Dss, Inc 8-K/A, filed Mar 10, 2022
Dss, Inc. (DSS)
About this 8-K/A
Dss, Inc filed this 8-K/A on March 10, 2022, reporting on events of December 29, 2021.
Items reported
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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EXPLANATORY NOTE
On December 29, 2021, DSS, Inc., a Nevada corporation (the “Company”), filed a Current Report on Form 8-K to report the Stock Purchase and Share Subscription Agreement (the “Subscription Agreement”) with Sharing Services Global Corporation (“SHRG”) that provided for an investment of up to $3,000,000 by Decentralized Sharing Services Systems, Inc.(“Decentralized”) into SHRG in exchange of an aggregate of fifty million (50,000,000) shares of Class A Common Stock (the “Shares”) and warrants (the “Warrants”) to purchase up to fifty million (50,000,000) shares (the “Warrant Shares”) of Class A Common Stock. The Warrants have a term of five (5) years and are exercisable immediately, at the option of Decentralized at a per share price equal to $0.063 (the “Transaction”). Prior to the transaction, the Company indirectly held a significant investment in SHRG through majority-owned subsidiaries. The Company’s and its subsidiary’s Decentralized’s board of directors approved this Subscription Agreement and the Transaction in connection therewith on December 23, 2021. Following the Transaction, the Company and its subsidiary, including Decentralized, shall own 59.6% shares of Class A Common Stock.
This Current Report on Form 8-K/A is filed as an amendment to the Current Report on Form 8-K filed by the Company on December 29, 2021, solely to include the financial information described in Item 9.01 below that was previously omitted in accordance with Item 9.01(a) and Item 9.01(b) of Form 8-K.
Item 9.01 Financial Statements and Exhibits
| (a) | Pro forma financial information. |
The unaudited Consolidated Balance Sheet of the Company and its subsidiaries as of September 30, 2021 is filed herewith as Exhibit 99.1 and incorporated by reference herein.
The unaudited pro forma condensed combined Statement of Operations and Comprehensive Loss for the Company and SHRG for nine and six months, respectively, ended September 30, 2021 is filed herewith as Exhibit 99.2 and incorporated by reference herein.
The unaudited pro forma Consolidated Balance Sheet of the Company and its subsidiaries as of December 31, 2020, is filed herewith as Exhibit 99.3 and incorporated by reference herein.
The unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) of the Company and its subsidiaries for the years ended December 31, 2020 (for the Company) and March 31, 2021 (for SHRG) are filed herewith as Exhibit 99.4 and incorporated by reference herein.
S-X Article 11 permits the ending date of the periods included for the target company to differ from those of the registrant by up to 93 days.
(b) Exhibits
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: March 10, 2022
| DSS INC. | ||
| By: | /s/ Jason Grady | |
| Jason Grady | ||
| Chief Operating Officer | ||
Exhibit 99.1
DSS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
As of September 30, 2021
| Pre-Acquisition DSS (Purchaser) | Record
12.23.2021 Investment | Post-Acquisition DSS (Purchaser) | Sharing Service Global Corp (Target) | Proforma
Adjustment (Note 1) | Proforma Adjustment (Note 2) | Consolidated | ||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||||
| Current assets: | ||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 69,137,000 | $ | (3,000,000 | ) | $ | 66,137,000 | $ | 28,841,283 | $ | 94,978,283 | |||||||||||||||||
