# EDGAR Filing Document

**Accession Number:** 0000771999
**File Stem:** 0001641172-25-024046
**Filing Date:** 2025-8
**Character Count:** 245939
**Document Hash:** 1f0fad73e2ddf7555fc6eb69b43b45be
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001641172-25-024046.hdr.sgml**: 20250814

**ACCESSION NUMBER**: 0001641172-25-024046

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 131

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250814

**DATE AS OF CHANGE**: 20250814

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** DSS, INC.
- **CENTRAL INDEX KEY:** 0000771999
- **STANDARD INDUSTRIAL CLASSIFICATION:** PAPERBOARD CONTAINERS & BOXES [2650]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 161229730
- **STATE OF INCORPORATION:** NY
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-32146
- **FILM NUMBER:** 251219463

**BUSINESS ADDRESS:**
- **STREET 1:** 275 WIREGRASS PKWY
- **CITY:** WEST HENRIETTA
- **STATE:** NY
- **ZIP:** 14586
- **BUSINESS PHONE:** 585 232 1500

**MAIL ADDRESS:**
- **STREET 1:** 275 WIREGRASS PKWY
- **CITY:** WEST HENRIETTA
- **STATE:** NY
- **ZIP:** 14586

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** DOCUMENT SECURITY SYSTEMS INC
- **DATE OF NAME CHANGE:** 20030326

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** NEW SKY COMMUNICATIONS INC
- **DATE OF NAME CHANGE:** 19920703

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** THOROUGHBREDS USA INC
- **DATE OF NAME CHANGE:** 19861118

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE**

**ACT OF 1934**

**For the quarterly period ended June 30, 2025**

**☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE**

**ACT OF 1934**

**001-32146**

Commission file number

![](form10-q_001.jpg)

---

| |
|:---|
| **DSS, INC.** |
| (Exact name of registrant as specified in its charter) |

---

---

| | |
|:---|:---|
| **New York** | **16-1229730** |
| (State or other Jurisdiction of<br> incorporation- or Organization) | (IRS Employer<br> Identification No.) |

---

**275 Wiregrass Pkwy, West Henrietta, NY 14586**

(Address of principal executive offices)

**(585) 325-3610**

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files) Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of each class | Ticker symbol(s) | Name of each exchange on which registered |
| Common Stock, $0.02 par value per share | DSS | The NYSE American LLC |

---

As of August 4, 2025 there were 9,092,518 shares of the registrant's common stock, $0.02 par value, outstanding.

**DSS, INC.**

**FORM 10-Q**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| **PART I** | **[FINANCIAL INFORMATION](#a_001)** |  |
| Item 1 |  |  |
|  | [Condensed Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024 (unaudited)](#a_003) | 3 |
|  | [Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024 (Unaudited)](#a_004) | 4 |
|  | [Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024 (Unaudited)](#a_005) | 5 |
|  | [Condensed Consolidated Statement of Changes in Stockholders' Equity for the six months ended June 30, 2025 and 2024 (Unaudited)](#a_006) | 6 |
|  | [Notes to Interim Condensed Consolidated Financial Statements (Unaudited)](#a_007) | 7 |
| Item 2 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_008) | 28 |
| Item 4 | [Controls and Procedures](#a_009) | 34 |
| **PART II** | **[OTHER INFORMATION](#a_010)** | 35 |
| Item 1 | [Legal Proceedings](#a_011) | 35 |
| Item 1A | [Risk Factors](#a_012) | 35 |
| Item 2 | [Unregistered Sales of Equity Securities and Use of Proceeds](#a_013) | 35 |
| Item 3 | [Defaults upon Senior Securities](#a_014) | 35 |
| Item 4 | [Mine Safety Disclosures](#a_015) | 35 |
| Item 5 | [Other Information](#a_016) | 35 |
| Item 6 | [Exhibits](#a_017) | 35 |

---

**PART I – FINANCIAL INFORMATION**

**ITEM 1 - FINANCIAL STATEMENTS**

**DSS, INC. AND SUBSIDIARIES**

**Condensed Consolidated Balance Sheets**

---

| | | |
|:---|:---|:---|
|  | **June 30, 2025** | **December 31, 2024** |
| **ASSETS** |  |  |
| **Current assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $9384000 | $11431000 |
| &nbsp;&nbsp;&nbsp;Restricted cash | 100000 |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 2688000 | 3068000 |
| &nbsp;&nbsp;&nbsp;Inventory, net | 2543000 | 2442000 |
| &nbsp;&nbsp;&nbsp;Marketable securities | 2974000 | 2442000 |
| &nbsp;&nbsp;&nbsp;Assets held for sale |  | 45158000 |
| &nbsp;&nbsp;&nbsp;Current portion of notes receivable, net |  | 240000 |
| &nbsp;&nbsp;&nbsp;Current portion of notes receivable - related party, net | 305000 | 337000 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 889000 | 1141000 |
| &nbsp;&nbsp;&nbsp;Total current assets | 18883000 | 66695000 |
| Property, plant and equipment, net | 5141000 | 5381000 |
| Investments in real estate, net | 35446000 |  |
| Other investments | 500000 | 500000 |
| Investment, equity method | 124000 | 129000 |
| Marketable securities | 6791000 | 6333000 |
| Notes receivable, net |  | 17000 |
| Notes receivable - related party, net |  | 112000 |
| Other assets | 964000 | 162000 |
| Right-of-use assets | 6135000 | 6465000 |
| Goodwill | 1769000 | 1769000 |
| Other intangible assets, net | 17640000 | 18890000 |
| **Total assets** | $93393000 | $106453000 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| **Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $2506000 | $2793000 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and deferred revenue | 2616000 | 2651000 |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 4537000 | 4193000 |
| &nbsp;&nbsp;&nbsp;Current portion of lease liability | 593000 | 606000 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term debt, net | 42964000 | 642000 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term debt on assets held-for-sale, net |  | 53534000 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term debt - related party, net | 616000 | 609000 |
| &nbsp;&nbsp;&nbsp;Total current liabilities | 53832000 | 65028000 |
| Long-term debt, net | 6172000 | 2398000 |
| Long term lease liability | 6011000 | 6311000 |
| **Total liabilities** | 66015000 | 73737000 |
| **Commitments and contingencies (Note 12)** |  |  |
| **Stockholders' equity** |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock, $.02 par value; 47,000 shares authorized, zero shares issued and outstanding (zero on December 31, 2024); \*Liquidation value $1,000 per share, zero aggregate. zero on December 31, 2024). |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $.02 par value; 200,000,000 shares authorized, 9,092,518 shares issued and outstanding on June 30, 2025 (8,092,518 on December 31, 2024) | 182000 | 161000 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 325488000 | 323150000 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (310001000) | (303072000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity of the Company | 15669000 | 20239000 |
| &nbsp;&nbsp;&nbsp;Non-controlling interest in subsidiaries | 11709000 | 12477000 |
| &nbsp;&nbsp;&nbsp;Total stockholders' equity | 27378000 | 32716000 |
| **Total liabilities and stockholders' equity** | $93393000 | $106453000 |

---

See accompanying notes to the condensed consolidated financial statements.

