrict litigation in the Northern District of Ohio. She also represents municipalities across the country in tort actions in state, federal and appellate courts. Ms. Sims brings to the Board her decades of plaintiff litigation with offer keen insight into potential matters which may be of importance on behalf of the Company. The Board believes that her legal background, knowledge expertise, and litigation experience will add great value to the board slate. David Keene , 66, is an executive level banker with 44 years of commercial banking experience with progressive responsibilities in all facets of credit risk management in both community and regional bank environments. Currently, Mr. Keene acts as chief credit officer of Unity National Bank; a position he has held since September 2022. As chief credit officer, he oversees loan policy, collections, loan operations, credit administration, and all credit underwriting and analysis, problem loan workouts. From May 2018 to September 2022, Mr. Keene was a senior credit risk officer at Community Bank of Texas in Houston, Texas. In this position, he was, among other tasks, responsible for the support of the credit underwriting of high-net-worth individuals, partnerships, and companies. Mr. Keene received a Bachelor of Business Administration degree from Baylor University in 1979. The Board believes that his background, knowledge expertise, and experience will add great value to the board slate. Christian Zimmerman , 45, is currently the executive vice president—chief financial officer of Keystone Bank, SSB. Mr. Zimmerman has held this position since April 2019. In this position, Mr. Zimmerman, among other tasks, reviews and prepares monthly, quarterly and year-end financial reports. From December 2015 to April 2019, Mr. Zimmerman was the executive vice president – controller of Community Bank of Texas, N.A. where he was involved in, among other responsibilities, regulatory reporting for the bank and its holding company, and preparing financial reports. Mr. Zimmerman worked on the holding company’s initial public offering with a focus on the financial statements and analysis. Mr. Zimmerman is a certified public accountant and received a Bachelor of Business Administration degree and a Master’s degree in Professional Accounting from the University of Texas at Austin. The Board believes that Mr. Zimmerman’s experience with initial public offerings, financial reporting and regulatory reporting will add great value to the board slate. Castel Hibbert , 64, has been involved in corporate banking for 39 years and has held various management, underwriting and line responsibilities. Since August 2011, Mr. Hibbert has been an executive vice president and managing director at Veritex Community Bank. He currently works with upper middle market companies whose annual revenues range from $75 million to $800 million. Mr. Hibbert received a Bachelor of Science degree in employee relations from Michigan State University in 1981 and a Master in Business Administration degree from the University of Texas at Austin in 1983. Committees of our Board Audit Committee . On September 28, 2023, our Board established the audit committee. The audit committee is appointed by the Board to assist the Board in its duty to oversee the Company’s accounting, financial reporting, and internal control functions and the audit of the Company’s financial statements. The role of the audit committee is to ● oversee management in the performance of its responsibility for the integrity of the Company’s accounting and financial reporting and its systems of internal controls, ● the performance and qualifications of the Company’s independent auditor, including the independent auditor’s independence, ● the performance of the Company’s internal audit function; and ● the Company’s compliance with legal and regulatory requirements. Our audit committee will consist of Mr. Castel Hibbert, Mr. Christian Zimmerman, Mr. David Keene, with Mr. Zimmerman serving as chair. Our Board has affirmatively determined that each meets the definition of “independent director” under the rules of NYSE American, and that they meet the independence standards under Rule 10A-3. Each member of our audit committee meets the financial literacy requirements of NYSE American’s rules. Our Board has adopted a written charter for the audit committee. 