| Restricted cash | 350,000 | 350,000 | - | 350,000 | ||||||||||||||||||||||||
| Accounts receivable, net | 2,774,000 | 2,774,000 | 1,538,965 | 4,312,965 | ||||||||||||||||||||||||
| Income taxes receivable | - | - | 1,974,211 | 1,974,211 | ||||||||||||||||||||||||
| Inventory | 3,535,000 | 3,535,000 | 5,604,519 | 9,139,519 | ||||||||||||||||||||||||
| Current portion of notes receivable | 19,716,000 | 19,716,000 | 136,281 | (16,830,000 | ) | 3,022,281 | ||||||||||||||||||||||
| Prepaid expenses and other current assets | 1,469,000 | 1,469,000 | 2,506,799 | 3,975,799 | ||||||||||||||||||||||||
| Total current assets | 96,981,000 | (3,000,000 | ) | 93,981,000 | 40,602,058 | (16,830,000 | ) | - | 117,753,058 | |||||||||||||||||||
| Property, plant and equipment, net | 6,396,000 | 6,396,000 | 921,694 | 7,317,694 | ||||||||||||||||||||||||
| Investment in real estate | 6,495,000 | 6,495,000 | - | 6,495,000 | ||||||||||||||||||||||||
| Other investments | 11,337,000 | 11,337,000 | - | (6,536,000 | ) | 4,801,000 | ||||||||||||||||||||||
| Investment, equity method | 16,107,000 | 16,107,000 | - | (14,872,000 | ) | 1,235,000 | ||||||||||||||||||||||
| Marketable securities | 9,207,000 | 9,207,000 | - | 9,207,000 | ||||||||||||||||||||||||
| Notes receivable | 4,483,000 | 4,483,000 | - | 4,483,000 | ||||||||||||||||||||||||
| Other assets | 409,000 | 409,000 | 98,312 | 507,312 | ||||||||||||||||||||||||
| Right-of-use assets | 198,000 | 198,000 | 319,517 | 517,517 | ||||||||||||||||||||||||
| Deferred tax asset, net | 283,000 | 283,000 | - | 283,000 | ||||||||||||||||||||||||
| Investment in unconsolidated entities | - | - | 5,051,970 | 5,051,970 | ||||||||||||||||||||||||
| Investment in target | - | 3,000,000 | 3,000,000 | - | (3,000,000 | ) | - | |||||||||||||||||||||
| Goodwill | 43,807,000 | 43,807,000 | - | 43,807,000 | ||||||||||||||||||||||||
| Other intangible assets, net | 23,373,000 | 23,373,000 | 760,299 | 24,133,299 | ||||||||||||||||||||||||
| Total assets | $ | 219,076,000 | $ | - | $ | 219,076,000 | $ | 47,753,850 | $ | (23,366,000 | ) | $ | (17,872,000 | ) | $ | 225,591,850 | ||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||||||||||
| Accounts payable | $ | 1,948,000 | $ | 1,948,000 | $ | 1,169,030 | $ | 3,117,030 | ||||||||||||||||||||
| Accrued expenses and deferred revenue | 9,555,000 | 9,555,000 | - | 9,555,000 | ||||||||||||||||||||||||
| Other current liabilities | 415,000 | 415,000 | 9,750,273 | 10,165,273 | ||||||||||||||||||||||||
| Current portion of lease liability | 122,000 | 122,000 | - | 122,000 | ||||||||||||||||||||||||
| Current portion of long-term debt, net | 498,000 | 498,000 | 100,000 | 598,000 | ||||||||||||||||||||||||
| Total current liabilities | 12,538,000 | - | 12,538,000 | 11,019,303 | - | - | 23,557,303 | |||||||||||||||||||||
| - | ||||||||||||||||||||||||||||
| Long-term debt, net | 6,664,000 | 6,664,000 | 5,367,394 | (4,872,262 | ) | 7,159,132 | ||||||||||||||||||||||
| Long term lease liability | 75,000 | 75,000 | 31,597 | 106,597 | ||||||||||||||||||||||||
| Other long-term liabilities | 507,000 | 507,000 | - | 507,000 | ||||||||||||||||||||||||
| Deferred tax liability, net | - | - | 4,149,937 | 4,149,937 | ||||||||||||||||||||||||
| Stockholders’ equity | ||||||||||||||||||||||||||||
| Preferred stock, $.02 par value; 47,000 shares authorized, shares issued and outstanding (43,000 on December 31, 2020); Liquidation value $1,000 per share, $- aggregate. $43,000,000 on December 31, 2020) | - | - | - | - | - | |||||||||||||||||||||||
