DSS(DSS) - 2024 Q3 - Quarterly Report

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]