DSS : Amendment to Annual Report Form 10 K/A

About this update from Dss, Inc.

[{"type":"text","content":" UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K/A \n ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31 , 2023 or \n ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to __________ Commission file number 001-32146 DSS, INC. \n (Exact name of registrant as specified in its charter)\n New York 16-1229730 \n \n (State or other jurisdiction of\n \n \n incorporation or organization)\n \n \n (I.R.S.Employer\n \n \n Identification No.)\n 275 Wiregrass Pkwy Henrietta , New York 14586 \n (Address of principal executive offices)\n (585) 325-3610 \n (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol Name of each exchange on which registered Common Stock, par value $0.02 per share DSS NYSE American LLC Securities registered pursuant to Section 12(g) of the Act: None \n Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. YES ☐ NO ☒\n \n \n \n Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ NO ☒\n \n \n \n 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. YES ☒ NO ☐\n \n \n \n Indicate by check mark whether the registrant has submitted electronically every Interactive Data 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). YES ☒ NO ☐\n \n \n \n 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\n Large Accelerated Filer ☐ \n Accelerated Filer ☐ \n Non-Accelerated Filer ☒\n Smaller Reporting Company ☒ \n Emerging growth company ☐ \n 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. ☐\n \n \n \n Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☐ No ☒ \n Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act). Yes ☐ No ☒ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐ \n The aggregate market value of the registrant's common stock held by non-affiliates of the registrant computed by reference to the price at which the common stock was last sold, as reported on the NYSE American LLC exchange on June 30, 2023 was $ 20,278,452 .\n \n \n \n The number of shares of the registrant's common stock outstanding as of October 9, 2024, was 7,066,772 .\n DOCUMENTS INCORPORATED BY REFERENCE \n None. EXPLANATORY NOTE \n DSS, Inc. (the \"Company\") is filing this Form 10-K/A (the \"Form 10-K/A\" or this \"Amendment\") to amend our Annual Report on Form 10-K for the year ended December 31, 2023, originally filed with the Securities and Exchange Commission (the \"SEC\") on March 27, 2024 (\"Original Report\"), to restate our financial statements and related footnote disclosures as of and for the year ended December 31, 2023 and 2022 (the \"Affected Periods\"). This Form 10-K/A also amends certain other Items in the Original Report, as listed in \"Items Amended in this Form 10-K/A\" below. Restatement Background \n On May 4, 2023, the Company distributed approximately 280 million shares of Sharing Service Global Corporation (\"SHRG\"), beneficially held by the Company, in the form of a dividend to the shareholders of the Company's common stock. Upon completion of this distribution, the Company retained an ownership interest in SHRG of approximately 7%. Effective May 1, 2023, SHRG was deconsolidated from the consolidated financial statements (the \"Deconsolidation\"). The consolidated statement of operations does not include SHRG activity after April 30, 2023, and the assets and liabilities of SHRG are no longer included within the Company's consolidated balance sheet. In the June 30, 2023 10-Q, the Company recorded an approximate $29.9 million loss on deconsolidation. The Company also recorded an decrease in accumulated deficit of $18.7 million to reflect the reversal of balances as of deconsolidation. In preparation of the Form S-3 as well as the September 30, 2024 10-Q filing, this transaction was revisited and it was determined that loss was unintentionally overstated by approximately $23.5 million driven primarily by the increases in accumulated deficit that should have been recorded as an offset to the initial income statement loss. In addition, the Company has determined that Deconsolidation also requires the recognition of discontinued operations. Management and the Audit Committee of the Company has concluded that restatement of its December 31, 2023 financial statements, filed on March 27, 2024, which would include the reclassification of discontinued operations for the year ended December 31, 2023 and 2022, is required. Effects of Restatement \n See Note 2 to the Notes to audited financial statements included in Part II, Item 8 of this Amendment for additional information on the restatement and the related financial statement effects. Items Amended in this Form 10-K/A \n This Form 10-K/A presents the Original Report, amended and restated with modifications as necessary to reflect the restatements. The following items have been amended to reflect the restatement: \n Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations \n Part II, Item 8. Financial Statements and Supplementary Data \n Part II, Item 9A - Controls and Procedures \n In addition, the Company's Interim Chief Executive Officer and Chief Financial Officer have provided new certifications dated as of the date of this filing in connection with this Form 10-K/A. DSS, INC. & SUBSIDIARIES Table of Contents PART I \n ITEM 1 BUSINESS \n 3 \n ITEM 1A RISK FACTORS \n 14 \n ITEM 1B UNRESOLVED STAFF COMMENTS \n 21 \n ITEM 1C\n CYBERSECUTIRY \n 21\n ITEM 2 PROPERTIES \n 22 \n ITEM 3 LEGAL PROCEEDINGS \n 22 \n ITEM 4 MINE SAFETY DISCLOSURES \n 23 PART II \n ITEM 5 MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES \n 24 \n ITEM 6 SELECTED FINANCIAL DATA \n 25 \n ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS \n 25 \n ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK \n 32 \n ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA \n 33 \n ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE \n 72 \n ITEM 9A CONTROLS AND PROCEDURES \n 72\n ITEM 9B OTHER INFORMATION \n 73 PART III \n ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE \n 74\n ITEM 11 EXECUTIVE COMPENSATION \n 84 \n ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS \n 87\n ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE \n 88\n ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES \n 92\n PART IV \n ITEM 15 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES \n 93\n ITEM 16 FORM 10-K/A SUMMARY \n 95\n SIGNATURES \n 96\n \n 2\n PART I ITEM 1 - BUSINESS Overview \n DSS, Inc. (together with its consolidated subsidiaries (unless the context otherwise requires), referred to herein as \"DSS,\" \"we,\" \"us,\" \"our\" or the \"Company\", currently operates five distinct business lines operate around the globe with primary operations in North America and Asia. The six divisions are:\n 1. \n Product Packaging, 2. \n Biotechnology, 3. \n Commercial Lending, 4. \n Securities and Investment Management, and 5. \n Alternative Trading, \n 6. \n Direct Marketing,\n \n \n \n Each of these business lines are in various stages of development, growth, and income generation. Due to these variations in the business cycle, including differences in revenue and assets acquired, the company is currently reporting financial information for five of these operating segments:\n 1. \n Product Packaging, \n 2. \n Commercial Lending, \n 3. \n Biotechnology, \n 4. \n Direct Marketing, and \n 5. \n Securities and Investment Management \n As the other divisions grow and start generating material operations and revenue, those operating segments will be added to our financial segmental reporting . \n Our divisions, their business lines, subsidiaries, and operating territories:\n 1. Product Packaging: The Company's consumer packaging and security printing business is led by its wholly owned subsidiary, 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. Biotechnology: (\"Biotech\") Biotechnology, a science-driven industry sector that uses living organisms and molecular biology to produce healthcare-related products, progressed on multiple fronts in 2021. This 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. We had a productive year including key patent awards, the advancement of key programs, the release of positive study results, and several projects now in global licensing discussions. Assets of this group are organized under the holding company, DSS BioHealth Security, Inc. Its subsidiaries are currently operating in Houston, TX and Rochester, NY. The group also has a research facility in Winter Haven, Florida. 3. Commercial Lending: American Pacific Bancorp, Inc. (\"APB\") represents our banking and financing business line. During 2023, APB issued more than $14 million in new loans, and over $4 million in renewal loan to customers with strong credit quality across a diverse portfolio of businesses. Looking ahead, to better meet the needs of the current financial market, the company is looking to transition away from 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 of more than $22 million, which earns 1.25% annually in service charges, and explore future opportunities. Importantly, the equity portfolio as a bank holding company is anticipated to remain relatively stable, regardless of stock market fluctuations. 4. Securities and Investment Management: In 2023, DSS continued our strategic investments in three broker dealers; WestPark Capital, BMI Capital Investments, and Sentinel Brokers Company, Inc. Additionally, we have become the Registered Investment Advisor (\"RIA\") for DSS AmericaFirst Quantitative Funds (DSS AmericaFirst) family. This group of businesses is led by its holding company, DSS Securities, Inc., (\"DSS Securities\") and the group is currently headquartered in Houston, Texas, with operations in Chicago, Illinois, Sacramento, California, Los Angeles, California, and New York, NY. Also in this segment is the Company's real estate investment trusts (\"REITs\"), 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. This group is headquartered in Houston, Texas. 5. Alternative Trading: (\"Alt. Trading\") This Division was established to develop and/or acquire assets and investments in the securities trading and/or funds management arena. Alt. Trading, in partnership with recognized global leaders in alternative trading systems, intends to obtain a broker-dealer license and launch an Alternative Trading System (\"ATS\"). The ATS, focusing on financial market inefficiencies, will utilize a blockchain based financial market infrastructure ('FMI') that will trade digital asset securities exempt from registration, or 'private securities'. The digital FMI will allow for T+0 settlement, which USX believes can be used to attract liquidity. The platform will generate trading liquidity for the 'middle' market - companies that are seeking to raise under $150M USD, can pursue private placements, which have lower compliance costs that public offerings. USX Holdings Company, Inc. (\"USX\"), a subsidiary of the DSS Blockchain, Inc., is a collaboration between the GSX Group, Coinstreet Partners and DSS, Inc. This collaboration is currently in the planning stages. The Alt. Trading division is currently headquartered in Houston, TX. 6. Digital Transformation (Legacy) : This division was established to serve as a Preferred Technology Partner and Application Development Solution for mid-cap brands across various industries, including the direct selling and affiliate marketing sector. Digital Transformation enhanced marketing, communications, and operational processes through tailored software development and implementation. It successfully launched several mobile applications for direct sales businesses, seamlessly integrating back-office and social networking functions. Please note that Digital Transformation was headquartered in Hong Kong until its discontinuation in 2023. \n \n 3\n 7. Secure Living (Legacy) : This division had embarked on a mission to create fully sustainable, secure, connected, and health-focused living communities, featuring homes equipped with advanced technology, energy-efficient solutions, and high-quality living environments, catering to both new construction and renovation projects for single and multi-family residential housing. Secure Living had been actively collaborating with various land development partners across the United States to develop complete, fully sustainable single-family subdivisions promoting healthy living. Secure Living was headquartered in Houston, Texas, until it was wound down in 2023. 