DSS 10-K
Dss, Inc. (DSS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
SECURITIES EXCHANGE ACT OF 1934
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DOCUMENTS INCORPORATED BY REFERENCE
DSS, INC. & SUBSIDIARIES
Table of Contents
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PART I
ITEM 1 - BUSINESS
Overview
DSS, Inc. together with its consolidated subsidiaries (unless the context otherwise requires), referred to herein as “DSS,” “we,” “us,” “our” or the “Company”, currently operates four distinct business lines operate around the globe with primary operations in North America and Asia. The four divisions are:
| 1. | Product Packaging, | |
| 2. | Biotechnology, | |
| 3. | Commercial Lending, | |
| 4. | Securities and Investment Management |
Each of these business lines are in various stages of development, growth, and income generation. Due to these variations in the business cycle, including differences in revenue and assets acquired, the Company is currently reporting financial information for four of these operating segments:
| 1. | Product Packaging, | |
| 2. | Biotechnology, | |
| 3. | Commercial Lending, | |
| 4. | Securities and Investment Management |
As the other divisions grow and start generating material operations and revenue, those operating segments may be added to our financial segmental reporting.
Our divisions, their business lines, subsidiaries, and operating territories:
| 1. | Product Packaging: The Company’s consumer packaging and security printing business is led by its wholly owned subsidiary, Premier Packaging Corporation, Inc. (“Premier”), a New York corporation. Premier operates in the paper board and fiber based folding carton, consumer product packaging, and document security printing markets. It markets, manufactures, and sells sophisticated custom folding cartons, mailers, photo sleeves and complex 3-dimensional direct mail solutions. Premier is currently located in its new facility in Rochester, NY, and primarily serves the US market. |
| 2. | Biotechnology: (“Biotech”) Biotechnology, a science-driven industry sector that uses living organisms and molecular biology to produce healthcare-related products. This division is committed to both funding research and developing intellectual property portfolio. It is currently focused on research in three main areas: (i) development of a universal therapeutic drug platform; (ii) a new sugar substitute; and (iii) a multi-use fragrance. Biotech discovers, confirms, and patents unique science and technologies which can be developed into new offerings in human healthcare and wellness in collaboration with external partners through licensing, co-development, joint ventures, and other relationships. By leveraging technology and new science with strategic partnerships, we provide advances in biopharmaceuticals and over the counter direct to consumer wellness offerings, and drug discovery for the prevention, inhibition, and treatment of neurological, oncology and immuno-related diseases. Assets of this group are organized under the holding company, DSS BioHealth Security, Inc. Its subsidiaries are currently operating in Houston, TX and Rochester, NY. |
| 3. | Commercial Lending: American Pacific Financial, Inc. (“APF”) represents our Company’s commercial lending business line. APF provides financing solutions including commercial business lines of credit, land development financing, inventory financing, equipment financing, and third-party loan servicing. |
| 4. | Securities and Investment Management: The Securities and Investment Management segment was established to develop and/or acquire assets in the securities trading and management arena and includes broker-dealer activities, investment advisory operations, and real estate-related investment entities. This segment includes DSS Securities, Inc., as well as affiliated broker-dealers and investment management platforms. It also includes real estate investment entities formed to acquire and lease healthcare-related properties. In April 2025, thew Company’s majority owned subsidiary Sentinel Brokers Company, Inc., a FINRA-registered broker-dealer subsidiary of the Company, received FINRA approval to act as an underwriter and selling group member for corporate securities offerings. |
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2025 RECAP
The following is a summary of the DSS reported transactions and investments since January 2025 that reflect the active advancements and investments in these business lines:
February 3, 2025 – DSS, Inc. issued a Letter to Shareholders outlining management’s strategic priorities for 2025, including operational efficiency, portfolio optimization, capital discipline, and long-term value creation initiatives.
February 26, 2025 – DSS, Inc. announced the sale of its Celios® air purification asset to Impact BioMedical Inc. in an all-equity transaction valued at approximately $1.15 million. The transaction was completed as part of the Company’s portfolio streamlining efforts.
April 24, 2025 – Sentinel Brokers Company, Inc., a FINRA-registered broker-dealer subsidiary of DSS, Inc., announced that it received FINRA approval to act as an underwriter and selling group member for corporate securities offerings, including IPOs and follow-on offerings.
May 22, 2025 – DSS, Inc. reported financial results for the first quarter ended March 31, 2025. The Company reported year-over-year revenue growth, increased printed product sales within the Product Packaging segment, increased rental income within its real estate portfolio, and the completion of the sale of its Plano, Texas facility for $9.5 million. The Company disclosed that a portion of the proceeds was used to reduce outstanding debt.
June 24, 2025 – DSS, Inc.’s subsidiary, Impact BioMedical Inc., announced that it entered into a definitive merger agreement with Dr. Ashleys Limited. The transaction was structured as a reverse merger and, if consummated, is expected to result in a combined public entity listed on the NYSE American.
| August 18, 2025 – Impact BioMedical Inc. announced the issuance of a United States patent related to its 3F™ intellectual property portfolio, further expanding the Company’s patent protection in insect repellent and antimicrobial applications. |
STRATEGIC BUSINESS PLAN AND PROGRESSION
Here we highlight three specific developments:
As DSS, Inc. enters a new chapter, our strategic focus is to optimize operational efficiencies, realign resources, and position the Company for sustainable long-term growth. This approach has already yielded meaningful results, as demonstrated in our most recent earnings report. Below, we outline our key initiatives moving forward:
Strategic Focus for Revenue Growth and Operational Excellence
| ● | Expansion of High-Impact Business Lines: We are strategically expanding key business units, such as Premier Packaging, to drive growth and contribute to long-term revenue generation. | |
| ● | Exploration of Untapped Markets: DSS, Inc. is committed to identifying and investing in high-growth markets, with a focus on creating scalable and recurring revenue streams across multiple sectors. | |
| ● | Enhancing Accountability Across Business Units: To ensure consistent execution of high-priority opportunities, we are implementing metrics-driven accountability systems across all business units. |
Cost Structure Optimization and Operational Efficiency
| ● | Comprehensive Business Unit Review: We are conducting an extensive evaluation of all business units to identify underperforming segments. Our goal is to restructure, streamline, or divest from non-core areas to bolster our core strengths. | |
| ● | Process and Technology Optimization: To improve productivity and reduce inefficiencies, DSS will introduce new operational tools and processes aimed at reducing waste in procurement, production, and logistics. | |
| ● | Targeted Cost Reduction: We have set a target to reduce costs by 15-20% in the upcoming fiscal year, which will significantly improve profitability and strengthen our financial position. |
Driving Innovation for Competitive Advantage
| ● | Advancing Research and Development (R&D): DSS is leveraging its R&D capabilities to develop cutting-edge solutions in emerging sectors, such as biomedical technologies and sustainable packaging, ensuring our leadership in innovation. | |
| ● | Cultivating Strategic Partnerships: We are actively building partnerships with key industry players to accelerate the market introduction of innovative products and solutions, enhancing our competitive advantage. | |
| ● | Pilot Program Launches: Targeted pilot programs will be deployed in select regions or sectors to validate new initiatives, which, once proven, will be scaled company-wide. |
Maximizing Shareholder Value Through Disciplined Growth
| ● | Disciplined Financial Stewardship: DSS remains steadfast in our commitment to delivering consistent growth, profitability, and returns for shareholders, ensuring long-term value creation. |
| ● | Commitment to Transparency: We will provide regular updates on our progress, milestones, and strategic objectives, ensuring stakeholders remain well-informed of our activities. |
| ● | Exploring Shareholder Rewards: We are exploring initiatives to directly reward our shareholders for their continued trust and support, reinforcing our commitment to shareholder value. |
Three-Stage Development for Exponential Growth
For every completed acquisition, and taking into consideration market conditions and other constraints, we adhere to a well-structured three-stage development process with the goal of maximizing value creation and propelling our growth by expanding our capabilities, strength, and scale.
Stage 1: Asset Acquisition and Organizational Development. In this initial phase, our focus lies in identifying and acquiring assets, vehicles, asset structures, and assembling the necessary talent and organizations. This strategic step serves as the strong foundation upon which we build future growth.
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Stage 2: Revenue Generation and Operational Excellence. Our second stage revolves around driving revenue through diverse channels, including revenue streams, licensing, and other scalable sources. Our primary objective during this phase is the creation of efficient and well-operating businesses that excel in operational performance.
Stage 3: Profitability and Positive EBITDA The third and final stage focuses on achieving positive EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and profitability. This is realized through the optimization of business operations, capitalizing on scale and efficiency to generate sustained profits.
Growth Strategies
IPOs as a Growth Strategy: Our company has plans to pursue Initial Public Offerings (IPOs) as a means to share its success with shareholders. We aim to take our businesses public once they reach an optimal point for effective leverage and meet internal goals and expectations.
Decentralized Sharing Model: We firmly believe in our unique decentralized sharing model, combined with the three-stage development process, to create substantial shareholder value. This model involves distributing dividends from potential IPOs directly to benefit shareholders.
In summary, our strategy delineates a methodical approach encompassing asset acquisition, revenue generation, operational efficiency, profitability, and ultimately, taking businesses public through IPOs to reward our shareholders. We place a strong emphasis on our decentralized sharing model, ensuring that the benefits of our success are shared directly with our valued shareholders.
Premier Packaging Strategic Update and Progression
Premier Packaging Corp. is focusing on its core competencies and growth areas for 2025 and 2026, with a strong emphasis on expanding into targeted markets while enhancing internal capabilities. Here’s an update on the Company’s focus areas and plans:
Focus Areas & Growth Markets
| 1. | Key Growth Markets |
| ○ | Medical Device: Targeting the growing need for safe, compliant, and sustainable packaging solutions for medical products. This sector presents high-margin opportunities, especially for custom paperboard packaging that aligns with regulatory standards (cGMP certifications). |
| ○ | Food & Beverage: With increasing demand for sustainable packaging, Premier Packaging is targeting secondary food packaging. The company is exploring the potential for obtaining SQF (Safe Quality Food) certification, addressing the growing concern for food safety and sustainability in packaging. |
| ○ | Health & Beauty: The company is also focusing on providing cost-effective, sustainable packaging solutions for health and beauty products, particularly where companies are overpaying for high-end packaging. |
| ○ | Mailers: Although not currently investing heavily in this category, the company continues to monitor the opportunity for growth in this space. |
| 2. | Sustainability Initiatives Premier is working towards aggressive sustainability certification and exploring green solutions across its offerings, ensuring that their products meet the growing demand for environmentally friendly packaging. |
Key Strategic Initiatives for 2026
| 1. | Sales Team Development and Specialization: We will prioritize investment in comprehensive, specialized training programs tailored to the unique needs of our key sectors—Food & Beverage, Medical Devices, and Health & Beauty. By equipping our sales force with sector-specific knowledge and customer insights, we aim to drive deeper client relationships, accelerate revenue growth, and position our team as experts in delivering high-value, tailored packaging solutions. |
| 2. | Capital Infrastructure and Technological Advancements: A critical component of our growth strategy for 2026 will be the strategic acquisition and installation of key capital assets. These investments will focus on advanced production technologies and equipment upgrades, including the procurement of glue systems, hot melt units, and enhanced press systems. These actions are expected to significantly expand production capacity, streamline operations, and improve product quality, contributing to both operational efficiency and customer satisfaction. |
| 3. | Optimization of the Quotation Process: To improve our operational efficiency and market competitiveness, we will undertake a comprehensive review and optimization of our quoting process. By leveraging automation tools and advanced analytics, we aim to reduce lead times, enhance the accuracy of cost estimates, and improve our responsiveness to customer inquiries, thereby increasing overall sales conversion rates and strengthening our market position. |
| 4. | Targeted Marketing and Brand Positioning: We will execute a focused marketing strategy designed to enhance brand visibility and reinforce our commitment to sustainability. This will include the development of impactful campaigns that highlight our leadership in eco-friendly packaging, showcase relevant case studies, and promote our ability to solve specific customer pain points. Additionally, we will strengthen our customer engagement initiatives, utilizing digital marketing channels, lead generation tactics, and thought leadership content to increase market penetration and foster long-term customer loyalty. |
These strategic initiatives will be instrumental in positioning the company for sustained growth, profitability, and shareholder value in 2026 and beyond.
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Impact BioMedical, Inc. IPO: A Key Milestone for DSS, Inc.
In 2024, Impact BioMedical, Inc., a subsidiary of DSS, Inc., achieved a significant milestone with the successful completion of its initial public offering (IPO). This event marks a pivotal moment in the strategic evolution of DSS, Inc., reflecting our commitment to creating long-term shareholder value and providing a solid foundation for continued growth within the biotechnology and biomedical sectors.
IPO Overview
Impact BioMedical’s IPO, which was finalized in the latter half of 2024, resulted in the company being listed on a recognized public exchange. This public offering raised substantial capital, enabling Impact BioMedical to further accelerate its expansion into cutting-edge biomedical technologies, which align with the growing demand for advanced healthcare solutions. The funds raised from the IPO will be allocated to advancing R&D initiatives, scaling production capabilities, and enhancing market penetration.
Strategic Importance for DSS, Inc.
The successful IPO of Impact BioMedical is not only a significant achievement for the subsidiary but also serves as a key strategic move for DSS, Inc. By spinning off Impact BioMedical and enabling it to operate as an independent public company, DSS has effectively unlocked the value inherent in this high-potential subsidiary, providing both entities with the flexibility to pursue their respective growth trajectories. The IPO also enhances DSS’s ability to focus on its core operations while benefiting from any future financial or strategic synergies with Impact BioMedical.
Financial and Market Impact
The completion of Impact BioMedical’s IPO reflects a robust market appetite for innovative biotech companies with strong growth prospects. For DSS, Inc., the IPO has led to increased market visibility and raised investor confidence in our broader portfolio. The capital infusion into Impact BioMedical, combined with the increased operational independence of the subsidiary, positions both DSS, Inc. and Impact BioMedical for sustainable growth in the rapidly evolving biomedical sector.
Sentinel Brokers Company
Sentinel Brokers Company (“Sentinel Brokers” or “Sentinel”), a majority owned subsidiary of the Company, operates as a registered broker-dealer and is subject to regulation by the Financial Industry Regulatory Authority (“FINRA”) and the U.S. Securities and Exchange Commission (“SEC”). During the year ended December 31, 2025, Sentinel Brokers continued to maintain its regulatory standing and focused on compliance infrastructure, supervisory controls, and operational readiness. The Company evaluated strategic opportunities to expand broker-dealer activities, including capital markets transactions, including IPOs and follow on offerings, and related advisory services, consistent with applicable regulatory requirements.
2026 Strategic Focus
For 2026, Sentinel Brokers intends to:
| ● | Maintain regulatory compliance and supervisory controls | |
| ● | Evaluate expansion of transactional capabilities, subject to regulatory approval | |
| ● | Assess potential capital markets engagements and advisory opportunities | |
| ● | Explore strategic partnerships where commercially appropriate |
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Reporting Operating Segments:
The Company reports its segment information to reflect the manner in which the Company’s chief operating decision maker (“CODM”) reviews and assesses performance. The Company’s Interim Chief Executive Officer has responsibilities as the CODM and reviews and assess the performance of the Company as a whole. The primary financial measures used by the CODM to evaluate performance and allocate resources are net income (loss) and operating income (loss). The CODM uses net income (loss) and operating income (loss) to evaluate the performance of the Company’s ongoing operations and as part of the Company’s internal planning and forecasting processes. Information on Net income (loss) and Operating income (loss) is disclosed in the Consolidated Statements of Operations. Segment expenses and other segment items are provided to the CODM on the same basis as disclosed in the Consolidated Statements of Operations. The CODM does not evaluate performance or allocate resources based on segment assets, and therefore such information is not presented in the notes to the financial statements. During the fourth quarter of 2025, we realigned our internal reporting to better reflect how management reviews operating results and allocates resources. As a result of this CODM realignment, Direct Marketing is no longer a reportable segment and is now reported within Corporate and Other. This change did not impact consolidated revenue, consolidated net income (loss), total assets, or cash flows for any period presented; it only impacted the presentation of segment information. Segment information for prior periods presented has been recast to conform to the current-period segment presentation.
As we have reported above, we financially report business operating results on four operating segments, which we believe will certainly increase and transition as the newer lines of business develop and mature. DSS’s operating segments in 2025 highlight the Company’s ongoing commitment to innovation and diversification. Each segment is strategically positioned for growth, with Premier Packaging and Commercial Lending continuing to evolve and adapt to market demands. The Securities and Investment Management segment remains a key pillar of our growth strategy, with expanding initiatives that include real estate investment, digital securities, and wealth management solutions. As DSS continues to evolve and execute its strategic objectives, it is well-positioned to deliver sustained value to its shareholders and customers across these key business lines. The four business segments that we are reporting on in 2025 are as follows:
Product Packaging: Our wholly-owned subsidiary Premier Packaging Corporation (“Premier”), provides custom packaging services and serves clients in the pharmaceutical, nutraceutical, consumer goods, beverage, specialty foods, confections, photo packaging and direct marketing industries, among others. The group also provides active and intelligent packaging and document security printing services for end-user customers. In addition, the division produces a wide array of printed materials, such as folding cartons and paperboard packaging, security paper, vital records, prescription paper, birth certificates, receipts, identification materials, entertainment tickets, secure coupons and parts tracking forms. The division also provides resources and production equipment for our ongoing research and development of security printing, brand protection, consumer engagement and related technologies.
Commercial Lending: (“Commercial Lending”) through its operating company, American Pacific Financial, Inc. (“APF”) represents our financing business line. is organized for the purposes of being a financial network holding company, focused providing commercial loans and on acquiring equity positions in (i) undervalued commercial bank(s), bank holding companies and nonbanking licensed financial companies operating in the United States, South East Asia, Taiwan, Japan and South Korea, and (ii) companies engaged in—nonbanking activities closely related to banking, including loan syndication services, mortgage banking, trust and escrow services, banking technology, loan servicing, equipment leasing, problem asset management, SPAC (special purpose acquisition company) consulting, and advisory capital raising services. From this financial platform, the Company shall provide an integrated suite of financial services for businesses that shall include commercial business lines of credit, land development financing, inventory financing, third party loan servicing, and services that address the financial needs of the world Gig Economy.
Biotechnology: (“Biotech”) targets unmet, urgent medical needs and expands the borders of medical and pharmaceutical science. Biotech drives mission-oriented research, development, and commercialization of solutions for medical advances in human wellness and healthcare. By leveraging technology and new science with strategic partnerships, Biotech provides advances in drug discovery for the prevention, inhibition, and treatment of neurological, oncology and immuno-related diseases. Other exciting technologies include a breakthrough alternative sugar aimed to combat diabetes and functional fragrance formulations aimed at the industrial and medical industry.
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Biotech has several important and valuable products, technology or compounds that are in continuing development and/or licensing stages:
| ● | LineBacker: Multi-faceted therapeutic platform for metabolic, neurologic, cancer, and infectious diseases. | |
| ● | Equivir: A polyphenol compound that is believed to be successful in antiviral infection treatments. Equivir/Nemovir technology is a novel blend of FDA Generally Recognized as Safe (“GRAS”) eligible polyphenols (e.g., Myricetin, Hesperetin, Piperine) which have demonstrated antiviral effects with additional potential application as health supplements or medication. Polyphenols are sourced from fruits, vegetables, and other natural substances. Myricetin is a member of the flavonoid class of polyphenolic compounds with antioxidant properties. Hesperitin is a flavanone and Piperine is an alkaloid, commonly found in black pepper. | |
| ● | Procombin: Applications as food additive, and natural preservative for beauty and person care products as well as natural food preservative. | |
| ● | VanXin: Food preservative booster made up of polyphenols that extend the shelf life. | |
| ● | Bioplastics: Advanced bio-compatible plastics that mitigate accumulation of plastics in oceans and landfills and provide UVA and UVB protection for many types of material for including containers, hard surfaces, and fibers for clothing. The technology is presently in development and testing antimicrobial plastics for consumer products that control the spread of active pathogens such as SARS-CoV-2, Influenza, E. coli, Staph, and Rhinovirus, by exploiting key strategies found in the biological realm. These new plastics are specifically focused on solutions for common products such as cups, plates, utensils, plastic bags, and countertops. The first prototypes are currently undergoing antimicrobial resistance testing. | |
| ● | Laetose: Laetose technology is derived from a unique combination of sugar and inositol, which demonstrates the ability to inhibit the inflammatory and metabolic response of sugar alone. A sugar alternative which is believed to lower human glycemic indexes and is believed to be a breakthrough alternative sugar aimed to combat diabetes. The use of Laetose in a daily diet, compared to sugar, could result in 30% lower sugar consumption and lower glycemic index/load. | |
| ● | 3F: A botanical compound believed to serve as an insect repellent and anti-microbial agent. 3F is a unique formulation of specialized ingredients (e.g. terpenes) from botanical sources with demonstrated effect as an insect repellent and an antimicrobial. | |
| ● | 3F Mosquito Repellent: 3F repellent contains botanical ingredients that mosquitos avoid. These ingredients are scientifically proven1 to affect the mosquito’s receptors, essentially making the insect blind to a human’s presence. This can be utilized as a stand-alone repellent or as an additive in detergents, lotions, shampoo, and other substances to provide mosquito protection. | |
| ● | 3F Antimicrobial: 3F antimicrobial contains botanical ingredients known to kill viruses. These ingredients are scientifically proven to inhibit viral replication. This can be utilized as a stand-alone antimicrobial or as an additive in detergents, lotions, shampoo, fabrics, and other substances. | |
| ● | Quantum: The solution to the Patent Cliff accomplished by creating a new class of medicinal chemistry that uses advanced methods to increase effectiveness and persistence of natural compounds and existing drugs. The safety attributes of the original molecules are maintained. Typically, drug discovery processes modify functional groups. Quantum’s new techniques alter behavior of molecules at the sub-molecular level. It is estimated that 65% of the World Health Organization Essential Medicines List can be improved and re-patented using Quantum and these methods can be used to enhance and patent natural compounds including many substances used in traditional medicines around the world. | |
| ● | Bio Med (license): A probiotic gut health product that helps to regulate many physiological functions, ranging from energy regulation and cognitive processes to toxin neutralization and immunity against pathogens. |
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Securities and Investment Management: (“Securities”) Securities was established to develop and/or acquire assets in the securities trading or management arena, and to pursue, among other product and service lines, real estate investment funds, broker dealers, and mutual funds management. This business sector has already established the following business lines/investments and associated products and services:
| ● | REIT Management Fund: In March 2020, DSS Securities formed AMRE (“American Medical REIT”) and its management company AAMI (“AMRE Asset Management, Inc.) Through AAMI/AMRE, a medical real estate investment trust, fulfills community needs for quality healthcare facilities while enabling care providers to allocate their capital to growth and investment in their contemporary clinical and critical care businesses. Urban and suburban communities are in need of modern healthcare facilities that provide a range of medical outpatient services. The funds ultimate product is an investor opportunity in a managed medical real estate investment trust. | |
| ● | Sentinel: Sentinel is a broker-dealer operating primarily as a fiduciary intermediary, facilitating intuitional trading of municipal and corporate bonds as well as preferred stock, and is registered with the Securities and Exchange Commission, is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”), and is a member of the Securities Investor Protection Corporation (“SIPC”). | |
| ● | BMI Capital International, LLC. (“BMIC”): is a private investment bank specializing in corporate finance advising, raising equity, and venture services, providing a global “one-stop” corporate consultancy to listed companies. From corporate finance to professional valuation, corporate communications to event management, BMIC services companies in the US, Hong Kong, Singapore, Taiwan, Japan, Canada, and Australia. |
Intellectual Property
We strive to protect the intellectual property that we believe is important to our business, including seeking and maintaining patent protection intended to cover the composition of matter of our product candidates, their methods of use, their methods of production, related technologies and other inventions. In addition to patent protection, we also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection, including certain aspects of technical know-how.
Patents
Impact Biomedical Inc. has nine (9) patents issued, and over forty (40) patents pending worldwide with expiration of US patents between 2029 and 2040. Pending patents could extend this exclusivity period in all regions.
The issued and allowed patents include composition and method of application for Linebacker, Equivir, 3F (Functional Fragrance), and Laetose.
Trademarks
We have several trademarks related to our DSS, Inc. businesses, which support the protection of our brand and products in various markets. These trademarks are critical to maintaining the distinctiveness and recognition of our offerings.
Websites:
The primary corporate website we maintain is www.dssworld.com. Our other sites are:
Premier Packaging: https://www.premiercustompkg.com
Impact Biomedical: https://www.impactbiomedinc.com
DSS PureAir, Inc.: https://dsspureair.com/
In addition to the active websites, the Company is building multiple new sites and owns several other domain names reserved for future use or for strategic competitive reasons. Information on our websites or any other website does not constitute a part of this annual report.
