DSS, Inc. (DSS) flags going concern risk amid larger 2026 losses
Rhea-AI Filing Summary
DSS, Inc. reports weaker results for the quarter and six months ended June 30, 2026. Total revenue for the quarter was $3.6 million versus $5.3 million a year earlier, and $7.9 million for the six-month period versus $10.2 million. The company recorded an operating loss of $3.8 million for the quarter and $9.3 million year-to-date, compared with $3.4 million and $7.2 million in the prior-year periods.
Net loss attributable to common stockholders widened to $4.8 million for the quarter and $10.4 million for the six months, with basic and diluted loss per share of $0.48 and $1.06, respectively. Cash and cash equivalents declined to $4.1 million, marketable securities to $2.8 million, and current assets to $9.4 million against current liabilities of $49.2 million, resulting in a reported negative working capital position of about $39.9 million. Management discloses that these conditions raise substantial doubt about the company’s ability to continue as a going concern and outlines plans relying on asset sales, additional financing, and cost reductions.
The balance sheet reflects significant debt, including approximately $38.5 million under a LifeCare real estate loan that is in default and past due. DSS also reports large credit loss reserves on notes receivable and continues to engage in related-party financing and investment transactions, including an equity method investment in True Partners Capital Holding Limited and convertible financing arrangements with Alset-affiliated entities. As of August 5, 2026, there were 10,042,518 common shares outstanding.
Positive
- None.
Negative
- Revenue declined more than 20% year over year for both the quarter ($3.6 million vs. $5.3 million) and six months ($7.9 million vs. $10.2 million), while operating losses widened.
- The company reports a net loss attributable to common stockholders of $10.4 million for the first six months of 2026, up from $6.9 million in the prior-year period.
- DSS has negative working capital of about $39.9 million as of June 30, 2026, with $9.4 million in current assets versus $49.2 million in current liabilities.
- Management states that these conditions raise substantial doubt about the company’s ability to continue as a going concern within one year of issuance of the financial statements.
- The LifeCare real estate loan, with outstanding principal and interest of approximately $38.5 million, is in default and past due following a demand for final payment.
- Marketable securities decreased from $9.2 million to $2.8 million over six months, and the company maintains a sizeable loan loss reserve of about $7.5 million on its credit portfolio.
Filing Explained
The quarter adds a potentially dilutive $2,450,000 note and warrant, while the True Partners conversion is complete and the Impact merger remains pending.
As an unaudited quarterly report, this Form 10-Q updates DSS’s interim financial information and reports a structural financing change: a
The note is convertible at the holder’s option at
Separately, DSS completed the April 29, 2026 conversion of a True Partners convertible bond into 190,683,500 True Partners shares; the filing reports DSS owned 272,520,408 shares, or approximately
The proposed Impact BioMedical–Dr Ashleys transaction remained incomplete as of the filing: regulatory approval was pending, and the company said closing was expected during the fourth quarter of 2026.
Key Figures
Key Terms
going concern financial
equity method investment financial
Level 3 financial asset financial
convertible promissory note financial
most favored nation provision financial
allowance for credit losses financial
Earnings Snapshot
FAQ
How did DSS (DSS) perform financially in the quarter ended June 30, 2026?
What is DSS (DSS)’s net loss and EPS for the first six months of 2026?
What liquidity position and working capital does DSS (DSS) report as of June 30, 2026?
Does DSS (DSS) disclose a going concern issue in its June 30, 2026 report?
What major debt obligations does DSS (DSS) highlight, and are any in default?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
ACT OF 1934
For
the quarterly period ended
ACT OF 1934
Commission file number
| (Exact name of registrant as specified in its charter) |
(State or other Jurisdiction of incorporation- or Organization) |
(IRS Employer Identification No.) |
(Address of principal executive offices)
(Registrant’s telephone number, including area code)
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | Smaller
reporting company | |
| Emerging
growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Ticker symbol(s) | Name of each exchange on which registered | ||
| The
|
As of August 5, 2026 there were shares of the registrant’s common stock, $ par value, outstanding.
DSS, INC.
FORM 10-Q
TABLE OF CONTENTS
| PART I | FINANCIAL INFORMATION | |
| Item 1 | ||
| Condensed Consolidated Balance Sheets as of June 30, 2026 (unaudited) and December 31, 2025 (unaudited) | 3 | |
| Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2026 and 2025 (unaudited) | 4 | |
| Condensed Consolidated Statement of Changes in Stockholders’ Equity for the three and six months ended June 30, 2026 and 2025 (unaudited) | 5 | |
| Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025 (unaudited) | 6 | |
| Notes to Interim Condensed Consolidated Financial Statements (unaudited) | 7 | |
| Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 29 |
| Item 4 | Controls and Procedures | 34 |
| PART II | OTHER INFORMATION | 35 |
| Item 1 | Legal Proceedings | 35 |
| Item 1A | Risk Factors | 35 |
| Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 35 |
| Item 3 | Defaults upon Senior Securities | 35 |
| Item 4 | Mine Safety Disclosures | 35 |
| Item 5 | Other Information | 35 |
| Item 6 | Exhibits | 35 |
| 2 |
PART I – FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
DSS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited)
As of June 30, 2026 | As of December 31, 2025 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable, net | ||||||||
| Inventory | ||||||||
| Investments in trading securities | ||||||||
| Current portion of notes receivable, net | ||||||||
| Current portion of notes receivable - related party | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Investment in real estate, net | ||||||||
| Investment, cost method | ||||||||
| Investment, equity method | ||||||||
| Investment in equity securities | ||||||||
| Other assets | ||||||||
| Right-of-use assets | ||||||||
| Goodwill | ||||||||
| Other intangible assets, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and deferred revenue | ||||||||
| Other current liabilities | ||||||||
| Accrued interest on long-term debt | ||||||||
| Current portion of lease liability | ||||||||
| Current portion of long-term debt, net | ||||||||
| Convertible note payable - related party, net | ||||||||
| Current portion of long-term debt - related party, net | ||||||||
| Total current liabilities | ||||||||
| Long-term debt, net | ||||||||
| Long term lease liability | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 13) | ||||||||
| Stockholders’ equity (deficit) | ||||||||
| Preferred stock, $ par value; shares authorized, shares issued and outstanding on June 30, 2026 ( on December 31, 2025) | ||||||||
| Common stock, $ par value; shares authorized, shares issued and outstanding on June 30, 2026 ( on December 31, 2025) | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity of the Company | ( | ) | ( | ) | ||||
| Non-controlling interest in subsidiaries | ||||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
| 3 |
DSS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue: | ||||||||||||||||
| Printed products | $ | $ | $ | $ | ||||||||||||
| Rental | ||||||||||||||||
| Commercial lending | ||||||||||||||||
| Commission | ||||||||||||||||
| Biotechnology | ||||||||||||||||
| Total revenue | ||||||||||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of revenue | ||||||||||||||||
| Selling, general and administrative (including stock-based compensation) | ||||||||||||||||
| Total costs and expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest income on note receivable, related party | ||||||||||||||||
| Dividend income | ||||||||||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss on equity method investment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| (Loss) gain on investments | ( | ) | ( | ) | ||||||||||||
| Impairment of intangible assets | ( | ) | ( | ) | ||||||||||||
| Loss on sale of real estate | ( | ) | ( | ) | ||||||||||||
| Loss from continuing operations before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax benefit | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss from operations attributed to noncontrolling interest | ||||||||||||||||
| Net loss attributable to DSS common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss per common share attributable to common stock holders | ||||||||||||||||
| Basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Shares used in computing loss per common share: | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
| 4 |
DSS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(unaudited)
| Common Stock | Preferred Stock | Additional Paid- | Accumulated | Total DSS | Non- controlling Interest in | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | in Capital | Deficit | Equity | Subsidiary | Total | ||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||
| - | ||||||||||||||||||||||||||||||||||||
| Stock-based payments for professional services | - | - | ||||||||||||||||||||||||||||||||||
| Stock-based payments | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock, net of expenses - Impact BioMedical, Inc. | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock for bonus | - | |||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||
| Balance, December 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Issuance of common stock, net of expenses | - | |||||||||||||||||||||||||||||||||||
| Fair value adjustment related to convertible bond received from related party | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of warrants in connection with convertible promissory note | - | - | ||||||||||||||||||||||||||||||||||
| Stock-based payments - Impact BioMedical, Inc. | - | - | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
| 5 |
DSS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30,
(unaudited)
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Issuance of common stock for bonus | ||||||||
| Stock-based payments for professional services rendered | ||||||||
| Stock-based payments to employees and directors | ||||||||
| Loss on equity method investment | ||||||||
| Unrealized loss on investments | ||||||||
| Change in ROU assets | ||||||||
| (Loss) gain on allowance for obsolescence of inventory | ( | ) | ||||||
| Provision for loan loss recoveries | ||||||||
| Impairment of intangible asset | ||||||||
| Amortization of debt discount | ||||||||
| Loss on sale of real estate | ||||||||
| Decrease (increase) in assets: | ||||||||
| Accounts receivable | ||||||||
| Inventory | ( | ) | ||||||
| Assets held for sale | ( | ) | ||||||
| Prepaid expenses and other current assets | ||||||||
| Investments in trading securities | ( | ) | ||||||
| Other assets | ( | ) | ||||||
| Increase (decrease) in liabilities: | ||||||||
| Accounts payable | ( | ) | ||||||
| Accrued expenses | ( | ) | ||||||
| ROU liabilities | ( | ) | ( | ) | ||||
| Accrued interest on notes payable | ||||||||
| Other liabilities | ||||||||
| Net cash (used) provided by operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property, plant and equipment | ( | ) | ( | ) | ||||
| Purchase of convertible bond - related party | ( | ) | ||||||
| Sale of real estate | ||||||||
| Sale of investment, related party | ||||||||
| Issuance of new notes receivable, net origination fees | ( | ) | ||||||
| Payments received on notes receivable | ||||||||
| Net cash (used) provided by investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Payments of long-term debt | ( | ) | ( | ) | ||||
| Borrowings of long-term debt, net | ||||||||
| Payment on margin loans | ( | ) | ( | ) | ||||
| Borrowings of convertible note payable - related party | ||||||||
| Issuances of common stock, net of issuance costs | ||||||||
| Net cash provided (used) by financing activities | ( | ) | ||||||
| Net decrease in cash | ( | ) | ( | ) | ||||
| Cash, cash equivalents and restricted cash at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
| 6 |
DSS, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
1. Nature of Operations
The Company, incorporated in the state of New York in May 1984 has conducted business in the name of DSS, Inc. On September 16, 2021, the board of directors approved an agreement and plan of merger with a wholly owned subsidiary, DSS, Inc. (a New York corporation, incorporated in August 2020), for the sole purpose of effecting a name change from Document Security Systems, Inc. to DSS, Inc. This change became effective on September 30, 2021. DSS, Inc. maintained the same trading symbol “DSS”.