47 Compensation Committee . On September 28, 2023, the Board established the compensation committee. The compensation committee is responsible for reviewing and recommending, among other things: ● the adequacy and form of compensation of the Board; ● the compensation of Chief Executive Officer, including base salary, incentive bonus, stock option and other grant, award and benefits upon hiring and on an annual basis; ● the compensation of other senior management upon hiring and on an annual basis; and ● the Company’s incentive compensation and other equity-based plans and recommending changes to such plans to our Board, when necessary. Our compensation committee will consist of Dr. Elise Brownell, Ms. Melissa Sims and Mr. Castel Hibbert with Dr. Brownell serving as chair. Our Board has adopted a written charter for the compensation committee. Nominating and Corporate Governance Committee . On September 28, 2023, the board established the nominating and corporate governance committee. The nominating committee is responsible for, among other things: ● developing criteria for membership on the board of directors and committees; ● identifying individuals qualified to become members of the board of directors; ● recommending persons to be nominated for election as directors and to each committee of the board of directors; ● annually reviewing our corporate governance guidelines; and ● monitoring and evaluating the performance of the board of directors and leading the board in an annual self-assessment of its practices and effectiveness. Our nominating and corporate governance committee will consist of Ms. Melissa Sims, Mr. David Keene and Dr. Brownell with Ms. Sims serving as chair. Our Board has adopted a written charter for the nominating and corporate governance committee. Term of office All directors hold office until the next annual meeting of the stockholders of the company and until their successors have been duly elected and qualified. Officers are elected by and serve at the discretion of our Board. Code of Business Conduct and Ethics On September 28, 2023, the Board adopted a Business Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Our Business Code of Ethics has been made available on our website. Involvement in Certain Legal Proceedings None of our directors or executive officers has been involved in any legal proceedings in the past 10 years that would require disclosure under Item 401(f) of Regulation S-K. 48 ITEM 11 - EXECUTIVE COMPENSATION No compensation has been paid to our executive officers or directors during the past two fiscal years. Name and Principal Position Year Salary ($) Bonus ($) Stock Awards ($) Option Awards ($) All Other Compensation ($) Total Compensation ($) Frank D. Heuszel 2023 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Chief Executive Officer, President and Director 2022 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Mark Suseck 2023 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Chief Operating Officer 2022 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Todd D. Macko 2023 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Chief Financial Officer 2022 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Heng Fai Ambrose Chan 2023 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Chairman of the Board 2022 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Dr. Elise Brownell 2023 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Director 2022 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Melissa Sims 2023 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Director 2022 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 David Keene 2023 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Director 2022 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Christian Zimmerman 2023 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Director 2022 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Castel Hibbert 2023 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Director 2022 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Employment Agreements There are no employment agreements. Director Compensation The Company has not paid any compensation to any directors since inception. Outstanding Equity Awards at Fiscal Year-End There are no outstanding equity awards held by the Company’s named executive officers or directors as of December 31, 2023. 2023 Equity Incentive Plan Our Board has adopted the 2023 Equity Incentive Plan, or 2023 Plan. As of December 31, 2023, no shares have been issued in relation to this plan. 49 ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth certain information regarding the beneficial ownership of our common stock and Series A Convertible Preferred Stock as of December 31, 2023 by: ● each of our named executive officers; ● each of our directors; ● all of our current directors and executive officers as a group; and ● each stockholder known by us to own beneficially more than five percent of our common stock. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Shares of common stock that may be acquired by an individual or group within 60 days of December 31, 2023, pursuant to the exercise of options or warrants and convertible debt are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group. Percentage of ownership of common stock is based on 10,000,000 shares of common stock outstanding on February 14, 2024. Percentage of ownership of Series A Convertible Preferred Stock is based on 60,496,041 shares of issued and outstanding preferred stock as of February 14, 2024 Except as indicated in footnotes to this table, we believe that the stockholders named in this table have sole voting and investment power with respect to all shares of common stock and Series A Convertible Preferred Stock shown to be beneficially owned by them, based on information provided to us by such stockholders. Unless otherwise indicated, the address of all listed stockholders is c/o Impact BioMedical Inc., 1400 Broadfield Blvd., Suite 130, Houston, Texas TX 77084. Beneficial Ownership of Common Stock Name of Beneficial Owner Number of Shares Beneficially Owned Percentage of Shares Beneficially Owned 5% or More Stockholders DSS, Inc. (3) 1,178,882 11.8 % Directors and Executive Officers Heng Fai Ambrose Chan (1) 4,568,165 45.7 % Frank D. Heuszel 95,475 * Mark Suseck - * Dr. Elise Brownell - * Todd D. Macko 121 * Melissa Sims - * Christian Zimmerman - * David Keene - * Castel Hibbert - * All officers and directors as a group (9 persons) 4,663,761 46.6 % * Less than 1% (1) The beneficial ownership of Heng Fai Ambrose Chan includes 4,568,165 shares of common stock, consisting of (a) 453,285 shares of common stock held by Global Biomedical Pte. Ltd.; and (b) 1,553,904 shares of common stock held by Alset International Limited (c) 2,560,976 shares of common stock held by Alset Inc. (2) DSS indirectly owns the shares through DSS BioHealth Security, Inc., its wholly-owned subsidiary. 50 Beneficial Ownership of Series A Convertible Preferred Stock Name of Beneficial Owner Number of Outstanding Series A Preferred Beneficially Owned Percentage of Outstanding Series A Preferred Beneficially Owned DSS, Inc.(1) 60,496,041 100 % (1) DSS indirectly owns the shares through DSS BioHealth Security, Inc., its wholly-owned subsidiary. As of the date of this prospectus, the holder has not converted any of the shares of Series A Convertible Preferred Stock into shares of the Company’s common stock and is precluded from doing so for 75 days after October 31, 2023 (the date of issuance). Equity Compensation Plans Information The following table sets forth information about our equity compensation plans as of December 31, 2023. Restricted stock to be issued upon vesting Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance (under equity compensation Plans (excluding securities reflected in column (a & b)) Plan Category (a) (b) (c) (d) Equity compensation plans approved by security holders 2023 Employee, Director and Consultant Equity Incentive Plan - options - - $ - - 2023 Employee, Director and Consultant Equity Incentive Plan - warrants - - $ - - 2023 Employee, Director and Consultant Equity Incentive Plan - - - 10,574,000 Total - - $ - 10,574,000 ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Related Party Transactions Based on Shareholders Agreement entered into on April 26, 2017, the Company would fund the scientific operations of GRDG, a company involved in research and development of biomedical products which is a minority stockholder of two of the Company’s subsidiaries and is owned by Daryl Thompson, a director of many subsidiaries of the Company, to do the development and research works on the biomedical products for the Company. On February 15, 2022, the Company and its subsidiaries, Global BioLife, Inc. (“Global”), and Impact BioLife Sciences, Inc. (“BioLife Sciences”), and GRDG entered into a Licensing Proceeds Distribution Agreement (“GRDG Agreement”), whereas GRDG would transfer its 20% equity position in both Global and BioLife Sciences to the Company in exchange for 20% interest in Global and/or BioLife Science revenue received from the exclusive or non-exclusive licensing of and/or the sale of Global Intellectual Property to a Third Party, net of specific costs. As of the date of this report, no contingent liability has been recognized under the GRDG Agreement. As of December 31, 2023, this funding approximates $25,000, per month. As of December 31, 2023, the Company incurred approximately $447,000 in expenses. 