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Markets and Competition
Product Packaging: In our packaging division, we face competition from a wide range of national and regional companies, many of which operate independently and are privately held. The competition is primarily concentrated in the consumer-packaged goods and health and beauty sectors, with major players including prominent integrated paper companies such as WestRock Company and Graphic Packaging Holding Company. Competition is based on pricing, quality, service, regulatory compliance, sustainability, and turnaround time.
Commercial Lending: American Pacific Financial, our commercial lending company, offers a comprehensive range of financial services tailored to businesses. Our services encompass commercial business lines of credit, land development financing, inventory financing, third-party loan servicing, and solutions designed to meet the diverse financial requirements of various business sectors. In this competitive landscape, APF competes with a wide array of traditional commercial banks and investment banking firms.
Biotechnology: This segment is dedicated to the discovery, confirmation, and patenting of unique scientific advancements and technologies, which lead to innovative solutions in the realm of human healthcare and wellness. It collaborates closely with licensing partners, engages in co-development initiatives, forms joint ventures, and nurtures other valuable relationships to effectively introduce these groundbreaking solutions to the market. Within this competitive landscape, we face competition from other biotechnology firms and research institutions that are also pursuing cutting-edge advancements in healthcare, wellness, and related technologies.
Securities and Investment Management: Was established to develop and/or acquire assets in the securities trading or management arena. This business unit faces competition from individual money managers, established financial institutions, and organizations that engage in securities trading and management, including Broker-Dealers. Additionally, the division competes with Real Estate Investment Trusts (REITs), private equity firms, and other personal investment companies that offer similar investment opportunities and financial products to individual and institutional clients.
Customers
As of December 31, 2025, one customer accounted for approximately 29% of our consolidated revenue. As of December 31, 2024, one customer accounted for approximately 22% of our consolidated revenue and second customer accounted for approximately 13% of our consolidated revenue.
Securities and Investment Management: Our Securities and Investment Management division has a mixture of retail and institutional investors.
Raw Materials
Product Packaging: The primary raw materials used in our packaging business are paper, paperboard, and ink. We work closely with leading suppliers to maximize purchasing efficiencies, utilizing a diverse range of paper grades, formats, ink formulations, and colors to meet the needs of our products. Sustainability in procurement is a critical focus for the Company. We not only ensure that our suppliers meet rigorous sustainability standards, but we are also committed to continuous internal improvements in sustainability practices. We are proactively setting high standards for sustainability and working with our supply chain partners to ensure these standards are met, contributing to the overall progress and compliance within the industry.
Environmental Compliance
The Company is committed to conducting its operations in full compliance with all applicable environmental laws, regulations, and other requirements. While the potential impact of future environmental matters, including remediation efforts and compliance initiatives, cannot be predicted with certainty, management believes that adherence to current environmental protection laws, excluding any potential recoveries from third parties, will not have a material adverse effect on the Company’s consolidated results of operations, financial position, or cash flows. The Company remains focused on maintaining environmental responsibility while managing any future environmental liabilities in a prudent and cost-effective manner.
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Government Regulation
Our biotechnology business is faced with potential government regulations. If new legislation, regulations, or rules are implemented either by Congress, the U.S. Patent and Trademark Office (the “USPTO”), or the courts that impact the patent application process, the patent enforcement process or the rights of patent holders, these changes could negatively affect our patent monetization efforts and, in turn, our assets, expenses and revenue. United States patent laws have been amended by the Leahy-Smith America Invents Act. The America Invents Act includes several significant changes to U.S. patent law. In general, the legislation attempts to address issues surrounding the enforceability of patents and the increase in patent litigation by, among other things, establishing new procedures for patent litigation. For example, the America Invents Act changes the way that parties may be joined in patent infringement actions, increasing the likelihood that such actions will need to be brought against individual parties allegedly infringing by their respective individual actions or activities. In addition, the U.S. Department of Justice (“DOJ”) has conducted reviews of the patent system to evaluate the impact of patent assertion entities, such as our Company, on industries in which those patents relate. It is possible that the findings and recommendations of the DOJ could adversely impact our ability to effectively license and enforce standards-essential patents and could increase the uncertainties and costs surrounding the enforcement of any such patented technologies.
Moreover, new rules regarding the burden of proof in patent enforcement actions could significantly increase the cost of our enforcement actions, and new standards or limitations on liability for patent infringement could negatively impact our revenue derived from such enforcement actions.
Corporate History
The Company, incorporated in the state of New York in May 1984 has formally conducted business in the name of Document Security Systems, Inc. On September 16, 2021, the board of directors approved an agreement and plan of merger with a wholly owned subsidiary, DSS, Inc. (a New York corporation, incorporated in August 2020), for the sole purpose of effecting a rebranding from Document Security Systems, Inc. to DSS, Inc. This change became effective on September 30, 2021. DSS, Inc. maintained the same trading symbol “DSS” and updated its CUSIP number to 26253C-102. In January 2024, in conjunction with a reverse split, DSS now operates under the CUSIP 26253C 201. See the “Overview” section above for further details about our acquisitions.
Human Capital Resources
As of December 31, 2025, DSS, Inc. had 102 employees. We continue to retain and attract qualified management and technical personnel. Our employees are not covered by any collective bargaining agreement, and we believe that our relations with our employees are in good standing.
Available information
Our website address is www.dssworld.com. Information on our website is not incorporated herein by reference. We make available free of charge through our website our press releases, Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after electronically filed with or furnished to the Securities and Exchange Commission.
ITEM 1A – RISK FACTORS
Investing in our common stock involves risk. Before deciding whether to invest in our common stock, you should carefully consider the risks and uncertainties described below. There may be other unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our future results. If any of these risks actually occur, our business, business prospects, financial condition or results of operations could be seriously harmed. This could cause the trading price of our common stock to decline, resulting in a loss of all or part of your investment. Please also read carefully the section contained in Part II, Item 7, below, entitled “Cautionary Statement Regarding Forward-Looking Statements.”
We have identified the following risks and uncertainties that may have a material adverse effect on our business, financial condition or results of operations in the future. Additional risks not presently known to us or that we currently believe are immaterial may also significantly impair our business operations. If any of these risks occur, our business, results of operations or financial condition could suffer, the market price of our common stock could decline, and you could lose all or part of your investment in our common stock.
The value of our intangible assets and investments may not be equal to their carrying values.
As of December 31, 2025, we had approximately $17.0 million of net intangible assets. Approximately $17.0 million is associated with Impact Biomedical, Inc. The Company has completed valuations for certain developed technology assets acquired in the transaction as well as the non-controlling interest portion of Impact BioMedical, Inc. and its subsidiaries. If licensing efforts are not successful, the values of these assets could be reduced. We are required to evaluate the carrying value of such intangibles and goodwill and the fair value of investments whenever events or changes in circumstances indicate that the carrying value of an intangible asset, including goodwill, and investment may not be recoverable. If any of our intangible assets, goodwill or investments are deemed to be impaired then it will result in a significant reduction of the operating results in such period.
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We have secured indebtedness, and a potential risk exists that we may be unable to satisfy our obligations to pay interest and principal thereon when due or negotiate acceptable extensions or settlements.
We have outstanding indebtedness (described below), most of which is secured by assets of various DSS subsidiaries and guaranteed by the Company. Given our history of operating losses and our cash position, there is a risk that we may not be able to repay indebtedness when due. If we were to default on any of our other indebtedness that require payments of cash to settle such default and we do not receive an extension or a waiver from the creditor and the creditor were to foreclose on the secured assets, it could have a material adverse effect on our business, financial condition, and operating results.
As of December 31, 2025, we had the following significant amounts of outstanding indebtedness:
| ● | Premier Packaging entered into master loan and security agreement (“BOA Note”) with Bank of America, N.A. (“BOA”) to secure financing approximating $3,710,000 to purchase a new Heidelberg XL 106-7+L printing press. The aggregate principal balance outstanding under the BOA Note shall bear interest at a variable rate on or before the loan closing. As of December 31, 2025, the outstanding principal on the BOA Note was $1,916,000 and had an interest rate of 4.63%. As of December 31, 2025, $544,000 was included in the current portion of long-term debt, net, and the remaining balance of approximately $1,372,000 recorded as long-term debt. The BOA Note contains certain covenants that are analyzed annually. As of December 31, 2025, Premier is in compliance with these covenants. | |
| ● | Premier Packaging entered into a loan and security agreement with Bank of America for the principal amount of $790,000 and shall accrued interest at the rate of 7.44%. Principal and interest shall be repaid in the approximate amount of $14,000 through March 2029. This loan is collateralized by a Bobst Model Novacut and is guaranteed by DSS, Inc. As of December 31, 2025, the outstanding principal and interest approximates $482,000 of which $132,000 was included in the current portion of long-term debt, net, and the remaining balance of approximately $350,000 recorded as long-term debt. | |
| ● | AMRE Shelton, LLC., (“AMRE Shelton”) a subsidiary of AMRE, entered into a loan agreement (“Shelton Agreement”) with Patriot Bank, N.A. (“Patriot Bank”) in an amount up to $6,155,000, with the amount financed approximating $5,105,000. The Shelton Agreement contains monthly payments of principal and an initial interest of 4.25%. The interest will be adjusted commencing on July 1, 2026 and continuing for the next succeeding 5-year period shall be determined one month prior to the change date and shall be an interest rate equal to two hundred fifty (250) basis points above the Federal Home Loan Bank Boston 5-Year/25-Year amortizing advance rate, but in no event less than 4.25% for the term of 120 months with a balloon payment approximating $2,829,000 due at term end. The net book value of these assets as of December 31, 2025 approximated $6,231,000. As of December 31, 2025, the outstanding principal and interest approximates $4,231,000. As of December 31, 2025, $226,000 was included in the current portion of long-term debt, net, and the remaining balance of approximately $4,005,000 recorded as long-term debt. on the accompanying consolidated balance sheet. | |
| ● | $3,000,000 loan agreement with BMI Capital Partners International Limited (“BMIC International”) (“BMIC International Loan”), between LVAM and BMIC International with interest to be charged at a variable rate to be calculated at the maturity date. The BMIC International Loan matured on October 12, 2022 and both parties agree based on the language of the loan documents that the loan will keep extending an additional 3 months until either party cancels the extension. As of December 31, 2025, the outstanding principal and interest approximated $33,000 and is included in current portion of long-term debt, net on the accompanying balance sheet. | |
| ● | $3,000,000 loan agreement with Lee Wilson Tsz Kin (“Wilson Loan”) between LVAM and Wilson with interest to be charged at a variable rate to be calculated at the maturity date. The Wilson Loan matured on October 12, 2022 and both parties agree based on the language of the loan documents that the loan will keep extending an additional 3 months until either party cancels the extension. As of December 31, 2025, the outstanding principal and interest approximated $145,000 and is included in current portion of long-term debt, net on the accompanying balance sheet. | |
| ● | AMRE LifeCare entered into a loan agreement (“LifeCare Agreement”) with Pinnacle Bank, (“Pinnacle Bank”) in the amount of $40,300,000. The LifeCare Agreement supported the acquisition of three medical facilities located in Fort Worth, Texas, Plano, Texas, and Pittsburgh, Pennsylvania for a purchase price of $62,000,000. The LifeCare Agreement has a variable interest rate which equated to 8.12% on December 31, 2025. The net book value of these assets as of December 31, 2025 approximated $12,338,000. The outstanding principal and interest approximated $37,000,000 and is included in current portion of long-term debt, net on the accompanying balance sheet. This note is in default and is due as of the date of this filing. |
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A significant amount of our revenue is derived by one customers.
As of December 31, 2025, one customers accounted for approximately 29% of our consolidated revenue. As of December 31, 2025, five customers accounted for 19%, 18%, 13%, 12% and 11% of our trade accounts receivable balance. If we were to lose this customer or if the amount of business we do with this customer declines significantly, our business would be adversely affected. As of December 31, 2024, two customers accounted for approximately 22% and 13% of our consolidated revenue and these two customers accounted for approximately 29% and 20% of our consolidated trade accounts receivable balance.
We may face intellectual property infringement or other claims against us, our customers or our intellectual property that could be costly to defend and result in our loss of significant rights.
Although we have received patents with respect to certain of our core business technologies, there can be no assurance that these patents will afford us any meaningful protection. Although we believe that our use of the technology and products we have developed, and other trade secrets used in our operations do not infringe upon the rights of others, our use of the technology and trade secrets we developed may infringe upon the patents or intellectual property rights of others. In the event of infringement, we could, under certain circumstances, be required to obtain a license or modify aspects of the technology and trade secrets we developed or refrain from using the same. We may not be able to successfully terminate any infringement in a timely manner, upon acceptable terms and conditions or at all. Failure to do any of the foregoing could have a material adverse effect on our operations and our financial condition. Moreover, if the patents, technology, or trade secrets we developed or use in our business are deemed to infringe upon the rights of others, we could, under certain circumstances, become liable for damages, which could have a material adverse effect on our operations and our financial condition. As we continue to market our products, we could encounter patent barriers that are not known today. A patent search may not disclose all related applications that are currently pending in the United States Patent Office, and there may be one or more such pending applications that would take precedence over any or all of our applications.
Furthermore, third parties may assert that our intellectual property rights are invalid, which could result in significant expenditures by us to refute such assertions. If we become involved in litigation, we could lose our proprietary rights, be subject to damages and incur substantial unexpected operating expenses. Intellectual property litigation is expensive and time-consuming, even if the claims are subsequently proven unfounded, and could divert management’s attention from our business. If there is a successful claim of infringement, we may not be able to develop non-infringing technology or enter into royalty or license agreements on acceptable terms, if at all. If we are unsuccessful in defending claims that our intellectual property rights are invalid, we may not be able to enter into royalty or license agreements on acceptable terms, if at all.
Certain of our recently developed products are not yet commercially accepted and there can be no assurance that those products will be accepted, which would adversely affect our financial results.
We’ve acquired several patents in the bio-health field through our acquisition if Impact Biomedical, Inc. Our business plan includes plans to incur significant marketing, intellectual property development and sales costs for the bio-health related products. If we are not able to develop and sell these new products, our financial results will be adversely affected.
The results of our research and development efforts are uncertain and there can be no assurance of the commercial success of our products.
We believe that we will need to continue to incur research and development expenditures to remain competitive. The products we are currently developing or may develop in the future may not be technologically successful. In addition, the length of our product development cycle may be greater than we originally expected, and we may experience delays in future product development. If our resulting products are not technologically successful, they may not achieve market acceptance or compete effectively with our competitors’ products.
The markets in which we operate are highly competitive, and we may not be able to compete effectively, especially against established industry competitors with greater market presence and financial resources.
Our markets are highly competitive and characterized by rapid technological change and product innovations. Our competitors may have advantages over us because of their longer operating histories, more established products, greater name recognition, larger customer bases, and greater financial, technical and marketing resources. As a result, they may be able to adapt more quickly to new or emerging technologies and changes in customer requirements and devote greater resources to the promotion and sale of their products. Competition may also force us to decrease the price of our products and services. We cannot assure you that we will be successful in developing and introducing new technology on a timely basis, new products with enhanced features, or that these products, if introduced, will enable us to establish selling prices and gross margins at profitable levels.
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If we are unable to respond to regulatory or industry standards effectively, our growth and development could be delayed or limited.
Our future success will depend in part on our ability to enhance and improve the functionality and features of our products and services in accordance with regulatory or industry standards. Our ability to compete effectively will depend in part on our ability to influence and respond to emerging industry governmental standards in a timely and cost-effective manner. If we are unable to influence these or other standards or respond to these or other standards effectively, our growth and development of various products and services could be delayed or limited.
Breaches in security, whether cyber or physical, and other disruptions and/or our inability to prevent or respond to such breaches, could diminish our ability to generate revenues or contain costs, compromise our assets, and negatively impact our business in other ways.
We face certain security threats, including threats to our information technology infrastructure, attempts to gain access to our proprietary or classified information, and threats to physical and cyber security. Our information technology networks and related systems are critical to the operation of our business and essential to our ability to successfully perform day-to-day operations. The risks of a security breach, cyber-attack, cyber intrusion, or disruption, particularly through actions taken by computer hackers, foreign governments and cyber terrorists, have increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Although we have acquired and developed systems and processes designed to protect our proprietary and/or classified information, they may not be sufficient and the failure to prevent these types of events could disrupt our operations, require significant management attention and resources, and could negatively impact our reputation among our customers and the public, which could have a negative impact on our financial condition, and weaken our results of operations and liquidity.
Our investments in Asia are subject to unique risks and uncertainties, including tariffs and trade restrictions.
Our investment in Alset International Limited, presents risks including, but not limited to, changes in share price of investments, changes in local regulatory requirements, changes in labor laws, local wage laws, environmental regulations, taxes and operating licenses, compliance with U.S. regulatory requirements, including the Foreign Corrupt Practices Act, uncertainties as to application and interpretation of local laws and enforcement of contract and intellectual property rights, currency restrictions, currency exchange controls, fluctuations of currency, and currency revaluations, eminent domain claims, civil unrest, power outages, water shortages, labor shortages, labor disputes, increase in labor costs, rapid changes in government, economic and political policies, political or civil unrest, acts of terrorism, or the threat of boycotts, other civil disturbances and the possible impact of the imposition of tariffs as a result of the tariff dispute between the U.S. and China as well as any retaliating trade policies or restrictions. Any such disruptions could depress our earnings and have other material adverse effects on our business, financial condition and results of operations.
Future growth in our business could make it difficult to manage our resources.
Future business expansion could place a significant strain on our management, administrative and financial resources. Significant growth in our business may require us to implement additional operating, product development and financial controls, improve coordination among marketing, product development and finance functions, increase capital expenditures and hire additional personnel. There can be no assurance that we will be able to successfully manage any substantial expansion of our business, including attracting and retaining qualified personnel. Any failure to properly manage our future growth could negatively impact our business and operating results.
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If we fail to retain certain of our key personnel and attract and retain additional qualified personnel, we might not be able to remain competitive, continue to expand our technology or pursue growth.
Our future success depends upon the continued service of certain of our executive officers and other key personnel who possess longstanding industry relationships and technical knowledge of our products and operations. Although we believe that our relationship with these individuals is positive, there can be no assurance that the services of these individuals will continue to be available to us in the future. There can be no assurance that these persons will agree to continue to be employed by us after the expiration dates of their current contracts.
We have identified weaknesses in our internal control over financial reporting structure; any material weaknesses may cause errors in our financial statements that could require restatements of our financial statements and investors may lose confidence in our reported financial information, which could lead to a decline in our stock price.
Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate the effectiveness of our internal control over financial reporting as of the end of each year, and to include a management report assessing the effectiveness of our internal control over financial reporting in each Annual Report on Form 10-K. We have had previously identified weaknesses in our internal control over financial reporting following management’s annual assessment of internal controls over financial reporting and, as a result of that assessment, management had concluded our controls associated 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.
We do not intend to pay cash dividends.
We do not intend to declare or pay cash dividends on our common stock in the foreseeable future. We anticipate that we will retain any earnings and other cash resources for investment in our business. The payment of dividends on our common stock is subject to the discretion of our board of directors and will depend on our operations, financial position, financial requirements, general business conditions, restrictions imposed by financing arrangements, if any, legal restrictions on the payment of dividends and other factors that our board of directors deems relevant.
We may seek to develop additional new inventions and intellectual property, which would take time and would be costly. Moreover, the failure to obtain or maintain intellectual property rights for such inventions would lead to the loss of our investments in such activities.
Part of our business may include the development of new inventions and intellectual property that we would seek to monetize. However, this aspect of our business would likely require significant capital and would take time to achieve. Such activities could also distract our management team from our present business initiatives, which could have a material and adverse effect on our business. There is also the risk that these initiatives would not yield any viable new inventions or technology, which would lead to a loss of our investments in time and resources in such activities.
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In addition, even if we are able to develop new inventions, in order for those inventions to be viable and to compete effectively, we would need to develop and maintain, and we would heavily rely on, a proprietary position with respect to such inventions and intellectual property. However, there are significant risks associated with any such intellectual property we may develop principally including the following:
| ● | patent applications we may file may not result in issued patents or may take longer than we expect to result in issued patents; | |
| ● | we may be subject to interference proceedings; | |
| ● | we may be subject to opposition proceedings in the U.S. or foreign countries; | |
| ● | any patents that are issued to us may not provide meaningful protection; | |
| ● | we may not be able to develop additional proprietary technologies that are patentable; | |
| ● | other companies may challenge patents issued to us; | |
| ● | other companies may design around technologies we have developed; and | |
| ● | enforcement of our patents may be complex, uncertain and very expensive. |
We cannot be certain that patents will be issued as a result of any future applications, or that any of our patents, once issued, will provide us with adequate protection from competing products. For example, issued patents may be circumvented or challenged, declared invalid or unenforceable, or narrowed in scope. In addition, since publication of discoveries in scientific or patent literature often lags behind actual discoveries, we cannot be certain that it will be the first to make our additional new inventions or to file patent applications covering those inventions. It is also possible that others may have or may obtain issued patents that could prevent us from commercializing our products or require us to obtain licenses requiring the payment of significant fees or royalties in order to enable us to conduct our business. As to those patents that we may license or otherwise monetize, our rights will depend on maintaining our obligations to the licensor under the applicable license agreement, and we may be unable to do so. Our failure to obtain or maintain intellectual property rights for our inventions would lead to the loss of our investments in such activities, which would have a material and adverse effect on our business.
Moreover, patent application delays could cause delays in recognizing revenue from our internally generated patents and could cause us to miss opportunities to license patents before other competing technologies are developed or introduced into the market.
Changes in the laws and regulations to which we are subject may increase our costs.
We are subject to numerous laws and regulations, including, but not limited to, environmental and health and welfare benefit regulations, as well as those associated with being a public company. These rules and regulations may be changed by local, state, provincial, national or foreign governments or agencies. Such changes may result in significant increases in our compliance costs. Compliance with changes in rules and regulations could require increases to our workforce, and could result in increased costs for services, compensation and benefits, and investment in new or upgraded equipment.
Declines in general economic conditions or acts of war and terrorism may adversely impact our business.
Demand for printing services is typically correlated with general economic conditions. The prolonged decline in United States economic conditions associated with the great recession adversely impacted our business and results of operations and may do so again. The overall business climate of our industry may also be impacted by domestic and foreign wars or acts of terrorism, which events may have sudden and unpredictable adverse impacts on demand for our products and services.
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If we fail to comply with the continued listing standards of the NYSE American LLC Exchange, it may result in a delisting of our common stock from the exchange.
Our common stock is currently listed for trading on the NYSE American LLC Exchange (“NYSE American”), and the continued listing of our common stock on the NYSE American is subject to our compliance with a number of listing standards.
If our common stock were no longer listed on the NYSE American, investors might only be able to trade our shares on the OTC Bulletin Board ® or in the Pink Sheets ® (a quotation medium operated by Pink Sheets LLC). This would impair the liquidity of our common stock not only in the number of shares that could be bought and sold at a given price, which might be depressed by the relative illiquidity, but also through delays in the timing of transactions and reduction in media coverage.
If we are delisted from the NYSE American, your ability to sell your shares of our common stock may be limited by the penny stock restrictions, which could further limit the marketability of your shares.
If our common stock is delisted from the NYSE American, it could come within the definition of a “penny stock” as defined in the Exchange Act and could be covered by Rule 15g-9 of the Exchange Act. That rule imposes additional sales practice requirements on broker-dealers who sell securities to persons other than established customers and accredited investors. For transactions covered by Rule 15g-9, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser’s written agreement to the transaction prior to the sale. Consequently, Rule 15g-9, if it were to become applicable, would affect the ability or willingness of broker-dealers to sell our securities, and accordingly would affect the ability of stockholders to sell their securities in the public market. These additional procedures could also limit our ability to raise additional capital in the future.
If our common stock is not listed on a national securities exchange, compliance with applicable state securities laws may be required for certain offers, transfers and sales of the shares of our common stock.
Because our common stock is listed on the NYSE American, we are not required to register or qualify in any state the offer, transfer or sale of the common stock. If our common stock is delisted from the NYSE American and is not eligible to be listed on another national securities exchange, sales of stock pursuant to the exercise of warrants and transfers of the shares of our common stock sold by us in private placements to U.S. holders may not be exempt from state securities laws. In such event, it will be the responsibility of us in the case of warrant exercises or the holder of privately placed shares to register or qualify the shares for any offer, transfer or sale in the United States or to determine that any such offer, transfer or sale is exempt under applicable state securities laws.
If securities or industry analysts do not publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline.
The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. Our research coverage by industry and financial analysts is currently limited. Even if our analyst coverage increases, if one or more of the analysts who cover us downgrade our stock, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.
