DSS(US:DSS)2023-11-13 16:00Financial Performance - Total revenue for Q3 2023 was $4,182,000, a decrease of 64.7% compared to $11,862,000 in Q3 2022[11] - Net loss for the nine months ended September 30, 2023, was $53,039,000, compared to a net loss of $39,161,000 for the same period in 2022, representing a 35.4% increase in losses[13] - Operating loss for Q3 2023 was $5,103,000, compared to an operating loss of $14,748,000 in Q3 2022, showing an improvement of 65.4%[11] - The company reported a loss per common share of $0.03 for Q3 2023, compared to a loss of $0.15 in Q3 2022[11] - Total revenue for the nine months ended September 30, 2023, was $23,245,000, a decrease from $35,927,000 in the same period of 2022, representing a decline of approximately 35%[135] - Net loss from operations for the nine months ended September 30, 2023, was $53,039,000, compared to a net loss of $39,161,000 for the same period in 2022, indicating an increase in losses of about 35%[135] Cash and Assets - Cash and cash equivalents decreased to $6,897,000 as of September 30, 2023, down from $19,290,000 at the end of 2022, a decline of 64.2%[9] - Total assets decreased to $196,551,000 as of September 30, 2023, from $248,916,000 at the end of 2022, a reduction of 21.0%[9] - Total stockholders' equity decreased to $127,747,000 as of September 30, 2023, from $156,681,000 at the end of 2022, a decline of 18.5%[9] - Identifiable assets as of September 30, 2023, totaled $196,551,000[134] - Identifiable assets as of September 30, 2023, were $196,551,000, down from $264,880,000 as of September 30, 2022, a reduction of about 26%[135] Operating Activities - The company experienced a net cash used by operating activities of $21,035,000 for the nine months ended September 30, 2023, compared to $23,251,000 in the same period of 2022[13] - The company incurred operating losses and negative cash flows from operating and investing activities over the past two years, raising concerns about its ability to continue as a going concern[45] - The company intends to control operating costs and reduce spending growth rates to return to profitability, while also exploring growth opportunities across its operating segments[47] Investments and Equity - The company reported a significant loss on investments of $30,490,000 for the nine months ended September 30, 2023, compared to a loss of $10,479,000 in the same period of 2022[13] - The fair value of the company's investment in Alset International Limited was approximately $3,726,000 as of September 30, 2023, with an unrealized gain of approximately $407,000 recorded during the nine months ended September 30, 2023[88] - The company impaired 100% of its investment in Vivacitas, amounting to $4,100,000, as of December 31, 2022[97] - The company has an equity position of approximately 16% in Vivacitas following the acquisition of shares for $2,480,000, with the largest shareholder being the Chairman of the company[140] Revenue Recognition and Inventory - The Company recognizes revenue based on when the title passes to the customer or when the service is completed, excluding sales and other taxes from revenue[49] - The Company had total inventory of $3,930,000 as of September 30, 2023, down from $7,721,000 as of December 31, 2022, reflecting a decrease in finished goods and work in process[55] - The allowance for obsolescence related to inventory was approximately $57,000 for the Premier subsidiary as of September 30, 2023, compared to $742,000 for the former SHRG subsidiary as of December 31, 2022[36] Financing and Debt - The Company issued 15,389,995 shares of common stock to Mr. Heng Fai Ambrose Chan for $5,848,000 under his employment agreement[124] - The Company issued a Convertible Promissory Note of $50,000 to HWH International, convertible into 333,333 shares of Common Stock[146] - Scheduled principal payments of long-term debt after September 30, 2023, total approximately $46,952,000 for 2024[116] - The Company recorded a loan loss reserve of approximately $1,179,000 for Q3 2023 and $4,936,000 for the nine months ended September 30, 2023[81] Business Operations - DSS operates nine distinct business lines, including Product Packaging, Biotechnology, and Alternative Energy, indicating a diversified operational strategy[18] - The Biotechnology division is focused on addressing urgent medical needs and developing initiatives to curb airborne infectious diseases[19] - The Digital Transformation division aims to improve marketing and operations for mid-cap brands through custom software development[19] - The Alternative Energy group is pursuing utility-scale solar farms to support regional power grids, reflecting a commitment to sustainable energy solutions[19] Shareholder Actions - Shareholders approved the issuance of up to 21,366,177 shares to Alset International to purchase a Convertible Promissory Note with a principal amount of $8,350,000[125] - The acquisition of 62,122,908 shares of True Partners Capital Holdings was completed in exchange for 17,570,948 shares of DSS stock valued at approximately $0.41 per share[126]