8. Alternative Energy (Legacy) : This group was established with the vision to lead the company into the clean energy sector, focusing on environmentally responsible and sustainable initiatives. Alset Energy, Inc., the holding company for this group, and its wholly owned subsidiary, Alset Solar, Inc., were dedicated to the development of utility-scale solar farms to support regional power grids in the United States and provide small microgrids for independent energy on underutilized properties. In addition to solar farms, solar battery banks, and residential energy creation and storage, Alset Energy also explored alternative energy investment and development opportunities. Our overarching goal was to make a significant impact in mitigating the negative effects of climate change by reducing air pollution and expanding access to clean energy, thus contributing to global economic well-being. Alset Energy was headquarters in Houston, Texas until its discontinuation in 2023. \n 9. \n Direct Marketing: (\"Direct\") Led by the holding corporation, Decentralized Sharing Systems, Inc. (\"Decentralized\") provides services to assist companies in the emerging growth \"Gig\" business model of peer-to-peer decentralized sharing marketplaces. Direct specializes in licensing its products and services through its subsidiary HWH World, Inc. (\"HWH World\") using the popular gig economic marketing strategy as a form of direct marketing. Direct's products include, among other things, nutritional and personal care products sold throughout North America, Asia Pacific, Middle East, and Eastern Europe. 2023 RECAP \n The following is a summary of the DSS reported transactions and investments since January 2023 that reflect the active advancements and investments in these business lines:\n On April 17, 2023, DSS, Inc.. announced today that Jason Grady, Chief Operating Officer of DSS, will be presenting at the Emerging Growth Virtual Conference on Wednesday, April 19 from 1:45-2:15 PM.\n On April 19, 2023, DSS, Inc. announced that the Company plans to distribute to its stockholders common stock of Sharing Services Global Corporation (\" Sharing Services \" or \" SHRG \") that is beneficially held by DSS, directly and through its subsidiary, Decentralized Sharing Systems, Inc. (\" DSSI \"). Sharing Services is a diversified direct marketing company that is currently listed on the OTC (OTC: SHRG) and is in the process of up-listing to Nasdaq.\n On May 1, 2023, DSS, Inc. announced today the distribution date for the common stock of Sharing Services Global Corporation (\"Sharing Services\" or \"SHRG\") that is beneficially held by DSS, directly and through its subsidiary, Decentralized Sharing Systems, Inc. (\"DSSI\"). As previously announced, DSS Inc., together with its subsidiary DSSI, distributed (the \"Distribution\") approximately 280 million shares of Sharing Services' common stock beneficially held by DSS and DSSI in a distribution to holders of DSS common stock, par value $0.02 per share (\"DSS Common Stock\") as of April 28, 2023. Each share of DSS Common Stock outstanding as of 5:00 p.m., New York City time, held on April 28, 2023, will entitle the holder thereof to receive two (2) SHRG common stock shares to be distributed on May 4, 2023.\n On May 16, 2023, DSS, Inc reported earnings results for the First Quarter Ended March 31, 2023. Premier Packaging division had a stellar quarter in booking a 72% increase in revenues in the first quarter compared to the First Quarter of 2022 as a result of our capital investments completed over the past year.\"\n On June 26, 2023, DSS, Inc Announces Record and Distribution Date for Impact BioMedical Spin-Off Special Dividend. DSS, Inc. has filed for the distribution of a special stock dividend to DSS Inc. shareholders of record on June 30th for distribution on July 14, 2023. DSS shareholders of record as of 4:00 p.m. ET on June 30, 2023 (the \"record date\") will receive four (4) shares of Impact Biomedical, Inc. for every one (1) share of DSS.\n On June 30, 2023, DSS, Inc announced updated shareholder of record date for Spin-Off of Impact BioMedical, Inc. DSS, Inc. filed for the distribution of a special stock dividend of Impact Biomedical Inc. to DSS Inc. shareholders of record on July 10, 2023, pending SEC clearance. DSS shareholders of record as of 5:00 p.m. ET on July 10, 2023 (the \"record date\") were entitled to four (4) shares of Impact Biomedical Inc. for every one (1) share of DSS on the distribution date.\n \n 4\n On July 31, 2023, DSS, Inc. announced today the distribution date for the previously announced stock dividend of Impact BioMedical Inc. DSS Inc. shareholders of record on July 10, 2023 will be entitled to four (4) shares of Impact Biomedical Inc. for every one (1) share of DSS to be distributed on August 8, 2023.\n On October 23, 2023, DSS, Inc. announced that a registration statement on Form S-1 was filed with the U.S. Securities and Exchange Commission (\"SEC\") relating to the proposed initial public offering of DSS's wholly-owned subsidiary, Impact Biomedical.\n On October 26, 2023, DSS, Inc. announced that the Company received a letter (the \"Letter\") from the staff of NYSE American LLC (the \"Exchange\") stating that the Company's securities have been selling for a low price per share for a substantial period of time and, pursuant to Section 1003(f)(v) of the NYSE American Company Guide. The Company's continued listing is predicated on it effecting a reverse stock split of its common stock or otherwise demonstrating sustained price improvement within a reasonable period of time, which the Exchange has determined to be no later than April 20, 2024.\n On November 8, 2023, Impact BioMedical Inc. (\"Impact\") filed a Current Report on Form 8-K with the Securities and Exchange Commission on November 6, 2023, disclosing that Impact effected a reverse stock split of its issued and outstanding common stock by a ratio of 1 for 55. Impact did not effectuate a reverse split of its authorized capital stock and no amendment to the articles of incorporation or bylaws was made. Impact received approval from its majority stockholder and the Company's Board of Directors to effectuate the reverse split.\n On November 14, 2023, DSS, Inc. announced that, in a unanimous decision, the Court of Appeals for the Federal Circuit (CAFC) rejected Nichia Corp.'s challenge to U.S. Patent No. 6,879,040 (the '040 Patent). U.S. Chief Circuit Judge Kimberly Moore, who authored the opinion, and U.S. Circuit Judges Kara Stoll and Tiffany Cunningham sat on the panel for the Federal Circuit.\n On November 28, 2023, Premier Packaging, a Wholly-Owned Subsidiary of DSS, Inc., Secures Contract Extension with Major Retailer Worth Up to $15 Million over Four Years. DSS, Inc. announced today that its wholly-owned subsidiary, Premier Packaging signed a contract extension with an existing client for the next three years totaling a minimum of $12 Million with a fourth year extension option bringing the potential total revenue to over $15 Million.\n On December 22, 2023, DSS, Inc. announced that it will proceed with a 1-for-20 reverse stock split (the \"Reverse Split\") of its issued and outstanding shares of common stock, par value $0.02, following authorization by its Board of Directors and majority shareholders to effect a reverse split by a ratio of not less than 1-for-20 and not more than 1-for-40 (the \"Reverse Split Range\"), at any time on or before April 20, 2024, with the Board having the discretion as to whether or not the Reverse Split is to be effected, and with the exact ratio to be set at a whole number within the Reverse Split Range as determined by the Chief Executive Officer in his discretion. The reverse split was effective January 8, 2024.\n \n 5\n STRATEGIC BUSINESS PLAN AND 2023 PROGRESSION Here we highlight three specific developments: \n We are preparing for an Initial Public Offering (\"IPO\") of our majority owned subsidiary, Impact Biomedical, Inc. (\"IBIO\"), after distributing four shares of IBIO for every share of DSS held as of the record date of July 10, 2023.\n \n \n \n Once the IPO has been completed, these stock dividend shares will not be eligible for resale until 180 days from the effective date of the IPO, a restriction that can be lifted at the discretion of IBIO. The structure of this spinoff is designed for DSS to maintain the consolidation of IBIO's financials, ensuring our shareholders receive the benefits of IBIO's success on a go forward basis. Our license agreement with ProPhase Labs (Nasdaq: PRPH) is resulting in promising clinical advancement in the development of our Linebacker and Equivir assets. Impact Biomedical is actively considering various ways to maximize the value of its investments and assets. The company is excited about the opportunities that the IPO will create and is looking forward to introducing its shareholders to subsequent spinoffs or similar liquidity events.\n \n \n \n Turning to our product packaging division, Premier Packaging Corporation, Inc., net income increased 126% year over year. Premier Packaging Corporation is experiencing a positive trend in its financial performance, thanks to strategic investments and operational improvements.\n \n \n \n Our commitment to reinforcing our leadership dynamics is evident in the recent enhancement of the management team at DSS Wealth Management, Inc. This deliberate move is aimed at fostering a legacy of investment excellence and scaling our assets under management. We are planning to launch a Total Return Bond Fund, to capitalize on the prevailing higher interest rates.\n Three-Stage Development for Exponential Growth \n For every completed acquisition, and taking into consideration market conditions and other constraints, we adhere to a well-structured three-stage development process with the goal of maximizing value creation and propelling our growth by expanding our capabilities, strength, and scale.\n \n \n \n Stage 1: Asset Acquisition and Organizational Development In this initial phase, our focus lies in identifying and acquiring assets, vehicles, asset structures, and assembling the necessary talent and organizations. This strategic step serves as the strong foundation upon which we build future growth.\n \n 6\n \n Stage 2: Revenue Generation and Operational Excellence Our second stage revolves around driving revenue through diverse channels, including revenue streams, licensing, and other scalable sources. Our primary objective during this phase is the creation of efficient and well-operating businesses that excel in operational performance. The success achieved in this stage in 2022, evidenced by substantial revenue growth, is a testament to our efforts.