Because certain of our stockholders control a significant number of shares of our common stock, they may have effective control over actions requiring stockholder approval.
As of February 15, 2026 our directors, executive officers and principal stockholders (those beneficially owning in excess of 5%), and their respective affiliates, beneficially own approximately 68% of our outstanding shares of common stock. As a result, these stockholders, acting together, could have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets. As such, these stockholders, acting together, could have the ability to exert influence over the management and affairs of our company. Accordingly, this concentration of ownership might harm the market price of our common stock by: delaying, deferring or preventing a change in corporate control; impeding a merger, consolidation, takeover or other business combination involving us; or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.
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Additional financing or future equity issuances may result in future dilution to our shareholders.
We expect that we will need to raise additional funds in the future to finance our internal growth, our merger and acquisition plans, investment activities, continued research and product development, and for other reasons. Any required additional financing may not be available on terms acceptable to us, or at all. If we raise additional funds by issuing equity securities, you may experience significant dilution of your ownership interest and the newly issued securities may have rights senior to those of the holders of our common stock. The price per share at which we sell additional securities in future transactions may be higher or lower than the price per share in this offering. Alternatively, if we raise additional funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions on our business that could impair our operational flexibility and would also require us to fund additional interest expense. If adequate additional financing is not available when required or is not available on acceptable terms, we may be unable to successfully execute our business plan.
ITEM 1B – UNRESOLVED STAFF COMMENTS
None.
ITEM 1C - CYBERSECURITY
Our Company is committed to maintaining the highest standards of cybersecurity to protect our data, intellectual property, and customer information from cyber threats. As part of this commitment, we leverage a sophisticated cybersecurity framework that integrates the robust capabilities of the Microsoft cloud ecosystem with the specialized services of a leading third-party cybersecurity service provider.
The Microsoft cloud ecosystem, including Microsoft 365, Azure, SharePoint Online, Microsoft Defender, and Microsoft InTune, forms the backbone of our cybersecurity infrastructure. These platforms offer advanced security features such as data encryption in transit and at rest, network security controls, identity and access management, and threat protection capabilities. Microsoft’s constant investment in cybersecurity research and development ensures that we benefit from cutting-edge security technologies and practices.
In
addition to utilizing the Microsoft cloud ecosystem, we have engaged a
| ● | Software Security Management: Ensuring that applications such as Office 365 and Azure are configured, maintained and following best security practices. | |
| ● | Security Monitoring and Consultation Services: Continuous monitoring of our systems for suspicious activities and providing expert consultation to address and mitigate potential threats. |
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| ● | Data Storage and Backup of Source Systems: Implementing robust data storage solutions and backup protocols to ensure data integrity and availability. | |
| ● | Security Policy Management: Developing and enforcing comprehensive security policies that govern all aspects of our cybersecurity efforts. | |
| ● | Threat Response Management: Rapid identification and response to security incidents to minimize impact. | |
| ● | Security Software Implementation: Deployment of state-of-the-art security software solutions that complement the security features of the Microsoft cloud ecosystem. |
ITEM 2 - PROPERTIES
The corporate group and the packaging division has occupied an approximate 105,000 square foot leased facility, located at 275 Wiregrass Parkway, Henrietta, New York since March 2022. This lease expires twelve years and 3 months later. Base rents escalate from $61,000 per month in year one to $78,000 per month in year twelve. In March 2021, the Company leased Suite 100 for approximately 3,800 sq. ft. in Houston for approximately $4,400 per month, in October 2022 the Company expanded the space by acquiring neighboring Suite 130. The Company currently leases both Suite 100 and Suite 130 at approximately 3,855 square feet for approximately $7,000 per month. The office is in Houston, Texas at 1400 Broadfield Blvd., Suite 100 and Suite 130, for corporate offices and subsidiary expansion.
ITEM 3 - LEGAL PROCEEDINGS
DSS BioHealth Holdings, Inc. (“DSS BioHealth”) is the plaintiff in an action pending in the 281st Judicial District Court of Harris County, Texas, styled DSS BioHealth Holdings, Inc. v. Puradigm LLC, Ryan Beagley, Derik Sandstrom, and Padraig Lawlor, Cause No. 2024-73209. DSS BioHealth, as assignee of DSS PureAir, Inc., seeks to recover amounts due under a $5,000,000 secured convertible note dated May 14, 2021 and a $210,000 secured promissory note dated May 9, 2022, as well as to enforce related security and guaranty agreements. DSS BioHealth alleges that Puradigm LLC has failed to make required payments on the notes and that the individual defendants have failed to perform under their personal guaranties. Puradigm has filed counterclaims against DSS BioHealth and certain affiliates alleging, among other things, breach of contract, fraud, negligent misrepresentation, deceptive trade practices, conspiracy, and promissory estoppel, and seeks monetary relief in excess of $1,000,000. The case is in the pre-trial stage, and the parties are engaged in motion practice and discovery. DSS BioHealth believes it has meritorious claims and valid defenses to the counterclaims, but the outcome of the litigation, including any potential losses or recoveries, cannot be predicted at this time, and no assurance can be given as to the ultimate resolution or its impact on the Company’s financial statements.
We may become subject to other legal proceedings that arise in the ordinary course of business and have not been finally adjudicated. Adverse decisions in any of the foregoing may have a material adverse effect on our results of operations, cash flows or our financial condition. The Company accrues for potential litigation losses when a loss is probable and estimable.
ITEM 4 - MINE SAFETY DISCLOSURES
Not applicable.
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Part II
ITEM 5 - MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is listed on the NYSE American LLC Exchange, where it trades under the symbol “DSS”.
Holders of Record
As of March 12, 2026, we had 311 record holders of our common stock. This number does not include the number of persons whose shares are in nominee or in “street name” accounts through brokers.
Dividends
We did not pay dividends during 2025 or 2024.
The payment of dividends on our common stock is subject to the discretion of our board of directors and will depend on our operations, financial position, financial requirements, general business conditions, restrictions imposed by financing arrangements, if any, legal restrictions on the payment of dividends and other factors that our board of directors deems relevant.
Securities Authorized for Issuance Under Equity Compensation Plans
As of December 31, 2025, securities issued and securities available for future issuance under 2020 Employee, Director and Consultant Equity Incentive Plan (the “Plans”) is as follows:
| 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 | ||||||||||||||||
| 2020 Employee, Director and Consultant Equity Incentive Plan | - | - | $ | - | 673,436 | |||||||||||
| Total | - | - | $ | - | 673,436 | |||||||||||
Recent Issuances of Unregistered Securities
Information regarding any equity securities we have sold during the period covered by this Report that were not registered under the Securities Act of 1933, as amended, and was not included in a quarterly report on Form 10-Q or in a current report on Form 8-K, is set forth below. Each such transaction was exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) of the Securities Act or Rule 506 of Regulation D promulgated by the SEC, unless otherwise noted. Unless stated otherwise: (i) the securities were offered and sold only to accredited investors; (ii) there was no general solicitation or general advertising related to the offerings; (iii) each of the persons who received these unregistered securities had knowledge and experience in financial and business matters which allowed them to evaluate the merits and risk of the receipt of these securities, and that they were knowledgeable about our operations and financial condition; (iv) no underwriter participated in, nor did we pay any commissions or fees to any underwriter in connection with the transactions; and, (v) each certificate issued for these unregistered securities contained a legend stating that the securities have not been registered under the Securities Act and setting forth the restrictions on the transferability and the sale of the securities.
Shares Repurchased by the Registrant
We did not purchase or repurchase any of our securities in the fiscal year ended December 31, 2025.
ITEM 6 - SELECTED FINANCIAL DATA
Not applicable.
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ITEM 7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Certain statements contained herein this report constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “1995 Reform Act”). Except for the historical information contained herein, this report contains forward-looking statements (identified by words such as “estimate”, “project”, “anticipate”, “plan”, “expect”, “intend”, “believe”, “hope”, “strategy” and similar expressions), which are based on our current expectations and speak only as of the date made. These forward-looking statements are subject to various risks, uncertainties, and factors, that could cause actual results to differ materially from the results anticipated in the forward-looking statements.
Overview
The Company, which was incorporated in the state of New York in May 1984, previously conducted its business under the name of Document Security Systems, Inc On September 16, 2021, our board of directors approved an agreement and plan of merger with a wholly owned subsidiary, DSS, Inc. This subsidiary, incorporated in August 2020, was created for the sole purpose of facilitating a transformational name change from Document Security Systems, Inc. to DSS, Inc. This significant shift in our identity became official on September 30, 2021. With the name change, DSS, Inc. retained its trading symbol, “DSS,” and is currently trading under its CUSIP number to 26253C 201. This change reflects not only our evolution as a company but also our commitment to adapting and growing in an ever-changing business landscape. DSS, Inc. (referred to herein as “DSS,” “we,” “us,” or “our”) now operates across four distinct business lines, each with its own unique scope and presence on a global scale. These business lines encompass a wide range of industries and sectors, including:
Product Packaging: Our involvement in product packaging represents our dedication to delivering innovative and sustainable packaging solutions that meet the evolving needs of various markets.
Biotechnology: In the field of biotechnology, we are focused on pioneering scientific advancements and technologies that have the potential to transform human healthcare and wellness.
Commercial Lending: We are actively engaged in commercial lending, offering a suite of financial services that cater to the unique needs of businesses, ranging from commercial lines of credit to land development financing.
Securities and Investment Management: In the world of securities and investment management, we aim to provide expertise and guidance to help our clients navigate the complexities of the financial markets and achieve their investment goals.
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Each of these business lines is at a different stage of development, growth, and income generation, reflecting the diversity of our operations. This multi-faceted approach allows us to adapt to changing market conditions and explore new opportunities for expansion and success. We are committed to our continued evolution and to delivering value to our stakeholders across these diverse business lines.
Diverse Business Lines and Global Presence:
Under the banner of DSS, Inc., we have diversified our operations into four distinct business lines, each with its own unique scope and geographical footprint. These business lines include:
Product Packaging: Led by Premier Packaging Corporation, Inc. (“Premier”), a New York corporation, this segment specializes in paperboard and fiber-based folding carton manufacturing, consumer product packaging, and document security printing. Premier is headquartered in its newly established facility in Rochester, NY, primarily serving the US market.
Biotechnology: This business line is dedicated to investing in or acquiring companies in the BioHealth and BioMedical fields, focusing on drug discovery, prevention, treatment of various diseases, and open-air defense initiatives against infectious diseases.
Commercial Lending: American Pacific Financial, Inc. (“APF”) represents our financing business line. Looking ahead, to better meet the needs of the current financial market, the company is looking to transition away form certain industries like direct marketing and focus more on growing its inventory / equipment loan portfolio as well as engaging in more specialized areas of lending like broker/dealer loans. We will continue to monitor our managed loan portfolio, and explore future opportunities. Importantly, the equity portfolio as a bank holding company is anticipated to remain relatively stable, regardless of stock market fluctuations.
Securities and Investment Management: This division focuses on acquiring assets in the securities trading and management arena, including broker-dealers. It also oversees a real estate investment trust (REIT) that acquires hospitals and care centers.
RESULTS OF OPERATIONS FOR THE FISCAL YEARS ENDED DECEMBER 31,
Revenue
| 2025 | 2024 | % Change | ||||||||||
| Printed products | $ | 18,085,000 | $ | 16,107,000 | 12 | % | ||||||
| Rental | 1,236,000 | 1,792,000 | -31 | % | ||||||||
Commercial lending | 45,000 | 226,000 | -80 | % | ||||||||
| Commission | 1,353,000 | 972,000 | 39 | % | ||||||||
| Biotechnology | 38,000 | - | N/A | |||||||||
| Total Revenue | $ | 20,757,000 | $ | 19,097,000 | 9 | % | ||||||
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Revenue - For the year ended December 31, 2025, revenue increased 9% to approximately $20.8 million as compared to revenues of approximately $19.1 million for the year ended December 31, 2024. The increase in Printed Product revenue of approximately 12% is driven by new customer orders as well as existing customer orders exceeding their forecasts. The decreases in Rental income of approximately 31% is driven by a tenant at our AMRE LifeCare subsidiary as our Pittsburgh, PA location had significant vacancy during 2025. The decreases in Net investment income approximating 80% is due to a number of loans made going on non-accrual as borrowers have struggled to make expect payments. Commission revenue associated with our Sentinel Brokers subsidiary increased 39% year over year as commissions on equity trading was reestablished during 2025 as a result of the completion of our clearing house change took place in December 2024 as well as commissions earned as part of its underwriting activities in 2025 as compared to none in 2024. Biotechnology revenue is driven by sales of the Company’s air purification Celios brand.
Costs and Expenses
| 2025 | 2024 | % Change | ||||||||||
| Cost of revenue | ||||||||||||
| Printed products | $ | 16,619,000 | $ | 15,230,000 | 9 | % | ||||||
| Securities | 5,844,000 | 7,550,000 | -23 | % | ||||||||
| Biotechnology | 424,000 | 42,000 | 910 | % | ||||||||
| Commercial lending | 20,000 | 712,000 | -97 | % | ||||||||
| Direct marketing | - | 5,000 | -100 | % | ||||||||
| Other | 19,000 | - | N/A | |||||||||
| Sales, general and administrative compensation | 5,104,000 | 4,574,000 | 12 | % | ||||||||
| Professional fees | 2,587,000 | 2,668,000 | -3 | % | ||||||||
| Stock based compensation | 13,000 | 19,000 | -32 | % | ||||||||
| Sales and marketing | 1,948,000 | 2,427,000 | -20 | % | ||||||||
| Rent and utilities | 531,000 | 682,000 | -22 | % | ||||||||
| Research and development | 340,000 | 278,000 | 22 | % | ||||||||
| Impairment of goodwill | - | 25,093,000 | -100 | % | ||||||||
| Impairment of fixed assets | - | 264,000 | -100 | % | ||||||||
| Other operating expenses | 1,742,000 | 2,149,000 | -18 | % | ||||||||
| Total costs and expenses | $ | 35,191,000 | $ | 61,693,000 | -43 | % | ||||||
Costs of revenue includes all direct costs of the Company’s printed products, including its packaging and printing sales, materials, direct labor, transportation, and manufacturing facility costs. In addition, this category includes all direct costs associated with the Company’s technology sales, services and licensing including hardware and software that are resold, third-party fees, and fees paid to inventors or others because of technology licenses or settlements, if any. Cost of revenue for our REIT line of business includes all direct cost associated with the maintenance and upkeep of the related facilities, depreciation, amortization and the costs to acquire the facilities. Our Commercial Lending operating segment has costs of revenue associated with the impairment of notes receivable for those amounts at risk of collection. Total costs of revenue decreased 3% in 2025 as compared to 2024. Cost of revenue at our Printed products business line increased driven by an increase in revenue. Cost of revenue at our Securities business segment decreased year over year driven by the disposal of the Company’s AMRE Plano, Tx., Ft Worth, Tx., and Winter Haven, Fl. Facilities during 2025 and the elimination of related cost to operate and maintain those locations. In addition, This our Pittsburgh, PA facility housed a new tenant for part of 2025 paying related cost previously paid for by the Company as well as decreases in our Commercial lending business unit driven by decreases on loans reserved for year over year.
Sales, general and administrative compensation costs, increased 12% in 2025 as compared to 2024, primarily due to stock awarded to Heng Fai Holdings Limited (“HFHL”), a Hong Kong Company, which is beneficially owned by Mr. Heng Fai Ambrose Chan, Director of DSS, Inc. The issuance was approved by the board of directors on January 31, 2025.
Professional fees decreased 3% in 2025 as compared to 2024, due primarily to efforts taken to control these costs as the Company continues to drive savings in non-essential areas.
Stock based compensation includes expense charges for all stock-based awards to employees, directors, and consultants. Such awards include option grants, warrant grants, and restricted stock awards. Stock based compensation during the year ended December 31, 2025, is associated with such awards given to officers, directors and consultants of Impact BioMedical.
Sales and marketing costs, which includes internet and trade publication advertising, travel and entertainment costs, sales-broker commissions, and trade show participation expenses, decreased 20% during 2025 as compared to 2024, primarily due decreases in marketing efforts at our Biotechnology business segments offset by increased sales persons within our Printed Products business segment.
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Rent and utilities decreased 22% in 2025, as compared to 2024 primarily due to end of the lease in office space in California for the Company’s DSS Wealth Management subsidiary.
Research and development costs represent costs consisting primarily of independent, third-party testing of the various properties of each technology the Company owns possesses as well as research on new technologies. During the year ended December 31, 2025, Research and development costs increased 22% as compared to the same period in 2024 due to cost incurred to file, perfect or update existing and potential patents on technologies owned by Impact BioMedical.
Impairment of goodwill during 2024, the Company performed qualitative and quantitative assessments of the goodwill value associated with its Impact BioMedical subsidiary and determined that as of December 31, 2024 the assets required impairment. At December 31, 2024 the Company deemed a full impairment of the Impact BioMedical goodwill was necessary in the amount of $25,093,000.
Impairment of fixed assets is the impairment of marketing assets in development that the Company decided to forego completion.
Other operating expenses consist primarily of equipment maintenance and repairs, office supplies, IT support, and insurance costs. During the year ended December 31, 2025, other operating expenses decreased 19% compared to the same period in 2024, due primarily the Company released certain legal fee accruals approximating $897,000 deemed no longer necessary, offset by increases in Impact BioMedical’s directors and officers insurance obtained post IPO.
Other Income and (Expense)
| 2025 | 2024 | % Change | ||||||||||
| Interest Income | $ | 19,000 | $ | 238,000 | -92 | % | ||||||
| Interest income on note receivable, related party | 32,000 | 102,000 | -69 | % | ||||||||
| Dividend Income | 20,000 | - | N/A | |||||||||
| Other | 11,000 | 218,000 | -95 | % | ||||||||
| Interest Expense | (266,000 | ) | (283,000 | ) | -6 | % | ||||||
| Foreign currency translation adjustment | - | (6,000 | ) | -100 | % | |||||||
| Gain on extinguishment of debt | 595,000 | - | N/A | |||||||||
| (Loss)/gain on equity method investment | (16,000 | ) | 1,000 | -1700 | % | |||||||
| (Loss)/gain on investments | (807,000 | ) | 224,000 | -460 | % | |||||||
| Provision for loan loss | - | (3,691,000 | ) | -100 | % | |||||||
| Impairment of real estate | (2,420,000 | ) | (7,288,000 | ) | -67 | % | ||||||
| Impairment of investment | - | (782,000 | ) | -100 | % | |||||||
Impairment of intangibles | 600,000 | - | N/A | |||||||||
| (Loss)/gain on sale of assets | (9,622,000 | ) | 165,000 | -5932 | % | |||||||
| Total other expense | $ | (13,054,000 | ) | $ | (11,102,000 | ) | 18 | % | ||||
Interest income is recognized on the Company’s money markets, and notes receivable identified in Note 4. The decrease of 92% year over year in interest income is driven by several notes being put on non-accrual as the related borrowers have shown an inability to pay timely.
Interest income on notes receivable, related party is recognized on the Company’s notes receivable with related parties identified in Note 4. The decrease of 69% year over year in interest income is driven by several notes being put on non-accrual as the related borrowers have shown an inability to pay timely.
Dividend income for 2025 represent dividends received on certain investments owned by the Company. No such dividends were received in 2024.
Other income decreased 95% during the year 2025 as compared to 2024 due primarily to Releases of accruals no longer deemed necessary associated with normal business operations.
Interest expense decreased 6% year-over-year primarily due to the decreasing debt balances driven by the sale of the Company’s Plano, Texas facility.
Gain on extinguishment of debt represents insurance proceeds received for claims on AMRE Lifecare’s Plano, Tx facility which was applied to the outstanding principle on a note for this location.
Gain/(loss) from equity method investment represents the Company’s prorated portion of earnings for its investments accounted for under the equity method for the year ended December 31, 2025, and 2024. The transition from a gain of $1,000 in 2024 to a loss of $16,000 in 2025 is indicative of the related companies financial performance year over year.
Gain/(loss) on investments consists of net realized and unrealized losses on marketable securities which are recognized as the difference between the purchase price and sale price of the common stock investment, and net unrealized losses on marketable securities which are recognized on the change in fair market value on our common stock investment. The 2025 loss in our marketable securities as compared to 2024 is driven by the performance in our True Partners Capital Holdings Limited investment which incurred an approximate loss in fair value of $609,000 in 2025 as compared to gain in fair value of approximately $591,000 in 2024.
Impairment of investments in real estate represents a write-down of real estate assets associated with our AMRE LifeCare properties during 2025 and 2024 based on a fair value analysis performed as of December 31, 2025 and 2024. At December 31, 2025, the Company performed an assessment of the fair value of its AMRE LifeCare properties and determined an impairment of its Pittsburg, Pa. facility in the amount of $2,420,000 was necessary, not such impairment was identified for the Company’s AMRE Shelton property. A fair value analysis was performed during 2024 which resulted in a $2,973,000 impairment of the AMRE LifeCare Pittsburgh and Fort Worth locations. Further, the Company executed a purchase agreement for its AMRE LifeCare Plano location with a sale price at approximately $4,250,000 below its 2023 fair value. This transaction closed on March 26, 2025.
Impairment of investments the Company determined an impairment of its investments in Nano9 and BioMed Technologies was necessary and were fully impaired in the amounts of $150,000 and $632,000, respectively, at December 31, 2024. No such impairments were deemed necessary in 2025.
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Impairment of intangible assets is a result of the Company resigning its position as the registered investment advisor (“RIA”) of the American First Mutual Funds during the third quarter of 2025. The related asset was acquired at the time the Company became the RIA in September 2021.
Provision for loan losses represents a reserve put against certain notes receivable deemed uncollectible. During the year ended December 31, 2024, the Company reviewed the entire loan portfolio and determined specific loans required an allowance for credit losses. See Note 5.
Gain/(loss) on sale of assets the gain in 2024 is driven by the sale of its Linden, Ut facility while, the loss in 2025 is driven by the Company’s loss on the sale of its AMRE LifeCare Forth Worth, Tx facility of approximately $9,318,000 and AMRE Winterhaven facility of approximately $292,000.
Liquidity and Capital Resources
The Company has historically met its liquidity and capital requirements primarily through the sale of its equity securities and debt financing. As of December 31, 2025, the Company had cash of approximately $6.2 million. In addition, the Company believes that it will have access to sources of capital from the sale of its equity securities and debt financing. As of December 31, 2025, the Company believes that it has sufficient cash or access to cash to meet its cash requirements for at least the next 12 months from the filing date of this Annual Report.
Cash Flow from Operating Activities
Net cash used by operating activities was approximately $9.1 million for the year ended December 31, 2025 as compared to approximately $8.8 million for the year ended December 31, 2024. This decrease is driven by $3.1 million decrease in net loss adjusted to reconcile net loss to net cash used by operating activities, less payments of accounts payable of $0.7 million year over year as well as in collections of accounts receivable of approximately $0.5 million year over year.
Cash Flow from Investing Activities
Net cash provided by investing activities was approximately $18.1 million for the year ended December 31, 2025 and $12.1 million for year ended December 31, 2024. The year ended December 31, 2025 included $15.7 million in cash provided by the sale of real estate, as well as $2.4 million received from the sale of investments in related parties. In comparison, the Company sold $3.3 million in marketable securities, received payments on notes receivable of $4.1 million for the year ended December 31, 2024.
Cash Flow from Financing Activities
Net cash used by financing activities was approximately $14.1 million for the year ended December 31, 2025 driven by payments toward long-term debt of $17.8 million offset by borrowings of long-term debt of $3.3 million. Net cash provided by financing activities for the year ended December 31, 2024 was $1.4 million due to $0.9 million of additional borrowings on long-term debt as well as $3.2 million of proceeds received from Impact BioMedical’s IPO offset by $2.6 million of payments toward long-term debt.
Continuing Operations and Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments to the specific amounts and classifications of assets and liabilities, which might be necessary should we be unable to continue as a going concern. While the Company has approximately $6.2 million in cash, the Company has incurred operating losses as well as negative cash flows from operating activities over the past two years.
Aside from its $6.2 million in cash as of December 31, 2025, to continue as a going concern, the Company can generate operating cash through the sale of its $6.5 million of marketable securities. To continue as a going concern, Also, historically, the Company has been able to obtain equity via issuance of authorized shares of its common stock currently not issued and/or debt-based financing to meet its working capital needs. In addition, the Company has taken steps, and will continue to take measures, to materially reduce the expenses and cash burn at all corporate and business line levels.
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Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, an effect on our financial condition, financial statements, revenues or expenses.
Inflation
Although our operations are influenced by general economic conditions, we do not believe that inflation had a material effect on our results of operations during 2025 or 2024 as we are generally able to pass the increase in our material and labor costs to our customers or absorb them as we improve the efficiency of our operations.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in our financial statements and accompanying notes. The financial statements as of December 31, 2025, describe the significant accounting policies and methods used in the preparation of the financial statements. There have been no material changes to such critical accounting policies as of the Annual Report on Form 10-K for the year ended December 31, 2025.