| Series A convertible preferred stock, $0.0001 par value, 100,000,000 shares designated, 3,100,000 shares and 5,100,000 shares issued and outstanding at September 30 and March 31, respectively | - | - | 310 | (310 | ) | - | ||||||||||||||||||||||
| Series C convertible preferred stock, $0.0001 par value, 10,000,000 shares designated, 3,220,000 shares and 3,230,000 shares issued and outstanding at September 30 and March 31, respectively | - | - | 322 | (322 | ) | - | ||||||||||||||||||||||
| Common stock, $.02 par value; 200,000,000 shares authorized, 79,745,886 shares issued and outstanding (5,836,000 on December 31, 2020) | 1,594,000 | 1,594,000 | - | - | 1,594,000 | |||||||||||||||||||||||
| Common Stock, $0.0001 par value, 800,000,000 Class A shares authorized, 187,610,769 shares and 160,100,769 shares issued and outstanding at September 30 and March 31, respectively | - | - | 18,761 | (18,761 | ) | - | ||||||||||||||||||||||
| Additional paid-in capital | 294,682,000 | 294,682,000 | 71,922,718 | (27,000,000 | ) | (44,922,718 | ) | 294,682,000 | ||||||||||||||||||||
| Non-controlling interest in subsidiary | 23,395,000 | 23,395,000 | - | (17,686,381 | ) | 5,708,619 | ||||||||||||||||||||||
| Shares to be issued | - | - | 12,146 | (12,146 | ) | - | ||||||||||||||||||||||
| Accumulated deficit | (120,379,000 | ) | (120,379,000 | ) | (44,792,611 | ) | 8,506,262 | 44,792,611 | (111,872,738 | ) | ||||||||||||||||||
| Cumulative translation adjustments | - | - | 23,973 | (23,973 | ) | - | ||||||||||||||||||||||
| Total stockholders’ equity | 199,292,000 | - | 199,292,000 | 27,185,619 | (18,493,738 | ) | (17,872,000 | ) | 190,111,881 | |||||||||||||||||||
| - | ||||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 219,076,000 | $ | - | $ | 219,076,000 | $ | 47,753,850 | $ | (23,366,000 | ) | $ | (17,872,000 | ) | $ | 225,591,850 | ||||||||||||
| Debit | Credit | |||||||
| Note 1: Eliminate intercompany activity | ||||||||
| Current portion of notes receivable | $ | 16,830,000 | ||||||
| Other investments | $ | 6,536,000 | ||||||
| Long-term debt, net | $ | 4,872,262 | ||||||
| Additional paid-in capital | $ | 27,000,000 | ||||||
| Accumulated deficit | $ | 8,506,262 | ||||||
| Note 2: Elimination of SHRG equity | ||||||||
| Investment, equity method | $ | 14,872,000 | ||||||
| Investment in target | $ | 3,000,000 | ||||||
| Series A convertible preferred stock, $0.0001 par value, 100,000,000 shares designated, 3,100,000 shares and 5,100,000 shares issued and outstanding at September 30 and March 31, respectively | $ | 310 | ||||||
| Series C convertible preferred stock, $0.0001 par value, 10,000,000 shares designated, 3,220,000 shares and 3,230,000 shares issued and outstanding at September 30 and March 31, respectively | $ | 322 | ||||||
| Common Stock, $0.0001 par value, 800,000,000 Class A shares authorized, 187,610,769 shares and 160,100,769 shares issued and outstanding at September 30 and March 31, respectively | $ | 18,761 | ||||||
| Additional paid-in capital | $ | 44,922,718 | ||||||
| Non-controlling interest in subsidiary | $ | 17,686,381 | ||||||
| Shares to be issued | $ | 12,146 | ||||||
| Accumulated deficit | $ | 44,792,611 | ||||||
| Cumulative translation adjustments | $ | 23,973 | ||||||
Note 3: DSS, Inc. is performing a valuation of the assets as well as the non-contorlling interest portion of SHRG and its subsidiaries. For purposes of this proforma, and until the valuation is complete, $17,686,381 is included non-controlling interest.