\n \n \n \n Stage 3: Profitability and Positive EBITDA The third and final stage focuses on achieving positive EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and profitability. This is realized through the optimization of business operations, capitalizing on scale and efficiency to generate sustained profits.\n Growth Strategies \n IPOs as a Growth Strategy: Our company has plans to pursue Initial Public Offerings (IPOs) as a means to share its success with shareholders. We aim to take our businesses public once they reach an optimal point for effective leverage and meet internal goals and expectations.\n \n \n \n Decentralized Sharing Model: We firmly believe in our unique decentralized sharing model, combined with the three-stage development process, to create substantial shareholder value. This model involves distributing dividends from potential IPOs directly to benefit shareholders.\n \n \n \n In summary, our strategy delineates a methodical approach encompassing asset acquisition, revenue generation, operational efficiency, profitability, and ultimately, taking businesses public through IPOs to reward our shareholders. We place a strong emphasis on our decentralized sharing model, ensuring that the benefits of our success are shared directly with our valued shareholders.\n Premier Packaging Secures Contract Extension with Major Retailer \n Our Premier Packaging Corporation, Inc. (\"Premier\") subsidiary provides a clear example of the second stage of our development process as it began operations at its new 105,000 sq. ft. facility in Western New York in the first half of 2022. The increased production capacity at the new facility, which has enabled us to meet growing customer demand, was a key driver behind our nearly 3% year-over-year revenue growth for this segment in the most recently reported quarter as well as net income increase of 126% year over year.\n \n \n \n Since 2019, we have accelerated the transformation of Premier's operations, investing in state-of-the-art manufacturing equipment, people, and processes to increase its capacity, improve quality and delivery, and to ensure it has the resources to support its growing customer base and their evolving supply chain demands. Utilizing these investments, we design and manufacture folding cartons that attract the consumer's attention when and where it matters most at the point of sale.\n \n \n \n In 2023, Premier Packaging signed a contract extension with an existing client for the next three years with expected revenue to approximate $12 Million with a fourth-year extension.\n \n \n \n We are very pleased to see that our capital investment to increase production capacity and economies of scale at Premier Packaging continues to result in satisfied clients and increasing revenues. Since inaugurating Premier's state-of-the-art 105,000 sq. ft. facility in 2022, our packaging division has expanded its customer base and built a competitive advantage in the packaging industry. We will continue to add capabilities in key areas that increase operational efficiencies to strengthen Premier's foundation and offerings while continuing to provide world-class service to our customers.\n \n \n \n Premier specializes in creating innovative fiber-based, folding cartons and packaging solutions which provide a sustainable alternative to traditional plastic packaging.\n \n 7\n Impact BioMedical Share Distribution and IPO \n In the field of Biotechnology and Biomedical, Impact Biomedical Inc. is dedicated to the discovery, validation, and patenting of innovative scientific advancements and technologies that lead to new developments in human healthcare and well-being. Once these breakthroughs are ready for implementation, IBIO collaborates closely with various partners through licensing agreements, co-development initiatives, joint ventures, and other strategic relationships to facilitate the introduction of these novel healthcare solutions to the market. Their mission is to advance and bring to fruition cutting-edge innovations that have the potential to significantly impact and improve the field of human health and wellness.\n \n \n \n In 2023, Impact BioMedical, a vital component of our BioHealth group, made significant strides in various areas. These achievements included promising initial test results related to new bioplastics, the reinforcement of intellectual property safeguards, and the establishment of licensing agreements with ProPhase Biopharma, a wholly-owned subsidiary of ProPhase Labs, Inc. (Nasdaq: PRPH). ProPhase Labs, an extensively diversified diagnostic company with a track record spanning over three decades, dedicated to enhancing wellness and improving health through both over-the-counter (OTC) and prescription products. They have shown strong belief in Impact BioMedical's Linebacker compounds, recognizing their potential value in the multi-billion-dollar range as co-therapies for cancer. Furthermore, ProPhase Labs anticipates the launch of Equivir as an OTC supplement in late 2023. Additionally, ProPhase BioPharma is preparing to submit an Investigational New Drug (\"IND\") application to the US FDA for Equivir G as a prescription antiviral.\n \n \n \n Impact BioMedical effectively utilizes its scientific expertise and intellectual property rights to provide innovative solutions to long-standing challenges within the biomedical field. The company's primary focus lies in dedicated research and discovery efforts aimed at developing promising products for the prevention, inhibition, and treatment of neurological, oncological, and immuno-related diseases. For further details about Impact BioMedical, you can visit their website at http://impactbiomedinc.com/ .\n \n \n \n With a strengthened foundation now in place, we expect Impact BioMedical to provide us with the first opportunity to clearly demonstrate a core tenant of our vision - sharing our success with our shareholders. In August of 2023, DSS, Inc. distributed a stock dividend of four (4) shares of Impact BioMedical Inc. to all DSS Inc. shareholders of record on July 10, 2023. Each share of Impact BioMedical distributed as part of the distribution will not be eligible for resale until 180 days from the date Impact BioMedical's initial public offering becomes effective under the Securities Act, subject to the discretion of the Company to lift the restriction sooner.\n \n \n \n Importantly, Impact BioMedical is just one of multiple assets we believe can have liquidity events in 2024 as we continue to diligently move our growing portfolio of businesses through our unique and strategic value creation process.\n Key Upcoming Milestone for AmericaFirst Quantitative Funds \n AmericaFirst Quantitative Funds, part of our Securities and Investment Management segment, showed improved performance versus benchmarks for three of the four mutual funds under management since the new investment advisory team took over in May 2023. In addition to focusing on improved relative performance, the team expects to enhance marketing and sales efforts to grow assets under management, continue to improve operational efficiencies, and plans to launch a Total Return Bond Fund in the first half of the year.\n \n 8\n Reporting Operating Segments: \n As we have reported above, we financially report business operating results on five operating segments, which we believe will certainly increase and transition as the newer lines of business develop and mature. However, the five business segments that we are reporting on in 2023 are as follows:\n 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.\n \n \n \n For over 25 years, Premier has been a market leader in providing solutions for paperboard packaging from consumer retail packaging and heavy mailing envelopes, to sophisticated custom folding cartons and complex three-dimensional direct mail solutions. Premier's innovative products and design team delivers packaging that provides functionality, marketability, and sustainability, with its fiber-based packing solutions providing an alternative to traditional plastic packaging.\n \n \n \n Since 2019, we have accelerated the transformation of Premier's operations, investing in state-of-the-art manufacturing equipment, people, and processes to increase its capacity, improve quality and delivery, and to ensure it has the resources to support its growing customer base and their evolving supply chain demands.\n \n \n \n We will continue to add capabilities in key areas that increasing operational efficiencies to strengthen our foundation and offerings to our customers while continuing to provide world-class customer service to the customers we serve.\n Commercial Lending: (\"Commercial Lending\") through its operating company, American Pacific Bancorp, Inc. (\"APB\") represents our banking and financing business line. Looking ahead, to better meet the needs of the current financial market, the company is looking to transition away from 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 of more than $6 million, which earns 1.25% annually in service charges, and explore future opportunities. Importantly, the equity portfolio as a bank holding company is anticipated to remain relatively stable, regardless of stock market fluctuations. Biotechnology: (\"Biotech\") Impact BioMedical, Inc. targets unmet, urgent medical needs and expands the borders of medical and pharmaceutical science. Impact 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, Impact BioMedical 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.\n \n 9\n \n Impact BioMedical has several important and valuable products, technology or compounds that are in continuing development and/or licensing stages:\n ● \n LineBacker: Multi-faceted therapeutic platform for metabolic, neurologic, cancer, and infectious diseases. \n ● \n Equivir: A polyphenol compound that is believed to be successful in antiviral infection treatments. Equivir/Nemovir technology is a novel blend of FDA Generally Recognized as Safe (\"GRAS\") eligible polyphenols ( e.g., Myricetin, Hesperetin, Piperine) which have demonstrated antiviral effects with additional potential application as health supplements or medication. Polyphenols are sourced from fruits, vegetables, and other natural substances. Myricetin is a member of the flavonoid class of polyphenolic compounds with antioxidant properties. Hesperitin is a flavanone and Piperine is an alkaloid, commonly found in black pepper. \n ● \n Procombin: Applications as food additive, and natural preservative for beauty and person care products as well as natural food preservative. \n ● \n VanXin: Food preservative booster made up of polyphenols that extend the shelf life. \n ● \n Bioplastics: Advanced bio-compatible plastics that mitigate accumulation of plastics in oceans and landfills and provide UVA and UVB protection for many types of material for including containers, hard surfaces, and fibers for clothing. The technology is presently in development and testing antimicrobial plastics for consumer products that control the spread of active pathogens such as SARS-CoV-2, Influenza, E. coli, Staph, and Rhinovirus, by exploiting key strategies found in the biological realm. These new plastics are specifically focused on solutions for common products such as cups, plates, utensils, plastic bags, and countertops. The first prototypes are currently undergoing antimicrobial resistance testing. \n ● \n Laetose: Laetose technology is derived from a unique combination of sugar and inositol, which demonstrates the ability to inhibit the inflammatory and metabolic response of sugar alone. A sugar alternative which is believed to lower human glycemic indexes and is believed to be a breakthrough alternative sugar aimed to combat diabetes. The use of Laetose in a daily diet, compared to sugar, could result in 30% lower sugar consumption and lower glycemic index/load. \n ● \n 3F: A botanical compound believed to serve as an insect repellent and anti-microbial agent. 