Allowance For Loans Losses
The Company adopted amended accounting guidance ASC Topic 326 which requires an allowance for credit losses to be deducted from the amortized cost basis of financial assets to present the net carrying value at the amount that is expected to be collected over the contractual term of the asset considering relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. In estimating expected losses in the loan and lease portfolio, borrower-specific financial data and macro-economic assumptions are utilized to project losses over a reasonable and supportable forecast period. Assumptions and judgment are applied to measure amounts and timing of expected future cash flows, collateral values and other factors used to determine the borrowers’ abilities to repay obligations. After the forecast period, the Company utilizes longer-term historical loss experience to estimate losses over the remaining contractual life of the loans.
Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Fair Value Measurement Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets.
● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
The carrying amounts reported in the consolidated balance sheet of cash and cash equivalents, accounts receivable, prepaids, accounts payable and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. Marketable securities classify as a Level 1 fair value financial instrument. The fair value of notes receivable approximates their carrying value as the stated or discounted rates of the notes do not reflect recent market conditions. The fair value of revolving credit lines notes payable and long-term debt approximates their carrying value as the stated or discounted rates of the debt reflect recent market conditions. The fair value of investments where the fair value is not considered readily determinable, are carried at cost.
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Investments
Investments in equity securities with a readily determinable fair value, not accounted for under the equity method, are recorded at that value with unrealized gains and losses included in earnings. For equity securities without a readily determinable fair value, the investment is recorded at cost, less any impairment, plus or minus adjustments related to observable transactions for the same or similar securities, with unrealized gains and losses included in earnings.
For equity method investments, the Company regularly reviews its investments to determine whether there is a decline in fair value below book value. If there is a decline that is other-than-temporary, the investment is written down to fair value. See Note 9 for further discussion on investments.
Revenue
The Company recognizes its revenue based on when the title passes to the customer or when the service is completed and accepted by the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for shipped product or service provided. Sales and other taxes billed and collected from customers are excluded from revenue. The Company recognizes rental income associated with its REIT, net of amortization of favorable/unfavorable lease terms relative to market and includes rental abatements and contractual fixed increases attributable to operating leases, where collection has been considered probable, on a straight-line basis over the term of the related lease. The Company recognizes net investment income from its investment banking line of business as interest owed to the Company occurs. The Company generates revenue from its direct marketing line of business primarily through internet sales and recognizes revenue as items are shipped.
As of December 31, 2025, the Company had no unsatisfied performance obligations for contracts with an original expected duration of greater than one year. Pursuant to Topic 606, the Company has applied the practical expedient with respect to disclosure of the deferral and future expected timing of revenue recognition for transaction price allocated to remaining performance obligations. The Company elected the practical expedient allowing it to not recognize as a contract asset the commission paid to its salesforce on the sale of its products as an incremental cost of obtaining a contract with a customer but rather recognize such commission as expense when incurred as the amortization period of the asset that the Company would have otherwise recognized is one year or less.
Business combinations and Acquisitions
Business combinations and non-controlling interests are recorded in accordance with FASB ASC 805 Business Combinations. Under the guidance, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition and all acquisition costs are expensed as incurred. The excess of the purchase price over the estimated fair values is recorded as goodwill. If the fair value of the assets acquired exceeds the purchase price and the liabilities assumed, then a gain on acquisition is recorded. The application of business combination accounting requires the use of significant estimates and assumptions.
Acquisition of assets are recorded at their relative fair value based on total accumulated costs of the acquisition. Direct acquisition-related costs are expensed as incurred. This includes all costs related to finding, analyzing and negotiating a transaction. The allocation of the purchase price is an area that requires judgment and significant estimates. Tangible and intangible assets include land, building and improvements, furniture, fixtures and equipment, acquired above market and below market leases, in-place lease value (if applicable). Acquisition-date fair values of assets and assumed liabilities are determined based on replacement costs, appraised values, and estimated fair values using methods like those used by independent appraisers and that use appropriate discount and/or capitalization rates and available market information.
Segment reporting
In November 2023, the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure through enhanced disclosures about significant segment expenses. The amendment is effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024 and early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company has adopted the enhanced segment disclosures for the year ended December 31, 2024.
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
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ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements
DSS, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
| Page | |
| Reports of Independent Registered Public Accounting Firm (PCAOB ID: |
29 |
| Reports of Independent Registered Public Accounting Firm (PCAOB ID: |
31 |
| Consolidated Financial Statements: | |
| Consolidated Balance Sheets | 32 |
| Consolidated Statements of Operations | 33 |
| Consolidated Statements of Changes in Stockholders’ Equity | 34 |
| Consolidated Statements of Cash Flows | 35 |
| Notes to the Consolidated Financial Statements | 36 |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of and Stockholders of
DSS, INC.
Opinion on the Consolidated Financial Statements
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred net losses, losses from operations and negative cashflow from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to this matter are also discussed in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
Emphasis of Matter
The Company has significant transactions with related parties which are described in Notes 20 of the consolidated financial statements. Transactions involving related parties cannot be presumed to be carried out on an arm’s length basis, as the requisite condition of competitive, free market dealings may not exist.
Critical Audit Matters
Critical audit matters are matters arising from the current year audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
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Investments in Real Estate
As disclosed in Note 2 and 9 to the consolidated financial statements, the Company owns real estate properties through their subsidiaries with a net book value of approximately $16,612,000. We identified the valuation of the real estate to be a critical audit matter.
The principal consideration for our determination of management’s assessment of impairment of the real estate as a critical audit matter is the high degree of subjective auditor judgment associated with evaluating management’s determination of impairment of the real estate properties, which is primarily due to the complexity of the valuation models used and the sensitivity of the underlying significant assumptions. The key assumptions used within the valuation models included site valuations and various approaches such as cost, sales comparison, etc. The calculated fair values are sensitive to changes in these key assumptions.
How the Critical Audit Matter was addressed in the Audit
Our audit procedures related to the determination of the fair value of the real estate properties included the following, among others:
| a) | We obtained management’s rollforward of investments in real estate from December 31, 2024, to December 31, 2025 and tested any material additions or disposals by vouching to the supporting documents . | |
| b) | We obtained third party valuations from management that assess the fair value of the properties. | |
| c) | We assessed the qualifications, competency and objectivity of third-party specialist. | |
| d) | We engaged a valuation firm to review the valuation reports provided by management to determine if the reports were reasonable and acceptable based on the methodologies used by management’s third-party valuation firm. We also assessed the qualifications and competence of the valuation firm. | |
| e) | We compared the net book value of the real estate properties to the fair values of the properties per the third-party valuations to determine if the carrying value is less than fair value and impairment was addressed properly. | |
| f) | We assessed the sufficiency of the Company’s disclosure of its accounting for these real estate properties included in Notes 2 and 9. |
Evaluation of Intangible Assets and Goodwill for Impairment
As disclosed in Notes 2 and 10 to the consolidated financial statements, the Company holds Intangible Assets and Goodwill through its subsidiaries with a net book value of approximately $17,034,000 and $1,769,000, respectively. We identified the value of Intangible Assets and Goodwill to be a critical audit matter.
The principal consideration for our determination of management’s assessment of impairment of the Intangible Assets and Goodwill as a critical audit matter is the high degree of subjective auditor judgment associated with evaluating management’s analysis, which is primarily due to the subjectivity of management’s qualitative assumptions. The conclusion of the impairment analysis is sensitive to changes in these key assumptions.
How the Critical Audit Matter was addressed in the Audit
Our audit procedures related to the evaluation of the Intangible Assets and Goodwill for impairment included the following, among others:
| a) | We obtained management’s rollforward of Intangible Assets from December 31, 2024, to December 31, 2025 and tested any material additions and disposals by vouching to the supporting documents. | |
| b) | We obtained management’s qualitative analysis that assessed the Intangible Assets and Goodwill. | |
| c) | We evaluated the reasonableness of management’s analysis of relevant events and circumstances, such as macroeconomic conditions, industry considerations, and entity-specific financial performance. We independently validated key points in management’s assessment by comparing their qualitative conclusions against internal financial trends and external market data | |
| d) | We assessed the sufficiency of the Company’s disclosure of its accounting for Intangible Assets and Goodwill included in Notes 3 and 11. |
| We have served as the Company’s auditor since 2025 | |
| March 31, 2026 | |
| 30 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
DSS, Inc.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheet of DSS, Inc. (the “Company”) as of December 31, 2024, and the related consolidated statement of operations, stockholders’ equity, and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Investments in Real Estate
As described in Note 2 to the consolidated financial statements, the Company owns real estate properties through their subsidiaries with a net book value of approximately $45,158,000, which are classified as held for sale. We identified the valuation of the real estate to be a critical audit matter.
The principal consideration for our determination of management’s assessment of impairment of the real estate as a critical audit matter is the high degree of subjective auditor judgment associated with evaluating management’s determination of impairment of the real estate properties, which is primarily due to the complexity of the valuation models used and the sensitivity of the underlying significant assumptions. The key assumptions used within the valuation models included site valuations and various approaches such as cost, sales comparison, etc. The calculated fair values are sensitive to changes in these key assumptions.
How the Critical Audit Matter was addressed in the Audit
Our audit procedures related to the determination of the fair value of the real estate properties included the following, among others:
| a) | We obtained management’s roll forward of investments in real estate from December 31, 2023, to December 31, 2024 and tested any material additions by vouching to invoices and contracts. | |
| b) | We obtained third party valuations that assess the fair value of the properties from management. | |
| c) | We assessed the qualifications and competence of management and the qualifications, competence and objectivity of third-party specialist. | |
| d) | We engaged a valuation firm to review the valuation reports provided by management to determine if the reports were reasonable and acceptable based on the methodologies used by management’s third-party valuation firm. We also assessed the qualifications and competence of the valuation firm. | |
| e) | We compared the net book value of the real estate properties to the fair values of the properties per the third-party valuations to determine if the carrying value is less than fair value and impairment was addressed properly. During the year ended December 31, 2024, Management reclassified the land and building related to AMRE Shelton to assets held for sale. | |
| f) | We assessed the sufficiency of the Company’s disclosure of its accounting for these real estate properties included in Notes 2 and 7. |
Evaluation of Intangible Assets and Goodwill for Impairment
As described in Notes 2 and 10 to the consolidated financial statements, the Company holds Intangible Assets and Goodwill through its subsidiaries with a net book value of approximately $18,890,000 and $1,769,000, respectively. We identified the value of Intangible Assets and Goodwill to be a critical audit matter.
The principal consideration for our determination of management’s assessment of impairment of the Intangible Assets and Goodwill as a critical audit matter is the high degree of subjective auditor judgment associated with evaluating management’s determination of impairment of Intangible Assets and Goodwill, which is primarily due to the complexity of the valuation models used and the sensitivity of the underlying significant assumptions. The key assumptions used within the valuation models included qualitative and quantitative assessments. The calculated fair values are sensitive to changes in these key assumptions.
How the Critical Audit Matter was addressed in the Audit
Our audit procedures related to the determination of the fair value of the Intangible Assets and Goodwill included the following, among others:
| a) | We obtained management’s rollforward of Intangible Assets and Goodwill from December 31, 2023, to December 31, 2024 and tested any material additions and disposals by vouching to agreements. | |
| b) | We obtained management’s qualitative and quantitative assessments and third-party valuations that assess the fair value of the Intangible Assets and Goodwill. | |
| c) | We assessed the qualifications and competence of management and the qualifications, competence and objectivity of third-party specialists. | |
| d) | We reviewed the valuation reports provided by management to determine if the reports were reasonable and acceptable based on the methodologies used by management’s third-party valuation firm. | |
| e) | We audited the critical inputs used in the valuation calculations and utilized the services of an independent auditor engaged specialist to ensure the methodologies and assumptions utilized by the Company’s independent specialists were reasonable and in accordance with industry standards. | |
| f) | We assessed the sufficiency of the Company’s disclosure of its accounting for Intangible Assets and Goodwill included in Notes 2 and 10. |
We served as the Company’s auditor from 2022 to 2025.
March 31, 2025
| 31 |
DSS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
As of December 31, 2025 | As of December 31, 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable, net | ||||||||
| Inventory | ||||||||
| Investment in trading securities | ||||||||
| Assets held for sale | ||||||||
| Current portion of notes receivable, net | ||||||||
| Current portion of notes receivable - related party | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Investments in real estate, net | ||||||||
| Investments, cost method | ||||||||
| Investments, equity method | ||||||||
| Investment in equity securities | ||||||||
| Notes receivable, net | ||||||||
| Notes receivable - related party, net | ||||||||
| Other assets | ||||||||
| Right-of-use assets | ||||||||
| Goodwill | ||||||||
| Other intangible assets, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and deferred revenue | ||||||||
| Other current liabilities | ||||||||
| Accrued interest on long-term debt | ||||||||
| Current portion of lease liability | ||||||||
| Current portion of long-term debt, net | ||||||||
| Current portion of long-term debt on assets held-for-sale, net | ||||||||
| Convertible note payable - related party | ||||||||
| Current portion of long-term debt - related party, net | ||||||||
| Total current liabilities | ||||||||
| Long-term debt, net | ||||||||
| Long term lease liability | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 16) | ||||||||
| Stockholders’ equity (deficit) | ||||||||
| Preferred stock, $ par value; shares authorized, shares issued and outstanding | ||||||||
| Common stock, $ par value; shares authorized, shares issued and outstanding ( on December 31, 2024) | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity of the Company | ( | ) | ||||||
| Non-controlling interest in subsidiaries | ||||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to the consolidated financial statements.
| 32 |
DSS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
For the year ended December 31, 2025 | For the year ended December 31, 2024 | |||||||
| Revenue: | ||||||||
| Printed products | $ | $ | ||||||
| Rental | ||||||||
| Commercial lending | ||||||||
| Commission | ||||||||
| Biotechnology | ||||||||
| Total revenue | ||||||||
| Costs and expenses: | ||||||||
| Cost of revenue | ||||||||
| Selling, general and administrative (including stock-based compensation) | ||||||||
| Total costs and expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Interest income | ||||||||
| Interest income on note receivable, related party | ||||||||
| Dividend income | ||||||||
| Other | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Foreign Currency Translation Adjustment | ( | ) | ||||||
| Gain on extinguishment of debt | ||||||||
| (Loss)/gain on equity method investment | ( | ) | ||||||
| (Loss) gain on investments | ( | ) | ||||||
| Impairment of investment | ( | ) | ||||||
| Impairment of intangible assets | ( | ) | ||||||
| Impairment of real estate assets | ( | ) | ( | ) | ||||
| Provision for loan losses | ( | ) | ||||||
| (Loss)/gain on sale real estate assets | ( | ) | ||||||
| Loss from operations before income taxes | ( | ) | ( | ) | ||||
| Income tax benefit | ( | ) | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Loss from operations attributed to noncontrolling interest | ||||||||
| Net loss attributable to DSS common stockholders | $ | ( | ) | $ | ( | ) | ||
| Loss per common share attributable to common stockholders | ||||||||
| Basic | $ | ( | ) | $ | ( | ) | ||
| Diluted | $ | ( | ) | $ | ( | ) | ||
| Shares used in computing loss per common share: | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
See accompanying notes to the consolidated financial statements.
| 33 |
DSS, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders’ Equity
For the Years Ended December 31,
| 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, 2023 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||
| - | ||||||||||||||||||||||||||||||||||||
| Issuance of common stock, net of expenses | - | |||||||||||||||||||||||||||||||||||
| Stock based payments | - | |||||||||||||||||||||||||||||||||||
| Issuance of common stock, net of expenses - Impact BioMedical, Inc. | - | - | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||
| - | ||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuance of common stock, net of expenses - Impact BioMedical, Inc. | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock for award | - | |||||||||||||||||||||||||||||||||||
| Stock based payments for professional services rendered for Impact Bio | - | |||||||||||||||||||||||||||||||||||
| Stock based payments | - | - | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||||||||
See accompanying notes to the consolidated financial statements.
| 34 |
DSS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the year December 31, 2025 |
For
the year December 31, 2024 |
|||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Issuance of common stock for reward | ||||||||
| Stock based payments for professional services rendered | ||||||||
| Stock based payments to employees and directors | ||||||||
| (Loss) gain on equity method investment | ( |
) | ||||||
| Unrealized loss (gain) on investment in marketable securities | ( |
) | ||||||
| Amortization of operating lease ROU assets | ||||||||
| Write off of inventory | ||||||||
| Provision for inventory obsolescence | ( |
) | ||||||
| Loss (gain) on sale of real estate assets | ( |
) | ||||||
| Impairment of fixed assets | ||||||||
| Impairment of investments of investments at cost | ||||||||
| Impairment of real estate | ||||||||
| Impairment of intangibles | ||||||||
| Provision for loan losses | ||||||||
| Gain on extinguishment of debt | ( |
) | ||||||
| Impairment of goodwill | ||||||||
| Decrease (increase) in assets: | ||||||||
| Accounts receivable | ||||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Investment in trading securities | ( |
) | ( |
) | ||||
| Other assets | ( |
) | ||||||
| Increase (decrease) in liabilities: | ||||||||
| Accounts payable | ( |
) | ( |
) | ||||
| Accrued expenses | ( |
) | ||||||
| ROU liabilities | ( |
) | ( |
) | ||||
| Accrued interest on notes payable | ||||||||
| Other liabilities | ( |
) | ||||||
| Net cash used by operating activities | ( |
) | ( |
) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property, plant and equipment | ( |
) | ( |
) | ||||
| Purchase of real estate | ( |
) | ( |
) | ||||
| Proceeds from sale of real estate | ||||||||
| Proceeds from sale of equity investments | ||||||||
| Proceeds from disposal of property, plant and equipment | ||||||||
| Proceeds from sale of investment, related party | ||||||||
| Issuance of new notes receivable, net origination fees | ( |
) | ||||||
| Payments received on notes receivable | ||||||||
| Payments received on notes receivable, related party | ||||||||
| Net cash provided by investing activities | ||||||||
| Cash flows from financing activities: | ||||||||
| Payments of long-term debt | ( |
) | ( |
) | ||||
| Borrowings of long-term debt, net | ||||||||
| Borrowings of convertible note payable - related party | ||||||||
| Issuances of common stock, net of issuance costs | ||||||||
| Net cash provided (used) by financing activities | ( |
) | ||||||
| Net increase (decrease) in cash | ( |
) | ||||||
| Cash and cash equivalents at beginning of year | ||||||||
| Cash and cash equivalents and restricted cash at end of period | $ | $ | ||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash and restricted cash | $ | $ | ||||||
See accompanying notes to the consolidated financial statements.
| 35 |
DSS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS
The Company, incorporated in the state of New York in May 1984 has conducted business in the name of Document Security Systems, Inc. On September 16, 2021, the board of directors approved an agreement and plan of merger with a wholly owned subsidiary, DSS, Inc. (a New York corporation, incorporated in August 2020), for the sole purpose of effecting a name change from Document Security Systems, Inc. to DSS, Inc. This change became effective on September 30, 2021. DSS, Inc. maintained the same trading symbol “DSS”.
DSS, Inc. (together with its consolidated subsidiaries, referred to herein as “DSS,” “we,” “us,” “our” or the “Company”) currently operates four (4) distinct business lines with operations and locations around the globe. These business lines are: (1) Product Packaging, (2) Biotechnology, (3) Commercial Lending, (4) Securities and Investment Management.
Our divisions, their business lines, subsidiaries, and operating territories: (1) Our Product Packaging line is led by Premier Packaging Corporation, Inc. (“Premier”), a New York corporation. Premier operates in the paper board and fiber based folding carton, consumer product packaging, and document security printing markets. It markets, manufactures, and sells sophisticated custom folding cartons, mailers, photo sleeves and complex 3-dimensional direct mail solutions. Premier is currently located in its new facility in Rochester, NY, and primarily serves the US market. (2) The Biotechnology business line was created to invest in or acquire companies in the BioHealth and BioMedical fields, including businesses focused on the advancement of drug discovery and prevention, inhibition, and treatment of neurological, oncological, and immune related diseases. This division is also targeting unmet, urgent medical needs, and is developing open-air defense initiatives, which curb transmission of air-borne infectious diseases, such as tuberculosis and influenza. (3) Our Commercial Lending business division, driven by American Pacific Financial (“APF”), provides financing solutions including commercial business lines of credit, land development financing, inventory financing, equipment financing, and third-party loan servicing (4) Securities and Investment Management was established to develop and/or acquire assets in the securities trading or management arena, and to pursue, among other product and service lines, broker dealers, and mutual funds management. Also in this segment is the Company’s real estate investment trusts (“REIT”), organized for the purposes of acquiring hospitals and other acute or post-acute care centers from leading clinical operators with dominant market share in secondary and tertiary markets, and leasing each property to a single operator under a triple-net lease. the REIT was formed to originate, acquire, and lease a credit-centric portfolio of licensed medical real estate.
On June 21, 2025, Impact BioMedical Inc. (“Impact”), Dr Ashleys Limited, a Cayman Islands exempted company limited by shares (“PubCo”), Dr Ashleys Nevada Sub, Inc., a Nevada corporation and wholly-owned subsidiary of PubCo (“Merger Sub”), Dr Ashleys Bio Labs Limited, a Cayman Islands exempted company limited by shares (“Dr Ashleys Cayman”), and Kanans Visvanats (a.k.a. Kannan Vishwanatth), a Latvian national, solely in his capacity as the sole shareholder of Dr Ashleys (“Dr Ashleys Shareholder”) entered into a Merger and Share Exchange Agreement (the “Merger Agreement”). Pursuant to the Merger Agreement and subject to the terms and conditions set forth therein, (i) Merger Sub shall be merged with and into Impact with Impact being the surviving entity (the “Merger”), and (ii) simultaneous with or immediately following the Merger, PubCo shall acquire all of the issued and outstanding ordinary shares of Dr Ashleys Cayman from the Dr Ashleys Shareholder (the “Share Exchange”). The closing date of the transaction is uncertain as of March 15, 2026, due to the pending approval from regulatory authorities. Both parties agreed to extend the closing date to July 1, 2026. Management will continue evaluating the status of this deal.
| 36 |
2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (U.S. GAAP). Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB).
Principles of Consolidation – The consolidated financial statements include the accounts of DSS and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires the Company to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, the Company evaluates its estimates, including those related to the accounts receivable, convertible notes receivable, inventory, fair values of investments, intangible assets and goodwill, useful lives of intangible assets and property and equipment, the impairment of long-lived assets, fair values of options and warrants to purchase the Company’s common stock, preferred stock, deferred revenue, and income taxes, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
Reclassifications - Certain prior period amounts have been reclassified to conform to the current period presentation. Such reclassifications had no effect on previously reported net income, cash flows, total assets, total liabilities, or total stockholders’ equity.
Revision of prior period
financial statements - During 2025, the Company identified and corrected immaterial classification errors
in our previously reported Consolidated balance sheet as of December 31, 2024.
The Company assessed the materiality of these change in presentation on prior period financial statements in accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” (ASC Topic 250, Accounting Changes and Error Corrections). Based on this assessment, the Company concluded that this classification error corrections in its Consolidated balance sheet and Consolidated statement of cash flows are not material to any previously presented financial statements based upon overall considerations of both quantitative and qualitative factors. The correction had no effect on any previously reported amounts in our consolidated financial statements as of and for the year ended December 31, 2024 other than those previously mentioned.
Cash Equivalents – All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents. Amounts included in cash equivalents in the accompanying consolidated balance sheets are money market funds whose adjusted costs approximate fair value.
Restricted cash - Restricted cash consists of deposits and other cash balances that are restricted as to withdrawal or use under the terms of certain contractual arrangements. These amounts are generally maintained as collateral for letters of credit, lease-related security deposits, or other business requirements. The Company classifies restricted cash as a current assets on noncurrent asset on the Consolidated balance sheets based on when the applicable restrictions are expected to lapse. For purposes of the consolidated statements of cash flows, cash, cash equivalents, and restricted cash are presented in total
Accounts Receivable – The Company extends credit to its customers in the normal course of business. The Company performs ongoing credit evaluations and generally does not require collateral. Payment terms are generally 30 days but up to net 120 for certain customers. The Company carries its trade accounts receivable at invoice amounts and its rent receivables at contract amounts, less an allowance for credit losses. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for credit losses based upon management’s estimates that include a review of the history of past write-offs and collections and an analysis of current credit conditions. In estimating expected losses in the accounts receivable portfolio, customer-specific financial data and macro-economic assumptions are utilized to project losses over a reasonable and supportable forecast period. Assumptions and judgment are applied to measure amounts and timing of expected future cash flows, collateral values and other factors used to determine the customers’ abilities to pay.
