DSS(US:DSS)2023-05-14 16:00Financial Performance - Total revenue for Q1 2023 was $11.926 million, a decrease of 3% from $12.304 million in Q1 2022[14] - Operating loss for Q1 2023 was $5.580 million, improved from a loss of $7.319 million in Q1 2022[14] - Net loss attributable to common stockholders for Q1 2023 was $8.035 million, compared to a net loss of $8.048 million in Q1 2022[14] - The company reported a basic loss per common share of $0.06 for Q1 2023, an improvement from a loss of $0.10 in Q1 2022[14] - The company reported a net loss of $8,048,000 for the quarter ending March 31, 2022, compared to a net loss of $8,951,000 for the same period in 2023, indicating a slight improvement in performance year-over-year[18] - Net income from continuing operations for Q1 2023 was a loss of $8,633,000 compared to a loss of $8,951,000 in Q1 2022, showing a slight improvement[131] Cash and Assets - Cash and cash equivalents decreased to $13.732 million as of March 31, 2023, down from $19.290 million at the end of 2022[9] - Total assets decreased to $226.750 million as of March 31, 2023, from $248.916 million at the end of 2022[9] - Total stockholders' equity decreased to $148.048 million as of March 31, 2023, from $156.681 million at the end of 2022[11] - Cash used in operating activities for Q1 2023 was $14.199 million, compared to $6.070 million in Q1 2022[16] - Cash provided by investing activities was $11.537 million in Q1 2023, contrasting with cash used of $5.359 million in Q1 2022[16] - The Company has approximately $13.7 million in cash and anticipates receipts of principal and interest on its notes receivable of approximately $12 million through March 31, 2024[54] - The Company has marketable securities valued at $13,391,000 as of March 31, 2023, down from $27,307,000 as of December 31, 2022, representing a decrease of approximately 50.8%[78] Investments and Acquisitions - The company made a significant investment of $40,000,200 in American Pacific Bancorp, acquiring 6,666,700 shares at $6.00 per share, resulting in majority ownership[23] - DSS increased its ownership in Sharing Services Global Corporation from approximately 47% to 58% after purchasing 50,000,000 shares at $0.06 per share[25] - The company finalized a transaction to acquire 62,122,908 shares of True Partners Capital Holdings Limited in exchange for 17,570,948 shares of DSS stock, valued at $0.34 per share[30] - The Company acquired a 30.75% equity interest in MojiLife, LLC for $1,537,000, which was fully impaired in March 2022 due to non-recoverability[101] - The Company increased its equity position in Sentinel Brokers Company, Inc. to 75% after investing a total of $1,050,000, with the acquisition meeting the definition of a business under Topic 805[102] Business Segments - DSS, Inc. operates nine distinct business lines, including Product Packaging, Biotechnology, and Digital Transformation, each at different stages of development and growth[21] - The Biotechnology division is focused on investing in companies addressing urgent medical needs, including drug discovery and treatment of various diseases[22] - The Digital Transformation division aims to enhance marketing and operational processes for mid-cap brands through custom software development[22] - The Securities segment aims to establish digital asset exchanges for securities and cryptocurrencies using blockchain technology[130] Liabilities and Debt - The company’s current liabilities decreased to $64.606 million as of March 31, 2023, from $73.689 million at the end of 2022[10] - The Company intends to negotiate with Pinnacle Bank to extend its note payable of approximately $40.2 million through November 2024[54] - The outstanding principal on the Bank of America loan was $3,290,000 as of March 31, 2023, down from $3,406,000 as of December 31, 2022, with an interest rate of 4.63%[109] - The outstanding principal and interest of the LifeCare agreement was approximately $40,486,000 as of March 31, 2023[114] Revenue Recognition and Accounting - The Company recognizes revenue based on when the title passes to the customer or when the service is completed and accepted[58] - The Company has no unsatisfied performance obligations for contracts with an original expected duration of greater than one year as of March 31, 2023[59] - The Company recorded stock-based compensation expense of approximately $4,000 for the three months ended March 31, 2022[127] Inventory and Allowances - Inventory as of March 31, 2023, totaled $7,319,000, a decrease from $8,463,000 as of December 31, 2022, with an allowance for obsolescence of $57,000[64] - The Company recorded an allowance for obsolescence of approximately $742,000 associated with inventory at its SHRG subsidiary as of December 31, 2022[43] - As of March 31, 2023, the Company established a reserve for doubtful accounts of approximately $29,000, unchanged from December 31, 2022[36] Future Outlook - The Company plans to continue growth among its operating segments while tightly controlling operating costs to return to profitability[55] - Future minimum lease payments total $10,616,000, with a present value of remaining lease payments at $8,573,000 as of March 31, 2023[120]