UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 001-32146 Commission file number DSS, INC. (Exact name of registrant as specified in its charter) New York 16-1229730 (State or other Jurisdiction of incorporation- or Organization) 275 Wiregrass Pkw ...

PART I – FINANCIAL INFORMATION [ITEM 1 - FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201%20-%20FINANCIAL%20STATEMENTS) This section presents DSS, Inc.'s unaudited condensed consolidated financial statements, covering balance sheets, operations, cash flows, and equity changes, with detailed notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific dates | Metric | June 30, 2025 (Unaudited) | December 31, 2024 (Unaudited) | | :-------------------------------- | :-------------------------- | :-------------------------- | | Total assets | $93,393,000 | $106,453,000 | | Total liabilities | $66,015,000 | $73,737,000 | | Total stockholders' equity | $27,378,000 | $32,716,000 | - Total assets decreased by approximately **$13.06 million**, and total liabilities decreased by approximately **$7.72 million** from December 31, 2024, to June 30, 2025. Total stockholders' equity also decreased by approximately **$5.34 million** during the same period[9](index=9&type=chunk)[10](index=10&type=chunk)[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance over specific periods, detailing revenues, expenses, and net loss | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $5,285,000 | $4,211,000 | $10,237,000 | $8,082,000 | | Total costs and expenses | $8,710,000 | $9,146,000 | $17,388,000 | $17,698,000 | | Operating loss | $(3,425,000) | $(4,935,000) | $(7,151,000) | $(9,616,000) | | Net loss | $(2,607,000) | $(4,954,000) | $(7,902,000) | $(10,063,000) | | Net loss attributable to DSS common stockholders | $(2,152,000) | $(4,683,000) | $(6,929,000) | $(8,754,000) | | Basic Loss per common share | $(0.24) | $(0.66) | $(0.78) | $(1.24) | | Diluted Loss per common share | $(0.24) | $(0.66) | $(0.78) | $(1.24) | - For the three months ended June 30, 2025, total revenue increased by **25.5% YoY**, and net loss decreased by **47.4% YoY**. For the six months ended June 30, 2025, total revenue increased by **26.7% YoY**, and net loss decreased by **21.4% YoY**[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section details the cash inflows and outflows from operating, investing, and financing activities over specific periods | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided (used) by operating activities | $430,000 | $(5,574,000) | | Net cash provided by investing activities | $10,135,000 | $8,776,000 | | Net cash (used) provided by financing activities | $(12,512,000) | $902,000 | | Net increase (decrease) in cash | $(1,947,000) | $4,104,000 | | Cash and cash equivalents at end of period | $9,484,000 | $10,719,000 | - Net cash provided by operating activities significantly improved, moving from a use of **$5.57 million** in 2024 to a provision of **$0.43 million** in 2025. Net cash used in financing activities increased substantially from a provision of **$0.90 million** in 2024 to a use of **$12.51 million** in 2025[16](index=16&type=chunk) [Condensed Consolidated Statement of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Stockholders'%20Equity) This section details changes in the company's equity, including common stock, additional paid-in capital, and accumulated deficit | Metric | December 31, 2024 | June 30, 2025 (Unaudited) | | :-------------------------------- | :---------------- | :------------------------ | | Common Stock Shares | 8,092,518 | 9,092,518 | | Common Stock Amount | $161,000 | $182,000 | | Additional Paid-in Capital | $323,150,000 | $325,488,000 | | Accumulated Deficit | $(303,072,000) | $(310,001,000) | | Total DSS Equity | $20,239,000 | $15,669,000 | | Non-controlling Interest in Subsidiary | $12,477,000 | $11,709,000 | | Total Stockholders' Equity | $32,716,000 | $27,378,000 | - The number of common stock shares increased by **1,000,000** from December 31, 2024, to June 30, 2025, primarily due to the issuance of common stock for bonus compensation. Total stockholders' equity decreased by **$5,338,000**, largely influenced by the net loss incurred during the period[18](index=18&type=chunk) [Notes to Interim Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the financial statements, covering accounting policies and specific financial items [1. Nature of Operations](index=9&type=section&id=1.