3F is a unique formulation of specialized ingredients ( e.g. terpenes) from botanical sources with demonstrated effect as an insect repellent and an antimicrobial. \n ● \n 3F Mosquito Repellent: 3F repellent contains botanical ingredients that mosquitos avoid. These ingredients are scientifically proven1 to affect the mosquito's receptors, essentially making the insect blind to a human's presence. This can be utilized as a stand-alone repellent or as an additive in detergents, lotions, shampoo, and other substances to provide mosquito protection. \n ● \n 3F Antimicrobial: 3F antimicrobial contains botanical ingredients known to kill viruses. These ingredients are scientifically proven to inhibit viral replication. This can be utilized as a stand-alone antimicrobial or as an additive in detergents, lotions, shampoo, fabrics, and other substances. \n ● \n Quantum: The solution to the Patent Cliff accomplished by creating a new class of medicinal chemistry that uses advanced methods to increase effectiveness and persistence of natural compounds and existing drugs. The safety attributes of the original molecules are maintained. Typically, drug discovery processes modify functional groups. Quantum's new techniques alter behavior of molecules at the sub-molecular level. It is estimated that 65% of the World Health Organization Essential Medicines List can be improved and re-patented using Quantum and these methods can be used to enhance and patent natural compounds including many substances used in traditional medicines around the world. \n ● \n Bio Med (license): A probiotic gut health product that helps to regulate many physiological functions, ranging from energy regulation and cognitive processes to toxin neutralization and immunity against pathogens. \n \n 10\n \n The business model of Impact BioMedical revolves around two methodologies - Licensing and Sales Distribution.\n 1) Impact develops valuable and unique patented technologies which will be licensed to pharmaceutical, large consumer package goods companies and venture capitalists in exchange for usage licensing and royalties.\n 2) Impact utilizes the DSS ecosystem to leverage its sister companies that have in place distribution networks on a global scale. Impact will engage in branded and private labelling of certain products for sales generation through these channels. This global distribution model will give direct access to end users of Impact's nutraceutical and health related products.\n 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. This business sector has already established the following business lines/investments and associated products and services:\n ● REIT Management Fund: In March 2020, DSS Securities formed AMRE (\"American Medical REIT\") and its management company AAMI (\"AMRE Asset Management, Inc.) Through AAMI/AMRE, a medical real estate investment trust, fulfills community needs for quality healthcare facilities while enabling care providers to allocate their capital to growth and investment in their contemporary clinical and critical care businesses. Urban and suburban communities are in need of modern healthcare facilities that provide a range of medical outpatient services. The funds ultimate product is an investor opportunity in a managed medical real estate investment trust. \n ● Sentinel: Sentinel primarily operates as a financial intermediary, facilitating institutional trading of municipal and corporate bonds as well as preferred stock, and accelerates the trajectory of the DSS digital securities business. \n ● WestPark: WestPark is a full-service investment banking and securities brokerage firm which serves the needs of both private and public companies worldwide, as well as individual and institutional investors. \n ● BMIC: BMIC is a private investment bank specializing in corporate finance advising, raising equity, and venture services, providing a global \"one-stop\" corporate consultancy to listed companies. From corporate finance to professional valuation, corporate communications to event management, BMIC services companies in the US, Hong Kong, Singapore, Taiwan, Japan, Canada, and Australia. \n ● DSS Wealth Management: AmericaFirst is a suite of mutual funds managed by DSS Wealth Management. AmericaFirst expects to expand into numerous investment platforms including additional mutual funds and exchange-traded funds. AmericaFirst currently consists of four mutual funds that seek to outperform their respective benchmark indices by applying top-down, fundamental research, quantitative and technical analysis to stock selection and portfolio management. Direct Marketing Segment : Prior to June 2023, the Direct Marketing business segment, operated through its holding company, Decentralized Sharing Systems, Inc., along with its subsidiaries and partners, including Sharing Services Global Corporation, offered a diverse range of products and services through an extensive independent contractor network until its transition to SHRG in late 2023 to effect DSS's refocus on core business lines.\n \n \n \n For instance, one of Decentralized's wholly-owned subsidiaries, HWH World, Inc., was dedicated to promoting products and services that aligned with its core values of health, wealth, and happiness. Within the HWH Marketplace and its associated brands, the primary goal was to assist customers in achieving their healthiest and happiest selves. In terms of health-related offerings, the company provided herbal alternatives, nutraceuticals, consumables, topicals, dietary supplements, beauty and skincare products, personal care items, gut health products, aloe vera-based supplements, and various wellness products. In the wealth sector, the company developed educational tools to help users manage their finances effectively and offered savings programs to assist consumers in reaching their financial goals. In pursuit of happiness, the company collaborated with partners to acquire or establish products and services that enabled consumers to enjoy a healthy lifestyle, including access to a global travel membership network.\n \n \n \n Sharing Services Global Corporation (\"SHRG\"), founded in Nevada on April 24, 2015, is focused on enhancing shareholder value by developing or acquiring businesses and technologies that expand its product and services portfolio, enhance its business capabilities, and broaden its geographic presence. Sharing Services' integrated platform harnesses the expertise of various companies engaged in direct-to-consumer product marketing through independent contractors. Their shared services platform caters to the direct selling \"gig economy\" sector by providing essential services such as equity and inventory financing, advisory services, mobile application tools, merchant processing services, commercial insurance, and event planning to smaller direct sales companies. Sharing Services, through its subsidiaries, currently markets and distributes health and wellness products, including subscription-based travel services, in the United States, Canada, and Mexico, utilizing a direct selling business model. Their growth strategy involves both organic expansion and strategic acquisitions that complement their product range, enhance their business capabilities, and align with their overall growth objectives.\n Beginning in July 2023, Direct now specializes in licensing its products and services through its subsidiary HWH World, Inc. (\"HWH World\") using the popular gig economic marketing strategy as a form of direct marketing. Direct's products include, among other things, nutritional and personal care products sold throughout North America, Asia Pacific, Middle East, and Eastern Europe. \n \n 11\n Intellectual Property Patents \n Impact Biomedical Inc. has nine (9) patents issued, one(1) allowed, and over forty (40) patents pending worldwide with expiration of US patents between 2029 and 2040. Pending patents could extend this exclusivity period in all regions.\n \n \n \n The issued and allowed patents include composition and method of application for Linebacker, Equivir, 3F (Functional Fragrance), and Laetose.\n Trademarks \n We have several trademarks related to our DSS, Inc. businesses.\n Websites: The primary corporate website we maintain is www.dssworld.com . Our other sites are: \n American Medical REIT, Inc: http://www.americanmedreit.com \n DSS AmericaFirst: https://www.afcm-quant.com \n American Pacific Bancorp (\"APB\"): https://www.ampacbancorp.com \n DSS PureAir, Inc.: https://dsspureair.com/ \n Premier Packaging: https://www.premiercustompkg.com \n Impact Biomedical: https://www.impactbiomedinc.com \n In addition to the active websites, the Company is building multiple new sites and owns several other domain names reserved for future use or for strategic competitive reasons. Information on our websites or any other website does not constitute a part of this annual report.\n Markets and Competition \n Product Packaging: Within our packaging division, we face competition from numerous national and regional companies, many of which operate independently and are privately held. The major players in this market are primarily concentrated in long-term consumer packaged goods and health and beauty sectors. These include prominent integrated paper companies like West Rock Company and Graphic Packaging Holding Company.\n \n \n \n Commercial Lending: American Pacific Bancorp, our commercial lending company, offers a comprehensive range of financial services tailored to businesses. Our services encompass commercial business lines of credit, land development financing, inventory financing, third-party loan servicing, and solutions designed to meet the diverse financial requirements of various business sectors. In this competitive landscape, APB competes with a wide array of traditional commercial banks and investment banking firms.\n \n \n \n Biotechnology: Impact Biomedical Inc. is dedicated to the discovery, confirmation, and patenting of unique scientific advancements and technologies, which lead to innovative solutions in the realm of human healthcare and wellness. IBIO collaborates closely with licensing partners, engages in co-development initiatives, forms joint ventures, and nurtures other valuable relationships to effectively introduce these groundbreaking solutions to the market.\n \n 12\n \n Securities and Investment Management: Was established to develop and/or acquire assets in the securities trading or management arena. These efforts and established business lines compete with individual money managers, companies or organizations that engage in the business of trading securities and derivatives for the benefit of their customers. Traditional RIA's, Brokers Dealers, REIT's and other personal investment companies would also be considered competition.\n Customers \n Product Packaging: During 2023, one customer accounted for approximately 20% of our consolidated revenue and second customer accounted for approximately 11% of our consolidated revenue. Customer diversification improvements have produced several new customers to our overall customer base and will continue to do so in 2024.