DSS, Inc. (together with its consolidated subsidiaries, referred to herein as “DSS,” “we,” “us,” “our” or the “Company”) currently operates four (4) distinct business lines with operations and locations around the globe. These business lines are: (1) Product Packaging, (2) Biotechnology, (3) Commercial Lending, (4) Securities and Investment Management.
Our divisions, their business lines, subsidiaries, and operating territories: (1) Our Product Packaging line is led by Premier Packaging Corporation, Inc. (“Premier”), a New York corporation. Premier operates in the paper board and fiber based folding carton, consumer product packaging, and document security printing markets. It markets, manufactures, and sells sophisticated custom folding cartons, mailers, photo sleeves and complex 3-dimensional direct mail solutions. Premier is currently located in its new facility in Rochester, NY, and primarily serves the US market. (2) The Biotechnology business line was created to invest in or acquire companies in the BioHealth and BioMedical fields, including businesses focused on the advancement of drug discovery and prevention, inhibition, and treatment of neurological, oncological, and immune related diseases. This division is also targeting unmet, urgent medical needs, and is developing open-air defense initiatives, which curb transmission of air-borne infectious diseases, such as tuberculosis and influenza. (3) Our Commercial Lending business division, driven by American Pacific Financial (“APF”), provides financing solutions including commercial business lines of credit, land development financing, inventory financing, equipment financing, and third-party loan servicing (4) Securities and Investment Management was established to develop and/or acquire assets in the securities trading or management arena, and to pursue, among other product and service lines, broker dealers, and mutual funds management. Also in this segment is the Company’s real estate investment trusts (“REIT”), organized for the purposes of acquiring hospitals and other acute or post-acute care centers from leading clinical operators with dominant market share in secondary and tertiary markets, and leasing each property to a single operator under a triple-net lease. The REIT was formed to originate, acquire, and lease a credit-centric portfolio of licensed medical real estate.
On June 21, 2025, Impact BioMedical Inc. (“Impact”), Dr Ashleys Limited, a Cayman Islands exempted company limited by shares (“PubCo”), Dr Ashleys Nevada Sub, Inc., a Nevada corporation and wholly-owned subsidiary of PubCo (“Merger Sub”), Dr Ashleys Bio Labs Limited, a Cayman Islands exempted company limited by shares (“Dr Ashleys Cayman”), and Kanans Visvanats (a.k.a. Kannan Vishwanatth), a Latvian national, solely in his capacity as the sole shareholder of Dr Ashleys (“Dr Ashleys Shareholder”) entered into a Merger and Share Exchange Agreement (the “Merger Agreement”). Pursuant to the Merger Agreement and subject to the terms and conditions set forth therein, (i) Merger Sub shall be merged with and into Impact with Impact being the surviving entity (the “Merger”), and (ii) simultaneous with or immediately following the Merger, PubCo shall acquire all of the issued and outstanding ordinary shares of Dr Ashleys Cayman from the Dr Ashleys Shareholder (the “Share Exchange”). The closing date of the transaction is uncertain as of August 14, 2026, due to the pending approval from regulatory authorities. Both parties agreed to extend the closing which is expected to take place during the fourth quarter of 2026. Management will continue evaluating the status of this deal.
| 7 |
2. Basis of Presentation and Significant Accounting Policies
Basis of Presentation - The accompanying condensed unaudited consolidated financial statements contain all adjustments (consisting of normal recurring adjustments, unless otherwise indicated) necessary to present fairly our consolidated financial position as of June 30, 2026 and December 31, 2025, and the results of our consolidated operations for the interim periods presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), the instructions to Form 10-Q and Article 10 of Regulation S-X. We follow the same accounting policies when preparing quarterly financial data as we use for preparing annual data. These statements should be read in conjunction with the consolidated financial statements and the notes included in our latest annual report on Form 10-K, for the fiscal year ended December 31, 2025 (“Form 10-K”), and our other reports on file with the Securities and Exchange Commission (the “SEC”).
Principles of Consolidation - The consolidated financial statements include the accounts of DSS, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires the Company to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, the Company evaluates its estimates, including those related to the accounts receivable, convertible notes receivable, inventory, fair values of investments, intangible assets and goodwill, useful lives of intangible assets and property and equipment, fair values of options and warrants to purchase the Company’s common stock, preferred stock, deferred revenue and income taxes, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
Reclassifications
- Costs in the amount of $
Cash Equivalents – All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents. Amounts included in cash equivalents in the accompanying consolidated balance sheets are money market funds whose adjusted costs approximate fair value.
Accounts Receivable - The Company extends credit to its customers in the normal course of business. The Company performs ongoing credit evaluations and generally does not require collateral. Payment terms are generally 30 days but up to net 120 for certain customers. The Company carries its trade accounts receivable at invoice amounts and its rent receivables at contract amounts, less an allowance for credit losses. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for credit losses based upon management’s estimates that include a review of the history of past write-offs and collections and an analysis of current credit conditions. In estimating expected losses in the accounts receivable portfolio, customer-specific financial data and macro-economic assumptions are utilized to project losses over a reasonable and supportable forecast period. Assumptions and judgment are applied to measure amounts and timing of expected future cash flows, collateral values and other factors used to determine the customers’ abilities to pay.
Accounts
receivable, net at June 30, 2026, and December 31, 2025, was $
| 8 |
Concentration
of Credit Risk - The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits.
The Company believes it is not exposed to any significant credit risk because of any non-performance by the financial institutions. As
of June 30, 2026, one customer accounted for approximately
As
of December 31, 2025, one customers accounted for approximately
Notes receivable, unearned interest, and related recognition - The Company records all future payments of principal and interest on notes as notes receivable, which are then offset by the amount of any related unearned interest income. For financial statement purposes, the Company reports the net investment in the notes receivable on the consolidated balance sheet as current or long-term based on the maturity date of the underlying notes. Such net investment is comprised of the amount advanced on the loans, adjusting for net deferred loan fees or costs incurred at origination, amounts allocated to warrants received upon origination, and any payments received in advance. The unearned interest is recognized over the term of the notes and the income portion of each note payment is calculated so as to generate a constant rate of return on the net balance outstanding. Net deferred loan fees or costs, together with discounts recognized in connection with warrants acquired at origination, are accreted as an adjustment to yield over the term of the loan.
Allowance
For Loans Losses - ASC Topic 326 which requires an allowance for credit losses to be deducted from the amortized cost basis of
financial assets to present the net carrying value at the amount that is expected to be collected over the contractual term of the asset
considering relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability
of the reported amount. In estimating expected losses in the loan portfolio, borrower-specific financial data and macro-economic assumptions
are utilized to project losses over a reasonable and supportable forecast period. Assumptions and judgment are applied to measure amounts
and timing of expected future cash flows, collateral values and other factors used to determine the borrowers’ abilities to repay
obligations. After the forecast period, the Company utilizes longer-term historical loss experience to estimate losses over the remaining
contractual life of the loans. At June 30, 2026 and December 31, 2025, the Company established a reserve for credit losses of approximately
$
Investments – Investments in equity securities with a readily determinable fair value, not accounted for under the equity method, are recorded at fair value with unrealized gains and losses included in earnings. For equity securities without a readily determinable fair value, the investment is recorded at cost, less any impairment, plus or minus adjustments related to observable transactions for the same or similar securities, with unrealized gains and losses included in earnings. For equity method investments, the investments are initially recorded at cost and subsequently adjusted for the Company’s proportionate share of the investee’s earnings or losses and other comprehensive income and reduced by any distributions received. Where an investee’s financial information is not available in time for the Company’s reporting deadline, the Company records its share of the investee’s results on a lag using the most recent financial information available, and records adjustment as needed when more current investee financial information becomes available. The Company also regularly reviews its equity method investments to determine whether there is a decline in fair value below book value. If there is a decline that is other-than-temporary, the investment is written down to fair value. See Note 10 for further discussion on investments.
Fair Value of Financial Instruments - Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Fair Value Measurement Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets.
● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
| 9 |
The carrying amounts reported in the consolidated balance sheet for cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable and accrued expenses approximate their fair values due primarily to the short-term nature of these instruments. The carrying amounts of notes receivable, notes payable and long-term debt generally approximate their fair values based on the stated or discounted interest rates, contractual terms and expected timing of cash flows. Investments are accounted for in accordance with the applicable U.S. GAAP guidance based on the nature and classification of the investment. Investments for which fair value is not readily determined are measured in accordance with the applicable measurement alternative, when eligible. Financial instruments measured at fair value are classified within the fair value hierarchy based on the observability of the inputs used in the valuation.
Inventory
– Inventories consist primarily of paper, pre-printed security paper, paperboard, fully prepared packaging, air filtration
systems, and health and beauty products which and are stated at the lower of cost or net realizable value on the first-in, first-out
(“FIFO”) method. Packaging work-in-process and finished goods included the cost of materials, direct labor and overhead.
At the closing of each reporting period, the Company evaluates its inventory in order to adjust the inventory balance for obsolete and
slow-moving items. An allowance for obsolescence of approximately $
Investments in real estate, net – Acquisition of assets are recorded at their relative fair value based on total accumulated costs of the acquisition. Direct acquisition-related costs are capitalized as a component of the acquired assets. This includes all costs related to finding, analyzing and negotiating a transaction. The allocation of the purchase price is an area that requires judgment and significant estimates. Tangible and intangible assets include land, building and improvements, furniture, fixtures and equipment, acquired above market and below market leases, in-place lease value (if applicable). Acquisition date fair values of assets and assumed liabilities are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent appraisers and that use appropriate discount and/or capitalization rates and available market information. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. Depreciation, amortization, cost to maintain and secure the buildings as well as interest incurred on the loans to procure the real estate are included in Cost of revenue on the accompanying Condensed consolidated statement of operations. The Company’s policy is to obtain an independent third-party valuation for each major project in the United States as part of our assessment of identifying potential triggering events for impairment. Management may use the market comparison method to value the investments. In addition to the annual assessment of potential triggering events in accordance with ASC 360 – Property Plant and Equipment (“ASC 360”), the Company applies a fair value-based impairment test to the net book value assets on an annual basis and on an interim basis if certain events or circumstances indicate that an impairment loss may have occurred.