At
December 31, 2025, and December 31, 2024 the Company established a reserve for credit losses of approximately $
Concentration
of Credit Risk - The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits.
The Company believes it is not exposed to any significant credit risk because of any non-performance by the financial institutions. As
of December 31, 2025, one customer accounted for approximately
Notes receivable, unearned interest, and related recognition - The Company records all future payments of principal and interest on notes as notes receivable, which are then offset by the amount of any related unearned interest income. For financial statement purposes, the Company reports the net investment in the notes receivable on the consolidated balance sheet as current or long-term based on the maturity date of the underlying notes. Such net investment is comprised of the amount advanced on the loans, adjusting for net deferred loan fees or costs incurred at origination, amounts allocated to warrants received upon origination, and any payments received in advance. The unearned interest is recognized over the term of the notes and the income portion of each note payment is calculated so as to generate a constant rate of return on the net balance outstanding. Net deferred loan fees or costs, together with discounts recognized in connection with warrants acquired at origination, are accreted as an adjustment to yield over the term of the loan.
Allowance
For Loans And Lease Losses - ASC Topic 326 which requires an allowance for credit losses to be deducted from the amortized cost
basis of financial assets to present the net carrying value at the amount that is expected to be collected over the contractual term
of the asset considering relevant information about past events, current conditions, and reasonable and supportable forecasts that affect
the collectability of the reported amount. In estimating expected losses in the loan portfolio, borrower-specific financial data and
macro-economic assumptions are utilized to project losses over a reasonable and supportable forecast period. Assumptions and judgment
are applied to measure amounts and timing of expected future cash flows, collateral values and other factors used to determine the borrowers’
abilities to repay obligations. After the forecast period, the Company utilizes longer-term historical loss experience to estimate losses
over the remaining contractual life of the loans. At December 31, 2025, and December 31, 2024, the Company established a reserve for
credit losses of approximately $
Investments – Investments in equity securities with a readily determinable fair value, not accounted for under the equity method, are recorded at fair value with unrealized gains and losses included in earnings. For other equity securities without a readily determinable fair value, the investment is recorded at cost, less any impairment, plus or minus adjustments related to observable transactions for the same or similar securities, with unrealized gains and losses included in earnings. For equity method investments, the Company regularly reviews its investments to determine whether there is a decline in fair value below book value. If there is a decline that is other-than-temporary, the investment is written down to fair value. See Note 8 for further discussion on investments.
| 37 |
Fair Value of Financial Instruments - Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Fair Value Measurement Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets.
● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
The carrying amounts reported in the consolidated balance sheet of cash and cash equivalents, accounts receivable, prepaids, accounts payable and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. Marketable securities classify as a Level 1 fair value financial instrument. The fair value of notes receivable approximates their carrying value as the stated or discounted rates of the notes do not reflect recent market conditions. The fair value of revolving credit lines notes payable and long-term debt approximates their carrying value as the stated or discounted rates of the debt reflect recent market conditions. The fair value of investments where the fair value is not considered readily determinable, are carried at cost.
Inventory –
Inventories consist primarily of paper, pre-printed security paper, paperboard, fully prepared packaging, air filtration systems,
and health and beauty products which and are stated at the lower of cost or net realizable value on the first-in, first-out
(“FIFO”) method. Packaging work-in-process and finished goods included the cost of materials, direct labor and overhead.
At the closing of each reporting period, the Company evaluates its inventory in order to adjust the inventory balance for obsolete
and slow-moving items. An allowance for obsolescence of approximately $
Property, Plant and Equipment – Property, plant and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives or lease period of the assets whichever is shorter. Expenditures for renewals and betterments are capitalized. Expenditures for minor items, repairs and maintenance are charged to operations as incurred. Any gain or loss upon sale or retirement due to obsolescence is reflected in the operating results in the period the event takes place.
Investments
in real estate, net – Acquisition of assets are recorded at their relative fair value based on total accumulated costs
of the acquisition. Direct acquisition-related costs are capitalized as a component of the acquired assets. This includes all costs related
to finding, analyzing and negotiating a transaction. The allocation of the purchase price is an area that requires judgment and significant
estimates. Tangible and intangible assets include land, building and improvements, furniture, fixtures and equipment, acquired above
market and below market leases, in-place lease value (if applicable). Acquisition date fair values of assets and assumed liabilities
are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent
appraisers and that use appropriate discount and/or capitalization rates and available market information. Depreciation and amortization
is computed using the straight-line method over the estimated useful lives of the assets. Depreciation, amortization, cost to maintain
and secure the buildings as well as interest incurred on the loans to procure the real estate are included in Cost of revenue on the
accompanying Condensed consolidated statement of operations. During 2023, the land and buildings related to AMRE LifeCare and AMRE Winter
Haven were reclassified to Assets held for sale. During 2024, the land and buildings related to AMRE Shelton were reclassified to Assets
held for sale. As of December 31, 2025, circumstances around the sale of these properties have changed and the Company does not believe
the sale of these properties will be finalized within the 12 months from the filing of these quarterly financial statements and have
reclassified these assets to Investment in real estate, net and will begin to depreciate these assets prospectively. The Company’s policy is to obtain an independent third-party valuation
for each major project in the United States as part of our assessment of identifying potential triggering events for impairment. Management
may use the market comparison method to value the investments. In addition to the annual assessment of potential triggering events in
accordance with ASC 360 – Property Plant and Equipment (“ASC 360”), the Company applies a fair value-based impairment
test to the net book value assets on an annual basis and on an interim basis if certain events or circumstances indicate that an impairment
loss may have occurred. The Company recorded impairment on for the amount of $
Leases - ASC 842 requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company used its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. A number of the lease agreements contain options to renew and options to terminate the leases early. The lease term used to calculate ROU assets and lease liabilities only includes renewal and termination options that are deemed reasonably certain to be exercised.
| 38 |
The Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period incurred. The Company has elected to separate lease and non-lease components for all property leases for the purposes of calculating ROU assets and lease liabilities.
Impairment
of Long-Lived Assets and Goodwill - The Company monitors the carrying value of long-lived assets for potential
impairment and tests the recoverability of such assets whenever events or changes in circumstances indicate that the carrying
amounts may not be recoverable. If a change in circumstance occurs, the Company performs a test of recoverability by comparing the
carrying value of the asset or asset group to its undiscounted expected future cash flows. If cash flows cannot be separately and
independently identified for a single asset, the Company will determine whether impairment has occurred for the group of assets for
which the Company can identify the projected cash flows. If the carrying values are in excess of undiscounted expected future cash
flows, the Company measures any impairment by comparing the fair value of the asset or asset group to its carrying value. In June
2025, the Company resigned its position as the registered investment advisor (“RIA”) that it assumed in September of
2021 of the American First Mutual Funds and impaired the related asset acquired in September
2021 in the amount of $
Assets
held for sale – The Company has several buildings and associated land for sale as of December 31, 2024. These consist of
primarily of retail space in Lindon, Utah approximating $
Goodwill
– Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities
assumed in a business combination. Goodwill is subject to impairment testing at least annually and will be tested for impairment between
annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. FASB ASC Topic 350 provides
an entity with the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to
a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after completing
the assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value,
the Company will proceed to a quantitative test. The Company may also elect to perform a quantitative test instead of a qualitative test
for any or all of our reporting units. The test compares the fair value of an entity’s reporting units to the carrying value of
those reporting units. This quantitative test requires various judgments and estimates. The Company estimates the fair value of the reporting
unit using a market approach in combination with a discounted operating cash flow approach. Impairment of goodwill is measured as the
excess of the carrying amount of goodwill over the fair values of recognized and unrecognized assets and liabilities of the reporting
unit. The Company performed its annual goodwill impairment test as of December 31, 2025, and no impairment was deemed necessary for the
goodwill associated with Premier Packaging Company of approximately $
Intangible
Assets - The estimated fair values of acquired intangibles are generally determined based upon future economic benefits such
as earnings and cash flows. Acquired identifiable intangible assets are recorded at fair value and are amortized over their estimated
useful lives. Acquired intangible assets with an indefinite life are not amortized but are reviewed for impairment at least annually
or more frequently whenever events or changes in circumstances indicate that the carrying amounts of those assets are below their estimated
fair values. Impairment is tested under ASC 350. At December 31, 2024, The Company impaired approximately $
Margin loan payable
- The Company utilizes margin loans to finance certain investments in marketable securities. These loans are recorded as a liability
at the principal amount borrowed and are classified as other current liabilities on the Consolidated Balance Sheets, as they are generally
due on demand. Interest expense is recognized as incurred within Interest expense on the Consolidated statement of operations. Marketable
securities purchased on margin are recorded at fair value within Investments in marketable securities, current on the Consolidated balance
sheets. As of December 31, 2025, the Company has a margin loan agreement with Apex Clearing Corp., which is used to finance additional
investments in equity securities. The margin loan bears an annual interest rate of
Convertible Promissory Note -The Company accounts for convertible promissory notes in accordance with ASU 2020-06, and evaluates embedded features under ASC 815, Derivatives and Hedging. Upon issuance, convertible notes are recorded at their principal amount, net of any original issue discount (“OID”) and debt issuance costs. OID and issuance costs are presented as a direct deduction from the carrying amount of the debt and are amortized to interest expense using the effective interest method over the contractual term (ASC 835-30). The Company assesses all terms and features of its convertible notes, including conversion options, redemption provisions, make-whole or down-round adjustments, and default put/call rights, to determine whether any embedded features shall be bifurcated and accounted for as derivatives at fair value with changes in fair value recognized in earnings (ASC 815 and ASC 820), or whether the convertible note instrument could be qualified for simplified accounting per ASU 2020-06 and recorded at amortized cost as liability. Convertible notes are classified as current or noncurrent liabilities based on contractual maturity and the Company’s intent and ability to settle the obligation within twelve months of the balance sheet date. Accrued interest and amortization of discounts and issuance costs are included in interest and amortization expense, respectively. For diluted earnings per share, the Company applies the if-converted method to its convertible instruments in accordance with ASU 2020-06 (ASC 260).
Revenue - The Company recognizes its revenue based on when the title passes to the customer or when the service is completed and accepted by the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for shipped product or service provided. Sales and other taxes billed and collected from customers are excluded from revenue. The Company recognizes rental income associated with its REIT, net of amortization of favorable/unfavorable lease terms relative to market and includes rental abatements and contractual fixed increases attributable to operating leases, where collection has been considered probable, on a straight-line basis over the term of the related lease. Commission revenues are generated when the Company buys and sells bond and equity securities on behalf of its customers. Each time a customer enters into a buy or sell transaction, the Company recognizes a commission. Commissions and related clearing expenses are recorded on the trade date. The Company recognizes net investment income from its investment banking line of business as interest and management fees related to loans managed for third parties owed to the Company occurs.
| 39 |
As of December 31, 2025 and 2024, the Company had no unsatisfied performance obligations for contracts with an original expected duration of greater than one year. Pursuant to Topic 606, the Company has applied the practical expedient with respect to disclosure of the deferral and future expected timing of revenue recognition for transaction price allocated to remaining performance obligations. The Company elected the practical expedient allowing it to not recognize as a contract asset the commission paid to its salesforce on the sale of its products as an incremental cost of obtaining a contract with a customer but rather recognize such commission as expense when incurred as the amortization period of the asset that the Company would have otherwise recognized is one year or less.
Costs of revenue - Costs of revenue includes all direct cost of the Company’s packaging, commercial and security printing sales, primarily, paper, inks, dies, and other consumables, and direct labor, transportation, amortization, deprecation, and manufacturing facility costs. In addition, this category includes all direct costs associated with the manufacturing and procurement of the products sold in the Company’s technology sales, services and licensing including hardware and software that is resold, third-party fees, and fees paid to inventors or others as a result of technology licenses or settlements, if any. Cost of revenue for our REIT line of business includes all direct cost associated with the maintenance and upkeep of the related facilities, depreciation, amortization and the costs to acquire the facilities. Our Commercial Lending operating segment has costs of revenue associated with the impairment of notes receivable for those amounts at risk of collection. Costs of revenue do not include expenses related to product development, integration, and support. These costs are included in research and development, which is a component of selling, general and administrative expenses on the consolidated statement of operations. Legal costs are included in selling, general and administrative.
Shipping and Handling Costs - Costs incurred by the Company related to shipping and handling are included in cost of revenue. Amounts charged to customers pertaining to these costs are reflected as revenue.
Sales
Commissions - Sales commissions are expensed as incurred for contracts with an expected duration of one year or less. A significant
portion of the Company’s sales commissions expense is generated from its direct marketing line of business. These commissions are
based on current month shipments and are paid one month in arrears. There were
Contingent Legal Expenses - Contingent legal fees are expensed in the consolidated statements of operations in the period that the related revenues are recognized. In instances where there are no recoveries from potential infringers, no contingent legal fees are paid; however, the Company may be liable for certain out of pocket legal costs incurred pursuant to the underlying legal services agreement that will be paid out from the proceeds from settlements or licenses that arise pursuant to an enforcement action, which will be expensed as legal fees in the period in which the payment of such fees is probable. Any unamortized patent acquisition costs will be expensed in the period a conclusion is reached in an enforcement action that does not yield future royalties potential.
Research
and Development - Research and development costs are expensed as incurred. Research and development costs consist primarily of
third-party research costs and consulting costs. The Company recognized costs of approximately $
Income Taxes - The Company recognizes estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income items is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized. We recognize penalties and accrued interest related to unrecognized tax benefits in income tax expense.
| 40 |
Business Combinations and Acquisitions - Business combinations and non-controlling interests are recorded in accordance with FASB ASC 805 Business Combinations. Under the guidance, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition and all acquisition costs are expensed as incurred. The excess of the purchase price over the estimated fair values is recorded as goodwill. If the fair value of the assets acquired exceeds the purchase price and the liabilities assumed, then a gain on acquisition is recorded. The application of business combination accounting requires the use of significant estimates and assumptions.
Acquisition of assets are recorded at their relative fair value based on total accumulated costs of the acquisition. Direct acquisition-related costs are expensed as incurred. This includes all costs related to finding, analyzing and negotiating a transaction. The allocation of the purchase price is an area that requires judgment and significant estimates. Tangible and intangible assets include land, building and improvements, furniture, fixtures and equipment, acquired above market and below market leases, in-place lease value (if applicable). Acquisition-date fair values of assets and assumed liabilities are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent appraisers and that use appropriate discount and/or capitalization rates and available market information.
Continuing
Operations and Going Concern - The accompanying consolidated financial statements have been prepared assuming that the Company
will continue as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities
in the normal course of business. These consolidated financial statements do not include any adjustments to the specific amounts and
classifications of assets and liabilities, which might be necessary should we be unable to continue as a going concern. While the Company
has approximately $
Aside
from its $
Recent Accounting Standards - The Financial Accounting Standards Board (FASB) issues various Accounting Standards Updates relating to the treatment and recording of certain accounting transactions. There are several new accounting pronouncements issued by FASB which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company.
In November 2023, the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure through enhanced disclosures about significant segment expenses. The amendment is effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024 and early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company has adopted the enhanced segment disclosures for the year ended December 31, 2024. The Company reports its segment information to reflect the manner in which the Company’s chief operating decision maker (“CODM”) reviews and assesses performance. The Company’s Interim Chief Executive Officer has responsibilities as the CODM and review and assess the performance of the Company as a whole.
The primary financial measures used by the CODM to evaluate performance and allocate resources are net income (loss) and operating income (loss). The CODM uses net income (loss) and operating income (loss) to evaluate the performance of the Company’s ongoing operations and as part of the Company’s internal planning and forecasting processes. Information on Net loss and Operating loss is disclosed in the Condensed Consolidated Statements of Operations. Segment expenses and other segment items are provided to the CODM on the same basis as disclosed in the Condensed Consolidated Statements of Operations.
The CODM does not evaluate performance or allocate resources based on segment assets, and therefore such information is not presented in the notes to the financial statements
In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures” which is intended to simplify various aspects related to accounting for income taxes. ASU 2023-09 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The amendments in ASU 2023-09 are effective for public business entities for fiscal years beginning after December 15, 2024, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods. The adoption of this ASU did not have a material impact on the Consolidated Financial Statements
In November 2024, the FASB issued ASU No. 2024-03 (“ASU 2024-03”), Disaggregation of Income Statement Expenses (“DISE”). ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. As revised by ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, the provisions of ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. With the exception of expanding disclosures to include more granular income statement expense categories, we do not expect the adoption of ASU 2024-03 to have a material effect on our consolidated financial statements taken as a whole.
In November 2024, the FASB issued ASU 2024-04 (“ASU 2024-04”), Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions or as extinguishments. The amendments in ASU 2024-04 are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for entities that have adopted ASU 2020-06. The Company is currently evaluating the effect of adopting ASU 2024-04 on its consolidated financial statements and related disclosures. The Company does not currently expect the adoption of this standard to have a material impact on its consolidated financial statements.
| 41 |
3. INVENTORY
Inventory consisted of the following as of December 31:
| 2025 | 2024 | |||||||
| Finished Goods | $ | $ | ||||||
| Work in Process | ||||||||
| Raw Materials | ||||||||
| $ | $ | |||||||
| Less allowance for obsolescence | ( | ) | ( | ) | ||||
| $ | $ | |||||||
4. NOTES RECEIVABLE
Note 1
On
May 14, 2021, DSS Pure Air, Inc. a subsidiary of the Company entered a convertible promissory note (“Note 1”) with Puradigm,
Inc. (“Puradigm”), a company registered in the state of Texas. Note 1 has an aggregate principal balance up to $
Note 2
On
October 25, 2021, APF entered into a loan agreement (“Note 2”) with Asili, LLC. (“Asili”), a company registered
in the state of Utah. Note 3 has an initial aggregate principal balance up to $
Note 3
On
January 24, 2022, APF and an individual entered into a promissory note (“Note 3”) in the principal sum of $
| 42 |
Note 4
On
March 2, 2022, APF and WUURII Commerce, Inc. (“WUURII”), a corporation organized under the laws of the Republic of Korea
entered into a promissory note (“Note 4”). Under the terms of Note 4, APF at its discretion, may lend up to the principal
sum of $
Note 5
On
May 9, 2022, DSS PureAir and Puradigm entered into a promissory note (“Note 5”) in the principal sum of $
Note 6, related party
On
August 29, 2022, DSS Financial Management Inc and BMI Capital International LLC. (“BMIC LLC”), a related party, entered
into a promissory note (“Note 6”) in the principal sum of $
Note 7, related party
On
May 8, 2023, DSS Financial Management Inc and BMIC LLC entered into a promissory note (“Note 7”) in the principal sum of
$
Note 8, related party
On
July 26, 2022, APF and Value Exchange International, Inc. (“VEII”) entered into a promissory note (“Note 8”) in the principal sum of
$
Note 9
On
February 19, 2021, Impact BioMedical, Inc, entered into a promissory note with an individual. The Company loaned the principal sum of
$
Note 10
On
June 27, 2023, Decentralized Sharing Systems, Inc. and Stemtech Corporation (“Stemtech”) entered into a convertible
promissory note (“Note 10”) in the principal sum of $
| 43 |
Note 11
On
March 31, 2023, DSS Biohealth Security, Inc and an individual entered into a promissory note (“Note 11”) in the principal
sum of $
Note 12
On
August 29, 2024, APF entered into a promissory note (“Note 12”) with WestPark. Note 12 has a principal balance of $
5. PROVISION FOR CREDIT LOSSES
ASC Topic 326 for the measurement of credit losses on financial instruments and other financial assets. That guidance requires an allowance for credit losses to be deducted from the amortized cost basis of financial assets to present the net carrying value that is expected to be collected over the contractual term of the assets considering relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The guidance replaced the previous incurred loss model for determining the allowance for credit losses.
Accounts receivable are stated at the amount owed by the customer. The Company maintains an allowance for credit losses for accounts receivable and unbilled receivables, based on expected credit losses resulting from the inability of our customers to make required payments. The allowance for credit losses is estimated based on historical experience, current economic conditions and the creditworthiness of customers. Receivables are charged to the allowance when determined to be no longer collectible. The Company regularly monitors and assesses its risk of not collecting amounts owed by customers and records its allowance for credit losses based on the results of this analysis.
As of December 31, 2025, we have reviewed the entire loan portfolio as well as all financial assets of the Company for the purpose of evaluating the loan portfolio and the loan balances, including a review of individual and collective portfolio loan quality, loan(s) performance, including past due status and covenant defaults, assessment of the ability of the borrower to repay the loan on the loan terms, whether any loans should be placed on nonaccrual or returned to accrual, any concentrations in any single borrower and/or industry that we might need to further manage, and if any specific or general loan loss reserve should be established for the entire loan portfolio or for any specific loan.
We
analyzed the loan loss reserve from three basis: general loan portfolio reserves; industry portfolio reserves, and specific loan loss
reserves. As of year-ended December 31, 2025 and December 2024, the Company recorded a Loan loss reserve of approximately $
General
Loan Portfolio Reserve - Based upon the review of our loan portfolio, we do not believe that a substantial general loan portfolio
reserve is due at this time. However, we do recognize that some inherent risks are in all loan portfolios, thus we recorded a general
contingent portfolio reserve of $
Industry Portfolio Reserves – Given the relatively young loan portfolio and a diversification of the portfolio over several different loan products, the risk is reduced. Accordingly, we have not recorded a discretionary reserve as of December 31, 2025 and December 31, 2024
Specific
Loan Reserves - Previously, we had identified credit weaknesses and borrower repayment weakness with Asili, which has a current principal
and interest balance of $
The following table identifies the loan loss reserve for the period ending December 31:
| 2025 | 2024 | |||||||
| General Loan Portfolio Reserve | $ | $ | ||||||
| Specific Loan Reserves | ||||||||
| Total | $ | $ | ||||||
| 44 |
Changes in the allowance for credit losses and loan loss reserve were as follows:
| Allowance for credit losses | Loan loss reserve | Total | ||||||||||
| Balance at December 31, 2024 | $ | $ | $ | |||||||||
| Credit loss expense | ||||||||||||
| Write-offs | ( | ) | ( | ) | ||||||||
| Recoveries | ( | ) | ( | ) | ||||||||
| Balance at December 31, 2025 | $ | $ | $ | |||||||||
6. FINANCIAL INSTRUMENTS
Cash, Cash Equivalents and Marketable Securities
The following tables show the Company’s cash and marketable securities by significant investment category as of December 31:
| 2025 | ||||||||||||||||||||
| Cost | Unrealized Gain/(Loss) | Fair Value | Cash and Cash Equivalents | Marketable Securities | ||||||||||||||||
| Cash | $ | $ | $ | $ | $ | |||||||||||||||
| Restricted Cash | ||||||||||||||||||||
| Level 1 | ||||||||||||||||||||
| Money Market Funds | ||||||||||||||||||||
| Marketable Securities | ( | ) | $ | |||||||||||||||||
| Total | $ | $ | ( | ) | $ | $ | $ | |||||||||||||
| 2024 | ||||||||||||||||||||
| Cost | Unrealized Gain/(Loss) | Fair Value | Cash and Cash Equivalents | Marketable Securities | ||||||||||||||||
| Cash | $ | $ | $ | $ | $ | |||||||||||||||
| Level 1 | ||||||||||||||||||||
| Money Market Funds | $ | |||||||||||||||||||
| Marketable Securities | ( | ) | $ | |||||||||||||||||
| Total | $ | $ | ( | ) | $ | $ | $ | |||||||||||||
The following tables shows the Company’s net unrealized (loss) gain recognized during the year on marketable securities as of December 31:
| 2025 | 2024 | |||||||
| Net gains (losses) recognized during the year on marketable securities | $ | ( | ) | $ | ( | ) | ||
| Less: Net gains (losses) realized during the year on marketable securities sold during the period | ( | ) | ( | ) | ||||
| Net unrealized gain (loss) recognized during the reporting year on marketable securities still held at the reporting date | $ | ( | ) | $ | ( | ) | ||
The Company typically invests with the primary objective of minimizing the potential risk of principal loss. The Company’s investment policy generally requires securities to be investment grade and limits the amount of credit exposure to any one issuer. Fair values were determined for each individual security in the investment portfolio.
7. DISPOSAL OF ASSETS
On
June 13, 2024, the Company sold its retail space in Lindon, Utah for the sales price, net of expenses, of approximately $
On March 27, 2025, the Company
finalized the sale of its Plano, Tx. Facility for a gross sales price of $
On
December 17, 2025 AMRE Winter Haven, LLC., a majority owned subsidiary of the Company, sold its property located in Winter Haven FL.