%20Nature%20of%20Operations) DSS, Inc. operates five distinct global business lines: Product Packaging, Biotechnology, Commercial Lending, Securities and Investment Management, and Direct Marketing - DSS, Inc. operates five distinct business lines: Product Packaging, Biotechnology, Commercial Lending, Securities and Investment Management, and Direct Marketing[20](index=20&type=chunk)[21](index=21&type=chunk) - The company changed its name from Document Security Systems, Inc. to DSS, Inc. effective September 30, 2021, maintaining the trading symbol 'DSS'[19](index=19&type=chunk) [2. Basis of Presentation and Significant Accounting Policies](index=10&type=section&id=2.%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) This note outlines the accounting principles, estimates, and policies used in preparing the financial statements, including consolidation, revenue recognition, and fair value measurements - The Company has incurred operating losses and negative cash flows from operating and investing activities over the past two years, raising substantial doubt about its ability to continue as a going concern within one year[50](index=50&type=chunk) - A prior period immaterial classification error in the December 31, 2024 balance sheet was corrected, increasing current marketable securities by **$2.8 million** and decreasing non-current marketable securities by the same amount, with no effect on previously reported consolidated financial statements other than presentation[27](index=27&type=chunk) - The Company reclassified assets related to AMRE LifeCare, AMRE Winter Haven, and AMRE Shelton from 'Assets held for sale' to 'Investment in real estate, net' as the sale of these properties is no longer expected to finalize within 12 months[40](index=40&type=chunk) - The Company recognizes revenue when title passes or service is completed and accepted, measuring it as the consideration expected in exchange for products or services[56](index=56&type=chunk) [4. Inventory](index=16&type=section&id=4.%20Inventory) Inventory consists of finished goods, work in process, and raw materials, valued at the lower of cost or net realizable value using the FIFO method | Inventory Category | June 30, 2025 | December 31, 2024 | | :----------------- | :------------ | :---------------- | | Finished Goods | $1,719,000 | $1,857,000 | | Work in Process | $100,000 | $345,000 | | Raw Materials | $861,000 | $420,000 | | Total | $2,680,000 | $2,622,000 | | Less allowance for obsolescence | $(137,000) | $(180,000) | | Net Inventory | $2,543,000 | $2,442,000 | - The allowance for obsolescence decreased from **$180,000** at December 31, 2024, to **$

Core Viewpoint - DSS, Inc. announced a definitive merger agreement with Dr. Ashleys Limited, marking a strategic move to enhance shareholder value and advance its subsidiaries toward public listings [1][2][6]. Strategic Rationale - The merger combines Dr. Ashleys' pharmaceutical capabilities with Impact BioMedical's innovative platform, aiming to accelerate the development of new therapies [3]. Transaction Overview - The merger will involve a reverse merger where Impact will be the surviving entity, and Dr. Ashleys will become a wholly-owned subsidiary of the newly formed public entity, referred to as PubCo [8]. Ownership Structure - The merger agreement includes actions to simplify ownership, such as converting Impact's Series A Preferred Stock and exercising DSS's debt-to-equity rights, resulting in DSS holding 4.80% of the combined company's total outstanding shares at closing [4][5]. Management and Governance - Post-merger, the management team of Dr. Ashleys will operate PubCo, and a new Board of Directors will be assembled by Dr. Ashleys [8]. Approval Process - The transaction requires approval from Impact's shareholders and must satisfy regulatory conditions, including SEC approval for the registration statement [9]. Company Background - DSS, Inc. operates across multiple sectors, including health and wellness, packaging, and blockchain, focusing on developing high-growth subsidiaries and unlocking value through strategic public listings [11].