Convertible bond investment - The Company accounts for its convertible bond investment as a financial asset measured at fair value. The Company has elected the fair value option under ASC 825, Financial Instruments, and, accordingly, changes in the fair value of the investment are recognized in earnings in the period of change. Interest income is recognized when earned in accordance with the contractual terms of the bond. Fair value is determined in accordance with ASC 820, Fair Value Measurement, using valuation techniques appropriate for the instrument and available market information. The valuation considers, among other factors, the stated interest rate, maturity date, conversion price, market price of the underlying equity securities, foreign currency exchange rates, issuer credit risk, expected term, volatility, liquidity, and conversion economics. The convertible bond investment is classified as a Level 3 financial asset because there is no quoted price in an active market for the identical bond and the valuation requires significant unobservable inputs, including issuer credit risk, expected term, volatility, liquidity, conversion probability, and conversion economics.
Intangible Assets - The estimated fair values of acquired intangibles are generally determined based upon future economic benefits such as earnings and cash flows. Acquired identifiable intangible assets are recorded at fair value and are amortized over their estimated useful lives. Acquired intangible assets with an indefinite life are not amortized but are reviewed for impairment at least annually or more frequently whenever events or changes in circumstances indicate that the carrying amounts of those assets are below their estimated fair values. Impairment is tested under ASC 350. No circumstances or events have occurred since the most recent analysis that would indicate the need for an impairment is needed for the six months ended June 30, 2026.
| 10 |
Goodwill
– Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities
assumed in a business combination. Goodwill is subject to impairment testing at least annually and will be tested for impairment between
annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. FASB ASC Topic 350 provides
an entity with the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to
a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after completing
the assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value,
the Company will proceed to a quantitative test. The Company may also elect to perform a quantitative test instead of a qualitative test
for any or all of our reporting units. The test compares the fair value of an entity’s reporting units to the carrying value of
those reporting units. This quantitative test requires various judgments and estimates. The Company estimates the fair value of the reporting
unit using a market approach in combination with a discounted operating cash flow approach. Impairment of goodwill is measured as the
excess of the carrying amount of goodwill over the fair values of recognized and unrecognized assets and liabilities of the reporting
unit. The Company performed its annual goodwill impairment test as of December 31, 2025, and no impairment was deemed necessary for the
goodwill associated with Premier Packaging Company of approximately $
Impairment of Long-Lived Assets and Goodwill - The Company monitors the carrying value of long-lived assets for potential impairment and tests the recoverability of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. If a change in circumstance occurs, the Company performs a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. If cash flows cannot be separately and independently identified for a single asset, the Company will determine whether impairment has occurred for the group of assets for which the Company can identify the projected cash flows. If the carrying values are in excess of undiscounted expected future cash flows, the Company measures any impairment by comparing the fair value of the asset or asset group to its carrying value. No circumstances or events have occurred since the most recent analysis that would indicate the need for an impairment is needed for the six months ended June 30, 2026.
Convertible Promissory Note - The Company accounts for convertible promissory notes in accordance with ASU 2020-06 and evaluates embedded and freestanding features under ASC 815. Convertible notes are initially recorded at principal amount, net of any original issue discount, debt issuance costs, and discounts arising from the allocation of proceeds to detachable warrants or other freestanding instruments. When a financing transaction includes multiple instruments, the Company allocates proceeds based on the relative fair values of the instruments, or, when required, first records liability-classified instruments at fair value with residual proceeds allocated to the remaining instruments.
The Company evaluates conversion options, redemption provisions, down-round or anti-dilution features, most-favored-nation provisions, default rights, warrants, and other terms to determine whether separate accounting is required. Embedded derivatives or liability-classified instruments are measured at fair value, with changes in fair value recognized in earnings. Debt discounts, original issue discount, and issuance costs are amortized to interest expense using the effective interest method over the contractual term. Convertible notes are classified as current or noncurrent based on contractual maturity and settlement provisions. For diluted earnings per share, the Company applies the if-converted method in accordance with ASC 260.
Business Combinations and Acquisitions - Business combinations and non-controlling interests are recorded in accordance with FASB ASC 805 Business Combinations. Under the guidance, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition and all acquisition costs are expensed as incurred. The excess of the purchase price over the estimated fair values is recorded as goodwill. If the fair value of the assets acquired exceeds the purchase price and the liabilities assumed, then a gain on acquisition is recorded. The application of business combination accounting requires the use of significant estimates and assumptions.
Acquisition of assets are recorded at their relative fair value based on total accumulated costs of the acquisition. Direct acquisition-related costs are expensed as incurred. This includes all costs related to finding, analyzing and negotiating a transaction. The allocation of the purchase price is an area that requires judgment and significant estimates. Tangible and intangible assets include land, building and improvements, furniture, fixtures and equipment, acquired above market and below market leases, in-place lease value (if applicable). Acquisition-date fair values of assets and assumed liabilities are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent appraisers and that use appropriate discount and/or capitalization rates and available market information.
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Income Taxes - The Company recognizes estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income items is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized. We recognize penalties and accrued interest related to unrecognized tax benefits in income tax expense.
Going
Concern – The accompanying consolidated financial statements have been prepared assuming that the Company will continue
as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal
course of business. These consolidated financial statements do not include any adjustments to the specific amounts and classifications
of assets and liabilities, which might be necessary should we be unable to continue as a going concern. While the Company has approximately
$
Aside
from its $
Related Party Transactions - Transactions with affiliates and other parties that meet the definition of a related party under ASC 850, Related Party Disclosures are reflected in the accompanying condensed consolidated financial statements. All related-party balances are recorded at the exchange amounts established and agreed to by the parties. All material transaction not in the normal course of business operations are approved by the Audit Committee of the Board of Directors.
Recently Issued Accounting Pronouncements — The Financial Accounting Standards Board (FASB) issues various Accounting Standards Updates relating to the treatment and recording of certain accounting transactions. There are several new accounting pronouncements issued by FASB which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company.
In November 2023, the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure through enhanced disclosures about significant segment expenses. The amendment is effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024 and early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company has adopted the enhanced segment disclosures for the year ended December 31, 2024. The Company reports its segment information to reflect the manner in which the Company’s chief operating decision maker (“CODM”) reviews and assesses performance. The Company’s Interim Chief Executive Officer has responsibilities as the CODM and review and assess the performance of the Company as a whole.
The primary financial measures used by the CODM to evaluate performance and allocate resources are net income (loss) and operating income (loss). The CODM uses net income (loss) and operating income (loss) to evaluate the performance of the Company’s ongoing operations and as part of the Company’s internal planning and forecasting processes. Information on Net loss and Operating loss is disclosed in the Condensed Consolidated Statements of Operations. Segment expenses and other segment items are provided to the CODM on the same basis as disclosed in the Condensed Consolidated Statements of Operations.
The CODM does not evaluate performance or allocate resources based on segment assets, and therefore such information is not presented in the notes to the financial statements
In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures” which is intended to simplify various aspects related to accounting for income taxes. ASU 2023-09 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The amendments in ASU 2023-09 are effective for public business entities for fiscal years beginning after December 15, 2024, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods. The adoption of this ASU did not have a material impact on the Condensed Consolidated Financial Statements.
In November 2024, the FASB issued ASU No. 2024-03 (“ASU 2024-03”), Disaggregation of Income Statement Expenses (“DISE”). ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. As revised by ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, the provisions of ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. With the exception of expanding disclosures to include more granular income statement expense categories, we do not expect the adoption of ASU 2024-03 to have a material effect on our consolidated financial statements taken as a whole.
In November 2024, the FASB issued ASU 2024-04 (“ASU 2024-04”), Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions or as extinguishments. The amendments in ASU 2024-04 are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for entities that have adopted ASU 2020-06. The Company adopted the amendments as effective January 1, 2026. The adoption of ASU 2024-04 did not have a material impact on the Company’s consolidated financial statements.
In December 2025, the Financial Accounting Standards Board issued Accounting Standards Update No. 2025-11, Interim Reporting (Topic 270). The amendments are intended to improve interim financial reporting disclosures and clarify the application of Topic 270. The Company is currently evaluating the provisions of ASU 2025-11, including the timing of adoption and the potential impact on its interim financial statement presentation and related disclosures. The Company does not currently expect the adoption of ASU 2025-11 to have a material impact on its consolidated financial position, results of operations, or cash flows.
3. Revenue
The Company recognizes its revenue based on when the title passes to the customer or when the service is completed and accepted by the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for shipped product or service provided. Sales and other taxes billed and collected from customers are excluded from revenue. The Company recognizes rental income associated with its REIT, net of amortization of favorable/unfavorable lease terms relative to market and includes rental abatements and contractual fixed increases attributable to operating leases, where collection has been considered probable, on a straight-line basis over the term of the related lease. The Company recognizes net investment income from its investment banking line of business as interest and management fees related to loans managed for third parties owed to the Company occurs. The Company generates revenue from its direct marketing line of business primarily through internet sales and recognizes revenue as items are shipped.
As of June 30, 2026, the Company had no unsatisfied performance obligations for contracts with an original expected duration of greater than one year. Pursuant to Topic 606, the Company has applied the practical expedient with respect to disclosure of the deferral and future expected timing of revenue recognition for transaction price allocated to remaining performance obligations. The Company elected the practical expedient allowing it to not recognize as a contract asset the commission paid to its salesforce on the sale of its products as an incremental cost of obtaining a contract with a customer but rather recognize such commission as expense when incurred as the amortization period of the asset that the Company would have otherwise recognized is one year or less.
| 12 |
Costs of revenue
Costs of revenue includes all direct cost of the Company’s packaging, commercial and security printing sales, primarily, paper, inks, dies, and other consumables, and direct labor, transportation, amortization, deprecation, and manufacturing facility costs. In addition, this category includes all direct costs associated with the manufacturing and procurement of the products sold in the Company’s technology sales, services and licensing including hardware and software that is resold, third-party fees, and fees paid to inventors or others as a result of technology licenses or settlements, if any. Cost of revenue for our REIT line of business includes all direct cost associated with the maintenance and upkeep of the related facilities, depreciation, amortization and the costs to acquire the facilities. Our Commercial Lending operating segment has costs of revenue associated with the impairment of notes receivable for those amounts at risk of collection. Costs of revenue do not include expenses related to product development, integration, and support. These costs are included in research and development, which is a component of selling, general and administrative expenses on the consolidated statement of operations. Legal costs are included in selling, general and administrative.
