DSS(US:DSS)2023-08-13 16:00Financial Performance - Total revenue for Q2 2023 was $7.233 million, a decrease of 38.5% compared to $11.771 million in Q2 2022[15]. - Net loss for Q2 2023 was $37.923 million, compared to a net loss of $4.652 million in Q2 2022, representing an increase in loss of 715.5%[15]. - The company reported a basic loss per share of $0.27 for Q2 2023, compared to a loss of $0.05 per share in Q2 2022[15]. - The company’s total costs and expenses for Q2 2023 were $13.683 million, a decrease of 40.4% from $22.953 million in Q2 2022[15]. - The net loss from continuing operations for the first half of 2023 was $46.36 million, compared to a net loss of $14.36 million in the same period of 2022, indicating a significant increase in losses[17]. - Direct Marketing Internet Sales decreased significantly to $1,572,000 in Q2 2023 from $6,070,000 in Q2 2022, reflecting a decline of about 74%[134]. - Net loss from continuing operations for the six months ended June 30, 2023, was $46,357,000, compared to a loss of $14,361,000 for the same period in 2022, indicating a deterioration of approximately 224%[133]. Assets and Liabilities - Total current assets decreased to $29.793 million as of June 30, 2023, down 37.9% from $47.994 million as of December 31, 2022[10]. - Total liabilities decreased to $70.898 million as of June 30, 2023, down 25.5% from $95.870 million as of December 31, 2022[11]. - Cash and cash equivalents decreased to $10.033 million as of June 30, 2023, down 48.0% from $19.290 million as of December 31, 2022[10]. - The company’s accumulated deficit increased to $221.529 million as of June 30, 2023, compared to $194.343 million as of December 31, 2022[12]. - The total stockholders' equity decreased to $134.429 million as of June 30, 2023, down 14.2% from $156.681 million as of December 31, 2022[12]. - Cash and cash equivalents at the end of the period were $10.03 million, down from $43.95 million at the end of the previous year, indicating a decrease in liquidity[17]. - Identifiable assets as of June 30, 2023, were $202,744,000, a decrease from $282,948,000 as of June 30, 2022, representing a decline of approximately 28%[133]. Cash Flow and Investments - Cash flows used in operating activities totaled $19.72 million for the first half of 2023, up from $13.95 million in the same period of 2022, reflecting increased operational challenges[17]. - The company reported a net cash provided by investing activities of $13.38 million in the first half of 2023, contrasting with a net cash used of $6.41 million in the same period of 2022, highlighting a positive shift in investment activities[17]. - The company recorded an unrealized loss on its investment in Alset International Limited of approximately $1,945,000 for the six months ended June 30, 2023[136]. - The investment in Alset International Limited was valued at approximately $1,501,000 as of June 30, 2023, down from $3,319,000 as of December 31, 2022, reflecting an unrealized loss of approximately $1,945,000 during the six months ended June 30, 2023[89]. Debt and Financing - The company incurred $5.52 million in payments of long-term debt during the first half of 2023, compared to only $169,000 in the same period of 2022, showing a significant increase in debt repayment[17]. - The Company is negotiating with Pinnacle Bank to extend a note payable of approximately $40.2 million, which is currently in default[48]. - The outstanding principal and interest for Note 2 as of June 30, 2023, approximated $5,544,000, with a reserve of $2,884,000 against the principal and interest outstanding[60]. - The Company has a current portion of long-term debt approximating $83,000 classified under Note 17, with a total outstanding principal and interest of $127,000[77]. - Scheduled principal payments of long-term debt after June 30, 2023, total approximately $47,206,000 for 2023 and $3,801,000 for 2024[117]. Operational Strategy - The company operates nine distinct business lines, including Product Packaging and Biotechnology, indicating a diversified operational strategy[22]. - The company is focused on expanding its presence in the clean energy sector through its Alternative Energy group, which aims to develop utility-scale solar farms[23]. - The Company operates in five segments, including Product Packaging and Biotechnology, focusing on diverse markets such as drug discovery and packaging solutions[131]. - The Company relies on intersegment cooperation, and the results reported may not reflect independent operations of the segments[132]. Reserves and Provisions - As of June 30, 2023, the Company established a reserve for doubtful accounts of approximately $3,390,000, an increase from $29,000 as of December 31, 2022[32]. - The company recorded a loan loss reserve of approximately $3,757,000 for the three and six months ended June 30, 2023, indicating a proactive approach to managing credit risk[82]. - Specific loan reserves included a full reserve of $884,000 for Borrow 4 and an additional reserve of approximately $2,884,000 for borrower 2 as of June 30, 2023[85]. - The total inventory allowance for obsolescence decreased from $742,000 as of December 31, 2022, to $57,000 as of June 30, 2023[58]. Acquisitions and Investments - The acquisition of Impact Oncology PTE Ltd. was completed for a purchase price of $2,480,000, classified as an asset acquisition[138]. - The company completed the acquisition of 62,122,908 shares of True Partners Capital Holdings in exchange for 17,570,948 shares of DSS stock, valued at $0.34 per share[144]. - SHRG invested $1.4 million in Stemtech Corporation, receiving a Convertible Promissory Note and a detachable Warrant to purchase shares of GNTW common stock[98]. - The company sold its subsidiary HWH World, Inc. for gross proceeds of $711,000 on July 1, 2023, which included total assets of $2,004,000 and total liabilities of $1,188,000 as of June 30, 2023[87][88]. Future Outlook - The Company intends to continue as a going concern by controlling operating costs and reducing spending growth rates to return to profitability[49]. - The Company has recognized revenue based on when the title passes to the customer or when the service is completed and accepted, excluding sales and other taxes[51]. - The Company had no unsatisfied performance obligations for contracts with an original expected duration of greater than one year as of June 30, 2023[52]. - No subsequent events requiring financial statement recognition or disclosure were noted through August 14, 2023[146].