Dss, Inc 10-Q for FY2024 Q1

Dss, Inc. (DSS)

10-Q 2024-05-14 For: 2024-03-31

Added on April 10, 2026

About this 10-Q

Dss, Inc filed this 10-Q on May 14, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).

Headline figures

Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $3.87M; down 67.5% from $11.93M a year earlier
Net loss: $4.07M; compared with a net loss of $8.04M a year earlier
Diluted EPS: -$0.58; compared with -$1.16 a year earlier

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Emerging growth company ☐

Title of each class		Ticker symbol(s)		Name of each exchange on which registered
Common Stock, $0.02 par value per share		DSS		The NYSE American LLC

PART I	FINANCIAL INFORMATION	3
Item 1	Condensed Consolidated Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	3
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023	4
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023	5
	Condensed Consolidated Statement of Changes in Stockholders’ Equity for the three months ended March 31, 2024 and 2023	6
	Notes to Interim Condensed Consolidated Financial Statements	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 4	Controls and Procedures	33

PART II	OTHER INFORMATION	34
Item 1	Legal Proceedings	34
Item 1A	Risk Factors	34
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3	Defaults upon Senior Securities	34
Item 4	Mine Safety Disclosures	34
Item 5	Other Information	34
Item 6	Exhibits	34

	March 31, 2024 (unaudited)			December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	9,252,000		$	6,615,000
Accounts receivable, net		2,863,000			3,994,000
Inventory		3,627,000			2,819,000
Assets held for sale		51,624,000			51,595,000
Current portion of notes receivable		4,062,000			8,772,000
Prepaid expenses and other current assets		736,000			839,000
Total current assets		72,164,000			74,634,000

Property, plant and equipment, net		6,225,000			6,417,000
Investment in real estate, net		6,252,000			6,279,000
Other investments		1,282,000			1,282,000
Investment, equity method		127,000			128,000
Marketable securities		8,483,000			9,979,000
Notes receivable		87,000			111,000
Other assets		133,000			97,000
Right-of-use assets		7,026,000			7,210,000
Goodwill		26,862,000			26,862,000
Other intangible assets, net		19,859,000			20,193,000
Total assets	$	148,500,000		$	153,192,000

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	4,084,000		$	3,654,000
Accrued expenses and deferred revenue		3,004,000			2,512,000
Other current liabilities		932,000			983,000
Current portion of lease liability		684,000			686,000
Current portion of long-term debt, net		47,509,000			47,776,000
Total current liabilities		56,213,000			55,611,000

Long-term debt, net		7,431,000			7,451,000
Long term lease liability		6,752,000			6,917,000

Commitments and contingencies (Note 11)		-			-

Stockholders’ equity
Preferred stock, $0.02 par value; 47,000 shares authorized, zero shares issued and outstanding (zero on December 31, 2023); Liquidation value $1,000 per share, zero aggregate. zero on December 31, 2023).		-			-
Common stock, $0.02 par value; 200,000,000 shares authorized, 7,066,772 shares issued and outstanding (7,066,772 on December 31, 2023)		140,000			140,000
Additional paid-in capital		319,963,000			319,963,000
Accumulated deficit		(260,248,000	)		(256,176,000	)
Total DSS stockholders’ equity		59,855,000			63,927,000
Non-controlling interest in subsidiaries		18,249,000			19,286,000
Total stockholders’ equity		78,104,000			83,213,000

Total liabilities and stockholders’ equity	$	148,500,000		$	153,192,000


	For the Three Months Ended March 31,
	2024			2023
Revenue:
Printed products	$	3,073,000		$	6,130,000
Rental income		400,000			1,685,000
Net investment income		95,000			117,000
Direct marketing		-			3,994,000
Commission revenue		303,000			-
Total revenue		3,871,000			11,926,000

Costs and expenses:
Cost of revenue		4,990,000			8,533,000
Selling, general and administrative		3,561,000			8,973,000
Total costs and expenses		8,551,000			17,506,000

Operating loss		(4,680,000	)		(5,580,000	)

Other income (expense):
Interest income		107,000			130,000
Dividend income		-			4,000
Other income (expense)		21,000			(65,000	)
Interest expense		(48,000	)		(249,000	)
Loss on equity method investment		(1,000	)		(4,000	)
Loss on investments		(189,000	)		(2,869,000	)
Provision for loan losses		(294,000	)		-
Loss from operations before income taxes		(5,084,000	)		(8,633,000	)

Income tax loss		(25,000	)		-

Net loss	$	(5,109,000	)	$	(8,633,000	)

Loss from operations attributed to noncontrolling interest		1,037,000			598,000

Net loss attributable to DSS common stockholders	$	(4,072,000	)	$	(8,035,000	)

Loss per common share:
Basic	$	(0.58	)	$	(1.16	)
Diluted	$	(0.58	)	$	(1.16	)

Shares used in computing loss per common share:
Basic		7,066,772			6,950,858
Diluted		7,066,772			6,950,858