Sales Commissions
Sales
commissions are expensed as incurred for contracts with an expected duration of one year or less. There were
Shipping and Handling Costs
Costs incurred by the Company related to shipping and handling are included in cost of products sold. Amounts charged to customers relating to these costs are reflected as revenue.
See Note 16 for disaggregated revenue information.
4. Inventory
Inventory consisted of the following as of:
| June 30, 2026 | December 31, 2025 | |||||||
| Finished Goods | $ | $ | ||||||
| Work in Process | ||||||||
| Raw Materials | ||||||||
| $ | $ | |||||||
| Less allowance for obsolescence | ( | ) | ( | ) | ||||
| $ | $ | |||||||
5. Notes Receivable
Note 1
On
May 14, 2021, DSS Pure Air, Inc. a subsidiary of the Company entered a convertible promissory note (“Note 1”) with Puradigm,
Inc. (“Puradigm”), a company registered in the state of Texas. Note 1 has an aggregate principal balance up to $
Note 2
On
March 2, 2022, APF and WUURII Commerce, Inc. (“WUURII”), a corporation organized under the laws of the Republic of Korea
entered into a promissory note (“WUURII Note”). Under the terms of WUURRI Note, APF at its discretion, may lend up to the
principal sum of $
Note 3
On
May 9, 2022, DSS PureAir and Puradigm entered into a promissory note (“Puradigm Note 1”) in the principal sum of $
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Note 4, related party
BMI
Capital International LLC. (“BMIC LLC”), a related party, entered into a promissory note (“BMIC Note 1”) in the
principal sum of $
Note 5, related party
On
May 8, 2023, DSS Financial Management Inc and BMIC LLC entered into a promissory note (“BMIC Note 2”) in the principal sum
of $
Note 6, related party
On
July 26, 2022, APF and VEII, Inc. (“VEII”) entered into a promissory note (“Note 6”) in the principal sum of
$
Note 7
On
February 19, 2021, Impact BioMedical, Inc, entered into a promissory note (“Note 7”) with an individual. The Company loaned
the principal sum of $
Note 8
On
March 31, 2023, DSS Biohealth Security, Inc and an individual entered into a promissory note (“Note 8”) in the principal
sum of $
Note 9
On
August 29, 2024, APF entered into a promissory note (“Note 9”) with WestPark. Note has a principal balance of $
Note 10
On
April 16, 2026, the Company, entered into a promissory note (“Note 10”) with an individual. The Company loaned the principal
sum of $
Note 11
On
June 23, 2026, the Company, entered into a promissory note (“Note 11”) with an individual. The Company loaned the principal
sum of $
| 14 |
6. Convertible Bond Investment – related party
On March 27, 2026, the Company
received a convertible bond investment from True Partners Capital Holding Limited (“True Partners”), a publicly listed company
on the Hong Kong Stock Exchange and a related party of the Company. The bond has a face value of $
True Partners is considered a related party because the Company holds a significant equity investment in True Partners and has determined that it has the ability to exercise significant influence over True Partners. This determination is based on the Company’s equity ownership, and the election of the Company’s Executive Chairman and significant stockholder, Heng Fai Ambrose Chan, to True Partners’ board of directors. Accordingly, the Company’s receipt of the convertible bond is considered a related party transaction.
The bond is convertible into
ordinary shares of True Partners at a conversion price of HKD $ per share, which was approximately USD $
The Company accounts for the
convertible bond investment at fair value and has elected the fair value option under ASC 825, Financial Instruments. Based on a valuation
performed as of March 27, 2026, the estimated fair value of the convertible bond was approximately $
The fair value of the convertible bond investment was determined in accordance with ASC 820, Fair Value Measurement. The valuation considered, among other factors, the contractual interest rate, maturity date, mandatory conversion terms, conversion price, market price of the underlying True Partners ordinary shares, foreign currency exchange rates, issuer credit risk, expected term, liquidity, discount rates, and conversion economics. The investment is classified as a Level 3 asset within the fair value hierarchy because there is no quoted price in an active market for the identical convertible bond and the valuation requires significant unobservable inputs, including issuer credit risk, expected term, liquidity assumptions, discount rates, and conversion economics.
Because the convertible bond
was received from a related party, the Company evaluated the substance of the transaction, including the relationship between the parties,
the nature of the consideration exchanged, and whether the fair value of the bond exceeded the stated face amount or consideration transferred.
Because the convertible bond was issued in connection with the Company’s
additional investment in True Capital Holdings and the parties are related, the Company evaluated the difference between the fair value
of the convertible bond and the consideration transferred in accordance with the applicable U.S. GAAP guidance. Based on the Company’s
assessment of the economic substance of the transaction, the Company determined that the excess of the fair value of the convertible bond
over the consideration transferred represented a capital contribution and recorded approximately $
On April 29, 2026, True Partner
International Limited, a subsidiary of the Company, delivered a conversion notice to True Partners to convert the full outstanding principal
amount of the $
7. Financial Instruments
Cash, Cash Equivalents, Restricted Cash and Marketable Securities
The following tables show the Company’s cash, cash equivalents, restricted cash, and marketable securities by significant investment category as of:
| June 30, 2026 | ||||||||||||||||||||
| Cost | Unrealized Gain/(Loss) | Fair Value | Cash and Cash Equivalents | Marketable Securities | ||||||||||||||||
| Cash | $ | $ | $ | $ | $ | |||||||||||||||
| Restricted Cash | ||||||||||||||||||||
| Level 1 | ||||||||||||||||||||
| Money Market Funds | ||||||||||||||||||||
| Marketable Securities | ( | ) | ||||||||||||||||||
| Total | $ | $ | ( | ) | $ | $ | $ | |||||||||||||
| December 31, 2025 | ||||||||||||||||||||
| Adjusted Cost | Unrealized Gain/(Loss) | Fair Value | Cash and Cash Equivalents | Marketable Securities | ||||||||||||||||
| Cash | $ | $ | $ | $ | $ | |||||||||||||||
| Restricted Cash | ||||||||||||||||||||
| Level 1 | ||||||||||||||||||||
| Money Market Funds | ||||||||||||||||||||
| Marketable Securities | ( | ) | ||||||||||||||||||
| Total | $ | $ | ( | ) | $ | $ | $ | |||||||||||||
The Company typically invests with the primary objective of minimizing the potential risk of principal loss. The Company’s investment policy generally requires securities to be investment grade and limits the amount of credit exposure to any one issuer. Fair values were determined for each individual security in the investment portfolio.
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8. Provision for Credit Losses
ASC Topic 326 for the measurement of credit losses on financial instruments and other financial assets. That guidance requires an allowance for credit losses to be deducted from the amortized cost basis of financial assets to present the net carrying value that is expected to be collected over the contractual term of the assets considering relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The guidance replaced the previous incurred loss model for determining the allowance for credit losses.
Accounts receivable are stated at the amount owed by the customer. The Company maintains an allowance for credit losses for accounts receivable and unbilled receivables, based on expected credit losses resulting from the inability of our customers to make required payments. The allowance for credit losses is estimated based on historical experience, current economic conditions and the creditworthiness of customers. Receivables are charged to the allowance when determined to be no longer collectible. The Company regularly monitors and assesses its risk of not collecting amounts owed by customers and records its allowance for credit losses based on the results of this analysis.
As of June 30, 2026 and December 31, 2025, we have reviewed the entire loan portfolio as well as all financial assets of the Company for the purpose of evaluating the loan portfolio and the loan balances, including a review of individual and collective portfolio loan quality, loan(s) performance, including past due status and covenant defaults, assessment of the ability of the borrower to repay the loan on the loan terms, whether any loans should be placed on nonaccrual or returned to accrual, any concentrations in any single borrower and/or industry that we might need to further manage, and if any specific or general loan loss reserve should be established for the entire loan portfolio or for any specific loan.
We
analyzed the loan loss reserve from three basis: general loan portfolio reserves; industry portfolio reserves, and specific loan loss
reserves. For the six months ended June 30, 2026, and year ended December 31, 2025, the Company recorded a Loan loss reserve of approximately
$
General
Loan Portfolio Reserve - Based upon the review of our loan portfolio, we do not believe that a substantial general loan portfolio
reserve is due at this time. However, we do recognize that some inherent risks are in all loan portfolios, thus we recorded a general
contingent portfolio reserve of $
Industry Portfolio Reserves - Given the relatively young loan portfolio and a diversification of the portfolio over several different loan products, the risk is reduced. Accordingly, we have not recorded a discretionary reserve as of June 30, 2026 and December 31, 2025.
Specific
Loan Reserves - The Company had previously identified credit weakness in Puradigm and has placed a reserve approximating $
9. Disposal of assets
On
March 27, 2025, the Company finalized the sale of its Plano, Tx. Facility for a gross sales price of $
| 16 |
10. Investments
Alset International Limited, related party
The
Company owns shares or approximately % of the outstanding shares of Alset International Limited (“Alset Intl”),
a company incorporated in Singapore and publicly listed on the Singapore Exchange Limited. This investment is classified as a marketable
security and is classified as long-term assets on the consolidated balance sheets as the Company has the intent and ability to hold the
investments for a period of at least one year. The Chairman of the Company, Mr. Heng Fai Ambrose Chan, is the Executive Director and
Chief Executive Officer of Alset Intl. Mr. Chan is also the majority shareholder of Alset Intl as well as the largest shareholder of
the Company. The fair value of the marketable security as of June 30, 2026 and December 31, 2025, was approximately $
True Partners Capital Holding Limited
The
Company owns shares or approximately % of True Partners Capital Holding Limited (“True Partners”. “TPCH”), a publicly
listed company on the Hong Kong Stock Exchange. On February 28, 2022, the Company entered into a Stock Purchase Agreement with Alset
EHome International Inc. (“AEI”), pursuant to which AEI has agreed to sell a subsidiary holding shares of stock
of True Partner Capital Holding Limited exchange for shares of common stock of the Company (the “DSS Shares”).
The Company’s Executive Chairman and a significant stockholder, Heng Fai Ambrose Chan is the Chairman, Chief Executive Officer
and largest shareholder of AEI. Further, on February 20, 2025, the Company acquired an additional shares of True Partners.