**DSS, INC. AND SUBSIDIARIES**

**Condensed Consolidated Statements of Operations**

**(unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended <br> June 30,** | **For the Three Months Ended <br> June 30,** | **For the Six Months Ended <br> June 30,** | **For the Six Months Ended <br> June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **Revenue:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Printed products | $4272000 | $3527000 | $8255000 | $6599000 |
| &nbsp;&nbsp;&nbsp;Rental income | 715000 | 438000 | 1429000 | 838000 |
| &nbsp;&nbsp;&nbsp;Net investment income | 9000 | 41000 | 29000 | 136000 |
| &nbsp;&nbsp;&nbsp;Commission revenue | 282000 | 204000 | 503000 | 507000 |
| &nbsp;&nbsp;&nbsp;Biotechnology retail sales | 7000 | 1000 | 21000 | 2000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue | 5285000 | 4211000 | 10237000 | 8082000 |
| **Costs and expenses:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost of revenue | 5499000 | 5673000 | 10685000 | 10663000 |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative (including stock based compensation) | 3211000 | 3473000 | 6703000 | 7035000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total costs and expenses | 8710000 | 9146000 | 17388000 | 17698000 |
| **Operating loss** | (3425000) | (4935000) | (7151000) | (9616000) |
| **Other income (expense):** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest income | 25000 | 195000 | 33000 | 302000 |
| &nbsp;&nbsp;&nbsp;Other income | 1000 | 12000 | 10000 | 38000 |
| &nbsp;&nbsp;&nbsp;Interest expense | (123000) | (142000) | (156000) | (190000) |
| &nbsp;&nbsp;&nbsp;Foreign Currency Translation Adjustment | 3000 | (9000) |  | (14000) |
| &nbsp;&nbsp;&nbsp;(Loss)/gain on equity method investment | (2000) | 8000 | (5000) | 7000 |
| &nbsp;&nbsp;&nbsp;Gain (loss) on investments | 1557000 | (383000) | 627000 | (572000) |
| &nbsp;&nbsp;&nbsp;Impairment of intangible assets | (600000) |  | (600000) |  |
| &nbsp;&nbsp;&nbsp;Provision for loan losses |  | (53000) |  | (346000) |
| &nbsp;&nbsp;&nbsp;(Loss)/gain on sale | (43000) | 165000 | (727000) | 165000 |
| **Loss from operations before income taxes** | (2607000) | (5142000) | (7969000) | (10226000) |
| Income tax benefit | - | 188000 | 67000 | 163000 |
| **Net loss** | $(2607000) | $(4954000) | $(7902000) | $(10063000) |
| &nbsp;&nbsp;&nbsp;Loss from operations attributed to noncontrolling interest | 455000 | 271000 | 973000 | 1309000 |
| **Net loss attributable to DSS common stockholders** | $(2152000) | $(4683000) | $(6929000) | $(8754000) |
| **Loss per common share attributable to common stockholders** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | $(0.24) | $(0.66) | $(0.78) | $(1.24) |
| &nbsp;&nbsp;&nbsp;Diluted | $(0.24) | $(0.66) | $(0.78) | $(1.24) |
| **Shares used in computing loss per common share:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;**Basic** | 9092518 | 7066772 | 8889221 | 7066772 |
| &nbsp;&nbsp;&nbsp;**Diluted** | 9092518 | 7066772 | 8889221 | 7066772 |

---

See accompanying notes to the condensed consolidated financial statements.

**DSS, INC. AND SUBSIDIARIES**

**Condensed Consolidated Statements of Cash Flows**

**For the Six Months Ended June 30, (unaudited)**

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| **Cash flows from operating activities:** |  |  |
| Net loss | $(7902000) | $(10063000) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 1058000 | 1136000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of common stock for bonus | 870000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock based payments for professional services rendered | 190000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock based payments | 4000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss)/gain on equity method investment | 5000 | (7000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss (gain) on investments | 303000 | 572000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in ROU assets | 330000 | 369000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in inventory obsolescence | (21000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest on notes payable | 1884000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss (Gain) on sale of assets | 250000 | (165000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment of intangibles | 600000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for loan losses | 235000 | 815000 |
| &nbsp;&nbsp;&nbsp;Decrease (increase) in assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 380000 | 1679000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | (80000) | (753000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assets held for sale | (38000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 241000 | 504000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (802000) | (42000) |
| &nbsp;&nbsp;&nbsp;Increase (decrease) in liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (287000) | (224000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | (26000) | (529000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ROU liabilities | (313000) | (339000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | 3549000 | 1473000 |
| **Net cash provided (used) by operating activities** | 430000 | (5574000) |
| **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Purchase of property, plant and equipment | (144000) | (29000) |
| &nbsp;&nbsp;&nbsp;Sale of real estate | 9500000 |  |
| &nbsp;&nbsp;&nbsp;Purchase of marketable securities | (1000000) |  |
| &nbsp;&nbsp;&nbsp;Purchase of investment |  | (379000) |
| &nbsp;&nbsp;&nbsp;Disposal of property, plant and equipment |  | 5140000 |
| &nbsp;&nbsp;&nbsp;Sale of investment, related party | 1500000 |  |
| &nbsp;&nbsp;&nbsp;Sale of marketable securities | 116000 |  |
| &nbsp;&nbsp;&nbsp;Payments received on notes receivable | 163000 | 4044000 |
| **Net cash provided by investing activities** | 10135000 | 8776000 |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Payments of long-term debt | (9443000) | (1269000) |
| &nbsp;&nbsp;&nbsp;Borrowings of long-term debt | 109000 | 2171000 |
| &nbsp;&nbsp;&nbsp;Payments on margin loan | (3178000) | - |
| **Net cash (used) provided by financing activities** | (12512000) | 902000 |
| **Net increase (decrease) in cash** | (1947000) | 4104000 |
| **Cash and cash equivalents at beginning of period** | 11431000 | 6615000 |
| **Cash and cash equivalents at end of period** | $9484000 | $10719000 |

---

See accompanying notes to the condensed consolidated financial statements.

**DSS, INC. AND SUBSIDIARIES**

**Condensed Consolidated Statements of Changes in Stockholders' Equity**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | **Preferred Stock** | **Preferred Stock** | | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional Paid-**<br>**in Capital** | **Accumulated**<br>**Deficit** | **Total DSS**<br>**Equity** | **Non- controlling Interest in**<br>**Subsidiary** |<br>**Total** |
| **Balance, December 31, 2023** | **7067772** | $**140000** |  | $**-** | $**319963000** | $**(256176000)** | $**63927000** | $**19286000** | $**83213000** |
|  |  |  |  |  |  |  | **-** |  |  |
| Net loss | - | - |  | - | - | (8754000) | (8754000) | (1309000) | (10063000) |
| **Balance, June 30, 2024 (unaudited)** | **7067772** | $**140000** |  | $**-** | $**319963000** | $**(264930000)** | $**55173000** | $**17977000** | $**73150000** |
| **Balance, December 31, 2024** | **8092518** | $**161000** |  | $**-** | $**323150000** | $**(303072000)** | $**20239000** | $**12477000** | $**32716000** |
| Issuance of common stock, net of expenses - Impact BioMedical, Inc. |  | 1000 |  |  | 1294000 |  | 1295000 | 205000 | 1500000 |
| Issuance of common stock for bonus | 1000000 | 20000 |  |  | 850000 |  | 870000 |  | 870000 |
| Stock based payments for professional services rendered for Impact Bio |  |  |  |  | 190000 |  | 190000 |  | 190000 |
| Stock based payments |  |  |  |  | 4000 |  | 4000 |  | 4000 |
| Net loss | - | - |  | - | - | (6929000) | (6929000) | (973000) | (7902000) |
| **Balance, June 30, 2025 (unaudited)** | **9092518** | $**182000** |  | $**-** | $**325488000** | $**(310001000)** | $**15669000** | $**11709000** | $**27378000** |

---

See accompanying notes to the condensed consolidated financial statements.