\n \n \n \n Commercial Lending: Since 2021, American Pacific Bancorp, Inc. has issued nearly $26 million in new loans since September 2021 to customers across a diverse portfolio of businesses.\n \n \n \n Securities and Investment Management: Our Securities and Investment Management division has a mixture of retail and institutional investors.\n Raw Materials \n Product Packaging: The primary raw materials the Company uses in its business are paper, paperboard, corrugated board and ink. The Company negotiates with leading suppliers to maximize its purchasing efficiencies and uses a wide variety of paper grades, formats, ink formulations and colors. The good news is that while there are materials that remain challenging, raw materials have begun to improve in terms of cost and availability. The good news is that while there are materials that remain challenging, raw materials have begun to improve in terms of cost and availability in late 2023. Procurement sustainability as a crucial element and it involves not only ensuring that suppliers meet sustainability standards, but also a commitment to ongoing internal improvement in sustainability practices. Premier is proactively engaged in setting high standards and ensuring that these standards are followed by its supply chain partners, contributing to the improvement and compliance of the broader industry. During 2023, one vendor accounted for approximately 25% and second vendor accounted for approximately 13% of our paper and paperboard purchases.\n \n \n \n Direct Marketing: Sources its products from 3 rd party suppliers for nutritional, performance, and health and beauty product ingredients. We rely on our extensive supplier network for the availability of an extensive range of vitamins, minerals, botanicals, plant, and herb extracts, as well as nutritional supplements.\n Environmental Compliance \n It is the Company's policy to conduct its operations in accordance with all applicable laws, regulations, and other requirements. While it is not possible to quantify with certainty the potential impact of actions regarding environmental matters, particularly remediation and other compliance efforts that the Company may undertake in the future, in the opinion of management, compliance with the present environmental protection laws, before taking into account estimated recoveries from third parties, will not have a material adverse effect on the Company's consolidated annual results of operations, financial position or cash flows.\n \n 13\n Government Regulation \n Our biotechnology business is faced with potential government regulations. If new legislation, regulations, or rules are implemented either by Congress, the U.S. Patent and Trademark Office (the \"USPTO\"), or the courts that impact the patent application process, the patent enforcement process or the rights of patent holders, these changes could negatively affect our patent monetization efforts and, in turn, our assets, expenses and revenue. United States patent laws have been amended by the Leahy-Smith America Invents Act. The America Invents Act includes several significant changes to U.S. patent law. In general, the legislation attempts to address issues surrounding the enforceability of patents and the increase in patent litigation by, among other things, establishing new procedures for patent litigation. For example, the America Invents Act changes the way that parties may be joined in patent infringement actions, increasing the likelihood that such actions will need to be brought against individual parties allegedly infringing by their respective individual actions or activities. In addition, the U.S. Department of Justice (\"DOJ\") has conducted reviews of the patent system to evaluate the impact of patent assertion entities, such as our Company, on industries in which those patents relate. It is possible that the findings and recommendations of the DOJ could adversely impact our ability to effectively license and enforce standards-essential patents and could increase the uncertainties and costs surrounding the enforcement of any such patented technologies.\n \n \n \n Moreover, new rules regarding the burden of proof in patent enforcement actions could significantly increase the cost of our enforcement actions, and new standards or limitations on liability for patent infringement could negatively impact our revenue derived from such enforcement actions.\n Corporate History \n The Company, incorporated in the state of New York in May 1984 has formally conducted business in the name of Document Security Systems, 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 rebranding from Document Security Systems, Inc. to DSS, Inc. This change became effective on September 30, 2021. DSS, Inc. maintained the same trading symbol \"DSS\" and updated its CUSIP number to 26253C-102. In January 2024, in conjunction with a reverse split, DSS now operates under the CUSIP 26253C 201. See the \"Overview\" section above for further details about our acquisitions.\n Human Capital Resources \n As of December 31, 2023, DSS, Inc. had 95 employees worldwide. We continue to retain and attract qualified management and technical personnel. Our employees are not covered by any collective bargaining agreement, and we believe that our relations with our employees are in good standing.\n Available information \n Our website address is www.dssworld.com . Information on our website is not incorporated herein by reference. We make available free of charge through our website our press releases, Annual Report on Form 10-K/A, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after electronically filed with or furnished to the Securities and Exchange Commission.\n ITEM 1A - RISK FACTORS Investing in our common stock involves risk. Before deciding whether to invest in our common stock, you should carefully consider the risks and uncertainties described below. There may be other unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our future results. If any of these risks actually occur, our business, business prospects, financial condition or results of operations could be seriously harmed. This could cause the trading price of our common stock to decline, resulting in a loss of all or part of your investment. Please also read carefully the section contained in Part II, Item 7, below, entitled \"Cautionary Statement Regarding Forward-Looking Statements.\" \n We have identified the following risks and uncertainties that may have a material adverse effect on our business, financial condition or results of operations in the future. Additional risks not presently known to us or that we currently believe are immaterial may also significantly impair our business operations. If any of these risks occur, our business, results of operations or financial condition could suffer, the market price of our common stock could decline, and you could lose all or part of your investment in our common stock.\n The value of our intangible assets and investments may not be equal to their carrying values .\n \n \n \n As of December 31, 2023, we had approximately $20.2 million of net intangible assets. Approximately $18.9 million is associated with the acquisition of Impact Biomedical, Inc. The Company has completed valuations for certain developed technology assets acquired in the transaction as well as the non-controlling interest portion of Impact BioMedical, Inc. and its subsidiaries. If licensing efforts are not successful, the values of these assets could be reduced. We are required to evaluate the carrying value of such intangibles and goodwill and the fair value of investments whenever events or changes in circumstances indicate that the carrying value of an intangible asset, including goodwill, and investment may not be recoverable. If any of our intangible assets, goodwill or investments are deemed to be impaired then it will result in a significant reduction of the operating results in such period.\n \n 14\n We have secured indebtedness, and a potential risk exists that we may be unable to satisfy our obligations to pay interest and principal thereon when due or negotiate acceptable extensions or settlements. \n We have outstanding indebtedness (described below), most of which is secured by assets of various DSS subsidiaries and guaranteed by the Company. Given our history of operating losses and our cash position, there is a risk that we may not be able to repay indebtedness when due. If we were to default on any of our other indebtedness that require payments of cash to settle such default and we do not receive an extension or a waiver from the creditor and the creditor were to foreclose on the secured assets, it could have a material adverse effect on our business, financial condition, and operating results.\n \n \n \n As of December 31, 2023, we had the following significant amounts of outstanding indebtedness:\n ● \n Premier Packaging entered into master loan and security agreement (\"BOA Note\") with Bank of America, N.A. (\"BOA\") to secure financing approximating $3,710,000 to purchase a new Heidelberg XL 106-7+L printing press. The aggregate principal balance outstanding under the BOA Note shall bear interest at a variable rate on or before the loan closing. As of December 31, 2023, and December 31, 2022, the outstanding principal on the BOA Note was $2,932,000 and $3,406,000, respectively and had an interest rate of 4.63%. As of December 31, 2023, $491,000 was included in the current portion of long-term debt, net, and the remaining balance of approximately $2,442,000 recorded as long-term debt, The BOA Note contains certain covenants that are analyzed annually. As of December 31, 2023, Premier is in compliance with these covenants. \n ● \n 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 $6,155,000, with the amount financed approximating $5,105,000. The Shelton Agreement contains monthly payments of principal and an initial interest of 4.25%. The interest will be adjusted commencing on July 1, 2026 and continuing for the next succeeding 5-year period shall be determined one month prior to the change date and shall be an interest rate equal to two hundred fifty (250) basis points above the Federal Home Loan Bank Boston 5-Year/25-Year amortizing advance rate, but in no event less than 4.25% for the term of 120 months with a balloon payment approximating $2,829,000 due at term end. The net book value of these assets as of December 31, 2023 approximated $6,279,000. \n ● \n $3,000,000 loan agreement with BMIC (\"BMIC Loan\"), between LVAM and BMIC with interest to be charged at a variable rate to be calculated at the maturity date. The BMIC Loan matured on October 12, 2022 and both parties agree based on the language of the loan documents that the loan will keep extending an additional 3 months until either party cancels the extension. \n ● \n $41,331,000 remaining principal balance, net of deferred financing costs, loan agreement (\"LifeCare Agreement\") between AMRE LifeCare Portfolio, LLC (\"AMRE LifeCare\") a subsidiary of AMRE, and Pinnacle Bank (\"Pinnacle\"). The LifeCare Agreement has a variable interest rate which equated to 9.6% on December 31, 2023. This note is due as of the date of this filing. \n ● \n AMRE Winter Haven, LLC (\"AMRE Winter Haven\") and Pinnacle Bank (\"Pinnacle\") entered a term loan (\"Pinnacle Loan\") whereas Pinnacle lent to AMRE Winter Haven the principal sum of $2,990,000, maturing on March 7, 2024. Payments are to be made in equal, consecutive installments based on a 25-year amortization period with interest at 4.28%. The outstanding principal and interest, net of debt issuance costs of $17,000, approximates $2,977,000 and is included in long-term debt, net on the accompanying consolidated balance sheet at December 31, 2023. This note is in default and demand was made for final payment to be made by December 22, 2023. This amount is past due. \n Both the Winter Haven and LifeCare agreements contain various covenants which are tested annually as of December 31. For the year ended December 31, 2023, AMRE Winter Haven and LifeCare were not in compliance with the annual covenants and these loans are in default.