DSS(DSS) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS 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 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][10][12] Condensed Consolidated Statements of Operations 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] Condensed Consolidated Statements of Cash Flows 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] Condensed Consolidated Statement of Changes in Stockholders' Equity 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] Notes to Interim Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures for the financial statements, covering accounting policies and specific financial items 1. Nature of Operations 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][21] - The company changed its name from Document Security Systems, Inc. to DSS, Inc. effective September 30, 2021, maintaining the trading symbol 'DSS'[19] 2. Basis of Presentation and Significant Accounting Policies 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] - 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] - 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] - 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] 4. Inventory 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 $180,000 at December 31, 2024, to **$