The fair value of the marketable security as of December 31, 2025, was approximately $
On
March 27, 2026, the Company acquired or received a convertible bond investment issued by True Partners with an initial fair value of
approximately $
As
a result of the change to equity method accounting, the Company reclassified its investment in True Partners from Investment in equity
securities to Investment, equity method on the consolidated balance sheet. On April 29, 2026, the convertible bond was converted into
approximately ordinary shares of TPCH increasing its total ownership to shares or approximately %. Immediately
prior to conversion the fair value of convertible bond approximately $
WestPark Capital Group, LLC.
On
December 30, 2020, the Company signed a binding letter of intent with WestPark Capital Group, LLC. (“WestPark”) and Century
TBD, Inc. (“TBD”) where the parties agreed to prepare a note and stock exchange agreement whereby DSS will assign the TBD
Note to WestPark and WestPark shall issue to DSS a stock certificate reflecting
BMI Capital International LLC, related party
On
September 10, 2020, the Company’s wholly owned subsidiary DSS Securities, Inc. entered into membership interest purchase agreement
with BMI Financial Group, Inc. a Delaware corporation (“BMIF”) and BMI Capital International LLC, a Texas limited liability
company (“BMIC”) whereas DSS Securities, Inc. purchased
BMIC is a broker-dealer registered with the Securities and Exchange Commission, is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”), and is a member of the Securities Investor Protection Corporation (“SIPC”). The Company’s chairman of the board and another independent board member of the Company also have ownership interest in BMIC.
| 17 |
11. Short-Term and Long-Term Debt
Promissory
Notes - On May 20, 2021, Premier Packaging entered into master loan and security agreement (“BOA Note”) with Bank
of America, N.A. (“BOA”) to secure financing approximating $
On
August 1, 2021, AMRE Shelton, LLC., (“AMRE Shelton”) a subsidiary of AMRE, entered into a loan agreement (“Shelton
Agreement”) with Patriot Bank, N.A. (“Patriot Bank”) in an amount up to $
On
October 13, 2021, LVAM entered into loan agreement with BMIC (“BMIC Loan”), a related party, whereas LVAM borrowed the principal
amount of $
On
October 13, 2021, LVAM entered into a loan agreement with Lee Wilson Tsz Kin (“Wilson Loan”), a related party, whereas LVAM
borrowed the principal amount of $
On
November 2, 2021, AMRE LifeCare entered into a loan agreement (“LifeCare Agreement”) with Pinnacle Bank,
(“Pinnacle Bank”) in the amount of $
On
March 30, 2023, Premier Packaging, a subsidiary of the Company entered into a loan and security agreement with Union Bank & Trust
Company for the principal amount of $
| 18 |
In
August of 2025, DSS issued a $
On
March 26, 2026, the Company issued a $
On
June 23, 2026, the Company issued a $
A summary of scheduled principal payments of long-term and current debt, not including revolving lines of credit, convertible notes and notes payable – related party subsequent to June 30, 2026, are as follows:
| Year | Debt | Convertible
note payable - related party | Notes
payable - related party | Total | ||||||||||||
| 2026 | $ | $ | $ | $ | ||||||||||||
| 2027 | ||||||||||||||||
| 2028 | ||||||||||||||||
| 2029 | ||||||||||||||||
| 2030 | ||||||||||||||||
| Thereafter | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
A summary of scheduled principal payments of long-term and current debt, not including revolving lines of credit, convertible notes and notes payable – related party subsequent to December 31, 2025, are as follows:
| Year | Debt | Convertible note payable - related party | Notes payable - related party | Total | ||||||||||||
| 2026 | $ | $ | $ | $ | ||||||||||||
| 2027 | ||||||||||||||||
| 2028 | ||||||||||||||||
| 2029 | ||||||||||||||||
| 2030 | ||||||||||||||||
| Thereafter | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
| 19 |
12. Lease Liability
The Company has operating leases predominantly for operating facilities. As of June 30, 2026, the remaining lease terms on our operating leases range from less than one to nine years. Renewal options to extend our leases have not been exercised due to uncertainty. Termination options are not reasonably certain of exercise by the Company. There is no transfer of title or option to purchase the leased assets upon expiration. There are no residual value guarantees or material restrictive covenants. There are no significant finance leases as of June 30, 2026.
Future minimum lease payments as of June 30, 2026 are as follows:
Maturity of Lease Liability:
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| After | ||||
| Total lease payments | $ | |||
| Less imputed interest | ( | ) | ||
| Present value of remaining lease payments | $ | |||
| Current | $ | |||
| Non-current | $ | |||
| Weighted average remaining lease term (years) | ||||
| Weighted average discount rate | % |
Total
cash paid for leases during the six months ended June 30, 2026 and 2025 approximated $
13. Commitments and Contingencies
License
Agreement – On March 19, 2022, Impact BioMedical entered into a License Agreement (“Equivir License”) with
a third-party (“Licensee”) where the Licensor is granted the right, amongst other things, to develop, commercialize, and
sell the Company’s Equivir technology.
Royalty Agreement - On August 15, 2018, the Impact BioMedical entered into Royalty Agreement with Chemia Corporation (“Chemia”) pursuant to which Chemia transferred to the Company all of its right to 3F (Functional Fragrance Formulation). This agreement has a 20-year term and auto renews for a period of 1 year unless mutually agreed upon by both parties. 3F consists of 3F Mosquito Repellant and 3F Anti-Viral formulations. Based on the Royalty Agreement, the Company should cover all the costs to prepare and finalize necessary patent application and other intellectual property related to 3F. Chemia agreed to support the Company in efforts leading to development of 3F intellectual property and it is licensing. Based on Royalty Agreement any payments received from development, sales, licensing or transfer of 3F technology will be paid 50% to the Company and 50% to Chemia. On November 27, 2018, Company and Chemia signed an Addendum to Royalty Agreement (“Addendum”), according to which the Company granted Chemia a royalty-based limited license for purposes of making and selling fragrances embodying the 3F technology. Based on the Addendum, Chemia should pay the Company 5% of net sales in royalty. On November 8, 2019, both companies entered into Amendment no.1 to Royalty Agreement, based on which certain expenses borne by the Company towards patent application and licensing should be reimbursed to the Company before any royalty payments are made. For the six months ended June 30, 2026 and 2025, there were no reimbursements or royalties paid to the Company and the Company cannot be assured that Chemia’s efforts will end up in any future sales of the technology.
Employment
Agreements – Impact BioMedical has an employment agreement with it CEO Frank Heuszel in which Mr. Heuszel’s agreement
contains a mandatory bonus clause of $
Contingent Litigation Payments – The Company retains the services of professional service providers, including law firms that specialize in intellectual property licensing, enforcement and patent law. These service providers are often retained on an hourly, monthly, project, contingent or a blended fee basis. In contingency fee arrangements, a portion of the legal fee is based on predetermined milestones or the Company’s actual collection of funds. The Company accrues contingent fees when it is probable that the milestones will be achieved, and the fees can be reasonably estimated. As of March 31, 2026 and December 31, 2025, the Company had not accrued any contingent legal fees pursuant to these arrangements.
| 20 |
14. Stockholders’ Equity
DSS, Inc.
Equity
transactions - On February 6, 2025, as a bonus for compensation awarded to Heng Fai Holdings Limited (“HFHL”), a
Hong Kong Company, which is beneficially owned by Mr. Heng Fai Ambrose Chan, Director of DSS, Inc., and pursuant to DSS, Inc’s.
2020 Employee, Director and Consultant Equity Incentive Plan (the “Plan”), HFHL was awarded shares of the Company’s
common stock, approximating $
On
March 21, 2025, DSS, the parent company of Impact Biomedical, Inc. completed the sale of shares of Impact Biomedical common stock.
These shares were acquired by DSS during Impact’s initial public offering on September 16, 2024. The sale of these shares, which
were previously held by DSS as part of its ownership interest in Impact, was completed for a total value of $
On
February 4, 2026, DSS entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp. (“Aegis”),
which provided for the issuance and sale by the Company and the purchase by the underwriter, in a firm commitment underwritten public
offering of shares of the Company’s common stock. Subject to the terms and conditions contained in the Underwriting Agreement,
the shares were sold at a public offering price of $ per share, less certain underwriting discounts and commissions. The Offering
closed on February 5, 2026 and the Company received approximately $
Stock-Based
Compensation - The Company records stock-based payment expense related to options and warrants based on the grant date fair value
in accordance with FASB ASC 718. Stock-based compensation includes expense charges for all stock-based awards to employees, directors,
and consultants. Such awards include option grants, warrant grants, and restricted stock awards On February 6, 2025, as a bonus for compensation
awarded to Heng Fai Holdings Limited (“HFHL”), a Hong Kong Company, which is beneficially owned by Mr. Heng Fai Ambrose Chan,
Director of DSS, Inc., and pursuant to DSS, Inc’s. 2020 Employee, Director and Consultant Equity Incentive Plan (the “Plan”),
HFHL was awarded shares of the Company’s common stock, approximating $
| 21 |
Impact BioMedical, Inc.
Equity
Transaction - On February 26, 2025, Impact BioMedical issued shares of the its common stock as payment of legal fees incurred
associated with Impact’s IPO, registration of shares associated with its equity incentive plan as well as other related services.
The legal fees received were valued at approximately $
On
February 25, 2025, the Company completed the acquisition of certain assets owned by DSS Pure Air, Inc. (DSS PureAir”), a related
party, for $
On February 26, 2025, the Company issued shares of the Company’s common stock as payment of legal fees incurred associated with the Company’s initial public offering (“IPO”), registration of shares associated with its equity incentive plan as well as other related services.
On June 23, 2025, the Company issued shares of the Company’s common stock as payment of legal fees incurred associated with the Company’s merger and share exchange agreement with Dr. Ashleys Limited.
On October 16, 2025, the Company converted its Note payable, related party to shares common stock as agreed upon by the Company and DSS (lender).