\n \n 15\n A significant amount of our revenue is derived by two customers. \n As of December 31, 2022, two customers accounted for approximately 14% and 6% of our consolidated revenue and these two customers accounted for approximately 36% and 17% of our consolidated trade accounts receivable balance. As of December 31, 2023, two customers accounted for approximately 20% and 11% of our consolidated revenue and 39% and 30% of our trade accounts receivable balance. If we were to lose this customer or if the amount of business we do with this customer declines significantly, our business would be adversely affected.\n We may face intellectual property infringement or other claims against us, our customers or our intellectual property that could be costly to defend and result in our loss of significant rights. \n Although we have received patents with respect to certain of our core business technologies, there can be no assurance that these patents will afford us any meaningful protection. Although we believe that our use of the technology and products we have developed, and other trade secrets used in our operations do not infringe upon the rights of others, our use of the technology and trade secrets we developed may infringe upon the patents or intellectual property rights of others. In the event of infringement, we could, under certain circumstances, be required to obtain a license or modify aspects of the technology and trade secrets we developed or refrain from using the same. We may not be able to successfully terminate any infringement in a timely manner, upon acceptable terms and conditions or at all. Failure to do any of the foregoing could have a material adverse effect on our operations and our financial condition. Moreover, if the patents, technology, or trade secrets we developed or use in our business are deemed to infringe upon the rights of others, we could, under certain circumstances, become liable for damages, which could have a material adverse effect on our operations and our financial condition. As we continue to market our products, we could encounter patent barriers that are not known today. A patent search may not disclose all related applications that are currently pending in the United States Patent Office, and there may be one or more such pending applications that would take precedence over any or all of our applications.\n \n \n \n Furthermore, third parties may assert that our intellectual property rights are invalid, which could result in significant expenditures by us to refute such assertions. If we become involved in litigation, we could lose our proprietary rights, be subject to damages and incur substantial unexpected operating expenses. Intellectual property litigation is expensive and time-consuming, even if the claims are subsequently proven unfounded, and could divert management's attention from our business. If there is a successful claim of infringement, we may not be able to develop non-infringing technology or enter into royalty or license agreements on acceptable terms, if at all. If we are unsuccessful in defending claims that our intellectual property rights are invalid, we may not be able to enter into royalty or license agreements on acceptable terms, if at all. Moreover, if we are unsuccessful in our pending patent infringement litigation, we could lose certain patents that have been collateralized by third party funding partners. This could prohibit us from providing our products and services to customers, which could have a material adverse effect on our operations and our financial condition.\n Certain of our recently developed products are not yet commercially accepted and there can be no assurance that those products will be accepted, which would adversely affect our financial results. \n We've acquired several patents in the bio-health field through our acquisition if Impact Biomedical, Inc. Our business plan includes plans to incur significant marketing, intellectual property development and sales costs for the bio-health related products. If we are not able to develop and sell these new products, our financial results will be adversely affected.\n The results of our research and development efforts are uncertain and there can be no assurance of the commercial success of our products. \n We believe that we will need to continue to incur research and development expenditures to remain competitive. The products we are currently developing or may develop in the future may not be technologically successful. In addition, the length of our product development cycle may be greater than we originally expected, and we may experience delays in future product development. If our resulting products are not technologically successful, they may not achieve market acceptance or compete effectively with our competitors' products.\n The markets in which we operate are highly competitive, and we may not be able to compete effectively, especially against established industry competitors with greater market presence and financial resources. \n Our markets are highly competitive and characterized by rapid technological change and product innovations. Our competitors may have advantages over us because of their longer operating histories, more established products, greater name recognition, larger customer bases, and greater financial, technical and marketing resources. As a result, they may be able to adapt more quickly to new or emerging technologies and changes in customer requirements and devote greater resources to the promotion and sale of their products. Competition may also force us to decrease the price of our products and services. We cannot assure you that we will be successful in developing and introducing new technology on a timely basis, new products with enhanced features, or that these products, if introduced, will enable us to establish selling prices and gross margins at profitable levels.\n \n 16\n If we are unable to respond to regulatory or industry standards effectively, our growth and development could be delayed or limited. \n Our future success will depend in part on our ability to enhance and improve the functionality and features of our products and services in accordance with regulatory or industry standards. Our ability to compete effectively will depend in part on our ability to influence and respond to emerging industry governmental standards in a timely and cost-effective manner. If we are unable to influence these or other standards or respond to these or other standards effectively, our growth and development of various products and services could be delayed or limited.\n Breaches in security, whether cyber or physical, and other disruptions and/or our inability to prevent or respond to such breaches, could diminish our ability to generate revenues or contain costs, compromise our assets, and negatively impact our business in other ways. \n We face certain security threats, including threats to our information technology infrastructure, attempts to gain access to our proprietary or classified information, and threats to physical and cyber security. Our information technology networks and related systems are critical to the operation of our business and essential to our ability to successfully perform day-to-day operations. The risks of a security breach, cyber-attack, cyber intrusion, or disruption, particularly through actions taken by computer hackers, foreign governments and cyber terrorists, have increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Although we have acquired and developed systems and processes designed to protect our proprietary and/or classified information, they may not be sufficient and the failure to prevent these types of events could disrupt our operations, require significant management attention and resources, and could negatively impact our reputation among our customers and the public, which could have a negative impact on our financial condition, and weaken our results of operations and liquidity.\n Our investments in Asia are subject to unique risks and uncertainties, including tariffs and trade restrictions. \n Our investment in Alset International Limited, presents risks including, but not limited to, changes in share price of investments, changes in local regulatory requirements, changes in labor laws, local wage laws, environmental regulations, taxes and operating licenses, compliance with U.S. regulatory requirements, including the Foreign Corrupt Practices Act, uncertainties as to application and interpretation of local laws and enforcement of contract and intellectual property rights, currency restrictions, currency exchange controls, fluctuations of currency, and currency revaluations, eminent domain claims, civil unrest, power outages, water shortages, labor shortages, labor disputes, increase in labor costs, rapid changes in government, economic and political policies, political or civil unrest, acts of terrorism, or the threat of boycotts, other civil disturbances and the possible impact of the imposition of tariffs as a result of the tariff dispute between the U.S. and China as well as any retaliating trade policies or restrictions. Any such disruptions could depress our earnings and have other material adverse effects on our business, financial condition and results of operations.\n Future growth in our business could make it difficult to manage our resources. \n Future business expansion could place a significant strain on our management, administrative and financial resources. Significant growth in our business may require us to implement additional operating, product development and financial controls, improve coordination among marketing, product development and finance functions, increase capital expenditures and hire additional personnel. There can be no assurance that we will be able to successfully manage any substantial expansion of our business, including attracting and retaining qualified personnel. Any failure to properly manage our future growth could negatively impact our business and operating results.\n If we fail to retain certain of our key personnel and attract and retain additional qualified personnel, we might not be able to remain competitive, continue to expand our technology or pursue growth. \n Our future success depends upon the continued service of certain of our executive officers and other key sales and research personnel who possess longstanding industry relationships and technical knowledge of our products and operations. Although we believe that our relationship with these individuals is positive, there can be no assurance that the services of these individuals will continue to be available to us in the future. There can be no assurance that these persons will agree to continue to be employed by us after the expiration dates of their current contracts.