Core Insights - DSS, Inc. reported significant financial improvements in Q1 2025, indicating progress in its financial repositioning strategy and setting a strong foundation for future corporate execution [1][2] Financial Performance - Total revenues increased by 28% year-over-year, driven by a 30% rise in printed product sales and nearly doubling rental income from the real estate segment, which grew from $400,000 to $714,000 [5] - The company completed the sale of its Plano, TX facility for $9.5 million, contributing to $12.88 million in cash from investing activities during the quarter [5] - DSS reduced over $8 million in total debt, demonstrating a commitment to balance sheet optimization [5] - The company raised $1.5 million in new equity capital through its partner company Impact BioMedical during Q1 [5] - Net cash used in operations improved from $2.15 million in Q1 2024 to $1.64 million in Q1 2025, highlighting early operational efficiencies [5] Strategic Focus - The company is focused on streamlining operations and financial discipline, with plans to showcase measurable results from development, operations, and M&A activities as the year progresses [2] - DSS aims to identify high-potential business units and allocate capital effectively to drive long-term value [2]

Financial Performance - Total revenue for Q1 2025 was $4,954,000, a 28% increase from $3,871,000 in Q1 2024[13] - Operating loss for Q1 2025 was $3,726,000, an improvement from a loss of $4,680,000 in Q1 2024[13] - Net loss attributable to common stockholders in Q1 2025 was $4,777,000, compared to $4,072,000 in Q1 2024[13] - Gross profit for Q1 2025 was a loss of $233,000, compared to a loss of $1,119,000 in Q1 2024, indicating an improvement in profitability[125] - The Biotechnology segment generated $15,000 in revenue in Q1 2025, up from $2,000 in Q1 2024, reflecting a significant growth in this area[126] - The Securities segment reported rental income of $699,000 in Q1 2025, an increase from $384,000 in Q1 2024, showing strong performance in this segment[126] - The Commercial Lending segment had net investment income of $21,000 in Q1 2025, down from $102,000 in Q1 2024, indicating a decline in this area[126] - The Company recorded an unrealized loss of approximately $241,000 on its investment in Alset International Limited for Q1 2025, compared to $916,000 in Q1 2024[127] Cash and Assets - Cash and cash equivalents decreased to $10,832,000 as of March 31, 2025, down from $11,431,000 at the end of 2024[10] - Total assets decreased to $92,435,000 as of March 31, 2025, from $106,453,000 at the end of 2024[10] - Total liabilities decreased to $62,614,000 as of March 31, 2025, from $73,737,000 at the end of 2024[10] - As of March 31, 2025, the Company reported cash and cash equivalents of approximately $10.8 million, with an additional $6.5 million in marketable securities available for generating operating cash[52][53] - The Company has identified real estate assets held for sale totaling approximately $35.4 million, including AMRE LifeCare ($24.7 million), AMRE Shelton ($6.3 million), and AMRE Winter Haven ($4.4 million)[42][53] Equity and Shares - As of March 31, 2025, the total equity of DSS, Inc. was $17,863,000, down from $59,855,000 on December 31, 2024, reflecting a net loss of $4,777,000 for the quarter[18] - The total number of common shares increased from 7,067,772 on December 31, 2023, to 9,092,518 by March 31, 2025, reflecting ongoing capital raising efforts[18] - The number of shares used in computing loss per common share increased to 8,685,925 in Q1 2025 from 7,066,772 in Q1 2024[13] Investments and Losses - The company reported a loss on investments of $930,000 in Q1 2025, compared to a loss of $189,000 in Q1 2024[13] - The Company recorded specific loan reserves totaling approximately $8,882,000 for identified credit weaknesses across multiple borrowers as of December 31, 2024[88] - The Company has a general contingent portfolio reserve of $196,000 as of March 31, 2025, reflecting inherent risks in the loan portfolio[86] - The Company recognized an allowance for inventory obsolescence of approximately $159,000 as of March 31, 2025, compared to $180,000 as of December 31, 2024[40][63] Business Operations - The company operates five distinct business lines, including Product Packaging and Biotechnology, with a focus on expanding its market presence globally[21] - The Biotechnology division is targeting unmet medical needs and developing initiatives to curb airborne infectious diseases[22] - The Commercial Lending division aims to acquire equity positions in