Stock-Based
Compensation – IBO records stock-based payment expense related to options and warrants based on the grant date fair
value in accordance with FASB ASC 718. Stock-based compensation includes expense charges for all stock-based awards to employees,
directors and consultants. Such awards include option grants, warrant grants, and restricted stock awards. On October 1, 2024,
option grants with a purchase price of $
per share were awarded to certain officers, directors and consultants of Impact BioMedical. These options have various vesting
periods, and all expire on October 31, 2031. Potential proceeds of these grants is $
In
January 2026, the Impact BioMedical granted and issued
shares of common stock to various individuals including executives, board members, audit committee members, etc. Agreement included
the individuals rescinding and cancelling any and all unexercised stock options previously granted. Impact Biomedical recorded
stock-based compensation expense of approximately $,
of which $
| 22 |
15. Supplemental Cash Flow Information
The following table summarizes supplemental cash flows for the six months ended June 30, 2026 and 2025:
| 2026 | 2025 | |||||||
| Cash paid for interest | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Fair value adjustment related to convertible bond received from related party | $ | $ | ||||||
| Conversion of convertible bond investment – related party into equity method investment | $ | |||||||
| Transfer of investment in equity securities to equity method investment upon obtaining significant influence | $ | |||||||
| Issuance of warrants in connection with convertible promissory note from related party | $ | $ | ||||||
16. Segment Information
The
Company reports its segment information to reflect the manner in which the Company’s chief operating decision maker
(“CODM”) reviews and assesses performance. The Company’s Interim Chief Executive Officer has responsibilities as
the CODM and reviews and assess the performance of the Company as a whole. The primary financial measures used by the CODM to
evaluate performance and allocate resources are net income (loss) and operating income (loss). The CODM uses net income (loss) and
operating income (loss) to evaluate the performance of the Company’s ongoing operations and as part of the Company’s
internal planning and forecasting processes. Information on Net income (loss) and Operating income (loss) is disclosed in the
Consolidated Statements of Operations. Segment expenses and other segment items are provided to the CODM on the same basis as
disclosed in the Consolidated Statements of Operations. The CODM does not evaluate performance or allocate resources based on
segment assets, and therefore such information is not presented in the notes to the financial statements. During the fourth quarter
of 2025, we realigned our internal reporting to better reflect how management reviews operating results and allocates resources. As
a result of this CODM realignment, Direct Marketing is no longer a reportable segment and is now reported within Corporate and Other
or the year ended December 31, 2025 and the three and six months ended June 30, 2026. This change did not impact consolidated
revenue, consolidated net income (loss), total assets, or cash flows for any period presented; it only impacted the presentation of
segment information. Segment information for prior periods presented has been recast to conform to the current-period segment
presentation. Our
Premier Packaging: (“Premier”) Premier Packaging Corporation provides custom packaging services and serves clients in the pharmaceutical, nutraceutical, consumer goods, beverage, specialty foods, confections, photo packaging and direct marketing industries, among others. The group also provides active and intelligent packaging and document security printing services for end-user customers. In addition, the division produces a wide array of printed materials, such as folding cartons and paperboard packaging, security paper, vital records, prescription paper, birth certificates, receipts, identification materials, entertainment tickets, secure coupons and parts tracking forms. The division also provides resources and production equipment for our ongoing research and development of security printing, brand protection, consumer engagement and related technologies.
Commercial Lending: (“Commercial Lending”) through its operating company, American Pacific Financial, Inc. (“APF”) represents our financing business line. is organized for the purposes of being a financial network holding company, focused providing commercial loans and on acquiring equity positions in (i) undervalued commercial bank(s), bank holding companies and nonbanking licensed financial companies operating in the United States, South East Asia, Taiwan, Japan and South Korea, and (ii) companies engaged in—nonbanking activities closely related to banking, including loan syndication services, mortgage banking, trust and escrow services, banking technology, loan servicing, equipment leasing, problem asset management, SPAC (special purpose acquisition company) consulting, and advisory capital raising services. From this financial platform, the Company shall provide an integrated suite of financial services for businesses that shall include commercial business lines of credit, land development financing, inventory financing, third party loan servicing, and services that address the financial needs of the world Gig Economy.
Biotechnology: (“Biotech”) targets unmet, urgent medical needs and expands the borders of medical and pharmaceutical science. Biotech drives mission-oriented research, development, and commercialization of solutions for medical advances in human wellness and healthcare. By leveraging technology and new science with strategic partnerships, Biotech provides advances in drug discovery for the prevention, inhibition, and treatment of neurological, oncology and immuno-related diseases. Other exciting technologies include a breakthrough alternative sugar aimed to combat diabetes and functional fragrance formulations aimed at the industrial and medical industry.
Securities and Investment Management: (“Securities”) Securities was established to develop and/or acquire assets in the securities trading or management arena, and to pursue, among other product and service lines, real estate investment funds, broker dealers, and mutual funds management.
| 23 |
Approximate information concerning the Company’s operations by reportable segment for the six months ended June 30, 2026 and 2025 is as follows. The Company relies on intersegment cooperation and management does not represent that these segments, if operated independently, would report the results contained herein:
| Three Months Ended June 30, 2026 | Product Packaging | Commercial Lending | Biotechnology | Securities | Corporate/ Other | Total | ||||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Cost of Revenue | ||||||||||||||||||||||||
| Gross profit (loss) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Operating expense | ||||||||||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Net income (loss) from operations before taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Three Months Ended June 30, 2025 | Product Packaging | Commercial Lending | Biotechnology | Securities | Corporate/ Other | Total | ||||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Cost of revenue | ( | ) | ||||||||||||||||||||||
| Gross profit (loss) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Operating expense | ||||||||||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Other income (expense) | ( | ) | ( | ) | ||||||||||||||||||||
| Net income (loss) from operations before taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Six Months Ended June 30, 2026 | Product Packaging | Commercial Lending | Biotechnology | Securities | Corporate/ Other | Total | ||||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Cost of Revenue | ||||||||||||||||||||||||
| Gross profit (loss) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Operating expense | ||||||||||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Other income (expense) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Net income (loss) from operations before taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Six Months Ended June 30, 2025 | Product Packaging | Commercial Lending | Biotechnology | Securities | Corporate/ Other | Total | ||||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Cost of revenue | ( | ) | ||||||||||||||||||||||
| Gross profit (loss) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Operating expense | ||||||||||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Net income (loss) from operations before taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| 24 |
The following tables disaggregate our business segment revenues by major source:
Printed Products Revenue Information:
| Three months ended June 30, 2026 | ||||
| Packaging Printing and Fabrication | $ | |||
| Commercial and Security Printing | ||||
| Real Property Rental Income | ||||
| Total Printed Products Revenue | $ | |||
| Three months ended June 30, 2025 | ||||
| Packaging Printing and Fabrication | $ | |||
| Commercial and Security Printing | ||||
| Real Property Rental Income | ||||
| Total Printed Products Revenue | $ | |||
| Six months ended June 30, 2026 | ||||
| Packaging Printing and Fabrication | $ | |||
| Commercial and Security Printing | ||||
| Real Property Rental Income | ||||
| Total Printed Products Revenue | $ | |||
| Six months ended June 30, 2025 | ||||
| Packaging Printing and Fabrication | $ | |||
| Commercial and Security Printing | ||||
| Real Property Rental Income | ||||
| Total Printed Products Revenue | $ | |||
Commercial Lending Revenue Information:
| Three months ended June 30, 2026 | ||||
| Net investment income | $ | |||
| Total Commercial Lending Revenue | $ | |||
| Three months ended June 30, 2025 | ||||
| Net Investment Income | $ | |||
| Total Commercial Lending Revenue | $ | |||
| Six months ended June 30, 2026 | ||||
| Net investment income | $ | |||
| Total Commercial Lending Revenue | $ | |||
| Six months ended June 30, 2025 | ||||
| Net Investment Income | $ | |||
| Total Commercial Lending Revenue | $ | |||
Biotechnology Revenue Information:
| Three months ended June 30, 2026 | ||||
| Retail internet sales | $ | |||
| Total Biotechnology Revenue | $ | |||
| Three months ended June 30, 2025 | ||||
| Retail internet sales | $ | |||
| Total Biotechnology Revenue | $ | |||
| Six months ended June 30, 2026 | ||||
| Retail internet sales | $ | |||
| Total Biotechnology Revenue | $ | |||
| Six months ended June 30, 2025 | ||||
| Retail internet sales | $ | |||
| Total Biotechnology Revenue | $ | |||
Securities Revenue Information:
| Three months ended June 30, 2026 | ||||
| Rental income | $ | |||
| Commission income | ||||
| Total Securities Revenue | $ | |||
| Three months ended June 30, 2025 | ||||
| Rental income | $ | |||
| Commission income | ||||
| Total Securities Revenue | $ | |||
| Six months ended June 30, 2026 | ||||
| Rental income | $ | |||
| Commission income | ||||
| Total Securities Revenue | $ | |||
| Six months ended June 30, 2025 | ||||
| Rental income | $ | |||
| Commission income | ||||
| Total Securities Revenue | $ | |||
| 25 |
17. Related Party Transactions
The
Company owns shares or approximately % of the outstanding shares of Alset International Limited (“Alset Intl”),
a company incorporated in Singapore and publicly listed on the Singapore Exchange Limited. This investment is classified as a marketable
security and is classified as long-term assets on the consolidated balance sheets as the Company has the intent and ability to hold the
investments for a period of at least one year. The Chairman of the Company, Mr. Heng Fai Ambrose Chan, is the Executive Director and
Chief Executive Officer of Alset Intl. Mr. Chan is also the majority shareholder of Alset Intl as well as the largest shareholder of
the Company. The fair value of the marketable security as of June 30, 2026 and December 31, 2025, was approximately $
On
September 10, 2020, the Company’s wholly owned subsidiary DSS Securities, Inc. entered into membership interest purchase agreement
with BMI Financial Group, Inc. a Delaware corporation (“BMIF”) and BMI Capital International LLC, a Texas limited liability
company (“BMIC”) whereas DSS Securities, Inc. purchased
BMI
Capital International LLC. (“BMIC LLC”), a related party, entered into a promissory note (“BMIC Note 1”) in the
principal sum of $
On
May 8, 2023, DSS Financial Management Inc and BMIC LLC entered into a promissory note (“BMIC Note 2”) in the principal sum
of $
On
July 26, 2022, APF and VEII, Inc. (“VEII”) entered into a promissory note (“Note 6”) in the principal sum of
$
On
October 13, 2021, LVAM entered into loan agreement with BMIC (“BMIC Loan”), a related party, whereas LVAM borrowed the principal
amount of $
On
October 13, 2021, LVAM entered into a loan agreement with Lee Wilson Tsz Kin (“Wilson Loan”), a related party, whereas LVAM
borrowed the principal amount of $
| 26 |
In
August of 2025, DSS issued a $
On
March 26, 2026, the Company issued a $
| 27 |
On
June 23, 2026, the Company issued a $
18. Subsequent Events
The Company has evaluated all subsequent events and transactions through August 14, 2026 the date that the condensed consolidated financial statements were available to be issued and noted no subsequent events requiring financial statement recognition or disclosure.
| 28 |
ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Certain statements contained herein this report constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “1995 Reform Act”). Except for the historical information contained herein, this report contains forward-looking statements (identified by words such as “estimate”, “project”, “anticipate”, “plan”, “expect”, “intend”, “believe”, “hope”, “strategy” and similar expressions), which are based on our current expectations and speak only as of the date made. These forward-looking statements are subject to various risks, uncertainties and factors that could cause actual results to differ materially from the results anticipated in the forward-looking statements.