The contract price of $
On
December 22, 2025 AMRE Lifecare, LLC., a majority owned subsidiary of the Company, sold its property located in Fort Worth TX. The contract
price of $
| 45 |
8. INVESTMENTS
Alset International Limited, related party
The
Company owns
shares or approximately %
of the outstanding shares of Alset International Limited (“Alset Intl”), a company incorporated in Singapore and
publicly listed on the Singapore Exchange Limited. This investment is classified as a marketable security and is classified as
Investment in marketable securities, noncurrent on the consolidated balance sheets as the Company has the intent and ability to hold
the investments for a period of at least one year. The Chairman of the Company, Mr. Heng Fai Ambrose Chan, is the Executive Director
and Chief Executive Officer of Alset Intl. Mr. Chan is also the majority shareholder of Alset Intl as well as the largest
shareholder of the Company. The fair value of the marketable security as of December 31, 2025, and December 31, 2024, was
approximately $
True Partners Capital Holding Limited
The
Company owns shares of True Partners Capital Holding Limited (“True Partners”), a publicly listed company on the
Hong Kong Stock Exchange. On February 28, 2022, the Company entered into a Stock Purchase Agreement with Alset EHome International Inc.
(“AEI”), pursuant to which AEI has agreed to sell a subsidiary holding shares of stock of True Partner Capital
Holding Limited exchange for shares of common stock of the Company (the “DSS Shares”). The Company’s Executive
Chairman and a significant stockholder, Heng Fai Ambrose Chan is the Chairman, Chief Executive Officer and largest shareholder of AEI.
Further, on February 20, 2025, the Company acquired an additional shares of True Partners. The fair value of the marketable
security as of December 31, 2025 and December 31, 2024, was approximately $
West Park Capital, Inc.
On
December 30, 2020, the Company signed a binding letter of intent with West Park Capital, Inc (“West Park”) and Century TBD
Holdings, LLC (“TBD”) where the parties agreed to prepare a note and stock exchange agreement whereby DSS will assign the
TBD Note to West Park and West Park shall issue to DSS a stock certificate reflecting
BMI Capital International LLC
On
September 10, 2020, the Company’s wholly owned subsidiary DSS Securities, Inc. entered into membership interest purchase agreement
with BMI Financial Group, Inc. a Delaware corporation (“BMIF”) and BMI Capital International LLC, a Texas limited liability
company (“BMIC LLC”) whereas DSS Securities, Inc. purchased
BioMed Technologies Asia Pacific Holdings Limited
On
December 19, 2020, Impact BioMedical, a wholly owned subsidiary of the Company, entered into a subscription agreement (the “Subscription
Agreement”) with BioMed Technologies Asia Pacific Holdings Limited (“BioMed”), a limited liability company incorporated
in the British Virgin Islands, pursuant to which the Company agreed to purchase ordinary shares or
| 46 |
9. PROPERTY PLANT AND EQUIPMENT AND INVESTMENT IN REAL ESTATE
Property, plant and equipment consisted of the following as of December 31:
| Estimated | ||||||||||
| Useful Life | 2025 | 2024 | ||||||||
| Machinery and equipment | $ | $ | ||||||||
| Building and improvements | ||||||||||
| Furniture and fixtures | ||||||||||
| Software and websites | ||||||||||
| Total Cost | ||||||||||
| Less: accumulated depreciation | ||||||||||
| Property, plant and equipment, net | $ | $ | ||||||||
Depreciation
expense for the years ended December 31, 2025 and 2024 was $
Investment in real estate consisted of the following at December 31:
| Estimated | ||||||||||
| Useful Life | 2025 | 2024 | ||||||||
| Building and improvements | $ | $ | ||||||||
| Land | ||||||||||
| Total Cost | ||||||||||
| Less: accumulated depreciation | ||||||||||
| Real estate, net | $ | $ | ||||||||
Depreciation
expense for the years ended December 31, 2025 and 2024 was $
10. INTANGIBLE ASSETS
Intangible assets are comprised of the following as of December 31:
| 2025 | 2024 | |||||||||||||||||||||||||||||
| Useful Life | Gross Carrying Amount | Accumulated Amortization | Write-off | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||
| Developed technology assets | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Acquired intangibles customer lists, licenses, non-compete agreements, branding, product formulas, tenant improvements, in-place, favorable and unfavorable leases | ||||||||||||||||||||||||||||||
| Acquired intangibles patents and patent rights | ||||||||||||||||||||||||||||||
| Patent application costs | ||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| (1) |
| 47 |
Amounts
amortized for the year ended December 31, 2025 and 2024 was approximately $
Expected amortization for each of the five succeeding fiscal years is as follows:
| Year | Amount | |||
| 2026 | $ | |||
| 2027 | $ | |||
| 2028 | $ | |||
| 2029 | $ | |||
| 2030 | $ | |||
| thereafter | $ | |||
11. ACCRUED EXPENSES AND DEFERRED REVENUE
Accrued expenses and deferred revenue consist of the following for the year ended December 31:
| 2025 | 2024 | |||||||
| Customer deposits | $ | $ | ||||||
| Deferred revenue | ||||||||
| Accrued wages | ||||||||
| Accrued expenses | ||||||||
| Sales tax payable | ||||||||
| $ | $ | |||||||
12. SHORT TERM AND LONG-TERM DEBT
Promissory
Notes - On May 20, 2021, Premier Packaging entered into master loan and security agreement (“BOA Note”) with Bank
of America, N.A. (“BOA”) to secure financing approximating $
| 48 |
On
August 1, 2021, AMRE Shelton, LLC., (“AMRE Shelton”) a subsidiary of AMRE, entered into a loan agreement (“Shelton
Agreement”) with Patriot Bank, N.A. (“Patriot Bank”) in an amount up to $
On
October 13, 2021, LVAM entered into loan agreement with BMIC International (“BMIC International Loan”), a related party,
whereas LVAM borrowed the principal amount of $
On
October 13, 2021, LVAM entered into a loan agreement with Lee Wilson Tsz Kin (“Wilson Loan”), a related party, whereas LVAM
borrowed the principal amount of $
On
November 2, 2021, AMRE LifeCare entered into a loan agreement (“LifeCare Agreement”) with Pinnacle Bank, (“Pinnacle
Bank”) in the amount of $
| 49 |
On
March 17, 2022, AMRE Winter Haven, LLC (“AMRE Winter Haven”) and Pinnacle Bank (“Pinnacle”) entered into a
term loan (“Pinnacle Loan”) whereas Pinnacle lent to AMRE Winter Haven the principal sum of $
On
March 30, 2023, Premier Packaging, a subsidiary of the Company entered into a loan and security agreement with Bank of America for the principal amount of $
In
August of 2025, DSS issued a $
A summary of scheduled principal payments of long-term debt, not including revolving lines of credit, subsequent to December 31, 2025 are as follows:
| Year | Notes payable | Convertible note payable - related party | Notes payable - related party | Total | ||||||||||||
| 2026 | $ | $ | $ | $ | ||||||||||||
| 2027 | ||||||||||||||||
| 2028 | ||||||||||||||||
| 2029 | ||||||||||||||||
| 2030 | ||||||||||||||||
| Thereafter | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
13. LEASE LIABILITIES
The
Company has operating leases predominantly for operating facilities. As of December 31, 2025, the remaining lease terms on our operating
leases range from less than one to
| 50 |
Future minimum lease payments as of December 31, 2025, are as follows:
Maturity of Lease Liability:
| Totals | ||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| thereafter | ||||
| Total lease payments | ||||
| Less imputed interest | ( | ) | ||
| Present value of remaining lease payments | $ | |||
| Current | $ | |||
| Non-current | $ | |||
| Weighted average remaining lease term (years) | ||||
| Weighted average discount rate | % | |||
| Cash payments made YTD | $ | |||
Total
cash paid during the years ended December 31, 2025 and 2024 approximated $
14. STOCKHOLDERS’ EQUITY
DSS,
Inc. Equity transactions – On January 4, 2024 the Company effected a reverse stock split of
On
December 10, 2024, DSS entered into a securities purchase agreement with Alset Inc., a related party, pursuant to which the Company agreed
to sell and issue in a private placement an aggregate of shares of the Company’s common stock for approximately $
On
December 10, 2024, DSS entered into a securities purchase agreement with Heng Fai Ambrose Chan, the Chaiman of the Board of Directors
and a related party, pursuant to which the Company agreed to sell and issue in a private placement an aggregate of shares of
the Company’s common stock for approximately $
On February 6, 2025, as a bonus
for compensation awarded to Heng Fai Holdings Limited (“HFHL”), a Hong Kong Company, which is beneficially owned by Mr. Heng
Fai Ambrose Chan, Director of DSS, Inc. HFHL was awarded
shares of the Company’s common stock, approximating $
On March 21, 2025, DSS, the parent
company of Impact Biomedical, Inc. completed the sale of shares of Impact Biomedical common stock. These shares were acquired
by DSS during Impact’s initial public offering on September 16, 2024. The sale of these shares, which were previously held by DSS
as part of its ownership interest in Impact, was completed for a total value of $
On April 4, 2025, DSS, the parent
company of Impact Biomedical, Inc. completed the sale of shares of Impact Biomedical common stock. The sale of these shares, which
were previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $
On May 22, 2025, DSS, the parent
company of Impact Biomedical, Inc. completed the sale of shares of Impact Biomedical common stock. The sale of these shares, which
were previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $
On May 23, 2025, DSS, the parent
company of Impact Biomedical, completed the sale of shares of Impact Biomedical common stock. The sale of these shares, which were
previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $
Equity Incentive Plan – On June 20, 2013, the Company’s shareholders adopted the 2013 Employee, Director and Consultant Equity Incentive Plan (the “2013 Plan”). The 2013 Plan provides for the issuance of up to a total of shares of common stock authorized to be issued for grants of options, restricted stock and other forms of equity to employees, directors and consultants. Under the terms of the 2013 Plan, options granted thereunder may be designated as options which qualify for incentive stock option treatment (“ISOs”) under Section 422A of the Internal Revenue Code, or options which do not qualify (“NQSOs”). During the year ended December 31, 2024, options were forfeited. As of December 31, 2024, shares remained available under this plan.
On December 9, 2019, the Company’s shareholders adopted the 2020 Employee, Director and Consultant Equity Incentive Plan (the “2020 Plan”). The 2020 Plan provides for the issuance of an initial shares of common stock authorized to be issued for grants of options, restricted stock and other forms of equity to employees, directors and consultants. Under the terms of the 2020 Plan, options granted thereunder may be designated as options which qualify for incentive stock option treatment (“ISOs”) under Section 422A of the Internal Revenue Code, or options which do not qualify (“NQSOs”). As of December 31, 2025, there are shares available under this plan.
Stock-Based Compensation – The Company records stock-based payment expense related to options and warrants based on the grant date fair value in accordance with FASB ASC 718. Stock-based compensation includes expense charges for all stock-based awards to employees, directors and consultants. Such awards include option grants, warrant grants, and restricted stock awards. During the year ended December 31, 2025, and 2024 the Company’s stock compensation approximated $. The Company did not issue any warrants in 2025 or 2024, nor did it have any outstanding warrants as of December 31, 2025 and 2024.
| 51 |
Impact
BioMedical, Inc. Equity Transactions – On September 16, 2024, Impact Biomedical Inc., entered into an underwriting
agreement (the “Underwriting Agreement”) with Revere Securities, LLC., as representative (the “Representative”)
of the underwriters named therein (the “Underwriters”), pursuant to which the Company agreed to sell to the Underwriters
in a firm commitment initial public offering (the “Offering”) an aggregate of
of the Company’s shares of common stock, par value $
per share at a public offering price of $
per share. On September 17, 2024, the Company closed the Offering.
The total net proceeds to the Company from the Offering, after deducting discounts, expenses allowance and expenses, was approximately
$
On February 26, 2025, IBO issued
shares of the Company’s common stock as payment of legal fees incurred associated with IBO’s IPO, registration of shares
associated with its equity incentive plan as well as other related services. The legal fees received were valued at approximately $
On June 23, 2025, IBO issued shares of IBO’s common stock
as payment of legal fees incurred associated with IBO’s merger and share exchange agreement with Dr. Ashleys Limited. The legal
fees received were valued at approximately $
Equity Incentive Plan – During 2023, the Company’s shareholders adopted the 2023 Employee, Director and Consultant Equity Incentive Plan (the “2023 Plan”). The 2023 Plan provides for the issuance of an initial shares of common stock authorized to be issued for grants of options, restricted stock and other forms of equity to employees, directors and consultants. Under the terms of the 2023 Plan, options granted thereunder may be designated as options which qualify for incentive stock option treatment (“ISOs”) under Section 422A of the Internal Revenue Code, or options which do not qualify (“NQSOs”). As of December 31, 2025, there are shares available under this plan.
Stock-Based
Compensation – The Company records stock-based payment expense related to options and warrants based on the grant date
fair value in accordance with FASB ASC 718. Stock-based compensation includes expense charges for all stock-based awards to
employees, directors and consultants. Such awards include option grants, warrant grants, and restricted stock awards. On October 1,
2024, option grants with a purchase price of $ per share were awarded to certain officers, directors and consultants of
the Company. These options have various vesting periods, and all expire on October 31, 2031. Potential proceeds of these grants is
$
15. INCOME TAXES
The Company accounts for income taxes in accordance with Accounting Standards Codification (“ASC”) Topic 740, Income Taxes, using the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which those temporary differences are expected to reverse or such carryforwards are expected to be utilized.
The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities. Deferred tax assets are reduced, if deemed necessary, by a valuation allowance for the amount of tax benefits which are not expected to be realized.
The following is a summary of the components giving rise to the income tax provision (benefit) for the years ended December 31:
The provision (benefit) for income taxes consists of the following:
| 2025 | 2024 | |||||||
| Currently payable: | ||||||||
| Federal | $ | $ | ||||||
| State | ||||||||
| Foreign | ||||||||
| Total currently payable | ||||||||
| Deferred: | ||||||||
| Federal | ( | ) | ||||||
| State | ( | ) | ||||||
| Foreign | ( | ) | ( | ) | ||||
| Total deferred | ( | ) | ( | ) | ||||
| Less: increase/(decrease) in allowance | ||||||||
| Net deferred | ||||||||
| Total income tax provision | $ | $ | ||||||
| 52 |
Individual components of deferred tax assets and liabilities are as follows:
| 2025 | 2024 | |||||||
| Deferred tax assets: | ||||||||
| Net operating loss carry forwards | $ | $ | ||||||
| Net operating loss IRC 382 limited | ||||||||
| Unrealized loss on securities | ||||||||
| Equity issued for services | ||||||||
| Goodwill and other intangibles | ||||||||
| Investment in pass-through entity | ||||||||
| Deferred revenue | ||||||||
| Operating Lease Liability | ||||||||
| Depreciation and amortization | ||||||||
| Other | ||||||||
| Gross deferred tax assets | ||||||||
| Deferred tax liabilities: | ||||||||
| Goodwill and other intangibles | ||||||||
| Depreciation and amortization | ( | ) | ||||||
| Right to Use Asset | ||||||||
| Gross deferred tax liabilities | ||||||||
| Less: valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax assets (liabilities) | $ | $ | ||||||
At
December 31, 2025 and 2024, the Company has approximately $
The
valuation allowance for deferred tax assets decreased approximately $
The differences between the United States statutory federal income tax rate and the effective income tax rate in the accompanying consolidated statements of operations are as follows:
| 2025 | 2024 | |||||||||||||||
| Statutory United States federal rate | $ | ( | ) | % | ( | ) | % | |||||||||
| State income taxes net of federal benefit | ( | ) | ( | ) | ||||||||||||
| Permanent differences | ( | ) | ( | ) | ||||||||||||
| Foreign Rate | ( | ) | ||||||||||||||
| NOL DTA Write-off | ( | ) | ( | ) | ||||||||||||
| other | ( | ) | ( | ) | ||||||||||||
| Change in valuation reserves | ( | ) | ( | ) | ||||||||||||
| Effective tax rate | $ | % | $ | ( | )% | |||||||||||
The
Company recognizes interest accrued and penalties related to unrecognized tax benefits in tax expense. During the years ended
December 31, 2025 and 2024 the Company recognized
The Company files income tax returns in the U.S. federal jurisdiction and various states. The tax years 2022-2024 generally remain open to examination by major taxing jurisdictions to which the Company is subject.
| 53 |
16. DEFINED CONTRIBUTION PENSION PLAN
The
Company maintains a qualified employee savings plans (the “401(k) Plan”) that qualifies as a deferred salary arrangement
under Section 401(k) of the Internal Revenue Code and which covers all eligible employees. Employees generally become eligible to participate
in the 401(k) Plan two months following the employee’s hire date. Employees may contribute a percentage of their earnings, subject
to the limitations of the Internal Revenue Code. Commencing on January 1, 2018, the Company matched
17. COMMITMENTS AND CONTINGENCIES
License
Agreement – On March 19, 2022, Impact BioMedical entered into a License Agreement (“Equivir License”) with
a third-party (“Licensee”) where the Licensor is granted the right, amongst other things, to develop, commercialize, and
sell the Company’s Equivir technology.
Employment
Agreements – As of December 31, 2025, DSS has no employment or severance agreements with members of its management team.
Its subsidiary Impact BioMedical has an employment agreement with it CEO Frank Heuszel in which Mr. Heuszel’s agreement contains
a mandatory bonus clause of $
Contingent Litigation Payments – The Company retains the services of professional service providers, including law firms that specialize in intellectual property licensing, enforcement and patent law. These service providers are often retained on an hourly, monthly, project, contingent or a blended fee basis. In contingency fee arrangements, a portion of the legal fee is based on predetermined milestones or the Company’s actual collection of funds. The Company accrues contingent fees when it is probable that the milestones will be achieved, and the fees can be reasonably estimated. As of December 31, 2025 and 2024 the Company had not accrued any contingent legal fees pursuant to these arrangements.
Contingent Payments – The Company is party to certain agreements with funding partners who have rights to portions of intellectual property monetization proceeds that the Company receives. As of December 31, 2025 and 2024, there are no contingent payments due.
| 54 |
18. SUPPLEMENTAL CASH FLOW INFORMATION
The following table summarizes supplemental cash flows for the years ended December 31, 2025 and 2024:
| 2025 | 2024 | |||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Shares awarded in lieu of cash award | $ | $ | ||||||
| Shares issued in lieu of cash as payment for legal services | $ | $ | ||||||
| Extinguishment of debt | $ | $ | ||||||
| Stock based compensation | $ | $ | ||||||
19. SEGMENT INFORMATION
The Company reports its segment information to reflect the manner in which the Company’s chief operating decision maker (“CODM”) reviews and assesses performance. The Company’s Interim Chief Executive Officer has responsibilities as the CODM and reviews and assess the performance of the Company as a whole. The primary financial measures used by the CODM to evaluate performance and allocate resources are net income (loss) and operating income (loss). The CODM uses net income (loss) and operating income (loss) to evaluate the performance of the Company’s ongoing operations and as part of the Company’s internal planning and forecasting processes. Information on Net income (loss) and Operating income (loss) is disclosed in the Consolidated Statements of Operations. Segment expenses and other segment items are provided to the CODM on the same basis as disclosed in the Consolidated Statements of Operations. The CODM does not evaluate performance or allocate resources based on segment assets, and therefore such information is not presented in the notes to the financial statements. During the fourth quarter of 2025, we realigned our internal reporting to better reflect how management reviews operating results and allocates resources. As a result of this CODM realignment, Direct Marketing is no longer a reportable segment and is now reported within Corporate and Other or the year ended December 31, 2025. This change did not impact consolidated revenue, consolidated net income (loss), total assets, or cash flows for any period presented; it only impacted the presentation of segment information. Segment information for prior periods presented has been recast to conform to the current-period segment presentation. Our four reporting segments are:
Premier Packaging: (“Premier”) Premier Packaging Corporation provides custom packaging services and serves clients in the pharmaceutical, nutraceutical, consumer goods, beverage, specialty foods, confections, photo packaging and direct marketing industries, among others. The group also provides active and intelligent packaging and document security printing services for end-user customers. In addition, the division produces a wide array of printed materials, such as folding cartons and paperboard packaging, security paper, vital records, prescription paper, birth certificates, receipts, identification materials, entertainment tickets, secure coupons and parts tracking forms. The division also provides resources and production equipment for our ongoing research and development of security printing, brand protection, consumer engagement and related technologies.
Commercial Lending: (“Commercial Lending”) through its operating company, American Pacific Financial, Inc. (“APF”) represents our financing business line. is organized for the purposes of being a financial network holding company, focused providing commercial loans and on acquiring equity positions in (i) undervalued commercial bank(s), bank holding companies and nonbanking licensed financial companies operating in the United States, South East Asia, Taiwan, Japan and South Korea, and (ii) companies engaged in—nonbanking activities closely related to banking, including loan syndication services, mortgage banking, trust and escrow services, banking technology, loan servicing, equipment leasing, problem asset management, SPAC (special purpose acquisition company) consulting, and advisory capital raising services. From this financial platform, the Company shall provide an integrated suite of financial services for businesses that shall include commercial business lines of credit, land development financing, inventory financing, third party loan servicing, and services that address the financial needs of the world Gig Economy.
Biotechnology: (“Biotech”) targets unmet, urgent medical needs and expands the borders of medical and pharmaceutical science. Biotech drives mission-oriented research, development, and commercialization of solutions for medical advances in human wellness and healthcare. By leveraging technology and new science with strategic partnerships, Biotech provides advances in drug discovery for the prevention, inhibition, and treatment of neurological, oncology and immuno-related diseases. Other exciting technologies include a breakthrough alternative sugar aimed to combat diabetes and functional fragrance formulations aimed at the industrial and medical industry.
Securities and Investment Management: (“Securities”) Securities was established to develop and/or acquire assets in the securities trading or management arena, and to pursue, among other product and service lines, real estate investment funds, broker dealers, and mutual funds management. T
| 55 |
Approximate
information concerning the Company’s operations by reportable segment for the twelve months ended December 31, 2025 and 2024
is as follows. Segment information for prior periods presented has been recast to conform to the current-period segment
presentation. The Company relies on intersegment cooperation and management does
| Year Ended December 31, 2025 | Product Packaging | Commercial Lending | Biotechnology | Securities | Corporate/ Other | Total | ||||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Cost of Revenue | ||||||||||||||||||||||||
| Gross profit (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Operating expense | ||||||||||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Net income (loss) from operations before taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Year Ended December 31, 2024 | Product Packaging | Commercial Lending | Direct Marketing | Biotechnology | Securities | Corporate | Total | |||||||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Cost of revenue | ||||||||||||||||||||||||||||
| Gross profit (loss) | ( | ) | ( |
) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Operating expense | ||||||||||||||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ( |
) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Net income (loss) from operations before taxes | ( | ) | ( | ) | ( |
) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| 56 |
The following tables disaggregate our business segment revenues by major source:
Printed Products Revenue Information:
| Twelve months ended December 31, 2025 | ||||
| Packaging Printing and Fabrication | $ | |||
| Commercial and Security Printing | ||||
| Real Property Rental Income | ||||
| Total Printed Products Revenue | $ | |||
| Twelve months ended December 31, 2024 | ||||
| Packaging Printing and Fabrication | $ | |||
| Commercial and Security Printing | ||||
| Real Property Rental Income | ||||
| Total Printed Products Revenue | $ | |||
Commercial Lending Revenue Information:
| Twelve months ended December 31, 2025 | ||||
| Commercial lending | $ | |||
| Total Commercial Lending Revenue | $ | |||
| Twelve months ended December 31, 2024 | ||||
| Commercial lending | $ | |||
| Total Commercial Lending Revenue | $ | |||
Biotechnology Revenue Information:
| Twelve months ended December 31, 2025 | ||||
| Retail internet sales | ||||
| Total Biotechnology Revenue | $ | |||
| Twelve months ended December 31, 2024 | ||||
| Retail internet sales | $ | |||
| Total Biotechnology Revenue | $ |
Securities Revenue Information:
| Twelve months ended December 31, 2025 | ||||
| Rental | $ | |||
| Commission | ||||
| Total Securities Revenue | $ | |||
| Twelve months ended December 31, 2024 | ||||
| Rental | $ | |||
| Commission | ||||
| Total Securities Revenue | $ | |||
| 57 |
20. RELATED PARTY TRANSACTIONS
The Company owns shares
or approximately % of the outstanding shares of Alset International Limited (“Alset Intl”), a company incorporated in Singapore
and publicly listed on the Singapore Exchange Limited. This investment is classified as a marketable security and is classified as long-term
assets on the consolidated balance sheets as the Company has the intent and ability to hold the investments for a period of at least one
year. The Chairman of the Company, Mr. Heng Fai Ambrose Chan, is the Executive Director and Chief Executive Officer of Alset Intl. Mr.