51 On March 15, 2021, the Company, through one of its subsidiaries, entered into a Stock Purchase Agreement (the “Vivacitas Agreement #1”) with Vivacitas Oncology Inc. (“Vivacitas”), to purchase 500,000 shares of its common stock at the per share price of $1.00, with an option to purchase 1,500,000 additional shares at the per share price of $1.00. This option will terminate upon one of the following events: (i) Vivacitas’ board of directors cancels this option because it is no longer in the best interest of the Company; (ii) December 31, 2022; or (iii) the date on which Vivacitas receives more than $1.00 per share of the Company’s common stock in a private placement with gross proceeds of $500,000. Under the terms of the Vivacitas Agreement #1, the Company will be allocated two seats on the board of Vivacitas. On March 18, 2021, the Company entered into an agreement with Alset EHome International, Inc. (“Seller”) to purchase from the Seller’s wholly owned subsidiary Impact Oncology PTE Ltd. (“IOPL”) for a purchase price of $2,480,000. The acquisition of IOPL has been treated as an asset acquisition as IOPL does not meet the definition of a business as defined in Topic 805. IOPL owns 2,480,000 shares of common stock of Vivacitas along with the option to purchase an additional 250,000 shares of common stock. The Sellers largest shareholder is Mr. Chan Heng Fai Ambrose, the Chairman of the Company’s board of directors and its largest shareholder. On April 1, 2021, the Company entered into an additional stock purchase agreement with Vivacitas (“Vivacitas Agreement #2”), whereas Vivacitas wished to employ the service of the Chief Business Officer of Impact Biomedical, and in return for the services of this individual, Vivacitas shall issue to the Company, the aggregate purchase price for the Class A Common Shares of Vivacitas at the value of $1.00 per share shall be $120,000 to be paid in twelve (12) equal monthly installments for the period between April 1, 2021 and March 31, 2022. On July 22, 2021, the Company exercised 1,000,000 of the available options under the Vivacitas Agreement #1 for $1,000,000. This, along with the shares received as part Vivacitas Agreement #2 increased the Company’s equity position in Vivacitas to approximately 16% as of December 31, 2022. As of December 31, 2022, the Company determined to impair 100% of its investment in Vivacitas, in the amount of $4,100,000. On June 1, 2022, Impact Biolife Science, Inc. assigned and transferred its entire interest of 100 shares of common stock of DSS PureAir, Inc. to DSS BioHealth Holdings, Inc. for consideration of $100. Effective January 18, 2024, DSS, the Company’s majority shareholder, and Impact BioMedical entered into an amendment to the revolving promissory note dated March 1, 2023 (the “Original Note”), whereby DSS loaned Impact an original amount of up to $12,000,000 (the “Loan”). Pursuant to the amendment, DSS agreed to amend the existing Original Note to (1) extend the maturity date of the Loan to September 30, 2030, (ii) advance funds under the Original Note to fund and pay interest to date, bringing the funded principal balance to $12,859,328.60, (iii) eliminate any advance feature under the terms of the Original Note, (iv) establish specific repayment terms for the Note balance, and (v) amend the interest rate to a market rate of interest (the “Amendment”). The Amendment is secured by a blanket first lien on all assets of Impact including but not limited to, any licenses or patents owned. Pursuant to the Amendment, payment of interest and principal will be on demand. If DSS does not make a demand, then Impact will repay the principal and interest in 60 payments (1) on the last day of each month during the period from February 1, 2024, through and including January 31, 2026, Impact will pay DSS the outstanding unpaid accrued interest owing; (2) on the last day of each month during the period from February 1, 2026, through and including August 31, 2030, Impact will pay DSS $126,380.80, being comprised of both principal and interest payment; and (3) on September 30, 2030, Impact will pay the entire amount of unpaid principal and interest then outstanding. The Amendment to the Original Note has modified the interest rate to WSJ Prime + 0.50% floating daily, with an initial interest rate of 9% and the post maturity rate is the lesser of (A) the maximum rate allowed by law or (B) 18.000% per annum based on a year of 360 days. Impact may pay without penalty all or a portion of the amount owed earlier than it is due. If an event of default occurs, other than a default in payment under the Amendment or any other note and/or the filing of bankruptcy, whether voluntarily or involuntarily, is curable, it may be cured if Impact, after DSS sends written notice demanding cure of such default, (1) cures the default within ten (10) business days; or (2) if the cure requires more than ten (10) business days, immediately initiates steps which DSS deems its sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. Impact has agreed to indemnify DSS and, among others, its members, officers and directors from and against any and all losses, damages, expenses or liabilities of any kind or nature and from any suits, claims or demands incurred in investigating or defending such claim, suffered by any of them and caused by, relating to, arising out of, resulting from, or in any way connected with the note, any loan documents or the transactions contemplated therein. Director Independence The Company has adopted the standards of NYSE American for determining the independence of its directors. The Company is not listed on NYSE American and is not subject to the rules of NYSE American but applies the rules established by NYSE American to establish director independence. 