Dss, Inc 8-K/A, filed Jun 8, 2020

Dss, Inc. (DSS)

8-K/A 2020-06-08 For: 2020-04-27

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Added on April 10, 2026

About this 8-K/A

Dss, Inc filed this 8-K/A on June 8, 2020, reporting on events of April 27, 2020.

Items reported

Item 1.01: Entered into a material agreement
Item 9.01: Financial statements and exhibits

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[ ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Exhibit
Number		Exhibit

99.1		Impact BioMedical’s Audited Consolidated Financial Statements and the notes related thereto.
99.2		Impact BioMedical’s Interim Unaudited Consolidated Financial Statement and the notes related thereto.
99.3		Unaudited Pro Forma Condensed Combined Financial Statements of DSS and Impact BioMedical and the notes related thereto

	DOCUMENT SECURITY SYSTEMS, INC.

Dated: June 8, 2020	By:	/s/ Frank D. Heuszel
	Name:	Frank D. Heuszel
	Title:	Chief Executive Officer and Interim Chief Financial Officer

	PAGE
Report of Independent Registered Public Accounting Firm	2

Financial Statements
Consolidated Balance Sheets	3
Consolidated Statements of Operations	4
Consolidated Statements of Stockholders’ Equity	5
Consolidated Statements of Cash Flows	6
Notes to Consolidated Financial Statements	7

	December 31,			December 31,
	2019			2018
Asset
Cash	$	108,731		$	35,375
Prepaid Expense		30,700			22,761
Investment in Security by Equity Method					5,312
Total Asset	$	139,431		$	63,448

Liabilities
Accounts Payable	$	7,021		$	77,018
Total Liabilities	$	7,021		$	77,018

Stockholders’ Equity
Common Stock, $0.001 Par Value,
100,000,000 shares authorized,
1,000 Issued and Outstanding	$	1		$	1
Additional Paid In Capital		1,732,590			1,183,135
Accumulated Deficit		(1,646,208	)		(1,191,772	)
Total Stockholders’ Equity (Deficit)		86,383			(8,636	)
Non-Controlling Interests		46,027			(4,934	)
Total Stockholders’ Equity (Deficit)	$	132,410		$	(13,570	)

Total Liabilities & Stockholders’ Equity	$	139,431		$	63,448

	2019			2018
Operating Expense
Research & Development	$	340,628		$	634,312
Professional Services		143,933			373,394
Marketing		5,000			25,950
Other General Expense		33,600			20,931
Total Operating Expense		523,161			1,054,587

Other Expense
Financial Services		544			683
Loss from Security Investment by Equity Method		40,314			49,688
Loss from Acquisition		90,001			-
Total Other Expense		130,859			50,371

Net Loss	$	(654,020	)	$	(1,104,958	)

Net Loss Attributable to Non-Controlling Interests		(199,584	)		(401,803	)

Net Loss Attributable to Common Stockholders	$	(454,437	)	$	(703,155	)

Net Loss Per Share - Basic and Diluted	$	(454.44	)	$	(703.15	)

Weighted Average Common Shares Outstanding - Basic and Diluted		1,000			1,000

	Common Stock				Additional					Non-			Total
	Shares		Par Value $0.001		Paid in Capital		Accumulated Deficit			controlling Interests			Stockholders Equity
Balance at January 1, 2018		1,000	$	1	$	539,731	$	(488,616	)	$	29,209		$	80,324

Proceeds from Shareholders						643,404					367,660			1,011,064

Net loss								(703,155	)		(401,803	)		(1,104,958	)

Balance at December 31, 2018		1,000	$	1	$	1,183,135	$	(1,191,772	)	$	(4,934	)	$	(13,570	)

Proceeds from Shareholders						549,455					250,545			800,000

Net Loss								(454,436	)		(199,584	)		(654,020	)

Balance at December 31, 2019		1,000	$	1	$	1,732,590	$	(1,646,208	)	$	46,027		$	132,410