**DSS, INC. AND SUBSIDIARIES**

**NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**June 30, 2025**

**(Unaudited)**

**1. Nature of Operations**

The Company, incorporated in the state of New York in May 1984 has conducted business in the name of DSS, Inc. On September 16, 2021, the board of directors approved an agreement and plan of merger with a wholly owned subsidiary, DSS, Inc. (a New York corporation, incorporated in August 2020), for the sole purpose of effecting a name change from Document Security Systems, Inc. to DSS, Inc. This change became effective on September 30, 2021. DSS, Inc. maintained the same trading symbol "DSS".

DSS, Inc. (together with its consolidated subsidiaries, referred to herein as "DSS," "we," "us," "our" or the "Company") currently operates five (5) distinct business lines with operations and locations around the globe. These business lines are: (1) Product Packaging, (2) Biotechnology, (3) Commercial Lending, (4) Securities and Investment Management, (5) Direct Marketing.

Our divisions, their business lines, subsidiaries, and operating territories: (1) Our Product Packaging line is led by Premier Packaging Corporation, Inc. ("Premier"), a New York corporation. Premier operates in the paper board and fiber based folding carton, consumer product packaging, and document security printing markets. It markets, manufactures, and sells sophisticated custom folding cartons, mailers, photo sleeves and complex 3-dimensional direct mail solutions. Premier is currently located in its new facility in Rochester, NY, and primarily serves the US market. (2) The Biotechnology business line was created to invest in or acquire companies in the BioHealth and BioMedical fields, including businesses focused on the advancement of drug discovery and prevention, inhibition, and treatment of neurological, oncological, and immune related diseases. This division is also targeting unmet, urgent medical needs, and is developing open-air defense initiatives, which curb transmission of air-borne infectious diseases, such as tuberculosis and influenza. (3) Our Commercial Lending business division, driven by American Pacific Financial ("APF"), is organized for the purposes of being a financial network holding company, focused on acquiring equity positions in (i) undervalued commercial bank(s), bank holding companies and nonbanking licensed financial companies operating in the United States, South East Asia, Taiwan, Japan and South Korea, and (ii) companies engaged in—nonbanking activities closely related to banking, including loan syndication services, mortgage banking, trust and escrow services, banking technology, loan servicing, equipment leasing, problem asset management, SPAC (special purpose acquisition company) consulting services, and advisory capital raising services. (4) Securities and Investment Management was established to develop and/or acquire assets in the securities trading or management arena, and to pursue, among other product and service lines, broker dealers, and mutual funds management. Also in this segment is the Company's real estate investment trusts ("REIT"), organized for the purposes of acquiring hospitals and other acute or post-acute care centers from leading clinical operators with dominant market share in secondary and tertiary markets, and leasing each property to a single operator under a triple-net lease. the REIT was formed to originate, acquire, and lease a credit-centric portfolio of licensed medical real estate. (5) Direct Marketing, 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 Marketing's products include, among other things, nutritional and personal care products sold throughout North America, Asia Pacific, Middle East, and Eastern Europe.

**2. Basis of Presentation and Significant Accounting Policies**

***Basis of Presentation -*** The accompanying condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments, unless otherwise indicated) necessary to present fairly our consolidated financial position as of June 30, 2025 and December 31, 2024, and the results of our consolidated operations for the interim periods presented. We follow the same accounting policies when preparing quarterly financial data as we use for preparing annual data. These statements should be read in conjunction with the consolidated financial statements and the notes included in our latest annual report on Form 10-K, for the fiscal year ended December 31, 2024 ("Form 10-K"), and our other reports on file with the Securities and Exchange Commission (the "SEC").

***Principles of Consolidation -*** The consolidated financial statements include the accounts of DSS, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

***Use of Estimates -*** The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires the Company to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, the Company evaluates its estimates, including those related to the accounts receivable, convertible notes receivable, inventory, fair values of investments, intangible assets and goodwill, useful lives of intangible assets and property and equipment, fair values of options and warrants to purchase the Company's common stock, preferred stock, deferred revenue and income taxes, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

***Reclassifications*** - Cost associated with Professional fees approximating $121,000 and $254,000 for the three and six months ended June 30, 2024, respectively have been reclassified to Research and development to conform with current period presentation.

***Revision of prior period financial statements -*** During the second quarter of 2025, the Company identified and corrected an immaterial classification error in our previously reported consolidated balance sheet as of December 31, 2024. The correction of this error between current and non-current assets resulted in an increase in the current asset line item referred to as "Marketable securities" and a decrease in the noncurrent line-item referred to as "Marketable securities" by $2.8 million, respectively, from the previously reported amounts of $0 to $2.8 million, and $9.21 million to $6.3 million, respectively. The Company assessed the materiality of this change in presentation on prior period financial statements in accordance with SEC Staff Accounting Bulletin No. 99, "Materiality," (ASC Topic 250, Accounting Changes and Error Corrections). Based on this assessment, the Company concluded that this classification error correction in its Balance Sheet is not material to any previously presented financial statements based upon overall considerations of both quantitative and qualitative factors. The correction had no effect on any previously reported amounts in our consolidated financial statements as of and for the year ended December 31, 2024 other than those previously mentioned.

***Cash Equivalents –*** All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents. Amounts included in cash equivalents in the accompanying consolidated balance sheets are money market funds whose adjusted costs approximate fair value.

***Accounts Receivable*** - The Company extends credit to its customers in the normal course of business. The Company performs ongoing credit evaluations and generally does not require collateral. Payment terms are generally 30 days but up to net 120 for certain customers. The Company carries its trade accounts receivable at invoice amounts and its rent receivables at contract amounts, less an allowance for credit losses. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for credit losses based upon management's estimates that include a review of the history of past write-offs and collections and an analysis of current credit conditions. In estimating expected losses in the accounts receivable portfolio, customer-specific financial data and macro-economic assumptions are utilized to project losses over a reasonable and supportable forecast period. Assumptions and judgment are applied to measure amounts and timing of expected future cash flows, collateral values and other factors used to determine the customers' abilities to pay.