Exhibit 99.2
DOCUMENT SECURITY SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Loss
(unaudited)
| DSS, Inc | Sharing Services Global Corporation | |||||||||||||||
| For the Nine Months Ended September 30, 2021 | For the Six Months Ended September 30, 2021 | Proforma Adjustment (Note 1) | Consolidated | |||||||||||||
| Revenue: | ||||||||||||||||
| Printed products | $ | 10,652,000 | $ | - | (151,509 | ) | $ | 10,500,491 | ||||||||
| Rental income | 184,000 | - | 184,000 | |||||||||||||
| Direct marketing | 2,382,000 | 21,084,827 | 23,466,827 | |||||||||||||
| Total revenue | 13,218,000 | 21,084,827 | (151,509 | ) | 34,151,318 | |||||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of revenue, exclusive of depreciation and amortization | 9,513,000 | 6,278,250 | (151,509 | ) | 15,639,741 | |||||||||||
| Selling, general and administrative (including stock based compensation) | 17,621,000 | 20,213,352 | 37,834,352 | |||||||||||||
| Depreciation and amortization | 2,075,000 | 228,294 | 2,303,294 | |||||||||||||
| Total costs and expenses | 29,209,000 | 26,719,896 | (151,509 | ) | 55,777,387 | |||||||||||
| Operating loss | (15,991,000 | ) | (5,635,069 | ) | - | (21,626,069 | ) | |||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 3,130,000 | - | (1,787,000 | ) | 1,343,000 | |||||||||||
| Other income (expense) | 575,000 | (14,046 | ) | (344,475 | ) | 216,479 | ||||||||||
| Interest expense | (157,000 | ) | (6,056,372 | ) | 1,671,419 | (4,541,953 | ) | |||||||||
| Gain on extinguishment of debt | 116,000 | 1,040,400 | 1,156,400 | |||||||||||||
| (Loss) gain on investment | (10,894,000 | ) | 2,114,970 | 6,410,318 | (2,368,712 | ) | ||||||||||
| Loss on equity method investment | (2,556,000 | ) | - | 2,556,000 | - | |||||||||||
| Gain on employee warrants liability | - | 1,781,100 | 1,781,100 | |||||||||||||
| Amortization of deferred financing costs and debt discount | - | - | - | |||||||||||||
| (Loss) income from continuing operations before income taxes | (25,777,000 | ) | (6,769,017 | ) | 8,506,262 | (24,039,755 | ) | |||||||||
| Income tax benefit | 4,315,000 | 506,245 | 4,821,245 | |||||||||||||
| (Loss) income from continuing operations | (21,462,000 | ) | (6,262,772 | ) | 8,506,262 | (19,218,510 | ) | |||||||||
| Income (loss) from discontinued operations, net of tax | 2,129,000 | - | 2,129,000 | |||||||||||||
| Net (loss) income | (19,333,000 | ) | (6,262,772 | ) | 8,506,262 | (17,089,510 | ) | |||||||||
| Other Comprehensive Income, net of tax | ||||||||||||||||
| Currency translation adjustments | - | 23,973 | 23,973 | |||||||||||||
| Total other comprehensive income | - | 23,973 | - | 23,973 | ||||||||||||
| Comprehensive earnings (loss) | (19,333,000 | ) | (6,238,799 | ) | 8,506,262 | (17,065,537 | ) | |||||||||
| Loss from continuing operations attributed to noncontrolling interest | 336,000 | - | - | 336,000 | ||||||||||||
| Net (loss) income attributable to common stockholders | $ | (18,997,000 | ) | $ | (6,262,772 | ) | $ | 8,506,262 | $ | (16,753,510 | ) | |||||
Note 1: Eliminate intercompany activity
Note 2: DSS, Inc. fiscal year end is December 31st , and Sharing Service Global Corporation fiscal year end is March 31st. DSS’s income statement covers the nine months ended September 30, 2021 while the SHRG income statement covers the six months ended September 30, 2021. As the difference in fiscal year ends do not differ by more that one fiscal quarted, the proforma condensed statements of operations are presented are in compliance with Rule 11-02(c).