52 These independence standards specify the relationships deemed sufficiently material to create the presumption that a director is not independent. No director qualifies as independent unless the Company’s Board affirmatively determines that the director does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In addition, Section 803A of the NYSE American Company Guide (and related commentary) sets forth the following non-exclusive list of persons who shall not be considered independent: (a) a director who is, or during the past three years was, employed by the Company, other than prior employment as an interim executive officer (provided the interim employment did not last longer than one year); (b) a director who accepted or has an immediate family member who accepted any compensation from the Company in excess of $120,000 during any period of twelve consecutive months within the three years preceding the determination of independence, other than the following: (i) compensation for Board or Board committee service, (ii) compensation paid to an immediate family member who is an employee (other than an executive officer) of the Company, (iii) compensation received for former service as an interim executive officer (provided the interim employment did not last longer than one year), or (iv) benefits under a tax-qualified retirement plan, or non-discretionary compensation; (c) a director who is an immediate family member of an individual who is, or at any time during the past three years was, employed by the Company as an executive officer; (d) a director who is, or has an immediate family member who is, a partner in, or a controlling shareholder or an executive officer of, any organization to which the Company made, or from which the Company received, payments (other than those arising solely from investments in the Company’s securities or payments under non-discretionary charitable contribution matching programs) that exceed 5% of the organization’s consolidated gross revenues for that year, or $200,000, whichever is more, in any of the most recent three fiscal years; (e) a director who is, or has an immediate family member who is, employed as an executive officer of another entity where at any time during the most recent three fiscal years any of the issuer’s executive officers serve on the compensation committee of such other entity; or (f) a director who is, or has an immediate family member who is, a current partner of the Company’s outside auditor, or was a partner or employee of the Company’s outside auditor who worked on the Company’s audit at any time during any of the past three years. Directors serving on the Company’s audit committee must also comply with the additional, more stringent requirements set forth in Section 803B of the NYSE American Company Guide and Rule 10A-3 of the Securities Exchange Act of 1934, as amended. Consistent with these considerations, the Board affirmatively determined that Mr. Castel Hibbert, Mr. Christian Zimmerman, Mr. David Keene, Dr. Elise Brownell and Ms. Melissa Sims each meets the definition of “independent director” under the rules of NYSE American. Directors serving on the Company’s compensation committee must also comply with the additional, more stringent requirements as set forth in Section 805(c) of the NYSE American Company Guide. Parent of the Company DSS BioHealth Securities, Inc., a wholly-owned subsidiary of DSS, Inc. owns approximately 87% of the voting shares of the Company which includes 60,496,041 shares of the Company’s Series A Convertible Preferred Stock, which is 100% of the Company’s issued and outstanding Series A Convertible Preferred Stock, ITEM 14 - PRINCIPAL ACCOUNTING FEES AND SERVICES Audit Fees Audit fees consist of fees for professional services rendered for the audit of the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K, the review of financial statements included in the Company’s Quarterly Reports on Form 10-Q, and for services that are normally provided by the auditor in connection with statutory and regulatory filings or engagements. The aggregate fees billed for professional services rendered by our former independent public accounting firm, Grassi & Co. CPAs, P.C., Jericho, NY, for audit and review services for the fiscal year ended December 31, 2023 were approximately $210,000. The aggregate fees build for professional services rendered by Grassi&Co for audit and review services for the fiscal year ended December 31, 2022 was approximately $123,000. The anticipated fees associated with the audit of the year ended December 31, 2023, is expected to range between $40,000 and $65,000. 