	2019			2018
Cash Flows From Operating Activities
Net Loss from Operations	$	(654,020	)	$	(1,104,958	)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Loss from Acquisition		90,001			-
Loss from Investment in Security by Equity Method		40,314			49,688
Changes in Operating Assets and Liabilities
Prepaid Expense		(7,940	)		1,566
Accounts Payable		(81,157	)		(45,145	)
Net Cash Used in Operating Activities		(612,802	)		(1,098,849	)

Cash Flows From Investing Activities
Acquisition of Securities		(91,000	)		-
Cash from Acquistion		13,158			-
Investment in Joint Venture		(36,000	)		(55,000	)
Net Cash Used in Investing Activities		(113,842	)		(55,000	)

Cash Flows From Financing Activities
Proceeds from Shareholders		800,000			986,064
Net Cash Provided by Financing Activities		800,000			986,064

Net Increase (Decrease) in Cash		73,356			(167,785	)

Cash - Beginning of Year		35,375			178,160
Cash - End of Year	$	108,731		$	10,375

Non Cash Investmnet in Joint Venture	$	-		$	25,000

	State or other		Attributable			Attributable
Name of consolidated	jurisdiction of incorporation or	Date of incorporation	interest as of December 31,			interest as of December 31,
subsidiary	organization	or formation	2019			2018
Global BioMedical, Inc.	Nevada	April, 18, 2017		90.9	%		90.9	%
Global BioLife, Inc.	Nevada	April 14, 2017		63.6	%		63.6	%
Biolife Sugar, Inc	Nevada	April 23, 2018		63.6	%		63.6	%
Happy Sugar Inc	Nevada	August 17, 2018		63.6	%		63.6	%
Sweet Sense Inc.	Nevada	April 30, 2018		81.8	%		31.8	%
SeD BioLife International, Inc.	Nevada	March 29, 2017		100	%		100	%
SeD BioMedical International Inc.	Nevada	March 13, 2017		100	%		100	%
Global Sugar Solutions Inc.	Nevada	November 7, 2019		80	%		n/a

	Year Ended December 31,
	2019			2018
Current:
Federal	$	-		$	-
State		-			-
Total Current		-			-
Deferred:
Federal		(530,629	)		(393,285	)
State		(151,034	)		(122,106	)
Total Deferred		(681,663	)		(515,390	)
Valuation Allowance		681,663			515,390
Total Incom Tax Expense	$	-		$	-

Pre-tax Loss	$	(645,020	)	$	(1,104,958	)

Effective Income Tax Rate		0	%		0	%

	PAGE

Consolidated Financial Statements
Consolidated Balance Sheets (unaudited)	2
Consolidated Statements of Operations (unaudited)	3
Consolidated Statements of Stockholders’ Equity (unaudited)	4
Consolidated Statements of Cash Flows (unaudited)	5
Notes to Consolidated Financial Statements (unaudited)	6

	March 31, 2020			December 31, 2019
Asset
Cash	$	130,115		$	108,731
Prepaid Expense		23,319			30,700
Total Asset	$	153,434		$	139,431

Liabilities
Accounts Payable	$	26,601		$	7,021
Total Liabilities	$	26,601		$	7,021
Stockholders’ Equity
Common Stock, $0.001 Par Value, 100,000,000 shares authorized, 13,897,069 and 1,000 Issued and Outstanding as of March 31, 2020 and December 31, 2019, respectively	$	13,897		$	1
Additional Paid In Capital		1,802,330			1,732,590
Accumulated Deficit		(1,729,966	)		(1,646,208	)
Total Stockholders’ Equity		86,261			86,383
Non-Controlling Interests		40,572			46,027
Total Stockholders’ Equity	$	126,833		$	132,410
Total Liabilities & Shareholder’s Equity	$	153,434		$	139,431