At June 30, 2025, December 31, 2024, the Company established a reserve for credit losses of approximately $1,014,000, $1,613,000, respectively. Accounts receivable, net at June 30, 2025, December 31, 2024, and January 1, 2024 was $2,688,000, $3,068,000, and $3,994,000, respectively. The Company does not accrue interest on past due accounts receivable.

***Concentration of Credit Risk*** - The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits. The Company believes it is not exposed to any significant credit risk because of any non-performance by the financial institutions. As of June 30, 2025, one customer accounted for approximately 25% of our consolidated revenue and three customers accounted for approximately 18%, 15%, and 11% of our trade accounts receivable balance. As of June 30, 2024, one customer accounted for approximately 24% of our consolidated revenue and one customer accounted for approximately 39% of our trade accounts receivable balance.

As of December 31, 2024, two customers accounted for approximately 22% and 13% of our consolidated revenue and 29% and 20% of our trade accounts receivable balance.

For the six months ending June 30, 2025 and 2024, one vendor accounted for approximately 10% and 12%, respectively, of our cost of revenue.

***Notes receivable, unearned interest, and related recognition*** - The Company records all future payments of principal and interest on notes as notes receivable, which are then offset by the amount of any related unearned interest income. For financial statement purposes, the Company reports the net investment in the notes receivable on the consolidated balance sheet as current or long-term based on the maturity date of the underlying notes. Such net investment is comprised of the amount advanced on the loans, adjusting for net deferred loan fees or costs incurred at origination, amounts allocated to warrants received upon origination, and any payments received in advance. The unearned interest is recognized over the term of the notes and the income portion of each note payment is calculated so as to generate a constant rate of return on the net balance outstanding. Net deferred loan fees or costs, together with discounts recognized in connection with warrants acquired at origination, are accreted as an adjustment to yield over the term of the loan.

***Allowance For Loans Losses*** - ASC Topic 326 which requires an allowance for credit losses to be deducted from the amortized cost basis of financial assets to present the net carrying value at the amount that is expected to be collected over the contractual term of the asset considering relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. In estimating expected losses in the loan portfolio, borrower-specific financial data and macro-economic assumptions are utilized to project losses over a reasonable and supportable forecast period. Assumptions and judgment are applied to measure amounts and timing of expected future cash flows, collateral values and other factors used to determine the borrowers' abilities to repay obligations. After the forecast period, the Company utilizes longer-term historical loss experience to estimate losses over the remaining contractual life of the loans. At June 30, 2025, December 31, 2024, the Company established a reserve for credit losses of approximately $7,670,000, $9,406,000, respectively.

***Investments*** – Investments in equity securities with a readily determinable fair value, not accounted for under the equity method, are recorded at fair value with unrealized gains and losses included in earnings. For equity securities without a readily determinable fair value, the investment is recorded at cost, less any impairment, plus or minus adjustments related to observable transactions for the same or similar securities, with unrealized gains and losses included in earnings. For equity method investments, the Company regularly reviews its investments to determine whether there is a decline in fair value below book value. If there is a decline that is other-than-temporary, the investment is written down to fair value. See Note 9 for further discussion on investments.

***Fair Value of Financial Instruments*** *-* Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Fair Value Measurement Topic of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets.

● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The carrying amounts reported in the consolidated balance sheet of cash and cash equivalents, accounts receivable, prepaids, accounts payable and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. Marketable securities classify as a Level 1 fair value financial instrument. The fair value of notes receivable approximates their carrying value as the stated or discounted rates of the notes do not reflect recent market conditions. The fair value of revolving credit lines notes payable and long-term debt approximates their carrying value as the stated or discounted rates of the debt reflect recent market conditions. The fair value of investments where the fair value is not considered readily determinable, are carried at cost.

***Inventory*** – Inventories consist primarily of paper, pre-printed security paper, paperboard, fully prepared packaging, air filtration systems, and health and beauty products which and are stated at the lower of cost or net realizable value on the first-in, first-out ("FIFO") method. Packaging work-in-process and finished goods included the cost of materials, direct labor and overhead. At the closing of each reporting period, the Company evaluates its inventory in order to adjust the inventory balance for obsolete and slow-moving items. An allowance for obsolescence of approximately $137,000 and $180,000 associated with the inventory at our Premier subsidiary for June 30, 2025, and December 31, 2024, respectively. Write-downs and write-offs are charged to cost of revenue.

***Investments in real estate, net*** – Acquisition of assets are recorded at their relative fair value based on total accumulated costs of the acquisition. Direct acquisition-related costs are capitalized as a component of the acquired assets. This includes all costs related to finding, analyzing and negotiating a transaction. The allocation of the purchase price is an area that requires judgment and significant estimates. Tangible and intangible assets include land, building and improvements, furniture, fixtures and equipment, acquired above market and below market leases, in-place lease value (if applicable). Acquisition date fair values of assets and assumed liabilities are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent appraisers and that use appropriate discount and/or capitalization rates and available market information. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. Depreciation, amortization, cost to maintain and secure the buildings as well as interest incurred on the loans to procure the real estate are included in Cost of revenue on the accompanying Condensed consolidated statement of operations. During 2023, the land and buildings related to AMRE LifeCare and AMRE Winter Haven were reclassified to Assets held for sale. During 2024, the land and buildings related to AMRE Shelton were reclassified to Assets held for sale. As of June 30, 2025, circumstances around the sale of these properties have changed and the Company does not believe the sale of these properties will be finalized within the 12 months from the filing of these quarterly financial statements and have reclassified these assets to Investment in real estate, net and will begin to depreciate these assets prospectively.

***Intangible Assets*** - The estimated fair values of acquired intangibles are generally determined based upon future economic benefits such as earnings and cash flows. Acquired identifiable intangible assets are recorded at fair value and are amortized over their estimated useful lives. Acquired intangible assets with an indefinite life are not amortized but are reviewed for impairment at least annually or more frequently whenever events or changes in circumstances indicate that the carrying amounts of those assets are below their estimated fair values. Impairment is tested under ASC 350. No circumstances or events have occurred since the most recent analysis that would indicate the need for an impairment is needed for the six months ended June 30, 2025.

***Goodwill*** – Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is subject to impairment testing at least annually and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. FASB ASC Topic 350 provides an entity with the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after completing the assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company will proceed to a quantitative test. The Company may also elect to perform a quantitative test instead of a qualitative test for any or all of our reporting units. The test compares the fair value of an entity's reporting units to the carrying value of those reporting units. This quantitative test requires various judgments and estimates. The Company estimates the fair value of the reporting unit using a market approach in combination with a discounted operating cash flow approach. Impairment of goodwill is measured as the excess of the carrying amount of goodwill over the fair values of recognized and unrecognized assets and liabilities of the reporting unit. The Company performed its annual goodwill impairment test as of December 31, 2024, and no impairment was deemed necessary for the goodwill associated with Premier Packaging Company of approximately $1,769,000, however an impairment of Impact BioMedical goodwill was deemed necessary of approximately $25,093,000. No circumstances or events have occurred since the most recent analysis that would indicate the need for an impairment is needed for the six months ended June 30, 2025.