Chan is also the majority shareholder of Alset Intl as well as the largest shareholder of the Company. The fair value of the marketable
security as of December 31, 2025, and December 31, 2024, was approximately $
On October 13, 2021, LVAM entered
into loan agreement with BMIC International (“BMIC International Loan”), a related party, whereas LVAM borrowed the principal
amount of $
On October 13, 2021, LVAM entered
into a loan agreement with Lee Wilson Tsz Kin (“Wilson Loan”), a related party, whereas LVAM borrowed the principal amount
of $
The Company owns shares
of True Partners Capital Holding Limited (“True Partners”), a publicly listed company on the Hong Kong Stock Exchange. On
February 28, 2022, the Company entered into a Stock Purchase Agreement with Alset EHome International Inc. (“AEI”), pursuant
to which AEI has agreed to sell a subsidiary holding shares of stock of True Partner Capital Holding Limited exchange for
shares of common stock of the Company (the “DSS Shares”). The Company’s Executive Chairman and a significant stockholder,
Heng Fai Ambrose Chan is the Chairman, Chief Executive Officer and largest shareholder of AEI. Further, on February 20, 2025, the Company
acquired an additional shares of True Partners. The fair value of the marketable security as of December 31, 2025 and December
31, 2024, was approximately $
On July 26, 2022, APF and VEII entered into a promissory note (“Note 8”) in the principal sum of $
On August 29, 2022, DSS
Financial Management Inc and BMIC LLC, a related party, entered into a promissory note (“Note 6”)
in the principal sum of $
On August 29, 2024, APF entered
into a promissory note with WestPark. This note has a principal balance of $
On May 8, 2023, DSS
Financial Management Inc and BMIC LLC entered into a promissory note (“Note 7”) in the principal sum of $
On
December 10, 2024, DSS entered into a securities purchase agreement with Alset Inc., a related party, pursuant to which the Company agreed
to sell and issue in a private placement an aggregate of shares of the Company’s common stock for approximately $
On
December 10, 2024, DSS entered into a securities purchase agreement with Heng Fai Ambrose Chan, the Chaiman of the Board of Directors
and a related party, pursuant to which the Company agreed to sell and issue in a private placement an aggregate of shares of
the Company’s common stock for approximately $
In August of 2025, DSS issued
a $
On February 6, 2025, as a bonus
for compensation awarded to Heng Fai Holdings Limited (“HFHL”), a Hong Kong Company, which is beneficially owned by Mr. Heng
Fai Ambrose Chan, Director of DSS, Inc., HFHL was awarded shares of the Company’s common stock, approximating $
On March 21, 2025, DSS, the parent
company of Impact Biomedical, Inc. completed the sale of shares of Impact Biomedical common stock. These shares were acquired
by DSS during Impact’s initial public offering on September 16, 2024. The sale of these shares, which were previously held by DSS
as part of its ownership interest in Impact, was completed for a total value of $
On April 4, 2025, DSS, the parent
company of Impact Biomedical, Inc. completed the sale of shares of Impact Biomedical common stock. The sale of these shares, which
were previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $
On May 22, 2025, DSS, the parent
company of Impact Biomedical, Inc. completed the sale of shares of Impact Biomedical common stock. The sale of these shares, which
were previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $
On May 23, 2025, DSS, the parent
company of Impact Biomedical, completed the sale of shares of Impact Biomedical common stock. The sale of these shares, which were
previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $
21. SUBSEQUENT EVENTS
The Company has evaluated all subsequent events and transactions through March 31, 2026 the date that the condensed consolidated financial statements were available to be issued and noted no subsequent events requiring financial statement recognition or disclosure other than noted below:
On
February 4, 2026, DSS entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp. (“Aegis”),
which provided for the issuance and sale by the Company and the purchase by the underwriter, in a firm commitment underwritten public
offering of shares of the Company’s common stock. Subject to the terms and conditions contained in the Underwriting Agreement,
the shares were sold at a public offering price of $ per share, less certain underwriting discounts and commissions. The Offering
closed on February 5, 2026 and the Company received approximately $
DSS,
Inc. asserted U.S. Patent No. 6,879,040, directed to surface-mountable electronic devices used in LED products, against Nichia Corporation
and Nichia America Corporation in the United States District Court for the Central District of California. In March 2026, the United States
Court of Appeals for the Federal Circuit affirmed the district court’s dismissal of the action on the ground that the asserted patent
claims are invalid as indefinite under 35 U.S.C. § 112, effectively concluding the litigation. As such, the Company at December 31,
2025, released an accrual of approximately $
On
March 26, 2026, Alset International Limited (“AIL”), a majority-owned subsidiary of Alset Inc. (the “Company”)
entered into a securities purchase agreement (the “SPA”) with DSS pursuant to which AIL will loan DSS $
| 58 |
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Effective June 27, 2025, the Audit Committee of the Board of Directors of DSS approved the dismissal of Grassi & Co., CPAs, P.C. (“Grassi”) as the Company’s independent registered public accounting firm and the engagement of HTL International, LLC. (“HTL”) as the Company’s new independent registered public accounting firm.
The reports of Grassi on the Company’s consolidated financial statements for the fiscal years ended December 31, 2024 and 2023 did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles.
During the fiscal years ended December 31, 2024 and 2023, and through June 27, 2025, there were no disagreements with Grassi on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Grassi, would have caused Grassi to make reference thereto in its reports on the Company’s consolidated financial statements.
During the fiscal years ended December 31, 2024 and 2023, and through June 27, 2025, there were no “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K.
During the fiscal years ended December 31, 2024 and 2023, and through the date of engagement, neither the Company nor anyone on its behalf consulted with HTL regarding (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and no written report or oral advice was provided to the Company by HTL that HTL concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue, or (ii) any matter that was either the subject of a disagreement, as defined in Item 304(a)(1)(iv) of Regulation S-K, or a reportable event under Item 304(a)(1)(v) of Regulation S-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 Interim 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, 2025. 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, 2025, 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, 2025. 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, 2025, our internal control over financial reporting was not effective based on those criteria.
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In connection with management’s assessment of our internal control over financial reporting described above, the following weaknesses have been identified in the Company’s internal control over financial reporting as of December 31, 2025:
| 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.
Remediation of the Material Weaknesses
Management believes it has taken significant steps to strengthen our overall internal controls and eliminate the material weakness of those controls. During the 2026 fiscal year, the Company will document and test the remediations put in place. Such remediation includes the following:
| ● | 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. |
| ● | The Company will engage an external, independent expert to review significant and/or complex accounting transactions, when appropriate, to ensure the proper accounting treatment is applied. |
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, 2025 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, 2025, 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
Please
see the disclosure related to the winding down of our intellectual property monetization
DSS intends to hold its 2025 Annual Meeting of Stockholders at the end of the third quarter of 2026.
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PART III
ITEM 10 - DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Our executive officers and directors as of the date of this report are as follows:
| NAME | POSITION | |
Jason Grady Todd D. Macko Ambrose Chan Heng Fai José Escudero Wai Leung William Wu Tung Moe Chan Hiu Pan Joanne Wong Shui Yeung Frankie Wong Lim Sheng Hon Danny |
Interim Chief Executive Officer Chief Financial Officer Director, Chairman Independent Director Lead Independent Director Director Independent Director Independent Director Director |
Biographical and certain other information concerning the Company’s officers and directors is set forth below. Except for Mr. Ambrose Chan Heng Fai and his son Mr. Tung Moe Chan, there are no familial relationships among any of our directors. Except as indicated below, none of our directors is a director of 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.
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| Name | Age | Director/Officer Since | Principal Occupation or Occupations and Directorships | |||
| Jason Grady | 52 | 2018 |
Jason Grady, 52, has served as Interim Chief Executive Officer of DSS, Inc since October 2024. He is a seasoned executive recognized for his expertise in turnaround management, executive leadership, corporate strategy, and disciplined shareholder communication. In his role as CEO, Mr. Grady is responsible for setting strategic direction, driving operational and financial performance, and aligning leadership execution with long-term value creation. He works closely with the Board of Directors, investors, and strategic partners, with a focus on accountability, capital discipline, and sustainable profitability across the enterprise.
Prior to assuming the CEO role, Mr. Grady served as Chief Operating Officer since August 2019, where he led enterprise-wide operational restructuring, improved cost discipline, and enhanced execution across a diversified portfolio of businesses. His tenure as COO was marked by hands-on leadership, performance-based management systems, and a strong emphasis on transparency and results.
Since July 2018, Mr. Grady has also served as President and CEO of Premier Packaging Corporation, a world class folding carton and consumer packaging manufacturer. Under his leadership, Premier has strengthened its operational foundation, expanded into higher-value end markets, and reinforced a quality-first, customer-centric culture. His impact across the broader DSS platform has been central to improving operational rigor and strategic focus.
From April 2010 to July 2018, Mr. Grady served as Vice President of Sales and Business Development, where he was instrumental in driving revenue growth, expanding key customer relationships, and positioning the Company for long-term expansion.
Before joining DSS, Mr. Grady held senior leadership roles including Vice President of Marketing at Parlec Corporation, Director of Business Development at Berlin Packaging Corporation, and sales and marketing leadership positions at OutStart, Inc. He brings a rare blend of operational depth, strategic clarity, and communication discipline, with a leadership style grounded in accountability, adaptability, and execution under pressure.
Mr. Grady holds a bachelor’s degree in marketing and communications and an Masters of Business Administration (MBA) from the Rochester Institute of Technology. |
| Todd D. Macko | 53 | 2020 | Mr. Todd D. Macko was promoted to Chief Financial Officer on August 16, 2021. Mr. Macko previously served as the Interim Chief Financial Officer and Vice President of Finance of DSS. As the Interim Chief Financial Officer and Vice President of Finance, Mr. Macko’s responsibilities included assisting DSS’s Chief Executive 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 is Bachelor of Science in Accounting from Rochester Institute of Technology. |
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| José Escudero | 49 | 2019 | Mr. Escudero’s career is focused on business transformations, including turnaround, growth and M&A situations. He has led large performance transformation programs within companies of various industries and countries, including retail, fashion & luxury, hotel and the new economy related to digitalization transformation and crypto world. Mr. Escudero has been member of different Boards of Directors and Direction Committees of many companies in different countries. He has been working as expert for the leading private equity firms like: Harvard Investment Group (HIG), Advent, Goldman Sachs, etc. He has been working in financial analysis, transactional support and strategy business development as well as operating management in first level of international companies. Also, he has worked in more than 10 countries along his career (Singapore, HK, US, UK, Brazil, Spain, etc.).
Mr. Escudero worked as a Partner at BMI Capital Partners from September 2013 to November 2019. Mr. Ecudero has worked as Certisign’s Chief Strategy and M&A Officer since November 2019. He is currently working as partner of the Managing Consulting firm Hallman & Burke, and previously worked for the Spanish M&A boutique Ambers & Co. He started his career in PwC.
Mr. Escudero has a B.Sc. in Economics from the Francisco de Vitoria University (Madrid, Spain) where he ranked number one of the promotion. He has a Masters degree in Corporate Finance and Investment Banking from the Options & Futures Institute. Currently he is enrolled in Harvard University in Business Postgraduate studies. He collaborates with different Organizations and Business Schools as speaker and professor: |
| ● | TED | ||
| ● | Ie - Instituto de Empresa | ||
| ● | Raffles University of Hong Kong | ||
| ● | IED - Istituto Europeo di Design | ||
| ● | ISDE - Instituto Superior de Derecho y Economía | ||
| ● | CEF - Centro de Estudios Financieros |
| Mr. Escudero’s experience in mergers and acquisitions, corporate finance, and international trade along with his education in economics and finance and investment banking qualify him to serve on the Company’s Board of Directors and as a member of the Compensation and Management Resources Committee, the Nominating and Corporate Governance Committee, and the Audit Committee. |
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| Wai Leung William Wu | 58 | 2019 |
Mr. Wai Leung William Wu has served as a director of the Company since October 20, 2019. Mr. Wu previously served as the executive director and chief executive officer of Power Financial Group Limited from November 2017 to January 2019. Mr. Wu has served as a director of Asia Allied Infrastructure Holdings Limited since February 2015. Mr. Wu previously served as a director and chief executive officer of RHB Hong Kong Limited from April 2011 to October 2017. Mr. Wu served initially as MD and subsequently CEO of SW Kingsway Capital Holdings Limited (now known as Sunwah Kingsway Capital Holdings Limited) from April 2006 to September 2010.
Mr. Wu serves as a director and is on the audit committees of Alset Inc., traded on The Nasdaq Stock Market LLC; JY GrandMark Holdings Limited listed on the Hong Kong Stock Exchange; and Asia Allied Infrastructure Holdings Limited listed on the Hong Kong Stock Exchange.
Mr. Wu holds a Bachelor of Business Administration degree and a Master of Business Administration degree from Simon Fraser University in Canada. He was qualified as a chartered financial analyst of The Institute of Chartered Financial Analysts in 1996.
Mr. Wu previously worked for a number of international investment banks and possesses over 26 years of experience in the investment banking, capital markets, institutional broking and direct investment businesses. He is a registered license holder to carry out Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). Mr. Wu has served as a member of the Guangxi Zhuang Autonomous Region Committee of the Chinese People’s Political Consultative Conference in between 2013 to 2022.
Mr. Wu’s experience in banking, capital markets, investment banking, Asian economic and banking dynamics, and education in corporate finance and asset management qualify him to serve on the Company’s Board as Lead Independent Director, Chair of the Audit Committee and member of the Compensation and Management Resources Committee |
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Tung Moe Chan
|
47 | 2020 | Mr. Tung Moe Chan has served as a director of the Company since September 2020. In addition, since August 2020, he has served as Director of Corporate Development of American Medical REIT Inc., a subsidiary of the Company.
Mr. Tung Moe Chan has served as the Co-Chief Executive Officer of Alset Inc., a Nasdaq listed company since July 2021 and as the Executive Director since October 2022. Mr. Tung Moe Chan also serves as the Co-Chief Executive Officer and Executive Director of Alset International Limited, a diversified holding company listed on the Catalist of the Singapore Exchange Securities Trading Limited. Mr. Moe Chan is responsible for Alset International Limited’s international real estate business (including serving as Co-Chief Executive Officer-International and a member of the Board of its subsidiary LiquidValue Development Inc.).
From April 2014 to June 2015, Mr. Moe Chan was the Chief Operating Officer of Zensun Enterprises Limited (formerly known as ZH International Holdings Limited and Heng Fai Enterprises Limited), an investment holding company listed on the HKSE and was responsible for that company’s global business operations consisting of REIT ownership and management, property development, hotels and hospitality, as well as property and securities investment and trading. Prior to that, Mr. Moe Chan was an executive director (from March 2006 to February 2014) and the Chief of Project Development (from April 2013 to February 2014) of SingHaiyi Group Ltd (now known as SingHaiyi Group Pte. Ltd.), a property development company in Singapore which was listed on the Singapore Exchange Mainboard, overseeing its property development projects. Mr. Moe Chan was also a non-executive director of the Toronto Stock Exchange-listed RSI International Systems Inc., a hotel software company and the developer of RoomKeyPMS, a web-based property management system, from July 2007 to August 2016.
Mr. Tung Moe Chan holds a Master’s Degree in Business Administration with honors from the University of Western Ontario, a Master’s Degree in Electro-Mechanical Engineering with honors and a Bachelor’s Degree in Applied Science with honors from the University of British Columbia
Mr. Tung Moe Chan’s experience with the Company and experience with global business operations makes him an asset to the Board. | |||
| Shui Yeung Frankie Wong | 54 | 2022 |
Wong Shui Yeung joined the Board of Directors of the Company in July 2022. Mr. Wong is a practicing member and fellow member of Hong Kong Institute of Certified Public Accountants and holds a bachelor’s degree in business administration. Mr. Wong is a Certified Public Accountant admitted to practice in Hong Kong and he serves as the sole proprietor of S.Y.WONG. He has over 25 years’ experience in accounting, auditing, corporate finance, corporate investment and development, and company secretarial practice.
Mr. Wong has served as a member of the Board of Directors of HWH International Inc. (formerly Alset Capital Acquisition Corp.) and Alset Inc. since January 2022 and November 2021 respectively, the shares of which are listed on NASDAQ. Mr. Wong has served as an independent non-executive director of Alset International Limited since June 2017, the shares of which are listed on the Catalist Board of Singapore Stock Exchange. Mr. Wong has served as a member of the Board of Directors of Value Exchange International, Inc. since April 2022, the shares of which are listed on the OTCQB. Mr. Wong was an independent non-executive member of the Board of Directors of First Credit Finance Group Limited from February 2024 to January 2026, the shares of which were listed on the GEM Board of The Stock Exchange of Hong Kong Limited.
Mr. Wong’s knowledge of complex, cross-boarder financial, accounting and tax matters is highly relevant to our business, as well as working experience in internal corporate controls, qualify him to server as a independent member of the Board. He serves on our Audit, Nominations and Corporateas Governance Committees. |
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| Hiu Pan Joanne Wong | 56 | 2022 | Ms. Joanne Wong has been Director and Responsible Officer (SFC), BMI Funds Management Limited since August 6, 2014. She has participated as the management role in fund administrator activities in A-Link Services Limited and Global Intelligence Trust Limited since 2020 and 2018. Ms. Joanne Wong graduated from The Chinese University of Hong Kong (CUHK) with an Honors Bachelor’s degree in Chemistry 1999. She has expertise in an array of strategic, business, turnaround and regulatory matters spanning across several industries. Ms. Joanne Wong’s experience in turnaround and regulatory matters across several industries makes her an asset to the Board. | |||
| Lim Sheng Hon Danny | 33 | 2023 | Mr. Lim Sheng Hon Danny has served as director of the Company since 2023.
Mr. Danny Lim has served as Senior Vice President, Business Development and as Executive Director of Alset International Limited, a diversified holding company listed on the Catalist of the Singapore Exchange Securities Trading Limited, since 2020. Mr. Danny Lim has served as an Executive Director of Alset Inc., a Nasdaq listed company, since October 2022. Mr. Danny Lim has served as Chief Operating Officer of HWH International Inc., a Nasdaq listed company, since February 2024 and also serves as its Chief Strategy Officer. Mr. Lim Sheng Hon Danny has served as director of Value Exchange International Inc., an OTCQB listed company, since December 2023.
Mr. Danny Lim has over 8 years of experience in business development, merger & acquisitions, corporate restructuring and strategic planning and execution. Mr. Danny Lim manages the Group’s business development efforts, focusing on corporate strategic planning, merger and acquisition and capital markets activities. He oversees and ensures the executional efficiency of the Group and facilitates internal and external stakeholders on the implementation of the Group’s strategies. Mr. Danny Lim liaises with corporate partners or investment prospects for potential working/ investment collaborations, operational subsidiaries locally and overseas to augment close parent-subsidiary working relationship.
Mr. Danny Lim graduated from Singapore Nanyang Technological University with a Bachelor’s Degree with Honors in Business, specializing in Banking and Finance. | |||
| Ambrose Chan Heng Fai | 80 | 2017 | Mr. Ambrose Chan Heng Fai has served as director of the Company since January 2017 and as Executive Chairman of the Board since March 2019. He has also served as director of the Company’s wholly-owned subsidiaries, DSS International Inc. since July 2017, as the Chief Executive Officer of DSS Digital Transformation Limited and DSS Cyber Security Pte. Ltd. since July 2019.
Mr. Chan is an expert in banking and finance, with 45 years of experience in these industries. He has also restructured numerous companies in various industries and countries during the past 40 years.
Mr. Chan has served as Chairman of the Board and Chief Executive Officer of Alset Inc., a Nasdaq listed company, since March 2018. Mr. Chan has served as Chief Executive Officer of Alset International Limited, a diversified holding company listed on the Catalist of the Singapore Exchange Securities Trading Limited, since April 2014, and has served as director of that company since May of 2013. Mr. Chan has served as Chairman of the Board of HWH International Inc., a Nasdaq listed company, since October 2021. Mr. Chan has served as director of Hapi Metaverse Inc., a public company reporting to U.S. Securities and Exchange Commission since October 2014, as Chairman of the Board since December 2017 and served as the Acting Chief Executive Officer of Hapi Metaverse Inc. from August 2018 until September 2020, having previously served as Chief Executive Officer from December 2014 until June 2017. Mr. Chan has served as director of LiquidValue Development Inc., a public company reporting to U.S. Securities and Exchange Commission, since January 2017 and has served as its Chairman of the Board since December 2017. Mr. Chan has served as director of Sharing Services Global Corporation, an OTC Pink listed company, since April 2020 and has served as its Chairman of the Board since July 2021. Mr. Chan has served as director of Value Exchange International, Inc., an OTCQB listed company, since December 2021.
Mr. Chan served as a non-executive director of Holista CollTech Ltd., an ASX listed company, from July 2013 to June 2021. Mr. Chan served as a director of OptimumBank Holdings, Inc. from June 2018 to April 2022. Mr. Chan’s previous experiences include serving as Managing Chairman of Heng Fai Enterprises Limited (now known as Zensun Enterprises Limited), an investment holding company listed on the HKSE, from 1992 to 2015. Mr. Chan was formerly the Managing Director of SingHaiyi Group Ltd. (now known as SingHaiyi Group Pte. Ltd.), a property development company in Singapore which was listed on the Singapore Exchange Mainboard, from March 2003 to September 2013, and the Executive Chairman of China Gas Holdings Limited, a Hong Kong listed investor and operator of city gas pipeline infrastructure in China from 1997 to 2002. Mr. Chan served on the Board of RSI International Systems, Inc. (now known as ARCpoint, Inc.), a Toronto Stock Exchange-listed company, the developer of RoomKeyPMS, a web-based property management system, from June 2014 to February 2019. Mr. Chan has also served as a director of Global Medical REIT Inc., a healthcare facility real estate company, from December 2013 to July 2015. He was a director of American Housing REIT Inc. from October of 2013 to July of 2015. He served as a director of Skywest Ltd., a public Australian airline company from 2005 to 2006. Mr. Chan was a director of Global Med Technologies, Inc., a medical company engaged in the design, development, marketing and support information for management software products for healthcare-related facilities, from May 1998 until December 2005.
Mr. Chan’s international business contacts and experience qualify him to serve on our Board of Directors. |
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Board of Directors and Committees
The Company has determined that each of Mr. Wai Leung William Wu, Mr. Shui Yeung Frankie Wong, Ms. Hiu Pan Joanne Wong and Mr. José Escudero qualify as independent directors (as defined under Section 803 of the NYSE American LLC Company Guide).
In fiscal 2025, each of the Company’s independent directors attended or participated in 100% of the aggregate of (i) the total number of meetings of the Board of Directors held during the period in which each such director served as a director and (ii) the total number of meetings held by all committees of the Board of Directors during the period in which each such director served on such committee. All directors attended last year’s annual general meeting. During the fiscal year ended December 31, 2025, the Board held four meetings and acted by written consent on three occasions.
Mr. Sassuan Samson Lee resigned from the Board on February 8, 2024. Mr. Lee did not resign from the Board as a result of any disagreement related to the Company’s operations, policies or practices.
Mr. Frank D. Heuszel resigned from the Board on August 23, 2024. Mr. Heuszel did not resign from the Board as a result of any disagreement related to the Company’s operations, policies or practices.
Audit Committee
The Company has separately designated an Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Audit Committee held six meetings in 2025 and did not acted by written consent. The Audit Committee is responsible for, among other things, the appointment, compensation, removal and oversight of the work of the Company’s independent registered public accounting firm, overseeing the accounting and financial reporting process of the Company, and reviewing related person transactions. As of December 31, 2025 and December 31, 2024, the Audit Committee is comprised of Mr. Wu, who serves as Chairman of the Audit Committee, Mr. Wong, and Mr. Escudero. Each of Messrs. Wu and Escudero is qualified as a “financial expert” as defined in Item 407 under Regulation S-K of the Securities Act of 1933, as amended (the “Securities Act”). Mr. Wong is financially sophisticated. Each of Mr. Wu, Mr. Escudero and Mr. Wong is an independent director (as defined under Section 803 of the NYSE American LLC Company Guide). The Audit Committee operates under a written charter adopted by the Board of Directors, which can be found in the Investors/Corporate Governance section of our web site, www.dssworld.com.