Exhibit 99.3
DSS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
As of December 31, 2020
| ASSETS | Pre-Acquisition DSS (Purchaser) December 31, 2020 | Record
12.23.2021 Investment | Post-Acquisition DSS (Purchaser) December 31, 2020 | Sharing
Service Global Corp (Target) March 31, 2021 | Proforma Adjustment (Note 1) | Proforma
Adjustment (Note 2) | Consolidated | |||||||||||||||||||||
| Current assets: | ||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 5,226,000 | $ | (3,000,000 | ) | $ | 2,226,000 | $ | 12,144,409 | $ | - | $ | - | $ | 14,370,409 | |||||||||||||
| Restricted cash | - | - | - | - | - | - | - | |||||||||||||||||||||
| Accounts receivable, net | 3,910,000 | - | 3,910,000 | 1,514,359 | - | - | 5,424,359 | |||||||||||||||||||||
| Income taxes receivable | - | - | - | 107,097 | - | - | 107,097 | |||||||||||||||||||||
| Inventory | 1,955,000 | - | 1,955,000 | 2,471,310 | - | - | 4,426,310 | |||||||||||||||||||||
| Current portion of notes receivable | - | - | - | 94,600 | - | - | 94,600 | |||||||||||||||||||||
| Prepaid expenses and other current assets | 1,359,000 | - | 1,359,000 | 2,403,634 | - | - | 3,762,634 | |||||||||||||||||||||
| Total current assets | 12,450,000 | (3,000,000 | ) | 9,450,000 | 18,735,409 | - | - | 28,185,409 | ||||||||||||||||||||
| Property, plant and equipment, net | 4,146,000 | - | 4,146,000 | 887,950 | - | - | 5,033,950 | |||||||||||||||||||||
| Investment in real estate | - | - | - | - | - | - | - | |||||||||||||||||||||
| Other investments | 1,788,000 | - | 1,788,000 | - | - | - | 1,788,000 | |||||||||||||||||||||
| Investment, equity method | 12,234,000 | - | 12,234,000 | - | (604,000 | ) | (11,630,000 | ) | - | |||||||||||||||||||
| Marketable securities | 9,136,000 | - | 9,136,000 | - | - | - | 9,136,000 | |||||||||||||||||||||
| Notes receivable | 537,000 | - | 537,000 | - | - | - | 537,000 | |||||||||||||||||||||
| Non-current assets held for sale - discontinued operations | 744,000 | - | 744,000 | - | - | - | 744,000 | |||||||||||||||||||||
| Other assets | 384,000 | - | 384,000 | 219,142 | - | - | 603,142 | |||||||||||||||||||||
| Right-of-use assets | 182,000 | - | 182,000 | 428,075 | - | - | 610,075 | |||||||||||||||||||||
| Deferred tax asset, net | - | - | - | 1,873,170 | - | - | 1,873,170 | |||||||||||||||||||||
| Investment in unconsolidated entities | - | - | - | - | - | - | - | |||||||||||||||||||||
| Investment in target | - | 3,000,000 | 3,000,000 | - | - | (3,000,000 | ) | - | ||||||||||||||||||||
| Goodwill | 26,862,000 | - | 26,862,000 | - | - | - | 26,862,000 | |||||||||||||||||||||
| Other intangible assets, net | 23,456,000 | - | 23,456,000 | 188,567 | - | - | 23,644,567 | |||||||||||||||||||||
| Total assets | $ | 91,919,000 | $ | - | $ | 91,919,000 | $ | 22,332,313 | $ | (604,000 | ) | $ | (14,630,000 | ) | $ | 99,017,313 | ||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||||||||||
| Accounts payable | $ | 1,482,000 | $ | - | $ | 1,482,000 | $ | 1,295,174 | $ | - | $ | - | $ | 2,777,174 | ||||||||||||||
| Accrued expenses and deferred revenue | 5,270,000 | - | 5,270,000 | 10,344,014 | - | - | 15,614,014 | |||||||||||||||||||||
| Other current liabilities | 1,435,000 | - | 1,435,000 | 2,473,412 | - | - | 3,908,412 | |||||||||||||||||||||
| Current liabilities held for sale - discontinued operations | 240000 | - | 240,000 | - | - | - | ||||||||||||||||||||||
| Current portion of lease liability | 167,000 | - | 167,000 | - | - | - | 167,000 | |||||||||||||||||||||
| Current portion of long-term debt, net | 278,000 | - | 278,000 | 1,140,031 | - | - | 1,418,031 | |||||||||||||||||||||
| Total current liabilities | 8,872,000 | - | 8,872,000 | 15,252,631 | - | - | 24,124,631 | |||||||||||||||||||||
| - | ||||||||||||||||||||||||||||
| Long-term debt, net | 1,976,000 | - | 1,976,000 | 34,762 | - | - | 2,010,762 | |||||||||||||||||||||
| Long term lease liability | 15,000 | - | 15,000 | 77,810 | - | - | 92,810 | |||||||||||||||||||||