***Impairment of Long-Lived Assets and Goodwill*** - The Company monitors the carrying value of long-lived assets for potential impairment and tests the recoverability of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. If a change in circumstance occurs, the Company performs a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. If cash flows cannot be separately and independently identified for a single asset, the Company will determine whether impairment has occurred for the group of assets for which the Company can identify the projected cash flows. If the carrying values are in excess of undiscounted expected future cash flows, the Company measures any impairment by comparing the fair value of the asset or asset group to its carrying value. At June 30, 2025, the Company determined to resign its position as the registered investment advisor ("RIA") of the American First Mutual Funds and impaired the related asset acquired at the time the Company became the RIA in September 2021 in the amount of $600,000.

***Business Combinations -*** Business combinations and non-controlling interests are recorded in accordance with FASB ASC 805 Business Combinations. Under the guidance, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition and all acquisition costs are expensed as incurred. The excess of the purchase price over the estimated fair values is recorded as goodwill. If the fair value of the assets acquired exceeds the purchase price and the liabilities assumed, then a gain on acquisition is recorded. The application of business combination accounting requires the use of significant estimates and assumptions.

***Loss Per Common Share*** - The Company presents basic and diluted (loss) earnings per share. Basic (loss) earnings per share reflect the actual weighted average of shares issued and outstanding during the period. Diluted (loss) earnings per share are computed including the number of additional shares from outstanding warrants, stock options and preferred stock that would have been outstanding if dilutive potential shares had been issued and is calculated utilizing the treasury stock method. In a loss period, the calculation for basic and diluted (loss) earnings per share is the same, as the impact of potential common shares is anti-dilutive. For the six months ended June 30, 2025 and 2024, there were no potential dilutive instruments issued and outstanding.

***Income Taxes*** - The Company recognizes estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income items is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized. We recognize penalties and accrued interest related to unrecognized tax benefits in income tax expense.

The Company adopted Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Accounting for Income Taxes, effective for the fiscal year beginning January 1, 2025. The Company applied the updated guidance during the interim period for the quarter ended March 31, 2025, in accordance with the modified retrospective approach. ASU 2023-09 enhances guidance on income tax accounting, with a focus on tax law changes, the allocation of tax credits, and the treatment of uncertain tax positions. Due to the Company's ongoing operating losses and significant net operating loss (NOL) carry forwards, the Company does not perform quarterly tax provisions. As a result, the adoption of ASU 2023-09 did not result in any immediate material impact on the Company's consolidated financial statements. The Company has continued to evaluate its deferred tax asset position, with the full utilization of its NOL carryforwards remaining dependent on the availability of future taxable income. Since no taxable income has been generated, and in light of the continued operating losses, there was no adjustment recorded to retained earnings upon the adoption of ASU 2023-09. The Company will continue to monitor its tax positions and NOL utilization, making adjustments to its deferred tax asset valuation allowance as needed in future periods.

***Going Concern*** – The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments to the specific amounts and classifications of assets and liabilities, which might be necessary should we be unable to continue as a going concern. While the Company has approximately $9.4 million in cash, the Company has incurred operating losses as well as negative cash flows from operating and investing activities over the past two years. These factors raise substantial doubt about the Company's ability to continue as a going concern within one year of the date that the financial statements are issued.

Aside from its $9.4 million in cash as of June 30, 2025, to continue as a going concern, the Company can generate operating cash through the sale of its $9.8 million of Marketable Securities. To continue as a going concern, The Company has also taken steps to sell its real estate holdings assets of AMRE LifeCare, Winter Haven, and Shelton located in Texas, Pennsylvania, Florida, and Connecticut. These properties approximate $35.4 million in assets and are identified on the accompanying balance sheet as Investments in real estate, net. Also, historically, the Company has been able to obtain equity and/or debt-based financing to meet its working capital needs. In addition, the Company has taken steps, and will continue to take measures, to materially reduce the expenses and cash burn at all corporate and business line levels.

***Related Party Transactions*** - Transactions with affiliates and other parties that meet the definition of a related party under ASC 850, Related Party Disclosures are reflected in the accompanying condensed consolidated financial statements. All related-party balances are recorded at the exchange amounts established and agreed to by the parties. All material transaction not in the normal course of business operations are approved by the Audit Committee of the Board of Directors.

***Recently Issued Accounting Pronouncements*** — The Financial Accounting Standards Board (FASB) issues various Accounting Standards Updates relating to the treatment and recording of certain accounting transactions. There are several new accounting pronouncements issued by FASB which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company.

The Company adopted ASC Topic 280, *Segment Reporting*, as part of the updates to the segment reporting requirements under GAAP. The new guidance requires the identification of operating segments and their aggregation based on similar economic characteristics, and for those segments to be reported consistent with the internal management reporting structure used by the chief operating decision maker (CODM). As a result of this adoption, the Company has assessed its operating segments and has realigned its segment reporting to more accurately reflect how its management team evaluates performance and makes strategic decisions. The adoption of Topic 280 did not result in a change to the Company's segment structure or to the method used to allocate resources among segments.

In November 2024, the FASB issued ASU No. 2024-03 ("ASU 2024-03"), *Disaggregation of Income Statement Expenses ("DISE")*. ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. As revised by ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, the provisions of ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. With the exception of expanding disclosures to include more granular income statement expense categories, we do not expect the adoption of ASU 2024-03 to have a material effect on our consolidated financial statements taken as a whole.

**3. Revenue**

The Company recognizes its revenue based on when the title passes to the customer or when the service is completed and accepted by the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for shipped product or service provided. Sales and other taxes billed and collected from customers are excluded from revenue. The Company recognizes rental income associated with its REIT, net of amortization of favorable/unfavorable lease terms relative to market and includes rental abatements and contractual fixed increases attributable to operating leases, where collection has been considered probable, on a straight-line basis over the term of the related lease. The Company recognizes net investment income from its investment banking line of business as interest and management fees related to loans managed for third parties owed to the Company occurs. The Company generates revenue from its direct marketing line of business primarily through internet sales and recognizes revenue as items are shipped.

As of June 30, 2025, the Company had no unsatisfied performance obligations for contracts with an original expected duration of greater than one year. Pursuant to Topic 606, the Company has applied the practical expedient with respect to disclosure of the deferral and future expected timing of revenue recognition for transaction price allocated to remaining performance obligations. The Company elected the practical expedient allowing it to not recognize as a contract asset the commission paid to its salesforce on the sale of its products as an incremental cost of obtaining a contract with a customer but rather recognize such commission as expense when incurred as the amortization period of the asset that the Company would have otherwise recognized is one year or less.

*Costs of revenue*

 

Costs of revenue includes all direct cost of the Company's packaging, commercial and security printing sales, primarily, paper, inks, dies, and other consumables, and direct labor, transportation, amortization, deprecation, and manufacturing facility costs. In addition, this category includes all direct costs associated with the manufacturing and procurement of the products sold in the Company's Direct Marketing line of business as well as with the Company's technology sales, services and licensing including hardware and software that is resold, third-party fees, and fees paid to inventors or others as a result of technology licenses or settlements, if any. Cost of revenue for our REIT line of business includes all direct cost associated with the maintenance and upkeep of the related facilities, depreciation, amortization and the costs to acquire the facilities. Our Commercial Lending operating segment has costs of revenue associated with the impairment of notes receivable for those amounts at risk of collection. Costs of revenue do not include expenses related to product development, integration, and support. These costs are included in research and development, which is a component of selling, general and administrative expenses on the consolidated statement of operations. Legal costs are included in selling, general and administrative.