	2020			2019
Operating Expense
Research & Development	$	71,967		$	106,123
Professional Services		51,325			4,645
Other General Expense		2,178			1,975
Total Operating Expense		125,470			112,743
Other Expense
Financial Services		107			76
Loss from Security Investment by Equity Method		-			3,206
Total Other Expense		107			3,282
Net Loss	$	(125,577	)	$	(116,024	)
Net Loss Attributable to Non-Controlling Interests		(41,819	)		(32,484	)
Net Loss Attributable to Common Stockholders	$	(83,758	)	$	(83,540	)
Net Loss Per Share - Basic and Diluted	$	(0.19	)	$	(83.54	)
Weighted Average Common Shares Outstanding - Basic and Diluted		449,260			1,000

Name of consolidated subsidiary	State or other jurisdiction of incorporation or organization	Date of incorporation or formation	Attributable interest as of March 31, 2020			Attributable interest as of December 31, 2019
Global BioMedical, Inc.	Nevada	April, 18, 2017		90.9	%		90.9	%
Global BioLife, Inc.	Nevada	April 14, 2017		63.6	%		63.6	%
Biolife Sugar, Inc	Nevada	April 23, 2018		63.6	%		63.6	%
Happy Sugar Inc	Nevada	August 17, 2018		63.6	%		63.6	%
Sweet Sense Inc.	Nevada	April 30, 2018		81.8	%		81.8	%
SeD BioLife International, Inc.	Nevada	March 29, 2017		100	%		100	%
SeD BioMedical International Inc.	Nevada	March 13, 2017		100	%		100	%
Global Sugar Solutions Inc.	Nevada	November 7, 2019		80	%		80	%

	Pre-Acquisition DSS (Purchaser)			Record Purchase		Post-acquisition DSS (Purchaser)			ImpactBio (Target)			Proforma Adjustment (Note 1)			Proforma Adjustment (Note 2)			Consolidated Financials
ASSETS
Current Assets:
Cash	$	3,802,000				$	3,802,000		$	130,000								$	3,932,000
Accounts Receivable		3,582,000					3,582,000			-									3,582,000
Inventory		1,743,000					1,743,000			-									1,743,000
Prepaid Expense and other current assets		514,000					514,000			23,000									537,000
Total Current Assets		9,641,000			-		9,641,000			153,000			-			-			9,794,000
Property plant and equipment, net		4,925,000					4,925,000			-									4,925,000
Investment		2,154,000					2,154,000			-									2,154,000
Marketable Securities		570,000					570,000			-									570,000
Investment in Target		-			50,000,000		50,000,000			-			(127,000	)		(49,873,000	)		-
Notes Receivable		1,255,000					1,255,000			-									1,255,000
Other assets		54,000					54,000			-									54,000
Right-of -use assets		1,119,000					1,119,000			-									1,119,000
Goodwill		1,769,000					1,769,000			-						78,440,000			80,209,000
Other intangible assets, net		816,000					816,000			-									816,000
Total Assets	$	22,303,000		$	50,000,000	$	72,303,000		$	153,000		$	(127,000	)	$	28,567,000		$	100,896,000

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts Payable	$	1,489,000				$	1,489,000		$	27,000								$	1,516,000
Accrued expenses and deferred revenue		706,000					706,000												706,000
Other current liabilities		390,000					390,000												390,000
Revolving line of credit		800,000					800,000												800,000
Current portion of lease liabilities		369,000					369,000												369,000
Current portion of long-term debt, net		403,000					403,000												403,000
Total Current Liabilities	$	4,157,000		$	-	$	4,157,000		$	26,000		$	-		$	-		$	4,183,000
Long-term debt, net		2,427,000					2,427,000												2,427,000
Long term lease liability		750,000					750,000												750,000
Other long-term liabilities		507,000					507,000												507,000
Deferred tax liability, net		44,000					44,000												44,000
Total Liabilities	$	7,885,000		$	-	$	7,885,000		$	26,000		$	-		$	-		$	7,911,000
																			-
Stockholders’ Equity																			-
Common Stock	$	42,000		$	10,000	$	52,000		$	14,000		$	(14,000	)				$	52,000
Convertible Preferred Stock		-			46,868,000		46,868,000			-									46,868,000
Additional Paid in Capital		119,624,000			3,122,000		122,746,000			1,802,000			(1,802,000	)					122,746,000
Accumulated Deficit		(105,181,000	)				(105,181,000	)		(1,730,000	)		1,730,000						(105,181,000	)
Total Stockholders’ Equity (Deficit)		14,485,000			50,000,000		64,485,000			86,000			(86,000	)		-			64,485,000
Non-Controlling Interests		(67,000	)				(67,000	)		41,000			(41,000	)		28,567,000			28,500,000
Total Stockholders’ Equity (Deficit)	$	14,418,000		$	50,000,000	$	64,418,000		$	127,000		$	(127,000	)	$	28,567,000		$	92,985,000
																			-
Total Liabilities & Stockholders’ Equity	$	22,303,000		$	50,000,000	$	72,303,000		$	153,000		$	(127,000	)	$	28,567,000		$	100,896,000