\n \n 17\n We have identified weaknesses in our internal control over financial reporting structure; any material weaknesses may cause errors in our financial statements that could require restatements of our financial statements and investors may lose confidence in our reported financial information, which could lead to a decline in our stock price. \n Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate the effectiveness of our internal control over financial reporting as of the end of each year, and to include a management report assessing the effectiveness of our internal control over financial reporting in each Annual Report on Form 10-K/A. We have had previously identified weaknesses in our internal control over financial reporting following management's annual assessment of internal controls over financial reporting and, as a result of that assessment, management had concluded our controls associated 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. We do not intend to pay cash dividends. \n We do not intend to declare or pay cash dividends on our common stock in the foreseeable future. We anticipate that we will retain any earnings and other cash resources for investment in our business. The payment of dividends on our common stock is subject to the discretion of our board of directors and will depend on our operations, financial position, financial requirements, general business conditions, restrictions imposed by financing arrangements, if any, legal restrictions on the payment of dividends and other factors that our board of directors deems relevant.\n We may seek to develop additional new inventions and intellectual property, which would take time and would be costly. Moreover, the failure to obtain or maintain intellectual property rights for such inventions would lead to the loss of our investments in such activities. \n Part of our business may include the development of new inventions and intellectual property that we would seek to monetize. However, this aspect of our business would likely require significant capital and would take time to achieve. Such activities could also distract our management team from our present business initiatives, which could have a material and adverse effect on our business. There is also the risk that these initiatives would not yield any viable new inventions or technology, which would lead to a loss of our investments in time and resources in such activities.\n \n 18\n \n In addition, even if we are able to develop new inventions, in order for those inventions to be viable and to compete effectively, we would need to develop and maintain, and we would heavily rely on, a proprietary position with respect to such inventions and intellectual property. However, there are significant risks associated with any such intellectual property we may develop principally including the following:\n ● \n patent applications we may file may not result in issued patents or may take longer than we expect to result in issued patents; \n ● \n we may be subject to interference proceedings; \n ● \n we may be subject to opposition proceedings in the U.S. or foreign countries; \n ● \n any patents that are issued to us may not provide meaningful protection; \n ● \n we may not be able to develop additional proprietary technologies that are patentable; \n ● \n other companies may challenge patents issued to us; \n ● \n other companies may design around technologies we have developed; and \n ● \n enforcement of our patents may be complex, uncertain and very expensive. \n We cannot be certain that patents will be issued as a result of any future applications, or that any of our patents, once issued, will provide us with adequate protection from competing products. For example, issued patents may be circumvented or challenged, declared invalid or unenforceable, or narrowed in scope. In addition, since publication of discoveries in scientific or patent literature often lags behind actual discoveries, we cannot be certain that it will be the first to make our additional new inventions or to file patent applications covering those inventions. It is also possible that others may have or may obtain issued patents that could prevent us from commercializing our products or require us to obtain licenses requiring the payment of significant fees or royalties in order to enable us to conduct our business. As to those patents that we may license or otherwise monetize, our rights will depend on maintaining our obligations to the licensor under the applicable license agreement, and we may be unable to do so. Our failure to obtain or maintain intellectual property rights for our inventions would lead to the loss of our investments in such activities, which would have a material and adverse effect on our business.\n \n \n \n Moreover, patent application delays could cause delays in recognizing revenue from our internally generated patents and could cause us to miss opportunities to license patents before other competing technologies are developed or introduced into the market.\n Changes in the laws and regulations to which we are subject may increase our costs. \n We are subject to numerous laws and regulations, including, but not limited to, environmental and health and welfare benefit regulations, as well as those associated with being a public company. These rules and regulations may be changed by local, state, provincial, national or foreign governments or agencies. Such changes may result in significant increases in our compliance costs. Compliance with changes in rules and regulations could require increases to our workforce, and could result in increased costs for services, compensation and benefits, and investment in new or upgraded equipment.\n Declines in general economic conditions or acts of war and terrorism may adversely impact our business. \n Demand for printing services is typically correlated with general economic conditions. The prolonged decline in United States economic conditions associated with the great recession adversely impacted our business and results of operations and may do so again. The overall business climate of our industry may also be impacted by domestic and foreign wars or acts of terrorism, which events may have sudden and unpredictable adverse impacts on demand for our products and services.\n \n 19\n If we fail to comply with the continued listing standards of the NYSE American LLC Exchange, it may result in a delisting of our common stock from the exchange. \n Our common stock is currently listed for trading on the NYSE American LLC Exchange (\"NYSE American\"), and the continued listing of our common stock on the NYSE American is subject to our compliance with a number of listing standards.\n \n \n \n If our common stock were no longer listed on the NYSE American, investors might only be able to trade our shares on the OTC Bulletin Board ® or in the Pink Sheets ® (a quotation medium operated by Pink Sheets LLC). This would impair the liquidity of our common stock not only in the number of shares that could be bought and sold at a given price, which might be depressed by the relative illiquidity, but also through delays in the timing of transactions and reduction in media coverage.\n If we are delisted from the NYSE American, your ability to sell your shares of our common stock may be limited by the penny stock restrictions, which could further limit the marketability of your shares. \n If our common stock is delisted from the NYSE American, it could come within the definition of a \"penny stock\" as defined in the Exchange Act and could be covered by Rule 15g-9 of the Exchange Act. That rule imposes additional sales practice requirements on broker-dealers who sell securities to persons other than established customers and accredited investors. For transactions covered by Rule 15g-9, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser's written agreement to the transaction prior to the sale. Consequently, Rule 15g-9, if it were to become applicable, would affect the ability or willingness of broker-dealers to sell our securities, and accordingly would affect the ability of stockholders to sell their securities in the public market. These additional procedures could also limit our ability to raise additional capital in the future.\n If our common stock is not listed on a national securities exchange, compliance with applicable state securities laws may be required for certain offers, transfers and sales of the shares of our common stock. \n Because our common stock is listed on the NYSE American, we are not required to register or qualify in any state the offer, transfer or sale of the common stock. If our common stock is delisted from the NYSE American and is not eligible to be listed on another national securities exchange, sales of stock pursuant to the exercise of warrants and transfers of the shares of our common stock sold by us in private placements to U.S. holders may not be exempt from state securities laws. In such event, it will be the responsibility of us in the case of warrant exercises or the holder of privately placed shares to register or qualify the shares for any offer, transfer or sale in the United States or to determine that any such offer, transfer or sale is exempt under applicable state securities laws.\n If securities or industry analysts do not publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline. \n The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. Our research coverage by industry and financial analysts is currently limited. Even if our analyst coverage increases, if one or more of the analysts who cover us downgrade our stock, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.\n Because certain of our stockholders control a significant number of shares of our common stock, they may have effective control over actions requiring stockholder approval. \n As of March 1,2024, our directors, executive officers and principal stockholders (those beneficially owning in excess of 5%), and their respective affiliates, beneficially own approximately 59% of our outstanding shares of common stock. As a result, these stockholders, acting together, could have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets. As such, these stockholders, acting together, could have the ability to exert influence over the management and affairs of our company. Accordingly, this concentration of ownership might harm the market price of our common stock by: delaying, deferring or preventing a change in corporate control; impeding a merger, consolidation, takeover or other business combination involving us; or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.\n \n 20\n Additional financing or future equity issuances may result in future dilution to our shareholders. \n We expect that we will need to raise additional funds in the future to finance our internal growth, our merger and acquisition plans, investment activities, continued research and product development, and for other reasons. Any required additional financing may not be available on terms acceptable to us, or at all. If we raise additional funds by issuing equity securities, you may experience significant dilution of your ownership interest and the newly issued securities may have rights senior to those of the holders of our common stock. The price per share at which we sell additional securities in future transactions may be higher or lower than the price per share in this offering. Alternatively, if we raise additional funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions on our business that could impair our operational flexibility and would also require us to fund additional interest expense. If adequate additional financing is not available when required or is not available on acceptable terms, we may be unable to successfully execute our business plan.