undervalued financial institutions across multiple regions, including Southeast Asia and South Korea[22] Debt and Liabilities - The outstanding principal and interest on a convertible promissory note with Puradigm, Inc. approximated $5.5 million as of March 31, 2025, with a reserve of the same amount against the principal and interest outstanding[64] - The Company has a liability of $0 recorded in relation to the Equivir License, which includes a 5.5% royalty on net sales and a reimbursement of 50% of development costs up to $1,250,000[107] - The total scheduled principal payments of long-term debt amount to $49,283,000, with $2,883,000 due in 2025[103] Regulatory and Accounting Changes - The Company adopted ASU 2023-09, which enhances guidance on income tax accounting, effective for the fiscal year beginning January 1, 2025, with no immediate material impact on its consolidated financial statements[51] Miscellaneous - The Company completed a private placement on December 10, 2024, selling 820,597 shares for approximately $803,000[110] - On February 25, 2025, the Company acquired assets from DSS Pure Air, Inc. for $1,150,000, to be paid with 545,024 shares of common stock[120] - The Company recorded stock-based compensation expenses of approximately $2,000 for the three months ended March 31, 2025[122]

Core Insights - Sentinel Brokers Company, Inc. has received approval from FINRA to act as an underwriter and selling group member for corporate securities offerings, marking a significant regulatory milestone for the firm [1][2][3] - This approval enhances Sentinel's capabilities in capital markets, allowing participation in IPOs, follow-on offerings, and various corporate financing transactions, thereby positioning the company to better serve clients seeking capital [2][3] - The CEO of Sentinel highlighted that this advancement expands the firm's scope beyond fixed income and equity market making, enabling more effective support for corporate issuers and institutional clients throughout the capital formation process [3] Company Overview - Established in 1996, Sentinel has built a reputation for excellence in institutional fixed income trading and has recently expanded its offerings to include equity market-making [3][6] - As a subsidiary of DSS, Inc., Sentinel benefits from the strategic support and operational scale of a diversified multinational company operating across various business divisions [4][7] - The company specializes in institutional bond brokerage, equity market making, IPOs, follow-on offerings, and other corporate financing transactions, emphasizing a client-focused service approach [6]

IPO and Market Position - Impact BioMedical's IPO was priced at $3.00 per share with an initial offering of 1,500,000 shares, marking a significant milestone for DSS, Inc. and enhancing shareholder value[21] - Impact BioMedical's IPO has significantly enhanced DSS, Inc.'s market visibility and investor confidence, reflecting a robust market appetite for innovative biotech companies[46] - Impact BioMedical holds nine issued patents and over forty pending patents worldwide, with expiration dates for US patents ranging from 2029 to 2040, highlighting the company's commitment to innovation[59] Financial Performance - Total revenue for the year ended December 31, 2024, decreased by 26% to approximately $19.1 million compared to $25.9 million in 2023[142] - Operating loss improved to $(42,596,000) in 2024 compared to $(50,778,000) in 2023, a reduction of about 16.3%[213] - Net loss attributable to common stockholders decreased to $(46,896,000) in 2024 from $(60,627,000) in 2023, reflecting a 22.7% improvement[213] - Total current assets decreased to $63,817,000 in 2024 from $74,634,000 in 2023, a decline of approximately 14.6%[208] - Total liabilities increased to $73,737,000 in 2024 from $55,610,000 in 2023, an increase of about 32.6%[209] - Total stockholders' equity decreased to $32,716,000 in 2024 from $83,214,000 in 2023, a decline of about 60.7%[210] Cost Management and Efficiency - DSS aims to reduce costs by 15-20% in the upcoming fiscal year to improve profitability and strengthen its financial position[32] - The strategic focus includes optimizing operational efficiencies and realigning resources for sustainable long-term growth[26] - Total costs and expenses decreased by 20% in 2024, amounting to $61,693,000 compared to $76,711,000 in 2023[144] Research and Development - The Laetose™ technology platform received a U.S. patent, demonstrating potential in reducing caloric intake and glycemic index in foods, with the patent expiring in 2037[24] - The