Overview
The Company, which was incorporated in the state of New York in May 1984, previously conducted its business under the name of Document Security Systems, Inc On September 16, 2021, our board of directors approved an agreement and plan of merger with a wholly owned subsidiary, DSS, Inc. This subsidiary, incorporated in August 2020, was created for the sole purpose of facilitating a transformational name change from Document Security Systems, Inc. to DSS, Inc. This significant shift in our identity became official on September 30, 2021. With the name change, DSS, Inc. retained its trading symbol, “DSS,” and is currently trading under its CUSIP number to 26253C 201. This change reflects not only our evolution as a company but also our commitment to adapting and growing in an ever-changing business landscape. DSS, Inc. (referred to herein as “DSS,” “we,” “us,” or “our”) now operates across four distinct business lines, each with its own unique scope and presence on a global scale. These business lines encompass a wide range of industries and sectors, including:
Product Packaging: Our involvement in product packaging represents our dedication to delivering innovative and sustainable packaging solutions that meet the evolving needs of various markets.
Biotechnology: In the field of biotechnology, we are focused on pioneering scientific advancements and technologies that have the potential to transform human healthcare and wellness.
Commercial Lending: We are actively engaged in commercial lending, offering a suite of financial services that cater to the unique needs of businesses, ranging from commercial lines of credit to land development financing.
Securities and Investment Management: In the world of securities and investment management, we aim to provide expertise and guidance to help our clients navigate the complexities of the financial markets and achieve their investment goals.
Each of these business lines is at a different stage of development, growth, and income generation, reflecting the diversity of our operations. This multi-faceted approach allows us to adapt to changing market conditions and explore new opportunities for expansion and success. We are committed to our continued evolution and to delivering value to our stakeholders across these diverse business lines.
Diverse Business Lines and Global Presence:
Under the banner of DSS, Inc., we have diversified our operations into four distinct business lines, each with its own unique scope and geographical footprint. These business lines include:
Product Packaging: Led by Premier Packaging Corporation, Inc. (“Premier”), a New York corporation, this segment specializes in paperboard and fiber-based folding carton manufacturing, consumer product packaging, and document security printing. Premier is headquartered in its newly established facility in Rochester, NY, primarily serving the US market.
Biotechnology: This business line is dedicated to investing in or acquiring companies in the BioHealth and BioMedical fields, focusing on drug discovery, prevention, treatment of various diseases, and open-air defense initiatives against infectious diseases.
Commercial Lending: American Pacific Financial, Inc. (“APF”) represents our financing business line. Looking ahead, to better meet the needs of the current financial market, the company is looking to transition away form certain industries like direct marketing and focus more on growing its inventory / equipment loan portfolio as well as engaging in more specialized areas of lending like broker/dealer loans. We will continue to monitor our managed loan portfolio, and explore future opportunities. Importantly, the equity portfolio as a bank holding company is anticipated to remain relatively stable, regardless of stock market fluctuations.
Securities and Investment Management: This division focuses on acquiring assets in the securities trading and management arena, including broker-dealers. It also oversees a real estate investment trust (REIT) that acquires hospitals and care centers.
| 29 |
Results of operations for the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025.
This discussion should be read in conjunction with the financial statements and footnotes contained in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2025.
Revenue
| Three months ended June 30, 2026 | Three months ended June 30, 2025 | % Change | Six months ended June 30, 2026 | Six months ended June 30, 2025 | % Change | |||||||||||||||||||
| Product Packaging | $ | 3,258,000 | $ | 4,281,000 | -24 | % | $ | 7,438,000 | $ | 8,286,000 | -10 | % | ||||||||||||
| Securities | 337,000 | 981,000 | -66 | % | 475,000 | 1,900,000 | -75 | % | ||||||||||||||||
| Commercial Lending | 6,000 | 16,000 | -63 | % | 11,000 | 30,000 | -63 | % | ||||||||||||||||
| Biotechnology | 3,000 | 7,000 | -57 | % | 10,000 | 21,000 | -52 | % | ||||||||||||||||
| $ | 3,604,000 | $ | 5,285,000 | -32 | % | $ | 7,934,000 | $ | 10,237,000 | -22 | % | |||||||||||||
For the three and six months ended June 30 2026, total revenue decreased 32% and 22%, as compared to the three and six months ended June 30, 2025, respectively. The decrease in Printed Product revenue of approximately 24% and 10% for the three and six months ended June 30, 2026 is driven by customer orders from existing customers falling short of their forecasts as well as the anticipated second quarter onboarding of several new customers being pushed out to the third and fourth quarters of 2026. The decreases in Securities revenue of approximately 66% and 75% for the three and six months ended June 30, 2026 is driven by an decrease in rental income at our AMRE LifeCare Pittsburgh facility. Additionally, the Company sold its AMRE Winterhaven and Ft Worth facilities during 2025, significantly reducing rental revenues in 2026. Also, the Company received approximately 67% and 77% less in commission revenues associated with its Sentinel Brokers subsidiary for the three and six months ended June 30, 2026. The Company decreases in Commercial lending revenue of approximating 63% for the three and six months ended June 30, 2026 is due to a number of loans made going on non-accrual as borrowers have struggled to make expect payments. Biotechnology revenue is driven by sales of the Company’s air purification Celios brand.
| 30 |
Costs and Expenses
| Three
months ended June 30, 2026 | Three
months ended June 30, 2025 | % Change | Six months ended June 30, 2026 | Six months ended
| % Change | |||||||||||||||||||
| Cost of revenue | ||||||||||||||||||||||||
| Printed products | $ | 3,357,000 | $ | 4,094,000 | -18 | % | $ | 7,796,000 | $ | 7,895,000 | -1 | % | ||||||||||||
| Securities | 1,161,000 | 1,165,000 | 0 | % | 2,255,000 | 2,561,000 | -12 | % | ||||||||||||||||
| Biotechnology | 1,000 | 3,000 | -67 | % | 1,000 | 4,000 | -75 | % | ||||||||||||||||
| Commercial lending | - | 234,000 | -100 | % | - | 212,000 | -100 | % | ||||||||||||||||
| Other | - | (7,000 | ) | -100 | % | - | 3,000 | -100 | % | |||||||||||||||
| Sales, general and administrative compensation | 1,043,000 | 1,122,000 | -7 | % | 2,042,000 | 3,167,000 | -36 | % | ||||||||||||||||
| Professional fees | 625,000 | 492,000 | 27 | % | 1,222,000 | 1,131,000 | 8 | % | ||||||||||||||||
| Stock-based compensation | - | 2,000 | -100 | % | 1,440,000 | 3,000 | 47900 | % | ||||||||||||||||
| Sales and marketing | 357,000 | 423,000 | -16 | % | 733,000 | 824,000 | -11 | % | ||||||||||||||||
| Rent and utilities | 129,000 | 133,000 | -3 | % | 261,000 | 259,000 | 1 | % | ||||||||||||||||
| Research and development | 76,000 | 75,000 | 1 | % | 123,000 | 178,000 | -31 | % | ||||||||||||||||
| Other operating expenses | 641,000 | 974,000 | -34 | % | 1,335,000 | 1,151,000 | 16 | % | ||||||||||||||||
| Total costs and expenses | $ | 7,390,000 | $ | 8,710,000 | -15 | % | $ | 17,208,000 | $ | 17,388,000 | -1 | % | ||||||||||||
Costs of revenue includes all direct costs of the Company’s printed products, including its packaging and printing sales and its direct marketing sales, materials, direct labor, transportation, and manufacturing facility costs. In addition, this category includes all direct costs associated with the Company’s technology sales, services and licensing including hardware and software that are resold, third-party fees, and fees paid to inventors or others because of technology licenses or settlements, if any. Cost of revenue for our REIT line of business includes all direct cost associated with the maintenance and upkeep of the related facilities, depreciation, amortization and the costs to acquire the facilities. Our Commercial Lending operating segment has costs of revenue associated with the impairment of notes receivable for those amounts at risk of collection. Total costs of revenue decreased for the three and six months ended June 30, 2026 as compared to June 30, 2025 by approximately 18% and 6%, respectively, due primarily to the decrease in revenues for each business line during these periods. Additionally, decreased in cost of revenue within our REIT business driven by the sale of the Fort Worth, Tx and Winter Haven, Fl facilities in December 2025.
Sales, general and administrative compensation costs, excluding stock-based compensation, decreased for the three and six months ended June 30, 2026 as compared to June 30, 2025 by approximately 7% and 36%, respectively due to headcount reductions within our Securities segment. Additionally, the decrease for the six months ended June 30, 2026 in comparison to the six months ended June 30, 2025 can be attributed to bonus awarded to Heng Fai Holdings Limited (“HFHL”), a Hong Kong Company, which is beneficially owned by Mr. Heng Fai Ambrose Chan, Director of DSS, Inc., for services rendered. The issuance was approved by the board of directors on January 31, 2025.
Professional fees increased for the three and six months ended June 30, 2026 as compared to June 30, 2025 by approximately 27% and 8%, respectively. These increases are driven by costs associated with recruitment of technical personnel at Premier Packaging and professional staff at DSS.
Stock-based compensation includes expense charges for all stock-based awards to employees, directors, and consultants of Impact Bio. Such awards can include option grants, warrant grants, and restricted and unrestricted stock awards. In January 2026, Impact BioMedical granted and issued 3,200,000 shares of common stock to various individuals including executives, board members, audit committee members, etc. Agreement included the individuals rescinding and cancelling any and all unexercised stock options previously granted. Impact Biomedical recorded stock-based compensation expense of approximately $1,440,000.
Sales and marketing which include internet and trade publication advertising, travel and entertainment costs, sales-broker commissions, and trade show participation expenses. Sales and marketing decreased for the three and six months ended June 30, 2026 as compared to June 30, 2025 by approximately 16% and 11%, respectively, due to decreases in marketing, and travel costs within our Printed Products division.