*Sales Commissions*

Sales commissions are expensed as incurred for contracts with an expected duration of one year or less. There were no sales commissions capitalized as of June 30, 2025 or June 30, 2024.

*Shipping and Handling Costs*

Costs incurred by the Company related to shipping and handling are included in cost of products sold. Amounts charged to customers relating to these costs are reflected as revenue.

See Note 15 for disaggregated revenue information.

**4. Inventory**

Inventory consisted of the following as of:

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| | | |
|:---|:---|:---|
|  | **June 30,**<br> **2025** | **December 31,**<br> **2024** |
| Finished Goods | $1719000 | $1857000 |
| Work in Process | 100000 | 345000 |
| Raw Materials | 861000 | 420000 |
|  | $2680000 | 2622000 |
| Less allowance for obsolescence | (137000) | (180000) |
|  | $2543000 | $2442000 |

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**5. Notes Receivable**

**Note 1**

On May 14, 2021, DSS Pure Air, Inc. a subsidiary of the Company entered a convertible promissory note ("Note 1") with Puradigm, Inc. ("Puradigm"), a company registered in the state of Texas. Note 1 has an aggregate principal balance up to $5,000,000, to be funded at the request of Puradigm. Note 1, which incurs interest at a rate of 6.65% due quarterly, had a maturity date of May 1, 2023. Note 1 contains an optional conversion clause that allows the Company to convert all, or a portion of all, into newly issued member units of Puradigm with the maximum principal amount equal to 18% of the total equity position of Puradigm at conversion. The outstanding principal and interest as of June 30, 2025 and December 31, 2024, approximated $5,544,000. As of June 30, 2025 and December 31, 2024 this note is in default and the Company has a reserve of $5,544,000 against the principal and interest outstanding.

**Note 2**

On September 23, 2021, APB entered into refunding bond anticipatory note ("Note 2") with Southeast Regional Management District ("SERMD"), which operates as a conservation and reclamation district pursuant to Chapter 3891, Texas Special District Local Laws Code, Chapter 375, Texas Local Government Code; and Chapter 49, Texas Water Code. The District Note was in the sum of $3,500,000 and incurs interest at a rate of 5.59% per annum. Principal and interest was due in full on September 22, 2022, and later amended to extend the maturity date to September 19, 2024. Note 2 was repaid in full during March 2024.

**Note 3**

On October 25, 2021, APF entered into a loan agreement ("Note 3") with Asili, LLC. ("Asili"), a company registered in the state of Utah. Note 3 has an initial aggregate principal balance up to $1,000,000, to be funded at the request of Asili, with an option to increase the maximum principal borrowing to $3,000,000. Note 3, which incurs interest at a rate of 8.0% with principal and interest due at the maturity date of October 25, 2022. This note contains an optional conversion feature allowing APF to convert the outstanding principal to a 10% membership interest. APF, as holder of Note 3, has the right to elect one member to the Board of Managers. This note is in default and the outstanding principal and interest of approximately $884,000 is fully reserved for as of June 30, 2025 and December 31, 2024.

**Note 4, related party**

On December 28, 2021, APF entered into a promissory note ("Note 4") with WestPark Capital Group, LLC. ("WestPark"), a company registered in the state of California. Note 4 has a principal balance of $700,000. Note 4, which incurs interest at a rate of 12.0% with principal and interest due at the maturity date of December 28, 2022. On December 29, 2022, the maturity date of this note was extended to May 31, 2023. On November 27, 2023, the parties to Note 4 agreed to modify the payment terms of the note to be monthly payments of $50,000 until the outstanding principal and interest are paid in full. The outstanding principal and interest was paid in full during 2024.

**Note 5**

On January 24, 2022, APF and an individual entered into a promissory note ("Note 5") in the principal sum of $100,000 with interest of 6%, due annually, and maturing in January 2024. The outstanding principal and interest at December 31, 2024 approximated $17,000 and was included in Current portion of notes receivable on the accompanying consolidate balance sheet. As of June 30, 2025, the outstanding principal and interest approximating $18,000 were written-off.

**Note 6**

On March 2, 2022, APF and WUURII Commerce, Inc. ("WUURII"), a corporation organized under the laws of the Republic of Korea entered into a promissory note ("Note 6"). Under the terms of Note 6, APF at its discretion, may lend up to the principal sum of $893,000 with an interest rate of 8%, and matured in March 2024 and was extended to April 2025, with interest payable quarterly. The outstanding principal and interest at June 30, 2025, and December 31, 2024 is $465,000 and $468,000, respectively. This loan is currently in default and as of June 30, 2025 the Company has a reserve of $465,000 against the principal and interest outstanding.

**Note 7**

On May 9, 2022, DSS PureAir and Puradigm entered into a promissory note ("Note 7") in the principal sum of $210,000 with interest of 10%, is due in three quarterly installments beginning on August 9, 2022, with the first two payment consisting of interest only. All unpaid principal and interest are due on February 9, 2023. This loan is currently in default. The outstanding principal and interest at June 30, 2025 and December 31, 2024 approximates $224,000. This note was fully reserved for as of June 30, 2025 and December 31, 2024.

**Note 8, related party**

On August 29, 2022, DSS Financial Management Inc and BMI Capital, Inc. ("BMIC"), a related party, entered into a promissory note ("Note 8") in the principal sum of $100,000 with interest of 8%, is due in three quarterly installments beginning on September 14, 2022. All unpaid principal and interest is due on August 29, 2025. The outstanding principal and interest at June 30, 2025, and December 31, 2024 approximated $83,000, and was fully reserved for as of June 30, 2025 and December 31, 2024. DSS owns 24.9% of the outstanding common shares of BMIC.

**Note 9, related party**

On May 8, 2023, DSS Financial Management Inc and BMIC entered into a promissory note ("Note 9") in the principal sum of $102,000 with interest at the prime rate plus 2% with a maturity date of May 7, 2026. The outstanding principal and interest at June 30, 2025, and December 31, 2024 approximated $110,000, and was fully reserved for as of June 30, 2025 and December 31, 2024. DSS owns 24.9% of the outstanding common shares of BMIC.

**Note 10, related party**

On July 26, 2022, APF and VEII, Inc. ("VEII") entered into a promissory note ("Note 10") in the principal sum of $1,000,000 with interest of 8% with all unpaid principal and interest due on July 26, 2024. This note was amended so that all unpaid principal and interest is due July 26, 2025. The outstanding principal and interest as of June 30, 2025 and December 31, 2024 approximates $917,000. This note was fully reserved for as of June 30, 2025 and December 31, 2024. Heng Fai Ambrose Chan, the Chairman of DSS, Inc is also the on the board of directors of VEII.