53 Tax Fees Impact BioMedical for the years ended December 31, 2023 and 2022 is included in the consolidated tax return of DSS, Inc. and does not file separate federal or state tax returns. In 2022, Impact BioMedical engaged Greendyke Jencik & Associates CPAs, PLLC to render quarterly and year end tax provisions. The aggregate fees for 2023 and 2022 were approximately $2,000 and $2,000. All Other Fees There were fees billed for professional services rendered by our principal accountant, Grassi & Co. CPAs, P.C., associated with the Company’s S-1 filings approximating $87,000 for the years ended December 31, 2023. Administration of the Engagement; Pre-Approval of Audit and Permissible Non-Audit Services The Company’s Audit Committee Charter requires that the Audit Committee establish policies and procedures for pre-approval of all audit or permissible non-audit services provided by the Company’s independent auditors. Our Audit Committee, approved, in advance, all work performed for year ended December 31, 2023 and nine-months ended September 30, 2024, by our principal accountant, Grassi & Co. CPAs, P.C. The Audit Committee may establish, either on an ongoing or case-by-case basis, pre-approval policies and procedures providing for delegated authority to approve the engagement of the independent registered public accounting firm, provided that the policies and procedures are detailed as to the particular services to be provided, the Audit Committee is informed about each service, and the policies and procedures do not result in the delegation of the Audit Committee’s authority to management. In accordance with these procedures, the Audit Committee pre-approved all services performed by Grassi & Co. CPAs, P.C. 54 PART IV ITEM 15 – EXHIBITS, FINANCIAL STATEMENT SCHEDULES The following exhibits to this registration statement included in the Index to Exhibits are incorporated by reference. Exhibit Number Exhibit Description 1.1 Form of Underwriting Agreement between the Company and Aegis Capital Corp. incorporated by reference to Exhibit 1.1 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 3.1 Amended and Restated Articles of Incorporation of Impact BioMedical Inc. dated July 29, 2020 incorporated by reference to Exhibit 3.1 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 3.2 Certificate of Amendment to the Amended and Restated Articles of Incorporation of Impact BioMedical Inc. incorporated by reference to Exhibit 3.2 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 3.3 Certificate of Amendment to the Amended and Restated Articles of Incorporation of Impact BioMedical Inc. incorporated by reference to Exhibit 3.3 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 3.4 Certificate of Amendment to the Amended and Restated Articles of Incorporation of Impact BioMedical Inc. incorporated by reference to Exhibit 3.4 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 3.5 Bylaws of the Company incorporated by reference to Exhibit 3.5 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 3.6 Certificate of Designation of Series A Convertible Preferred Stock incorporated by reference to Exhibit 3.6 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 4.1 Form of Underwriter Warrant incorporated by reference to Exhibit 4.1 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.1 Share Exchange Agreement dated as of April 27, 2020, among Document Security Systems, Inc., DSS BioHealth Security, Inc., Singapore Development Limited and Global BioMedical Pte Ltd. incorporated by reference to Exhibit 10.1 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.2 Subscription Agreement dated December 19, 2020, between the Company and BioMed Technologies Asia Pacific Holdings Limited incorporated by reference to Exhibit 10.2 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.3 Promissory Note with Dustin Michael Crum dated February 21, 2021 incorporated by reference to Exhibit 10.3 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.4 Stock Purchase Agreement dated March 15, 2021 between the Company and Vivacitas Oncology Inc. incorporated by reference to Exhibit 10.4 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.5 Convertible Promissory Note dated May 14, 2021 incorporated by reference to Exhibit 10.5 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 55 10.6 Revolving Promissory Note dated December 31, 2020 incorporated by reference to Exhibit 10.6 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.7 Royalty Agreement by and between Global BioLife Inc. and Chemia Corporation, dated August 15, 2018 incorporated by reference to Exhibit 10.7 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.8 Addendum to Royalty Agreement by and between Global BioLife Inc. and Chemia Corporation, dated November 27, 2018 incorporated by reference to Exhibit 10.8 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.9 Distribution Agreement by and between BioMed