	2024			2023
Cash flows from operating activities:
Loss from continuing operations	$	(5,109,000	)	$	(8,633,000	)
Adjustments to reconcile loss from continuing operations to net cash used by operating activities:
Depreciation and amortization		582,000			1,333,000
Loss on equity method investment		1,000			-
Loss on investments		189,000			2,869,000
Change in ROU assets		184,000			16,000
Provision for loan losses		763,000			-
Decrease (increase) in assets:
Accounts receivable		1,347,000			608,000
Inventory		(808,000	)		459,000
Prepaid expenses and other current assets		36,000			(383,000	)
Other assets		(36,000	)		(55,000	)
Increase (decrease) in liabilities:
Accounts payable		430,000			(819,000	)
Accrued expenses		489,000			(9,551,000	)
Change in ROU liabilities		(167,000	)		(43,000	)
Other liabilities		(51,000	)		-
Net cash used by operating activities		(2,150,000	)		(14,199,000	)

Cash flows from investing activities:
Purchase of property, plant and equipment		(3,000	)		(594,000	)
Purchase of investment		(31,000	)		-
Disposal of property, plant and equipment		-			32,000
Change in equity investment		-			5,000
Sale of marketable securities		1,160,000			11,330,000
Payments received on notes receivable		3,971,000			764,000
Net cash provided by investing activities		5,097,000			11,537,000

Cash flows from financing activities:
Payments of long-term debt		(1,062,000	)		(4,002,000	)
Borrowings of long-term debt		752,000			1,106,000
Net cash used by financing activities		(310,000	)		(2,896,000	)

Net increase (decrease) in cash		2,637,000			(5,558,000	)
Cash and cash equivalents at beginning of period		6,615,000			19,290,000

Cash and cash equivalents at end of period	$	9,252,000		$	13,732,000

															-
	Common Stock				Preferred Stock				Additional Paid-in		Accumulated			Total DSS			Non- controlling Interest in
	Shares		Amount		Shares		Amount		Capital		Deficit			Equity			Subsidiary			Total

Balance, December 31, 2022		6,950,858	$	139,000		-	$	-	$	319,766,000	$	(194,343,000	)	$	125,562,000		$	31,119,000		$	156,681,000
															-
Net loss		-		-		-		-		-		(8,035,000	)		(8,035,000	)		(598,000	)		(8,633,000	)
Balance, March 31, 2023		6,950,858	$	139,000		-	$	-	$	319,766,000	$	(202,378,000	)	$	117,527,000		$	30,521,000		$	148,048,000

Balance, December 31, 2023		7,066,772	$	140,000		-	$	-	$	319,963,000	$	(256,176,000	)	$	63,927,000		$	19,286,000		$	83,213,000
Balance		7,066,772	$	140,000		-	$	-	$	319,963,000	$	(256,176,000	)	$	63,927,000		$	19,286,000		$	83,213,000

Net loss		-		-		-		-		-		(4,072,000	)		(4,072,000	)		(1,037,000	)		(5,109,000	)
Balance, March 31, 2024		7,066,772	$	140,000		-	$	-	$	319,963,000	$	(260,248,000	)	$	59,855,000		$	18,249,000		$	78,104,000
Balance		7,066,772	$	140,000		-	$	-	$	319,963,000	$	(260,248,000	)	$	59,855,000		$	18,249,000		$	78,104,000

	March			December
	2024			2023
Finished Goods	$	2,318,000		$	2,218,000
Work in Process		845,000			180,000
Raw Materials		479,000			439,000
Inventory Gross	$	3,642,000		$	2,837,000
Less allowance for obsolescence		(15,000	)		(18,000	)
Inventory Net	$	3,627,000		$	2,819,000

	2024
	cost		Unrealized Gain/(Loss)			Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	9,182,000	$	-		$	9,182,000	$	9,182,000	$	-
Level 1
Money Market Funds		70,000		-			70,000		70,000		-
Marketable Securities		26,629,000		(17,146,000	)		8,483,000		-		8,483,000
Total	$	34,881,000	$	(17,146,000	)	$	17,735,000	$	9,252,000	$	8,483,000

	2023
	Adjusted Cost		Unrealized Gain/(Loss)			Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	6,545,000	$	-		$	6,545,000	$	6,545,000	$	-
Level 1
Money Market Funds	$	70,000		-		$	70,000		70,000		-
Marketable Securities	$	27,304,000		(17,325,000	)	$	9,979,000		-		9,979,000
Total	$	33,919,000	$	(17,325,000	)	$	16,594,000	$	6,615,000	$	9,979,000

Year	Amount
2024	$	47,509,000
2025		858,000
2026		902,000
2027		948,000
2028		996,000
Thereafter		3,727,000

	Totals
2024	$	719,000
2025		861,000
2026		839,000
2027		808,000
2028		824,000
After		4,913,000
Total lease payments		8,964,000
Less: Imputed Interest		(1,598,000	)
Present value of remaining lease payments	$	7,436,000