**Note 11**

On February 19, 2021, Impact BioMedical, Inc, entered into a promissory note with an individual. The Company loaned the principal sum of $206,000, with interest at a rate of 6.5%, and maturity date of August 19, 2022 later amended to February 19, 2026. Monthly payments are due on the twenty-first day of each month and continuing each month thereafter until February 19, 2026. This note is secured by certain real property situated in Collier County, Florida.

The outstanding principal and interest as of June 30, 2025, and December 31, 2024 was approximately $200,000 and $201,000, respectively. As of June 30, 2025, approximately $200,000 is classified in Current notes receivable. As of December 31, 2024, $184,000 is classified in Current notes receivable and the remaining $17,000 is classified as Notes receivable on the accompanying consolidated balance sheet.

**Note 12**

On June 27, 2023, Decentralized Sharing Systems, Inc. and Stemtech Corporation ("Stemtech") entered into a convertible promissory note ("Note 12") in the principal sum of $1,400,000 with a discount of $300,000 and interest rate of 10% and maturity date of September 1, 2024. The outstanding principal, interest, and associated discount was fully reserved for as of December 31, 2024 and written off as of June 30, 2025

**Note 13**

On March 31, 2023, DSS Biohealth Security, Inc and an individual entered into a promissory note ("Note 13") in the principal sum of $140,000 and interest rate floating daily to Wall Street Journal Prime rate per annum with the total outstanding principal and interest due at the maturity date of March 31, 2025. As of June 30, 2025 and December 31, 2024, the outstanding principal and interest approximated $135,000. This balance was fully reserved for as of June 30, 2025 and December 31, 2024.

**Note 14**

On August 29, 2024, APF entered into a promissory note ("Note 14") with WestPark. Note 14 has a principal balance of $459,000. Note 14, which incurs interest at a rate of 10.0% with principal and interest due at the maturity date of April 27, 2026. On November 1, 2024, monthly payments of approximately $28,000 are due with any unpaid interest and principal due at maturity. As of June 30, 2025, the outstanding principal and interest approximates $304,000, which is classified as Current notes receivable on the accompanying consolidated balance sheet. As of December 31, 2024, the outstanding principal and interest approximates $450,000, of which $337,000 is classified as Current notes receivable and the remaining $113,000 is classified as Notes receivable on the accompanying consolidated balance sheet.

**6. Financial Instruments**

*Cash, Cash Equivalents, Restricted Cash and Marketable Securities*

The following tables show the Company's cash, cash equivalents, restricted cash, and marketable securities by significant investment category as of:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **cost** | **Unrealized<br> Gain/(Loss)** | **Fair <br> Value** | **Cash and<br> Cash<br> Equivalents** | **Marketable<br> Securities** |
| Cash | $8151000 | $- | $8151000 | $8151000 | $- |
| Restricted Cash | 100000 |  | 100000 | 100000 |  |
| Level 1 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Money Market Funds | 1233000 |  | 1233000 | 1233000 |  |
| &nbsp;&nbsp;&nbsp;Marketable Securities | 27816000 | (18051000) | $9765000 | - | 9765000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $37300000 | $(18051000) | $19249000 | $9484000 | $9765000 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Adjusted**<br> **Cost** | **Unrealized**<br> **Gain/(Loss)** | **Fair**<br> **Value** | **Cash and**<br> **Cash**<br> **Equivalents** | <br>**Marketable**<br> **Securities** |
| Cash | $11369000 | $- | $11369000 | $11369000 | $- |
| Level 1 |  |  | $- |  |  |
| &nbsp;&nbsp;&nbsp;Money Market Funds | $62000 | $- | $62000 | $62000 | $- |
| &nbsp;&nbsp;&nbsp;Marketable Securities | $25933000 | $(16722000) | $9211000 | $- | $9211000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $37364000 | $(16722000) | $20642000 | $11431000 | $9211000 |

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The Company typically invests with the primary objective of minimizing the potential risk of principal loss. The Company's investment policy generally requires securities to be investment grade and limits the amount of credit exposure to any one issuer. Fair values were determined for each individual security in the investment portfolio.

**7. Provision for Credit Losses**

ASC Topic 326 for the measurement of credit losses on financial instruments and other financial assets. That guidance requires an allowance for credit losses to be deducted from the amortized cost basis of financial assets to present the net carrying value that is expected to be collected over the contractual term of the assets considering relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The guidance replaced the previous incurred loss model for determining the allowance for credit losses.

Accounts receivable are stated at the amount owed by the customer. The Company maintains an allowance for credit losses for accounts receivable and unbilled receivables, based on expected credit losses resulting from the inability of our customers to make required payments. The allowance for credit losses is estimated based on historical experience, current economic conditions and the creditworthiness of customers. Receivables are charged to the allowance when determined to be no longer collectible. The Company regularly monitors and assesses its risk of not collecting amounts owed by customers and records its allowance for credit losses based on the results of this analysis.

As of June 30, 2025 and December 31, 2024, we have reviewed the entire loan portfolio as well as all financial assets of the Company for the purpose of evaluating the loan portfolio and the loan balances, including a review of individual and collective portfolio loan quality, loan(s) performance, including past due status and covenant defaults, assessment of the ability of the borrower to repay the loan on the loan terms, whether any loans should be placed on nonaccrual or returned to accrual, any concentrations in any single borrower and/or industry that we might need to further manage, and if any specific or general loan loss reserve should be established for the entire loan portfolio or for any specific loan.

We analyzed the loan loss reserve from three basis: general loan portfolio reserves; industry portfolio reserves, and specific loan loss reserves. For the six months ended June 30, 2025, June 30, 2024 and year ended December 31, 2024, the Company recorded a Loan loss reserve of approximately $233,000, $346,000 and $9,406,000, respectively.

**General Loan Portfolio Reserve -** Based upon the review of our loan portfolio, we do not believe that a substantial general loan portfolio reserve is due at this time. However, we do recognize that some inherent risks are in all loan portfolios, thus we recorded a general contingent portfolio reserve of $192,000 and $196,000 of the loan portfolio loan balance as of June 30, 2025 and December 31, 2024, respectively.

**Industry Portfolio Reserves -** Given the relatively young loan portfolio and a diversification of the portfolio over several different loan products, the risk is reduced. Accordingly, we have not recorded a discretionary reserve as of June 30, 2025 and December 31, 2024.

**Specific Loan Reserves** - Previously, we had identified credit weaknesses and borrower repayment weakness with Asili, which has a current principal and interest balance of $884,000 and have recorded a loan loss reserve for the full balance due the Company as of December 31, 2024. The Company had also previously identified credit weakness in Puradigm and has placed a reserve approximating $5,768,000 against the outstanding principal and interest as of December 31, 2024 of their two loans. Previously, the Company identified credit weakness in Stemtech and has placed a reserve approximating $1,045,000 against the outstanding principal and interest as of December 31, 2024. During the first quarter of 2024, the Company identified credit weakness in VEII and an individual and has placed a reserve approximating $959,000 against the outstanding principal and interest as of March 31, 2024. There has been no change to this amount. Also, during the first quarter of 2024, the Company identified credit weakness in BMIC, a related party, and has placed a reserve approximating $211,000 against the outstanding principal and interest as of March 31, 2024, later adjusted to $196,000 as of September 30, 2024. The Company identified credit weakness with WUURII and has placed a $234,000 reserve against the outstanding principal and interest as of December 31, 2024 and reserved for the remaining outstanding balance of approximately $233,000 as of June 30, 2025. The Company has also identified credit weakness with an individual and has placed a $135,000 reserve against the outstanding principal and interest as of December 31, 2024, and reserved for an approximate $17,000 against the outstanding principal and interest for another individual as of June 30, 2025. No additional reserves were deemed necessary as of June 30, 2025.