\n ITEM 1B - UNRESOLVED STAFF COMMENTS \n None.\n ITEM 1C - CYBERSECURITY \n We have a range of security measures that are designed to protect against the unauthorized access to and misappropriation of our information, corruption of data, intentional or unintentional disclosure of confidential information, or disruption of operations. These security measures include controls, security processes and monitoring of our manufacturing systems. We have cloud security tools and governance processes designed to assess, identify and manage material risks from cybersecurity threats. In addition, we maintain an information security training program designed to address phishing and email security, password security, data handling security, cloud security, operational technology security processes, and cyber-incident response and reporting processes. \n Our Company is committed to maintaining the highest standards of cybersecurity to protect our data, intellectual property, and customer information from cyber threats. As part of this commitment, we leverage a sophisticated cybersecurity framework that integrates the robust capabilities of the Microsoft cloud ecosystem with the specialized services of a leading third-party cybersecurity service provider. \n The Microsoft cloud ecosystem, including Microsoft 365, Azure, SharePoint Online, Microsoft Defender, and Microsoft InTune, forms the backbone of our cybersecurity infrastructure. These platforms offer advanced security features such as data encryption in transit and at rest, network security controls, identity and access management, and threat protection capabilities. Microsoft's constant investment in cybersecurity research and development ensures that we benefit from cutting-edge security technologies and practices. \n In addition to utilizing the Microsoft cloud ecosystem, we have engaged a third-party service provider to enhance our cybersecurity posture further. This provider brings additional layers of security through services including: \n ● \n Software Security Management: Ensuring that applications such as Office 365 and Azure are configured, maintained and following best security practices. \n ● \n Security Monitoring and Consultation Services: Continuous monitoring of our systems for suspicious activities and providing expert consultation to address and mitigate potential threats. \n \n 21\n \n ● \n Data Storage and Backup of Source Systems: Implementing robust data storage solutions and backup protocols to ensure data integrity and availability. \n ● \n Security Policy Management: Developing and enforcing comprehensive security policies that govern all aspects of our cybersecurity efforts. \n ● \n Threat Response Management: Rapid identification and response to security incidents to minimize impact. \n ● \n Security Software Implementation: Deployment of state-of-the-art security software solutions that complement the security features of the Microsoft cloud ecosystem. \n Our approach to cybersecurity is proactive and multifaceted, combining the scalability and reliability of the Microsoft cloud services with the agility and expertise of our third-party cybersecurity partner. Together, these resources form a comprehensive defense mechanism against a wide range of cyber threats, from phishing and malware attacks to sophisticated nation-state sponsored cyber-attacks. We continuously evaluate and adapt our cybersecurity strategy to respond to evolving threats and to align with best practices and regulatory requirements. Our commitment to cybersecurity is integral to our business operations, and we believe our strategic investments in this area significantly mitigate the risk of cybersecurity incidents that could impact our company's reputation, financial position, or operational capabilities. Governance \n The management of the Company is responsible for overseeing risk for the Company and has delegated to the VP, Engineering & Technology (\"VPE&T\") the responsibility for overseeing the cybersecurity risk management strategy for the Company. Management receives regular updates on our cybersecurity risk management process from the VPE&T. The VPE&T reviews our comprehensive cybersecurity framework, including reviewing our cybersecurity reporting protocol that provides for the notification, escalation and communication of significant cybersecurity events to the management team. \n The Company's cybersecurity program is overseen by our VPE&T, who is responsible for global information technology, including cybersecurity. Our VPE&T, is primarily responsible for assessing and managing material risks from cybersecurity threats, including monitoring the measures used for prevention, detection, mitigation and remediation of cybersecurity incidents. The information security organization is comprised of internal IBIO employees and external security suppliers who provide security monitoring and response. ITEM 2 - PROPERTIES \n The corporate group and the packaging division has occupied an approximate 105,000 square foot leased facility, located at 275 Wiregrass Parkway, Henrietta, New York since March 2022. This lease expires twelve years and 3 months later. Base rents escalate from $61,000 per month in year one to $78,000 per month in year twelve. In March 2021, the Company leased Suite 100 for approximately 3,800 sq. ft. in Houston for approximately $4,400 per month, in October 2022 the Company expanded the space by acquiring neighboring Suite 130. The Company currently leases both Suite 100 and Suite 130 at approximately 3,855 square feet for approximately $5,000 per month. The office is in Houston, Texas at 1400 Broadfield Blvd., Suite 100 and Suite 130, for corporate offices and subsidiary expansion. Ate 30 Old Kings Highway South in Darien, CT we have a flexible executive office suite facility that we use for DSS Wealth Management Office. The cost for this service is nominal at only $85/month.\n ITEM 3 - LEGAL PROCEEDINGS \n On February 15, 2021, Maiden Biosciences, Inc. (\"Maiden\") commenced an action against DSS, Inc. (\"DSS\"), Decentralized Sharing Systems, Inc. (\"Decentralized\"), HWH World, Inc. (\"HWH\"), RBC Life International, Inc. (RBC International) (together, the \"DSS Defendants\"), Frank D. Heuszel (\"Heuszel\"), RBC Life Sciences, Inc (\"RBC\"), Steven E. Brown, Clinton Howard, and Andrew Howard (collectively, \"Defendants\"). The lawsuit is currently pending in the United States District Court Northern District of Texas, Dallas Division, and is styled and numbered Maiden Biosciences, Inc. v. Document Security Stems, Inc., et al., Case No. 3:21-cv-00327. \n This lawsuit relates to two promissory notes executed by RBC in the 4 th quarter of 2019 in favor of Decentralized and HWH, totaling approximately $1,000,000. Maiden, a 2020 default judgment creditor of RBC, in the principal amount of $4,329,000, now complains about those notes, the funding of those notes, the subsequent default of those notes by RBC, and HWH and Decentralized's subsequent Article 9 foreclosure or deed-in-lieu debt conveyances. In the instant lawsuit, Maiden first asserted claims against Defendants for unjust enrichment, fraudulent transfer under the Texas Uniform Fraudulent Transfer Act (\"TUFTA\"), and violation of the Racketeer Influenced and Corrupt Organizations Act (\"RICO\"). Maiden also sought a judgment from the court declaring: \"(1) Defendants lacked a valid security interest in RBC and RBC Subsidiaries' assets and therefore lacked the authority to sell the assets during the public foreclosure sale; (2) Defendant Heuszel's low bid at the public foreclosure sale was invalid and void; (3) the public foreclosure sale was conducted in a commercially unreasonable manner; and (4) Defendants do not have the legal authority to transfer RBC and RBC's Subsidiaries assets to Heuszel and HWH.\" Maiden sought to recover from Defendants: (1) treble damages or, alternatively, damages in the amount of their underlying judgment plus the other creditors' claims or the value of the assets transferred, whichever is less, plus punitive or exemplary damages; (2) pre- and post-judgment interest; and (3) attorneys' fees and cost. \n \n 22\n \n On March 30, 2021, Defendants DSS, Decentralized, HWH, RBC International, and Heuszel filed a motion to dismiss seeking to dismiss Maiden's unjust enrichment, exemplary damages, and RICO claims against DSS, Decentralized, HWH, RBC Life International, Inc., and Heuszel, as well as Maiden's fraudulent transfer claims against DSS and RBC International. On August 9, 2021, the Court then entered an order granting in part the motion to dismiss filed on behalf of DSS, Decentralized, HWH, RBC International, and Heuszel. Among other things, the Court held that Maiden failed to plausibly plead certain causes of action, including (1) the civil RICO claim against DSS, Decentralized, HWH, RBC International, and Heuszel, (2) the TUFTA claim against DSS, and (3) the unjust enrichment claim against DSS and RBC International. Notably, the Court declined the request to dismiss the TUFTA claim against RBC International. On September 3, 2021, Maiden filed its first amended complaint, asserting a single cause of action against the DSS Defendants, Heuszel, and RBC for an alleged TUFTA violation. \n Generally, Maiden sought the same relief requested in its original complaint. Maiden, however, abandoned its request for treble damages. On September 17, 2021, the DSS Defendants filed a motion to dismiss the amended complaint seeking to dismiss Maiden's TUFTA claim to the extent it seeks to avoid a transfer of assets owned by any of RBC's subsidiaries, including but not limited to RBC Life Sciences USA, Inc. (\"RBC USA\"). Further, the motion to dismiss sought the dismissal of Maiden's TUFTA claim against Heuszel. On November 19, 2021, the Court granted the motion to dismiss in part, dismissing Maiden's claim against Heuszel and determined Maiden failed to plead that it was a creditor of RBC USA or RBC's other subsidiaries. However, the Court permitted Maiden to replead once again. \n On December 17, 2021, Maiden filed its second amended complaint which asserted a single TUFTA claim against only the DSS Defendants, RBC, and RBC USA. During the discovery period, the Parties conducted written discovery, production of documents, and depositions of fact witnesses and expert witnesses. The discovery period closed on August 9, 2022. The DSS Defendants have engaged Stout Risius Ross, LLC (\"Stout\") to provide expert opinions regarding the value of the assets at issue. \n The trial in this matter began on December 12, 2022. The Company vigorously defended its position that Maiden should recover nothing on its TUFTA claim. The DSS Defendants' experts at Stout provided expert opinions regarding the value of the assets at issue and the deficiencies with Maiden's designated expert's opinions. The jury returned a verdict in favor of Maiden, and the Court entered a judgment on December 20, 2022. The DSS Defendants filed post-judgment motions seeking reversal of the judgment for several reasons, including that: (1) the evidence does not support Maiden's claim against the Company; (2) recovery of...

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