Current	$	684,000
Noncurrent	$	6,752,000

Weighted-average remaining lease term (years)		10.1

Weighted-average discount rate		4.1	%

Three Months Ended March 31, 2024	Product Packaging			Commercial Lending			Direct Marketing			Biotechnology			Securities			Corporate		Total
Revenue	$	3,080,000		$	104,000		$	-		$	-		$	687,000		$	-	$	3,871,000
Depreciation and amortization		190,000			-			34,000			288,000			69,000			1,000		582,000
Cost of Revenue		2,767,000			469,000			-			10,000			1,744,000			-		4,990,000
Interest expense		47,000			-			-			-			1,099,000			-		1,146,000
Interest income		-			-			36,000			6,000			63,000			2,000		107,000
Net income (loss) from continuing operations		(474,000	)		(1,382,000	)		(70,000	)		(942,000	)		(2,349,000	)		108,000		(5,109,000	)
Capital expenditures		3,000			-			-			-			-			-		3,000
Total Identifiable assets		20,475,000			9,361,000			6,178,000			48,882,000			58,327,000			5,277,000		148,500,000
Assets held for sale		-			-			-			-			51,595,000			-		51,595,000

Three Months Ended March 31,2023	Product Packaging		Commercial Lending			Direct Marketing			Biotechnology			Securities			Corporate			Total
Revenue	$	6,130,000	$	117,000		$	3,994,000		$	-		$	1,685,000		$	-		$	11,926,000
Depreciation and amortization		188,000		-			46,000			298,000			743,000			58,000			1,333,000
Cost of revenue		4,660,000		-			1,290,000			-			2,537,000			46,000			8,533,000
Interest expense		39,000		-			-			-			210,000			-			249,000
Interest income		-		-			4,000			94,000			32,000			-			130,000
Net income (loss) from continuing operations		696,000		(564,000	)		(3,187,000	)		(848,000	)		(2,028,000	)		(2,702,000	)		(8,633,000	)
Capital expenditures		576,000		-			(15,000	)		5,000			28,000			-			594,000
Identifiable assets		25,217,000		43,133,000			20,539,000			52,983,000			76,003,000			8,875,000			226,750,000

Three months ended March 31, 2024
Packaging Printing and Fabrication	$	2,882,000
Commercial and Security Printing		191,000
Total Printed Products	$	3,073,000

Three months ended March 31, 2023
Packaging Printing and Fabrication	$	5,865,000
Commercial and Security Printing		265,000
Total Printed Products	$	6,130,000

Three months ended March 31, 2024
Direct Marketing Internet Sales	$	-
Total Direct Marketing	$	-

Three months ended March 31, 2024
Commission income	$	303,000
Total commission income	$	303,000

	●	Sentinel Brokers Company, Inc.: Sentinel primarily operates as a financial intermediary, facilitating institutional trading of municipal and corporate bonds as well as preferred stock, and accelerates the trajectory of the DSS digital securities business.

	●	DSS AmericaFirst: DSS AmericaFirst is a suite of mutual funds managed by DSS Wealth Management. DSS AmericaFirst expects to expand into numerous investment platforms including additional mutual funds, exchange-traded funds, unit investment trusts, and closed-end funds. DSS AmericaFirst currently consists of four mutual funds that seek to outperform their respective benchmark indices by applying a quantitative rules-based approach to security selection.

	Three months ended March 31, 2024		Three months ended March 31, 2023		% Change

Printed products	$	3,073,000	$	6,130,000		-50	%
Rental income		400,000		1,685,000		-76	%
Net investment income		95,000		117,000		-19	%
Commission revenue		303,000		-		N/A
Direct marketing		-		3,994,000		-100	%

Total Revenue	$	3,871,000	$	11,926,000		-68	%

Exhibit Number		Exhibit Description

3.1		Certificate of Incorporation *

3.2		Fifth Amended and Restated Bylaws *

3.3		Amendment 1 to Fifth Amended and Restated Bylaws

10.1		Securities Purchase Agreement between Decentralized Sharing Systems, Inc. and Sharing Services Global Corporation for the sale of HWH Holdings, Inc.

10.2		Securities Purchase Agreement between Decentralized Sharing Systems, Inc. and Sharing Services Global Corporation for the sale of HWH World, Inc.

31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.*

31.2		Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer. *

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. *

32.2		Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. *

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)*

	DSS, INC.

May 14, 2024	By:	/s/ Frank D. Heuszel
		Frank D. Heuszel
		Chief Executive Officer
		(Principal Executive Officer)

May 14, 2024	By:	/s/ Todd D. Macko
		Todd D. Macko
		Chief Financial Officer

	If to Buyer to:	Sharing Services Global Corporation Address: 5200 Tennyson Parkway Plano TX 75024

	If to Seller to:	Decentralized Sharing Systems, Inc. Address: 275 Wiregrass Pkwy Henrietta, New York 14586

	With copies to:	Sichenzia Ross Ference LLP 1185 Avenue of the Americas, 31^st Floor New York, New York 10036 Attention: Darrin M. Ocasio Facsimile No.: (212) 930-9725 Sichenzia Email: DMOcasio@SRF.LAW

	By Seller:

	DECENTRALIZED SHARING SYSTEMS, INC.

	By:
	Name:
	Title:

	By Buyer:

	SHARING SERVICES GLOBAL CORPORATION

	By:
	Name:
	Title:

	(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.