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Compensation and Management Resources Committee
The purpose of the Compensation and Management Resources Committee is to assist the Board in discharging its responsibilities relating to executive compensation, succession planning for the Company’s executive team, and to reviewing and making recommendations to the Board regarding employee benefit policies and programs, incentive compensation plans and equity-based plans. The Compensation and Management Resources Committee did not meet in 2025 and did not act by written consent in 2025. The Compensation and Management Resources Committee is responsible for, among other things, (a) reviewing all compensation arrangements for the executive officers of the Company and (b) administering the Company’s stock option plans. The Compensation and Management Resources Committee consists of Mr. Escudero, Mr. Wu and Mr. Wong, with Mr. Escudero as the Chairman. Each of the members of the Compensation and Management Resources Committee is an independent director (as defined under Section 803 of the NYSE American Company Guide). The Compensation and Management Resource Committee operates under a written charter adopted by the Board of Directors, which can be found in the Investors/Corporate Governance section of our web site, www.dsssecure.com. The duties and responsibilities of the Compensation and Management Resources Committee in accordance with its charter, are to review and discuss with management and the Board the objectives, philosophy, structure, cost and administration of the Company’s executive compensation and employee benefit policies and programs; no less than annually, review and approve, with respect to the Chief Executive Officer and the other executive officers (a) all elements of compensation, (b) incentive targets, (c) any employment agreements, severance agreements and change in control agreements or provisions, in each case as, when and if appropriate, and (d) any special or supplemental benefits; make recommendations to the Board with respect to the Company’s major long-term incentive plans applicable to directors, executives and/or non-executive employees of the Company and approve (a) individual annual or periodic equity-based awards for the Chief Executive Officer and other executive officers and (b) an annual pool of awards for other employees with guidelines for the administration and allocation of such awards; recommend to the Board for its approval a succession plan for the Chief Executive Officer, addressing the policies and principles for selecting a successor to the Chief Executive Officer, both in an emergency situation and in the ordinary course of business; review programs created and maintained by management for the development and succession of other executive officers and any other individuals identified by management or the Compensation and Management Resources Committee; review the establishment, amendment and termination of employee benefits plans, review employee benefit plan operations and administration; and any other duties or responsibilities expressly delegated to the Compensation and Management Resources Committee by the Board from time to time relating to the Committee’s purpose. The Compensation and Management Resources Committee may request any officer or employee of the Company or the Company’s outside counsel to attend a meeting of the Compensation and Management Resources Committee or to meet with any members of, or consultants to, the Compensation and Management Resources Committee. The Company’s Chief Executive Officer does not attend any portion of a meeting where the Chief Executive Officer’s performance or compensation is discussed, unless specifically invited by the Compensation and Management Resources Committee.
The Compensation and Management Resources Committee has the sole authority to retain and terminate any compensation consultant to be used to assist in the evaluation of director, Chief Executive Officer or other executive officer compensation or employee benefit plans and has sole authority to approve the consultant’s fees and other retention terms. The Compensation and Management Resources Committee also has the authority to obtain advice and assistance from internal or external legal, accounting or other experts, advisors and consultants to assist in carrying out its duties and responsibilities and has the authority to retain and approve the fees and other retention terms for any external experts, advisors or consultants.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is responsible for overseeing the appropriate and effective governance of the Company, including, among other things, (a) nominations to the Board of Directors and making recommendations regarding the size and composition of the Board of Directors and (b) the development and recommendation of appropriate corporate governance principles. At December 31, 2025, the Nominating and Corporate Governance Committee consisted of Mr. Wu, Mr. Wong and Mr. Escudero, each of whom is an independent director (as defined under Section 803 of the NYSE American LLC Company Guide Mr. Wong was appointed to the Nominating and Corporate Governance Committee as Chair of the Committee.
The Nominating and Corporate Governance Committee did not met during 2025 and did not act by written consent in 2025. The Nominating and Corporate Governance Committee operates under a written charter adopted by the Board of Directors, which can be found in the Investors/Corporate Governance section of our web site, www.dsssecure.com. The Nominating and Corporate Governance Committee adheres to the Company’s By-Laws provisions and Securities and Exchange Commission rules relating to proposals by stockholders when considering director candidates that might be recommended by stockholders, along with the requirements set forth in the committee’s Policy with Regard to Consideration of Candidates Recommended for Election to the Board of Directors, also available on our website. The Nominating and Corporate Governance Committee of the Board of Directors is responsible for identifying and selecting qualified candidates for election to the Board of Directors prior to each annual meeting of the Company’s stockholders. In identifying and evaluating nominees for director, the Committee considers each candidate’s qualities, experience, background and skills, as well as other factors, such as the individual’s ethics, integrity and values which the candidate may bring to the Board of Directors. Currently, the Nominating and Corporate Governance Committee does not have an explicit policy regarding diversity, however, when considering candidates nominees shall not be discriminated against based on race, religion, national origin, sex, disability or any other basis proscribed by applicable law.
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Code of Ethics
The Company has adopted a Code of Ethics that establishes the standards of ethical conduct applicable to all directors, officers and employees of the Company. A copy of the Code of Ethics covering all of our employees, directors and officers, and all other corporate governance documents, are available on the Corporate Governance section of our web site at www.dsssecure.com.
Information about our Executive Officers
On April 17, 2019, Frank D. Heuszel became the Chief Executive Officer of the Company. Mr. Heuszel resigned his position as CEO on August 23, 2024. Mr. Heuszel’s resignation as the Chief Executive Officer does not reflect any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices On August 16, 2021, Todd D. Macko was appointed Chief Financial Officer of the Company. On July 15, 2019, Jason Grady was appointed Chief Operating Officer of the Company. Effective August 23, 2024, the Board of Directors of DSS, Inc. elected Mr. Grady as the Company’s new Interim Chief Executive Officer. The biographies for Messrs. Macko and Grady are contained herein in the information disclosures relating to the Company’s directors above.
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.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who own more than ten percent of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Officers, directors and holders of more than ten percent of the Company’s Common Stock are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.
To the Company’s knowledge, based solely upon review of the copies of such reports filed with the SEC and written representations that no other reports were required, during the fiscal year ended December 31, 2025 all Section 16(a) filing requirements applicable to the Company’s officers, directors and holders of more than ten percent of the Company’s common stock were satisfied.
ITEM 11 - EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the compensation earned by each of the persons serving as the Company’s Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, referred to herein collectively as the “Named Executive Officers”, or NEOs, for services rendered to us for the years ended December 31, 2025 and 2024:
| Name and principal position | Year | Salary | Bonus | Stock Awards (1) | Option Awards | Non-Equity Incentive Plan Compensation | Nonqualified Deferred Compensation Earnings | All
Other Compensation (2) | Total | |||||||||||||||||||||||||
| Jason Grady, Interim Chief Executive Officer | 2025 | $ | 280,198 | 10,000 | - | - | - | - | 21,563 | $ | 311,761 | |||||||||||||||||||||||
| 2024 | $ | 259,149 | 93,182 | - | - | - | - | 18,854 | $ | 371,185 | ||||||||||||||||||||||||
| Todd D. Macko, Chief Financial Officer | 2025 | $ | 263,447 | 10,000 | - | - | - | - | 21,626 | $ | 295,073 | |||||||||||||||||||||||
| 2024 | $ | 246,165 | 69,440 | - | - | - | - | 19,602 | $ | 335,207 | ||||||||||||||||||||||||
| (2) | Includes health insurance premiums, retirement matching funds and automobile expenses paid by the Company. |
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Employment and Severance Agreements- DSS, Inc.
On December 12, 2023, Frank D. Heuszel, the Chief Executive Officer (“CEO”) of DSS, Inc. (the “Company”) and the Company executed a letter agreement (“Heuszel Interim Agreement”) pursuant to which Mr. Heuszel agreed to act as CEO of the Company on a month-to-month basis beginning January 1, 2024 until a new employment agreement is executed (the “Heuszel Interim Period”). Mr. Heuszel resigned as the CEO of DSS in August 2024.
On December 15, 2023, Jason Grady, the Chief Operating Officer (“COO”) of the Company and the Company executed a letter agreement (the “Grady Interim Agreement”) pursuant to which Mr. Grady agreed to act as COO of the Company on a month-to-month basis beginning January 1, 2024 until a new employment agreement is executed (the “Grady Interim Period”). In accordance with the Grady Interim Agreement, Mr. Grady will continue to act as COO until either a new employment agreement is successfully negotiated and executed or if the Grady Interim Agreement is terminated by either party by giving one month’s written notice to the other party. In October of 2024, Mr. Grady was named Interim CEO of DSS and serves in that roll on a month-to-month until a new employment agreement is executed. Mr. Grady’s base salary is approximately $277,000 per annum, which will be payable to him in accordance with the payroll policies of the Company.
Also on December 15, 2023, Todd Macko, the Chief Financial Officer (“CFO”) of the Company and the Company executed a letter agreement (the “Macko Interim Agreement”) pursuant to which Mr. Macko agreed to act as CFO of the Company on a month-to-month basis beginning January 1, 2024 until a new employment agreement is executed (the “Macko Interim Period”). In accordance with the Macko Interim Agreement, Mr. Macko will continue to act as CFO until either a new employment agreement is successfully negotiated and executed or if the Macko Interim Agreement is terminated by either party by giving one month’s written notice to the other party. Pursuant to the Macko Interim Agreement, Mr. Macko’s base salary is approximately $264,000 per annum, which will be payable to him in accordance with the payroll policies of the Company.
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Outstanding Equity Awards at Fiscal Year-End
As of December 31, 2025, there were no outstanding equity awards to our Named Executive Officers.
Director Compensation
The following table sets forth cash compensation and the value of stock options awards granted to the Company’s non-employee independent directors for their service in 2025:
| Name | Fees Earned or Paid in Cash | Stock Awards | All Other Compensation (2) | Total | ||||||||||||
| Current Directors | ||||||||||||||||
| Heng Fai Ambrose Chan | $ | - | - | - | $ | - | ||||||||||
| Jose Escudero | $ | 26,800 | - | - | $ | 26,800 | ||||||||||
| William Wu | $ | 26,800 | - | - | $ | 26,800 | ||||||||||
| Tung Moe Chan | $ | - | - | 120,000 | $ | 120,000 | ||||||||||
| Joanne Wong | $ | 22,300 | - | - | $ | 22,300 | ||||||||||
| Wong Shui Yueng | $ | 26,800 | - | - | $ | 26,800 | ||||||||||
| Lim Sheng Hon, Danny | $ | - | - | 60,000 | $ | 60,000 | ||||||||||
(2) Mr. Tung Moe Chan has consulting agreements with DSS which pays him $120,000 annual And Mr. Lim has a consulting agreement with DSS which pays him $50,000 annually.
Each independent director (as defined under Section 803 of the NYSE MKT LLC Company Guide) is entitled to receive base cash compensation of $18,000 annually, provided such director attends at least 75% of all Board of Director meetings, and all scheduled committee meetings. Each independent director is entitled to receive an additional $1,000 for each Board of Director meeting he attends, and an additional $500 for each nominating and compensation committee meeting he attends and $750 for each audit and executive committee meeting he attends, provided such committee meeting falls on a date other than the date of a full Board of Directors meeting. Each of the independent directors is also eligible to receive discretionary grants of options or restricted stock under the Company’s 2020 Equity Incentive Plan. Non-independent members of the Board of Directors do not receive compensation in their capacity as directors, except for reimbursement of travel expenses.
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ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth beneficial ownership of Common Stock as of February 16, 2026 by each person known by the Company to beneficially own more than 5% of the Common Stock, each director and each of the executive officers named in the Summary Compensation Table (see “Executive Compensation” above), and by all of the Company’s directors and executive officers as a group. Each person has sole voting and dispositive power over the shares listed opposite his name except as indicated in the footnotes to the table and each person’s address is c/o DSS, Inc., 275 Wiregrass Parkway, West Henrietta, New York 14586.
For purposes of this table, beneficial ownership is determined in accordance with the Securities and Exchange Commission rules, and includes investment power with respect to shares owned and shares issuable pursuant to warrants for February 16, 2026.
The percentages of shares beneficially owned are based on 9,992,518 shares of our Common Stock issued and outstanding as of February 16, 2026, and is calculated by dividing the number of shares that person beneficially owns by the sum of (a) the total number of shares outstanding on March 12, 2026, plus (b) the number of shares such person has the right to acquire within 60 days of March 12, 2026.
| Percentage of | ||||||||
| Number of Shares | Outstanding Share | |||||||
| Name | Beneficially Owned | Beneficially Owned | ||||||
| Heng Fai Ambrose Chan (1) | 6,148,000 | 61.5 | % | |||||
| José Escudero | 51 | * | ||||||
| Wai Leung William Wu | - | * | ||||||
| Jason Grady | 125 | * | ||||||
| Todd D. Macko | 83 | * | ||||||
| Tung Moe Chan | - | * | ||||||
| Frankie Wong | - | * | ||||||
| Joanne Wong | - | * | ||||||
| All officers and directors as a group (8 persons) | 6,148,259 | 61.5 | % | |||||
| 5% Shareholders | ||||||||
| Alset International limited | 1,068,309 | 10.7 | % | |||||
| Alset, Inc. | 2,581,268 | 25.8 | % | |||||
| * Less than 1% | ||
| (1) | The beneficial ownership of Heng Fai Chan includes 6,148,664 shares of common stock, consisting of (a) 1,002,978 shares of common stock held by Heng Fai Holdings Limited, an entity controlled by Heng Fai Chan; (b) 1,184,475 shares of common stock held by Heng Fai Chan directly; (C) 311,634 shares of common stock held by Global Biomedical Pte. Ltd.; and (d) 1,068,309 shares of common stock held by Alset International Limited (e) 2,581,268 shares of common stock held by Alset Inc | |
Equity Compensation Plans Information
The following table sets forth information about our equity compensation plans as of December 31, 2025.
| 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 | ||||||||||||||||
| 2013 Employee, Director and Consultant Equity Incentive Plan - options | - | - | $ | - | - | |||||||||||
| 2013 Employee, Director and Consultant Equity Incentive Plan - warrants | - | - | $ | - | - | |||||||||||
| 2020 Employee, Director and Consultant Equity Incentive Plan | - | - | $ | - | 673,436 | |||||||||||
| Total | - | - | $ | - | 673,436 | |||||||||||
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ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Transactions with Related Persons
Except as disclosed herein, no director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since January 1, 2020, in which the amount involved in the transaction exceeds the lesser of $120,000 or one percent of the average of our total assets at the year-end for the last two completed fiscal years.
The Company owns 127,179,291 shares or approximately 4% of the outstanding shares of Alset International Limited (“Alset Intl”), a company incorporated in Singapore and publicly listed on the Singapore Exchange Limited. This investment is classified as a marketable security and is classified as long-term assets on the consolidated balance sheets as the Company has the intent and ability to hold the investments for a period of at least one year. The Chairman of the Company, Mr. Heng Fai Ambrose Chan, is the Executive Director and Chief Executive Officer of Alset Intl. Mr. Chan is also the majority shareholder of Alset Intl as well as the largest shareholder of the Company. The fair value of the marketable security as of December 31, 2025, and December 31, 2024, was approximately $2,277,000 and $2,518,000 respectively. During the year ended December 31, 2025 and December 31, 2024, the Company recorded unrealized loss on this investment of approximately $242,000 and unrealized loss of $750,000, respectively.
On October 13, 2021, LVAM entered into loan agreement with BMIC International (“BMIC International Loan”), a related party, whereas LVAM borrowed the principal amount of $3,000,000, with interest to be charged at a variable rate to be adjusted at the maturity date. The BMIC International Loan contains an auto renewal period of three months, with a maturity date of January 2026 as of December 31, 2025. As of December 31 2025, and December 31, 2024, the outstanding principal and interest of approximately $33,000 and $463,000, respectively, are included in Current portion of long-term debt – related party, net on the consolidated balance sheet.
On October 13, 2021, LVAM entered into a loan agreement with Lee Wilson Tsz Kin (“Wilson Loan”), a related party, whereas LVAM borrowed the principal amount of $3,000,000, with interest to be charged at a variable rate to be calculated at the maturity date. The Wilson Loan contains an auto renewal period of three months, with a maturity date of January 2026 as of December 31, 2025. As of December 31, 2025, and December 31, 2024, the outstanding principal and interest of approximately $145,000 and $145,000, respectively, are included in Current portion of long-term debt – related party, net on the consolidated balance sheet.
The Company owns 81,836,908 shares of True Partners Capital Holding Limited (“True Partners”), a publicly listed company on the Hong Kong Stock Exchange. On February 28, 2022, the Company entered into a Stock Purchase Agreement with Alset EHome International Inc. (“AEI”), pursuant to which AEI has agreed to sell a subsidiary holding 62,336,908 shares of stock of True Partner Capital Holding Limited exchange for 17,570,948 shares of common stock of the Company (the “DSS Shares”). The Company’s Executive Chairman and a significant stockholder, Heng Fai Ambrose Chan is the Chairman, Chief Executive Officer and largest shareholder of AEI. Further, on February 20, 2025, the Company acquired an additional 19,500,000 shares of True Partners. The fair value of the marketable security as of December 31, 2025 and December 31, 2024, was approximately $4,206,000 and $3,815,000, respectively. During the year ended December 31, 2025 and December 31, 2024, the Company recorded unrealized loss on this investment of approximately $609,000 and unrealized loss of $590,000, respectively.
On July 26, 2022, APF and VEII entered into a promissory note (“Note 8”) in the principal sum of $1,000,000 with interest of 8% with all unpaid principal and interest due on July 26, 2024. This note was amended so that all unpaid principal and interest is due July 26, 2025. The outstanding principal and interest as of December 31, 2025 and December 31, 2024 approximates $917,000. This note was fully reserved for as of December 31, 2025 and December 31, 2024. Heng Fai Ambrose Chan, the Chairman of DSS, Inc is also the on the board of directors of VEII.
On August 29, 2022, DSS Financial Management Inc and BMIC LLC, a related party, entered into a promissory note (“Note 6”) in the principal sum of $100,000 with interest of 8%, is due in three quarterly installments beginning on September 14, 2022. All unpaid principal and interest was due on August 29, 2025. The outstanding principal and interest at December 31, 2025, and December 31, 2024 approximated $86,000, and was fully reserved for as of December 31, 2025 and December 31, 2024. DSS owns 24.9% of the outstanding common shares of BMIC LLC.
On May 8, 2023, DSS Financial Management Inc and BMIC LLC entered into a promissory note (“Note 7”) in the principal sum of $102,000 with interest at the prime rate plus 2% with a maturity date of May 7, 2026. The outstanding principal and interest at December 31, 2025, and December 31, 2024 approximated $110,000, and was fully reserved for as of December 31, 2025 and December 31, 2024. DSS owns 24.9% of the outstanding common shares of BMIC LLC.
On December 10, 2024, DSS entered into a securities purchase agreement with Alset Inc., a related party, pursuant to which the Company agreed to sell and issue in a private placement an aggregate of 820,597 shares of the Company’s common stock for approximately $803,000.
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On December 10, 2024, DSS entered into a securities purchase agreement with Heng Fai Ambrose Chan, the Chaiman of the Board of Directors and a related party, pursuant to which the Company agreed to sell and issue in a private placement an aggregate of 205,149 shares of the Company’s common stock for approximately $197,000.
In August of 2025, DSS issued a $500,000 convertible promissory note to Alset, Inc. (“holder”), the Company’s largest shareholder and a related party, bearing interest at Prime (6.75% at December 31, 2025). The first 12 months’ interest is to be paid in shares of the Company; thereafter, interest is prepaid annually in cash or shares at the holder’s election. The note is convertible at the holder’s option at a fixed $0.86 per share, is payable on demand (or July 31, 2028 if not demanded) and may be redeemed by the Company on or after the first anniversary. The Company is required to reserve sufficient authorized shares and maintain the listing/quotation of its common stock. Under ASU 2020-06 and ASC 815-40, the debt host’s embedded conversion feature is indexed to the Company’s own stock and is equity-classified; accordingly, no embedded derivative is bifurcated and the instrument is accounted for as single-unit debt using the effective interest method. Interest is recognized in interest expense; when settled in shares, a credit to APIC is recorded at the fair value of shares on settlement, and any prepaid interest is recorded as a discount/prepaid and amortized to expense over the related period. The outstanding principal and interest, approximates $512,000 and is included in Convertible note payable, related party on the accompanying consolidated balance sheet at December 31, 2025.
On February 6, 2025, as a bonus for compensation awarded to Heng Fai Holdings Limited (“HFHL”), a Hong Kong Company, which is beneficially owned by Mr. Heng Fai Ambrose Chan, Director of DSS, Inc., HFHL was awarded 1,000,000 shares of the Company’s common stock, approximating $870,000. The issuance was approved by the board of directors on January 31, 2025.
On March 21, 2025, DSS, the parent company of Impact Biomedical, Inc. completed the sale of 499,800 shares of Impact Biomedical common stock. These shares were acquired by DSS during Impact’s initial public offering on September 16, 2024. The sale of these shares, which were previously held by DSS as part of its ownership interest in Impact, was completed for a total value of $1,500,000, which represents the consideration received from the transaction. With this sale, the shares are now publicly held and are no longer held by DSS.
On April 4, 2025, DSS, the parent company of Impact Biomedical, Inc. completed the sale of 890,800 shares of Impact Biomedical common stock. The sale of these shares, which were previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $845,000, which represents the consideration received from the transaction. With this sale, the shares are now publicly held and are no longer held by DSS.
On May 22, 2025, DSS, the parent company of Impact Biomedical, Inc. completed the sale of 115,600 shares of Impact Biomedical common stock. The sale of these shares, which were previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $63,000, which represents the consideration received from the transaction. With this sale, the shares are now publicly held and are no longer held by DSS.
On May 23, 2025, DSS, the parent company of Impact Biomedical, completed the sale of 45,400 shares of Impact Biomedical common stock. The sale of these shares, which were previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $24,000, which represents the consideration received from the transaction. With this sale, the shares are now publicly held and are no longer held by DSS.
Review, Approval or Ratification of Transactions with Related Persons
The Board conducts an appropriate review of and oversees all related party transactions on a continuing basis and reviews potential conflict of interest situations where appropriate. The Board has adopted formal standards to apply when it reviews, approves or ratifies any related party transaction. In addition, the Board applies the following standards to such reviews: (i) all related party transactions must be fair and reasonable and on terms comparable to those reasonably expected to be agreed to with independent third parties for the same goods and/or services at the time they are authorized by the Board and (ii) all related party transactions should be authorized, approved or ratified by the affirmative vote of a majority of the directors who have no interest, either directly or indirectly, in any such related party transaction.
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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. for review services for the March 31, 2025 quarterly review was approximately $50,000. The aggregate fees billed for professional services rendered by HTL for June 30, 2025, September 30, 2025 quarterly reviews and audit services for the fiscal year ended December 31, 2025 was approximately $219,000. The aggregate fees billed for professional services rendered by Grassi & Co for audit and review services for the fiscal year ended December 31, 2024 was approximately $365,000.
Tax Fees
The aggregate fees billed for professional services rendered by our principal accountant, Withum Smith Brown, P.C., for tax compliance, tax advice and tax planning during the years ended December 31, 2025 and 2024 were approximately $150,000 and $150,000 respectively. DSS has engaged Greendyke Jencik & Associates CPAs, PLLC to render quarterly and year end tax provisions. The aggregate fees for 2025 and 2024 were approximately $8,000 and $8,000.
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, 10-Q and 10-K filings for Impact BioMedical for audit and review services for the fiscal year ended December 31, 2024 were approximately $210,000. The aggregate fees billed for professional services rendered by Grassi & Co for audit and review services for Impact BioMedical for the fiscal year ended December 31, 2025 was approximately $140,000.
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, 2025 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.
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PART IV
ITEM 15 – EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(b) Exhibits
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| 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)* |
* Filed herewith
ITEM 16 – Form 10K SUMMARY
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DSS, INC.
| March 31, 2026 | By: | /s/ Jason Grady |
| Jason Grady | ||
| Interim Chief Executive Officer | ||
| (Principal Executive Officer) |
| March 31, 2026 | By: | /s/ Todd D. Macko |
| Todd D. Macko | ||
Chief Financial Officer (Principal Financial and Accounting 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.
| March 31, 2026 | By: | /s/ Todd D. Macko |
| Todd D. Macko | ||
Chief Financial Officer (Principal Financial and Accounting Officer) | ||
| March 31, 2026 | By: | /s/ Jason Grady |
Jason Grady Interim Chief Executive Officer | ||
| March 31, 2026 | By: | /s/ Heng Fai Ambrose Chan |
Heng Fai Ambrose Chan Chairman of the Board and CEO of DSS International, Inc. | ||
| March 31, 2026 | By: | /s/ Hiu Pan Joanne Wong |
Hiu Pan Joanne Wong Director | ||
| March 31, 2026 | By: | /s/ José Escudero |
José Escudero Director | ||
| March 31, 2026 | By: | /s/ Shui Yeung Frankie Wong |
Shui Yeung Frankie Wong Director | ||
| March 31, 2026 | By: | /s/ Tung Moe Chan |
| Tung Moe Chan | ||
| Director | ||
| March 31, 2026 | By: | /s/ Lim Sheng Hon Danny |
| Lim Sheng Hon Danny | ||
| Director | ||
| March 31, 2026 | By: | /s/ Wai Leung William Wu |
William Wu Director |
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