biotechnology segment is focused on developing solutions for urgent medical needs, including a breakthrough alternative sugar believed to lower glycemic index by 30% compared to regular sugar[56] - The company is focusing on advancing R&D capabilities in biomedical technologies and sustainable packaging to maintain its leadership in innovation[32] Management and Governance - DSS has appointed Jason Grady as Interim CEO, bringing over 25 years of experience in executive leadership and operations management[23] - DSS Wealth Management announced the election of three new independent directors to enhance its investment operations and risk management[22] - As of March 24, 2025, directors and principal stockholders own approximately 57% of the company's outstanding shares, potentially controlling significant corporate decisions[107] Market Strategy and Growth - DSS is committed to exploring high-growth markets to create scalable and recurring revenue streams across multiple sectors[32] - The company is implementing metrics-driven accountability systems across all business units to ensure consistent execution of high-priority opportunities[32] - The company plans to execute targeted strategies to improve operational efficiencies and attract new assets under management in the DSS AmericaFirst Funds[50] Risks and Challenges - The company has identified risks that could materially affect its financial condition, including potential losses from customer dependency and intellectual property claims[77][84] - The company faces potential government regulations that could negatively impact patent monetization efforts and revenue[72] - The company’s ability to compete effectively may be hindered by established competitors with greater resources and market presence[88] - The company may need to raise additional funds for growth and acquisitions, which could lead to dilution of existing shareholders' ownership[108] Cash Flow and Investments - Net cash used by operating activities was approximately $9.1 million in 2024, a decrease from $19.2 million in 2023[165] - Net cash provided by investing activities was approximately $8.8 million in 2024, slightly down from $8.9 million in 2023[166] - The company had cash of approximately $11.4 million as of December 31, 2024, sufficient to meet cash requirements for at least the next 12 months[164] Dividends and Shareholder Returns - The company does not intend to declare or pay cash dividends in the foreseeable future, opting to retain earnings for business investments[95] - The company has not paid dividends in 2023 or 2024, with the board of directors retaining discretion over future dividend payments[123][124]

Core Insights - DSS, Inc. has sold its Celios® air purification asset to Impact BioMedical Inc. for approximately $1.15 million in an all-equity transaction, aligning with its strategy to optimize its portfolio and focus on core growth areas [1][3] - The Celios® technology features a patented three-stage filtration system that removes ultrafine particles as small as 10 nanometers, enhancing indoor air quality and reducing airborne health risks [2][5] - The CEO of DSS, Inc. stated that the sale is part of a strategic effort to streamline holdings and concentrate on key business objectives, allowing Impact BioMedical to leverage the technology effectively [3] Company Overview - DSS, Inc. operates across multiple high-growth sectors, focusing on creating, acquiring, and investing in innovative companies that provide sustainable value for shareholders [4] - Celios® is dedicated to improving indoor air quality through advanced filtration solutions, designed for efficiency and portability, meeting high standards of cleanliness and safety [5]

Core Insights - DSS, Inc. has appointed a new Interim Chief Executive Officer, Jason Grady, who brings over 25 years of leadership experience across various sectors [2] - The company is focused on optimizing operational efficiencies and positioning itself for sustainable long-term growth [3] Financial Performance - For the nine months ended September 30, 2024, DSS reported a decrease in operating loss by approximately $1.3 million (8%) compared to the same period in 2023 [6] - The net loss for the same period declined by $17.3 million (52%) year-over-year, with a reduction of $1.0 million (15%) for the three-month period [6] - Cash flow from operations improved significantly, increasing by $11.8 million (56%) for the nine months ended September 30, 2024 [6] - The net cash position strengthened from $6.9 million to $11.6 million [6] Strategic Initiatives - The company is focusing