| Non-current liabilities held for sale - discontinued operations | 505,000 | - | 505,000 | - | - | - | ||||||||||||||||||||||
| Other long-term liabilities | 507,000 | - | 507,000 | 808,071 | - | - | 1,315,071 | |||||||||||||||||||||
| Deferred tax liability, net | 3,499,000 | - | 3,499,000 | - | - | - | 3,499,000 | |||||||||||||||||||||
| Stockholders’ equity | ||||||||||||||||||||||||||||
| Preferred stock, $.02 par value; 47,000 shares authorized, shares issued and outstanding (43,000 on December 31, 2020); Liquidation value $1,000 per share, $- aggregate. $43,000,000 on December 31, 2020) | 1,000 | - | 1,000 | - | - | - | 1,000 | |||||||||||||||||||||
| Series A convertible preferred stock, $0.0001 par value, 100,000,000 shares designated, 3,100,000 shares and 5,100,000 shares issued and outstanding at September 30 and March 31, respectively | - | - | - | 510 | - | (510 | ) | - | ||||||||||||||||||||
| Series C convertible preferred stock, $0.0001 par value, 10,000,000 shares designated, 3,220,000 shares and 3,230,000 shares issued and outstanding at September 30 and March 31, respectively | - | - | - | 323 | - | (323 | ) | - | ||||||||||||||||||||
| Common stock, $.02 par value; 200,000,000 shares authorized, 79,745,886 shares issued and outstanding (5,836,000 on December 31, 2020) | 116,000 | - | 116,000 | - | - | - | 116,000 | |||||||||||||||||||||
| Common Stock, $0.0001 par value, 800,000,000 Class A shares authorized, 187,610,769 shares and 160,100,769 shares issued and outstanding at September 30 and March 31, respectively | - | - | - | 16,010 | - | (16,010 | ) | - | ||||||||||||||||||||
| Additional paid-in capital | 174,380,000 | - | 174,380,000 | 43,757,768 | - | (43,757,768 | ) | 174,380,000 | ||||||||||||||||||||
| Non-controlling interest in subsidiary | 3,430,000 | - | 3,430,000 | - | - | (8,470,961 | ) | (5,040,961 | ) | |||||||||||||||||||
| Shares to be issued | - | - | - | 12,146 | - | (12,146 | ) | - | ||||||||||||||||||||
| Accumulated deficit | (101,382,000 | ) | - | (101,382,000 | ) | (37,627,718 | ) | (604,000 | ) | 37,627,718 | (101,986,000 | ) | ||||||||||||||||
| Cumulative translation adjustments | - | - | - | - | - | - | - | |||||||||||||||||||||
| Total stockholders’ equity | 76,545,000 | - | 76,545,000 | 6,159,039 | (604,000 | ) | (14,630,000 | ) | 67,470,039 | |||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 91,919,000 | $ | - | $ | 91,919,000 | $ | 22,332,313 | $ | (604,000 | ) | $ | (14,630,000 | ) | $ | 99,017,313 | ||||||||||||
| Credit | Debit | |||||||
| Note 1: Eliminate intercompany activity | ||||||||
| Investment, equity method | $ | 604,000 | ||||||
| Accumulated deficit | $ | 604,000 | ||||||
| Note 2: Elimination of SHRG equity | ||||||||
| Investment, equity method | $ | 11,630,000 | ||||||
| Investment in target | $ | 3,000,000 | ||||||
| Series A convertible preferred stock, $0.0001 par value, 100,000,000 shares designated, 3,100,000 shares and 5,100,000 shares issued and outstanding at September 30 and March 31, respectively | $ | 510 | ||||||
| Series C convertible preferred stock, $0.0001 par value, 10,000,000 shares designated, 3,220,000 shares and 3,230,000 shares issued and outstanding at September 30 and March 31, respectively | $ | 323 | ||||||
| Common Stock, $0.0001 par value, 800,000,000 Class A shares authorized, 187,610,769 shares and 160,100,769 shares issued and outstanding at September 30 and March 31, respectively | $ | 16,010 | ||||||
| Additional paid-in capital | $ | 43,757,768 | ||||||
| Non-controlling interest in subsidiary | $ | 8,470,961 | ||||||
| Shares to be issued | $ | 12,146 | ||||||
| Accumulated deficit | $ | 37,627,718 | ||||||
| Cumulative translation adjustments | ||||||||
Note 3: DSS, Inc. is performing a valuation of the assets as well as the non-contorlling interest portion of SHRG and its subsidiaries. For purposes of this proforma, and until the valuation is complete, $8,470,961 is included non-controlling interest.