Technologies Asia Pacific Holdings Limited and Impact BioMedical Inc., dated December 9, 2020 incorporated by reference to Exhibit 10.9 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.10 Global BioLife, Inc. Stockholders’ Agreement among Global BioLife, Inc., Global BioMedical, Inc., Holista Colltech Limited, and GRDG Sciences, LLC, dated April 26, 2017 incorporated by reference to Exhibit 10.10 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.11 Amendment No. 1 to Global BioLife, Inc. Stockholders’ Agreement among Global BioLife, Inc., Global BioMedical, Inc., Holista Colltech Limited, and GRDG Sciences, LLC, dated May 22, 2018 incorporated by reference to Exhibit 10.11 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.12 Amendment No. 2 to Global BioLife, Inc. Stockholders’ Agreement among Global BioLife, Inc., Global BioMedical, Inc., Holista Colltech Limited, and GRDG Sciences, LLC, dated August 2020 incorporated by reference to Exhibit 10.12 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.13 Impact BioLife Science, Inc. Stockholders Agreement among Impact BioLife Science, Inc., Impact BioMedical Inc. and GRDG Sciences, LLC, dated December 11, 2020 incorporated by reference to Exhibit 10.13 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.14 Licensing Proceeds Distribution Agreement with GRDG Sciences, LLC dated May 16, 2022 incorporated by reference to Exhibit 10.14 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.15 Amendment No. 1 to Revolving Promissory Note dated December 31, 2021 incorporated by reference to Exhibit 10.15 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.16 Amendment No. 2 to Revolving Promissory Note dated March 31, 2022 incorporated by reference to Exhibit 10.16 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.17 License Agreement with ProPhase Labs, Inc. dated March 17, 2022 incorporated by reference to Exhibit 10.17 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.18 License Agreement with ProPhase Labs, Inc. dated July 18, 2022 incorporated by reference to Exhibit 10.18 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.19 Licensing Proceeds Distribution Agreement with GRDG Sciences, LLC dated February 15, 2022 incorporated by reference to Exhibit 10.19 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.20 Share Exchange Agreement between Impact BioMedical Inc. and DSS BioHealth Security, Inc. incorporated by reference to Exhibit 10.20 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 10.21 Amendment to Promissory Note effective January 18, 2024 between Impact BioMedical Inc. and DSS, Inc. incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission File No. 333-253037) filed with the SEC on January 22, 2024. 14.1 Impact BioMedical Employee Handbook incorporated by reference to Exhibit 14.1 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 16.1 Letter from Turner Stone & Company LLP incorporated by reference to Exhibit 16.1 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 21.1 List of subsidiaries of Impact BioMedical Inc. incorporated by reference to Exhibit 21.1 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333- 275062 ) filed with the SEC on November 21, 2023. 23.2 Consent of Grassi & Co., CPAs, P.C. incorporated by reference to Exhibit 23.2 to the Company’s Amendment to the Registration Statement on Form S-1 (No. 333-275062) filed with the SEC on November 21, 2023. 31.1 Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended. 31.2 Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended. 32.1 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rules 13a-14(b) or 15d-14(b) of the Securities and Exchange Act, as amended, and 18 U.S.C. Section 1350. 101.INS Inline XBRL Instance Document 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) ITEM 16 – Form 10K SUMMARY None. 56 SIGNATURES Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. Impact BioMedical, Inc. February 20, 2024 By: /s/ Frank D. Heuszel Frank D. Heuszel Chief Executive Officer (Principal Executive Officer) February 20, 2024 By: /s/ Todd D. Macko Todd D. Macko Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. February 20, 2024 By: /s/ Frank D. Heuszel Frank D. Heuszel Chief Executive Officer (Principal Executive Officer) February 20, 2024 By: /s/ Todd D. Macko Todd D. Macko Chief Financial Officer (Principal Financial and Accounting Officer) February 20, 2024 By: /s/ Heng Fai Ambrose Chan Heng Fai Ambrose Chan Chairman of the Board February 20, 2024 By: /s/ Mark Suseck Mark Suseck Chief Operating Officer February 20, 2024 By: /s/ Dr. Elise Brownell Dr. Elise Brownell Director February 20, 2024 By: /s/ Melissa Sims Melissa Sims Director February 20, 2024 By: /s/ Castel Hibbert Castel Hibbert Director February 20, 2024 By: /s/ Christian Zimmerman Christian Zimmerman Director February 20, 2024 By: /s/ David Keene David Keene Director 57