DSS(DSS) - 2025 Q1 - Quarterly Report

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]