Exhibit 99.4
DOCUMENT SECURITY SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Income (Loss)
(unaudited)
| DSS, Inc | Sharing Services Global Corporation | |||||||||||||||
| Fiscal year ended December 31, 2020 | Fiscal year ended March 31, 2021 | Proforma Adjustment (Note 1) | Consolidated | |||||||||||||
| Revenue: | ||||||||||||||||
| Printed products | $ | 13,000,000 | $ | - | - | $ | 13,000,000 | |||||||||
| Technology sales, services and licensing | 2,085,000 | - | - | 2,085,000 | ||||||||||||
| Rental income | - | - | - | - | ||||||||||||
| Direct marketing | 2,326,000 | 64,811,151 | - | 67,137,151 | ||||||||||||
| Total revenue | 17,411,000 | 64,811,151 | - | 82,222,151 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of revenue, exclusive of depreciation and amortization | 11,207,000 | 18,264,494 | - | 29,471,494 | ||||||||||||
| Selling, general and administrative (including stock based compensation) | 15,867,000 | 48,560,935 | - | 64,427,935 | ||||||||||||
| Depreciation and amortization | 1,084,000 | 163,248 | - | 1,247,248 | ||||||||||||
| Total costs and expenses | 28,158,000 | 66,988,677 | - | 95,146,677 | ||||||||||||
| Operating loss | (10,747,000 | ) | (2,177,526 | ) | - | (12,924,526 | ) | |||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 69,000 | - | - | 69,000 | ||||||||||||
| Other income (expense) | 1,000 | - | - | 1,000 | ||||||||||||
| Interest expense | (185,000 | ) | (47,613 | ) | - | (232,613 | ) | |||||||||
| Gain on extinguishment of debt | 969,000 | - | - | 969,000 | ||||||||||||
| (Loss) gain on investment | 10,609,000 | - | - | 10,609,000 | ||||||||||||
| Loss on equity method investment | 604,000 | - | (604,000 | ) | - | |||||||||||
| Litigation settlements and other non-operating expenses | - | (134,726 | ) | - | (134,726 | ) | ||||||||||
| Gain on employee warrants liability | - | 530,335 | - | 530,335 | ||||||||||||
| Amortization of deferred financing costs and debt discount | (8,000 | ) | - | - | (8,000 | ) | ||||||||||
| (Loss) income from continuing operations before income taxes | 1,312,000 | (1,829,530 | ) | (604,000 | ) | (1,121,530 | ) | |||||||||
| Income tax benefit | 1,774,000 | 594,509 | - | 2,368,509 | ||||||||||||
| (Loss) income from continuing operations | 3,086,000 | (1,235,021 | ) | (604,000 | ) | 1,246,979 | ||||||||||
| Income (loss) from discontinued operations, net of tax | (1,668,000 | ) | - | (1,668,000 | ) | |||||||||||
| Net (loss) income | 1,418,000 | (1,235,021 | ) | (604,000 | ) | (421,021 | ) | |||||||||
| Other Comprehensive Income, net of tax | ||||||||||||||||
| Currency translation adjustments | - | - | - | - | ||||||||||||
| Total other comprehensive income | - | - | - | - | ||||||||||||
| Comprehensive earnings (loss) | 1,418,000 | (1,235,021 | ) | (604,000 | ) | (421,021 | ) | |||||||||
| Loss from continuing operations attributed to noncontrolling interest | 481,000 | - | - | 481,000 | ||||||||||||
| Net (loss) income attributable to common stockholders | $ | 1,899,000 | $ | (1,235,021 | ) | $ | (604,000 | ) | $ | 59,979 | ||||||
Note 1: Eliminate intercompany activity
Note 2: DSS, Inc. fiscal year end is December 31st , and Sharing Service Global Corporation fiscal year end is March 31st. DSS’s income statement covers the nine months ended September 30, 2021 while the SHRG income statement covers the six months ended September 30, 2021. As the difference in fiscal year ends do not differ by more that one fiscal quarted, the proforma condensed statements of operations are presented are in compliance with Rule 11-02(c).