	DSS (Purchaser)			Impact BioMedical (Target)			Proforma Adjustment (Note 1)		Proforma Adjustment (Note 2)		Consolidated Proforma

Revenue:
Printed products	$	3,949,000		$	-		$	-	$	-	$	3,949,000
Technology sales, services and licensing		479,000			-			-		-		479,000
Direct selling		573,000			-			-		-		573,000
Total revenue	$	5,001,000		$	-		$	-	$	-	$	5,001,000
Costs and expense
Costs of revenue, exclusive of deprecation and amortization	$	3,271,000		$	-		$	-	$	-	$	3,271,000
Selling, general and administrative (including stock based compensation)		2,641,000			125,000			-		-		2,766,000
Deprecation and amortization		360,000			-			-		-		360,000
Impairment of Goodwill		685,000			-			-		-		685,000
Total Operating Expense		6,957,000			125,000			-		-		7,082,000
Operating Loss		(1,956,000	)		(125,000	)		-		-		(2,081,000	)
Other Income (expense)
Interest Income		24,000			-			-		-		24,000
Interest Expense		(39,000	)		-			-		-		(39,000	)
Gain on Marketable Securities		4,000			-			-		-		4,000
Amortization of deferred financing costs a debt discount		-			-			-		-		-
Financial Services		-						-		-		-
Loss from Security Investment by Equity Method		-			-			-		-		-
Loss from Acquisition		-			-			-		-		-
Total Other Expense		(11,000	)		-			-		-		(11,000	)
Income (loss) before income tax		(1,967,000	)		(125,000	)		-		-		(2,092,000	)

Income tax benefit		-			-			-		-		-

Net Loss	$	(1,967,000	)	$	(125,000	)	$	-	$	-	$	(2,092,000	)

Add: loss attributed to noncontrolling interest		67,000			41,000			-		-		108,000

Net Loss Attributable to Common Stockholders	$	(1,900,000	)	$	(84,000	)	$	-	$	-	$	(1,984,000	)

Note 1:	Elimination of impactbio equity	Investment in subsidiary	126,000
		Accumulated Deficit	1,730,000
		Common Stock		14,000
		Additional Paid in Capital		1,802,000
		Non-Controlling Interests		40,000


Note 2:	Record goodwill	Goodwill	78,441,000
		Investment in subsidiary		49,874,000
		Non-Controlling Interests		28,567,000

Note 3:	Document Security Systems, Inc. has engaged an independent valuation firm to value the assets of Impact BioMedical, Inc. and its subsidiaries. For purposes of this proforma, and until the valuation is complete, the purchase price of $50 million is included in goodwill.

Note 4:	Document Security Systems, Inc. is analyzing the accounting treatment of the perpetual convertible preferred shares offered and for the purposes of this proforma has assumed that the transaction will be recorded as an equity transaction. Also, DSS is evaluating the valuation of those shares and the quoted price of the common shares and face value of the perpetual convertible preferred shares have been assumed to be $50 million.

