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DSS(DSS) - 2024 Q3 - Quarterly Report
DSSDSS(DSS)2024-11-13 22:16

Revenue Performance - Total revenue for the three months ended September 30, 2024, increased by 34% to 5,599,000comparedto5,599,000 compared to 4,182,000 for the same period in 2023[152] - Revenue from Printed Products rose by approximately 46% to 4,828,000,drivenbynewcustomerorders[152]−Rentalincomesurgedby1104,828,000, 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 13,681,000comparedto13,681,000 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 10,000forthethreemonthsendedSeptember30,2024,comparedto10,000 for the three months ended September 30, 2024, compared to 4,000 in the same period last year[155] - Commission revenue reached 230,000,asignificantincreasefromzerointhepreviousyear[152]−Directmarketingrevenuedroppedtozero,reflectingastrategicshiftfrommaintainingasalesforcetolicensingproducts[152]CostsandExpenses−Totalcostsandexpensesincreasedby11230,000, 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 9,285,000forthesameperiodin2023[155]−Otheroperatingexpensesincreasedby11239,285,000 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 64,000inthesameperiodlastyear[155]−Professionalfeesdecreasedby3264,000 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 3,248,000forthesameperiodin2023[158]InvestmentandCashFlow−Netinvestmentincomedecreasedby583,248,000 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 9,181,000fortheninemonthsendedSeptember30,2024,downfrom9,181,000 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 9,916,000fortheninemonthsendedSeptember30,2024,comparedto9,916,000 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 28,000forthethreemonthsendedSeptember30,2024,comparedto28,000 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 11.6millionasofSeptember30,2024,sufficienttomeetcashrequirementsforatleastthenext12months[172]FinancialPerformance−NetlossfortheninemonthsendedSeptember30,2024,was11.6 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 33,061,000inthesameperiodin2023[170]InternalControlsandCompliance−AsofSeptember30,2024,thecompany′sdisclosurecontrolsandprocedureswerenoteffective,asdisclosedmaterialweaknessesfromtheAnnualReportonForm10−KfortheyearendedDecember31,2023remained[177]−Thecompanyhasaremediationplaninplacetoaddressmaterialweaknesses,withongoingimplementationstepsthatmaytaketimetofullyintegrateandconfirmeffectiveness[179]−Therewerenochangesinthecompany′sinternalcontroloverfinancialreportingduringthequarterendedSeptember30,2024,thatmateriallyaffecteditsinternalcontrols[180]CorporateChanges−ThecompanydeconsolidatedSharingServicesGlobalCorporation(SHRG)effectiveMay1,2023,resultinginasignificantimpactontheDirectMarketingsegment[139]ResearchandDevelopment−Researchanddevelopmentcostsdecreasedby9333,061,000 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]