on the strategic expansion of promising business units, such as Premier Packaging, to fuel continued growth [6] - DSS is committed to identifying and investing in high-growth markets to create scalable and recurring revenue streams [6] - A comprehensive review of all business units is underway to identify underperforming segments for restructuring or divestment [6] - Targeted cost reduction aims to achieve a 15-20% decrease in costs in the upcoming fiscal year [6] Innovation and Partnerships - DSS plans to leverage research and development capabilities to drive solutions in emerging sectors like biomedical technologies and sustainable packaging [10] - The company is actively forging alliances with key industry players to accelerate the market introduction of innovative products [10] Shareholder Engagement - DSS is exploring initiatives designed to directly reward shareholders for their continued trust and support [10] - The company commits to providing regular, transparent updates on progress and strategic objectives to keep shareholders informed [10]

Revenue Performance - Total revenue for the three months ended September 30, 2024, increased by 34% to $5,599,000 compared to $4,182,000 for the same period in 2023[152] - Revenue from Printed Products rose by approximately 46% to $4,828,000, driven by new customer orders[152] - Rental income surged by 110% to $496,000, attributed to new tenants at the AMRE LifeCare Pittsburg facility[152] - For the nine months ended September 30, 2024, total revenue decreased by 28% to $13,681,000 compared to $18,920,000 for the same period in 2023[153] - Revenue from Printed Products for the nine months decreased by 12% due to delayed shipments and reduced orders from existing customers[153] - Rental income for the nine months fell by 61% as tenants at AMRE LifeCare struggled to make payments[153] - Biotechnology revenue surged by 150% to $10,000 for the three months ended September 30, 2024, compared to $4,000 in the same period last year[155] - Commission revenue reached $230,000, a significant increase from zero in the previous year[152] - Direct marketing revenue dropped to zero, reflecting a strategic shift from maintaining a sales force to licensing products[152] Costs and Expenses - Total costs and expenses increased by 11% to $10,270,000 for the three months ended September 30, 2024, compared to $9,285,000 for the same period in 2023[155] - Other operating expenses increased by 1123% to $783,000 for the three months ended September 30, 2024, compared to $64,000 in the same period last year[155] - Professional fees decreased by 32% to $2,206,000 for the nine months ended September 30, 2024, compared to $3,248,000 for the same period in 2023[158] Investment and Cash Flow - Net investment income decreased by 58% to $45,000 due to several loans going on non-accrual[152] - Cash used by operating activities was $9,181,000 for the nine months ended September 30, 2024, down from $21,035,000 for the same period in 2023[173] - Net cash provided by investing activities was $9,916,000 for the nine months ended September 30, 2024, compared to $11,885,000 for the same period in 2023[174] - Interest income decreased by 96% to $28,000 for the three months ended September 30, 2024, compared to $682,000 for the same period in 2023[165] - The company had cash of approximately $11.6 million as of September 30, 2024, sufficient to meet cash requirements for at least the next 12 months[172] Financial Performance - Net loss for the nine months ended September 30, 2024, was $15,762,000, a 52% improvement from a net loss of $33,061,000 in the same period in 2023[170] Internal Controls and Compliance - As of September 30, 2024, the company's disclosure controls and procedures were not effective, as disclosed material weaknesses from the Annual Report on Form 10-K for the year ended December 31, 2023 remained[177] - The company has a remediation plan in place to address material weaknesses, with ongoing implementation steps that may take time to fully integrate and confirm effectiveness[179] - There were no changes in the company's internal control over financial reporting during the quarter ended September 30, 2024, that materially affected its internal controls[180] Corporate Changes - The company deconsolidated Sharing Services Global Corporation (SHRG) effective May 1, 2023, resulting in a significant impact on the Direct Marketing segment[139] Research and Development - Research and development costs decreased by 93% to $50,000 for the nine months ended September 30, 2024, compared to $684,000 for the same period in 2023[161]