Ended December 31, 2019
	Pre-Acquisition DSS (Purchaser)			Record Purchase		Post-acquisition DSS (Purchaser)			ImpactBio Medical, Inc. (Target)			Proforma Adjustment (Note 1)			Proforma Adjustment (Note 2)			Consolidated Financials
ASSETS
Current Assets:
Cash	$	1,096,000				$	1,096,000		$	109,000								$	1,205,000
Accounts Receivable		4,212,000					4,212,000			-									4,212,000
Inventory		1,708,000					1,708,000			-									1,708,000
Prepaid Expense and other current assets		460,000					460,000			30,000									490,000
Total Current Assets		7,476,000			-		7,476,000			139,000			-			-			7,615,000
Property plant and equipment, net		5,061,000					5,061,000			-									5,061,000
Investment		2,154,000					2,154,000			-									2,154,000
Investment in Target		-			50,000,000		50,000,000			-			(132,000	)		(49,868,000	)		-
Notes Receivable		793,000					793,000			-									793,000
Other assets		50,000					50,000			-									50,000
Right-of -use assets		1,223,000					1,223,000			-									1,223,000
Goodwill		2,454,000					2,454,000			-						78,435,000			80,889,000
Other intangible assets, net		935,000					935,000			-									935,000
Total Assets	$	20,146,000		$	50,000,000	$	70,146,000		$	139,000		$	(132,000	)	$	28,567,000		$	98,720,000

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts Payable	$	1,492,000				$	1,492,000		$	7,000								$	1,499,000
Accrued expenses and deferred revenue		936,000					936,000												936,000
Other current liabilities		390,000					390,000												390,000
Revolving line of credit		500,000					500,000												500,000
Current portion of lease liabilities		397,000					397,000												397,000
Current portion of long-term debt, net		441,000					441,000												441,000
Total Current Liabilities	$	4,156,000		$	-	$	4,156,000		$	7,000		$	-		$	-		$	4,163,000
Long-term debt, net		2,310,000					2,310,000												2,310,000
Long term lease liability		826,000					826,000												826,000
Other long-term liabilities		507,000					507,000												507,000
Deferred tax liability, net		44,000					44,000												44,000
Total Liabilities	$	7,843,000		$	-	$	7,843,000		$	7,000		$	-		$	-		$	7,850,000
																			-
Stockholders’ Equity																			-
Common Stock	$	24,000		$	10,000	$	34,000		$	-		$	-					$	34,000
Convertible Preferred Stock		-			46,868,000		46,868,000			-									46,868,000
Additional Paid in Capital		115,560,000			3,122,000		118,682,000			1,732,000			(1,732,000	)					118,682,000
Accumulated Deficit		(103,281,000	)				(103,281,000	)		(1,646,000	)		1,646,000						(103,281,000	)
Total Stockholders’ Equity (Deficit)		12,303,000			50,000,000		62,303,000			86,000			(86,000	)		-			62,303,000
Non-Controlling Interests		-								46,000			(46,000	)		28,567,000			28,567,000
Total Stockholders’ Equity (Deficit)	$	12,303,000		$	50,000,000	$	62,303,000		$	132,000		$	(132,000	)	$	28,567,000		$	90,870,000
																			-
Total Liabilities & Stockholders’ Equity	$	20,146,000		$	50,000,000	$	70,146,000		$	139,000		$	(132,000	)	$	28,567,000		$	98,720,000

Note 3:	Document Security Systems, Inc. has engaged an independent valuation firm to value the assets of Impact BioMedical, Inc. and its subsidiaries. For purposes of this proforma, and until the valuation is complete, the purchase price of $50 million is included in goodwill.

Note 4:	Document Security Systems, Inc. is analyzing the accounting treatment of the perpetual convertible preferred shares offered and for the purposes of this proforma has assumed that the transaction will be recorded as an equity transaction. Also, DSS is evaluating the valuation of those shares and the quoted price of the common shares and face value of the perpetual convertible preferred shares have been assumed to be $50 million.