Rent and utilities decreased for the three months ended June 30, 2026 as compared to June 30, 2025 by approximately 3% and remained relatively flat for the six months ended June 30, 2026 as compared to June 30, 2025 as both rent and utilities at the Company’s places of business remained flat.
Research and development costs represent costs consisting primarily of independent, third-party testing of the various properties of each technology the Company owns possesses as well as research on new technologies. Theses costs remained relatively flat for the three months ended June 30, 2026 as compared to June 30, 2025 and decreased for the six months ended June 30, 2026 as compared to June 30, 2025. The six month decrease is driven due primarily to a decrease in spending on identifying new technologies as well as pausing the spend on several in-development technologies.
Other operating expenses consist primarily of equipment maintenance and repairs, office supplies, IT support, and insurance costs. These costs decreased for the three months ended June 30, 2026 as compared to June 30, 2025 by approximately 34% and increased by approximately 16% for the six months ended June 30, 2026 as compared to June 30, 2025. The decrease or the three months ended June 30, 2026 as compared to June 30, 2025 is due to efforts by management to control such costs. The increase for the six months ended June 30, 2026 as compared to June 30, 2025, primarily due to collections of previously written-off accounts receivable associated with our AMRE LifeCare facilities of approximately $600,000 during the first quarter of 2025.
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Other Income (Expense)
Three months ended June 30, 2026 | Three months ended June 30, 2025 | % Change | Six months ended June 30, 2026 | Six months ended June 30, 2025 | % Change | |||||||||||||||||||
| Interest Income | $ | 2,000 | $ | 13,000 | -85 | % | $ | 3,000 | $ | 17,000 | -82 | % | ||||||||||||
| Interest income on note receivable, related party | 6,000 | $ | 12,000 | -50 | % | 12,000 | 16,000 | -25 | % | |||||||||||||||
| Dividend Income | 5,000 | $ | - | N/A | 16,000 | - | N/A | |||||||||||||||||
| Other Income | 21,000 | 4,000 | 425 | % | 7,000 | 10,000 | -30 | % | ||||||||||||||||
| Interest Expense | (89,000 | ) | (123,000 | ) | -28 | % | (128,000 | ) | (156,000 | ) | -18 | % | ||||||||||||
| Loss on equity method investment | (364,000 | ) | (2,000 | ) | 18100 | % | (367,000 | ) | (5,000 | ) | 7240 | % | ||||||||||||
| Gain (loss) on investments | (830,000 | ) | 1,557,000 | -153 | % | (1,531,000 | ) | 627,000 | -344 | % | ||||||||||||||
| Impairment of intangible assets | - | (600,000 | ) | -100 | % | - | (600,000 | ) | -100 | % | ||||||||||||||
| Loss on sale of real estate | - | (43,000 | ) | -100 | % | - | (727,000 | ) | -100 | % | ||||||||||||||
| Total other income (expense) | $ | (1,249,000 | ) | $ | 818,000 | $ | (1,988,000 | ) | $ | (818,000 | ) | |||||||||||||
Interest income is recognized on the Company’s money markets, and a portion of notes receivable, identified in Note 4. The decrease in interest income is driven by several notes being put on non-accrual as the related borrowers have shown an inability to pay timely.
Interest income on notes receivable, related party is recognized on the Company’s notes receivable with related parties identified in Note 4 and remained flat year over year as outstanding principal balances remained flat year over year.
Dividend income for the three and six months ended June 30, 2026 represent dividends received on certain investments owned by the Company. No such dividends were received the three and six months ended June 30, 2025.
Other income increased for the three ended June 30, 2026 as compared to June 30, 2025 by approximately 425% and decrease for the six months ended June 30, 2026 as compared to June 30, 2025 by approximately 30% driven by fluctuations in foreign exchange rates.
Interest expenses decreased for the three and six months ended June 30, 2026 as compared to June 30, 2025 by approximately 28% and 18%, respectively, due primarily to decrease in overall debt balances.
Loss on equity method investment is the Company’s prorated portion of earnings on its investments treated under the equity method of account for the six months ended June 30, 2026 as compared to 2025.
Gain (loss)on investments consists of net realized losses on marketable securities which are recognized as the difference between the purchase price and sale price of the common stock investment, and net unrealized losses on marketable securities which are recognized on the change in fair market value on our common stock investment. The fluctuation decreased for the three and six months ended June 30, 2026 as compared to June 30, 2025 by driven by the performance of our stock portfolio.
Impairment of intangible assets is a result of the Company resigning its position as the registered investment advisor (“RIA”) of the American First Mutual Funds. The related asset was acquired at the time the Company became the RIA in September 2021.
Loss on sale of real estate is driven by the sale of the Company’s Plano, Texas facility.
Net Loss
Three months ended June 30, 2026 | Three months ended June 30, 2025 | % Change | Six months ended June 30, 2026 | Six months ended June 30, 2025 | % Change | |||||||||||||||||||
| Net loss | $ | (5,035,000 | ) | $ | (2,607,000 | ) | 93 | % | $ | (11,262,000 | ) | $ | (7,902,000 | ) | 43 | % | ||||||||
For the six months ended June 30, 2026 the Company recorded net losses of $11,262,000 as compared to net losses of $7,902,000 for the same period in 2025. The increase in net loss is driven by a decrease in total revenue of approximately 22% as well as stock-based compensation of approximately $1,440,000 paid at our Impact BioMedical subsidiary during the first quarter of 2026.
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LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2026, the Company had approximately $4.1 million in cash, $2.8 million in marketable securities, and negative working capital of approximately $39.9 million. The Company has funded its liquidity needs through equity and debt financing and expects to pursue additional liquidity through potential asset sales, financing activities, and continued reductions in operating expenses and cash burn. However, there can be no assurance that the Company will successfully complete asset sales, obtain additional financing on acceptable terms, or achieve the anticipated cost reductions. Accordingly, substantial doubt remains regarding the Company’s ability to continue as a going concern.
Cash Flow from Continuing Operating Activities
Net cash used by operating activities was $1,985,000 for the six months ended June 30, 2026 as compared to cash provided by operating activities of $454,000 for six months ended June 30, 2025. This fluctuation is driven by increases in net loss, after reconciling items, approximating $2,932,000.
Cash Flow from Investing Activities
Net cash used by investing activities was $2,707,000 for the six months ended June 30, 2026 as compared to net cash provided by investing activities of $11,019,000 for the six months ended June 30, 2025. This fluctuation is driven by the sale of real estate approximating $9,500,000, and the sale of related party investments of approximately $1,500,000 during the six months ended June 30, 2025, offset by the purchase of a convertible bond of $2,450,000 during 2026.
Cash Flow from Financing Activities
Net cash provided by financing activities was $2,446,000 for the six months ended June 30, 2026 as compared to cash used by financing activities of $12,512,000 for the six months ended June 30, 2025. This variance is driven by payments toward long term debt of $628,000 in 2026 versus $9,443,000 in 2025. Also, payments on margin loans of $1,152,000 were made in 2026 as compared to payments on margin loans of $3,178,000 in 2025. Additionally, the Company had borrowings of $3,450,000 from related parties in 2026 and had no such borrowings in 2025.
Off-Balance Sheet Arrangements
We do not have any material off-balance sheet arrangements that have, or are reasonably likely to have, an effect on our financial condition, financial statements, revenues, or expenses.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in our financial statements and accompanying notes. The financial statements as of December 31, 2025, describe the significant accounting policies and methods used in the preparation of the financial statements. There have been no material changes to such critical accounting policies as of the Quarterly Report on Form 10-Q for the quarter ended June 30, 2026.
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ITEM 4 - CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures for the quarter ended June 30, 2026, pursuant to Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation and on the material weaknesses disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025 which remained as of June 30, 2026, our principal executive officer and principal financial officer concluded that as of June 30, 2026, our disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is being recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that our disclosure controls are not effectively designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is being accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Plan for Remediation of Material Weaknesses
As discussed in our Annual Report on Form 10-K for the year ended December 31, 2025, the Company has a remediation plan and is committed to maintaining a strong internal control environment and believes that these remediation efforts will represent significant improvements in our controls. The Company has started to implement these steps, however, some of these steps will take time to be fully integrated and confirmed to be effective and sustainable. Additional controls may also be required over time. Until the remediation steps set forth above are fully implemented and tested, the material weaknesses described above will continue to exist.
Changes in Internal Control over Financial Reporting
During the quarter ended June 30, 2026, the Company continued to implement certain remediation measures described above. These remediation efforts resulted in changes to the Company’s internal control over financial reporting; however, such changes did not materially affect, and are not reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company will continue to implement, evaluate, and test the effectiveness of its remediation measures as part of its ongoing remediation plan.
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PART II
OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
See commentary in Note 13 Commitments and Contingencies.
ITEM 1A - RISK FACTORS
There have been no material changes to the discussion of risk factors previously disclosed in our most recently filed Annual Report on Form 10-K for the year ended December 31, 2025.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 - MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS
Exhibit Number |
Exhibit Description | |
| 3.1 | Certificate of Incorporation * | |
| 3.2 | Certificate of Incorporation of Document Security Systems, Inc., as amended (incorporated by reference to exhibit 3.1 to Form 8-K dated August 25, 2016). | |
| 3.3 | Fifth Amended and Restated Bylaws * | |
| 10.1 | Securities Purchase Agreement between Decentralized Sharing Systems, Inc. and Sharing Services Global Corporation for the sale of HWH Holdings, Inc. (incorporated by reference to exhibit 10.1 to Form 10-Q to the Company’s quarterly report, dated August 13, 2024) | |
| 10.2 | Securities Purchase Agreement between Decentralized Sharing Systems, Inc. and Sharing Services Global Corporation for the sale of HWH World, Inc. (incorporated by reference to exhibit 10.2 to Form 10-Q to the Company’s quarterly report, dated August 13, 2024) | |
| 31.1 | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer. * | |
| 31.2 | Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer. * | |
| 32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. * | |
| 32.2 | Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. * | |
| 101.INS | Inline XBRL Instance Document* | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document* | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document* | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document* | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document* | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document* | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document)* |
*Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| DSS, INC. | ||
| August 14, 2026 | By: | /s/ Jason Grady |
| Jason Grady | ||
| Interim Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| August 14, 2026 | By: | /s/ Todd D. Macko |
| Todd D. Macko | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
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