**8. Disposal of assets**

On March 27, 2025, the Company finalized the sale of its Plano, Tx. Facility for a gross sales price of $9,500,000. The associated asset was previously classified as held for sale in the amount of $9,750,000, resulting in a loss on the sale of approximately $727,000 after related expenses.

**9. Investments**

**Alset International Limited**, **related party**

The Company owns 127,179,291 shares or approximately 4% of the outstanding shares of Alset International Limited ("Alset Intl"), a company incorporated in Singapore and publicly listed on the Singapore Exchange Limited. This investment is classified as a marketable security and is classified as long-term assets on the consolidated balance sheets as the Company has the intent and ability to hold the investments for a period of at least one year. The Chairman of the Company, Mr. Heng Fai Ambrose Chan, is the Executive Director and Chief Executive Officer of Alset Intl. Mr. Chan is also the majority shareholder of Alset Intl as well as the largest shareholder of the Company. The fair value of the marketable security as of June 30, 2025 and December 31, 2024, was approximately $2,098,000 and $2,518,000, respectively. During the six months ended June 30, 2025 and 2024, the Company recorded unrealized loss of approximately $420,000 and $356,000, respectively.

**True Partners Capital Holding Limited**

The Company owns 81,836,908 shares of True Partners Capital Holding Limited ("True Partners"), a publicly listed company on the Hong Kong Stock Exchange. On February 28, 2022, the Company entered into a Stock Purchase Agreement with Alset EHome International Inc. ("AEI"), pursuant to which AEI has agreed to sell a subsidiary holding 62,336,908 shares of stock of True Partner Capital Holding Limited exchange for 17,570,948 shares of common stock of the Company (the "DSS Shares"). The Company's Executive Chairman and a significant stockholder, Heng Fai Ambrose Chan is the Chairman, Chief Executive Officer and largest shareholder of AEI. Further, on February 20, 2025, the Company acquired an additional 19,500,000 shares of True Partners. The fair value of the marketable security as of June 30, 2025 and December 31, 2024, was approximately $4,689,000 and $3,815,000, respectively. During the six months ended June 30, 2025 and 2024, the Company recorded unrealized loss of approximately $126,000 and a gain of approximately $11,000, respectively.

**WestPark Capital Group, LLC.**

On December 30, 2020, the Company signed a binding letter of intent with WestPark Capital Group, LLC. ("WestPark") and Century TBD, Inc. ("TBD") where the parties agreed to prepare a note and stock exchange agreement whereby DSS will assign the TBD Note to WestPark and WestPark shall issue to DSS a stock certificate reflecting 7.5% of the issued and outstanding shares of West Park. This note and stock exchange agreement was finalized during the first quarter 2022 and valued at approximately $500,000 and is included in Investments on the consolidated balance sheet on June 30, 2025 December 31, 2024.

**BMI Capital International LLC, related party**

On September 10, 2020, the Company's wholly owned subsidiary DSS Securities, Inc. entered into membership interest purchase agreement with BMI Financial Group, Inc. a Delaware corporation ("BMIF") and BMI Capital International LLC, a Texas limited liability company ("BMIC") whereas DSS Securities, Inc. purchased 14.9% membership interests in BMIC for $100,000. DSS Securities also had the option to purchase an additional 10% of the outstanding membership interest which it exercised for $100,000 in January of 2021 and increased its ownership to 24.9%. The Company is currently accounting for this investment under the equity method of accounting per ASC 323. The Company's portion of net loss in BMIC during the three months ended June 30, 2025 and 2024, approximated $5,000 and $7,000, respectively.

BMIC is a broker-dealer registered with the Securities and Exchange Commission, is a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"), and is a member of the Securities Investor Protection Corporation ("SIPC"). The Company's chairman of the board and another independent board member of the Company also have ownership interest in BMIC.

**BioMed Technologies Asia Pacific Holdings Limited**

On December 19, 2020, Impact BioMedical, a wholly owned subsidiary of the Company, entered into a subscription agreement (the "Subscription Agreement") with BioMed Technologies Asia Pacific Holdings Limited ("BioMed"), a limited liability company incorporated in the British Virgin Islands, pursuant to which the Company agreed to purchase 525 ordinary shares or 4.99% of BioMed at a purchase price of approximately $632,000. The Subscription Agreement provides, among other things, the Company has the right to appoint a new director to the board of BioMed. With respect to an issuance of shares to a third party by BioMed, the Company will have the right of first refusal to purchase such shares, as well as customary tag-along rights. In connection with the Subscription Agreement, Impact Biomedical entered into an exclusive distribution agreement (the "Distribution Agreement") with BioMed, to directly market, advertise, promote, distribute, and sell certain BioMed products, which focus on manufacturing natural probiotics, to resellers. This investment was impaired in full at December 31, 2024 as it does not have a readily determined fair value.

Under the terms of the Distribution Agreement, the Company will have exclusive rights to distribute the products within the United States, Canada, Singapore, Malaysia, and South Korea and non-exclusive distribution rights in all other countries. In exchange, the Company agreed to certain obligations, including mutual marketing obligations to promote sales of the products. This agreement is for ten years with a one year auto-renewal feature.

**10. Short-Term and Long-Term Debt**

***Promissory Notes -*** On May 20, 2021, Premier Packaging entered into master loan and security agreement ("BOA Note") with Bank of America, N.A. ("BOA") to secure financing approximating $3,710,000 to purchase and use as collateral, 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 June 30, 2025, and December 31, 2024, the outstanding principal on the BOA Note was $2,179,000 and $1,647,000, respectively and had an interest rate of 4.63%. As of June 30, 2025, $532,000 was included in the Current portion of long-term debt, net, and the remaining balance of approximately $1,783,000 is recorded as Long-term debt. As of December 31, 2024, $520,000 was included in the current portion of long-term debt, net, and the remaining balance of approximately $1,916,000 recorded as long-term debt. This note matures in April of 2029. Interest expense for the six months ended June 30, 2025 and 2024 approximated $54,000 and $66,000, respectively. The BOA Note contains certain covenants that are analyzed annually. As of June 30, 2025, Premier is in compliance with these covenants.

On August 1, 2021, AMRE Shelton, LLC., ("AMRE Shelton") a subsidiary of AMRE, entered into a loan agreement ("Shelton Agreement") with Patriot Bank, N.A. ("Patriot Bank") in an amount up to $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 funds borrowed were used to purchase a 40,000 square foot, 2.0 story, Class A+ multi-tenant medical office building located on a 13.62-acre site, which serves as collateral for the Shelton Agreement. The purchase price has been allocated as $4,640,000, $1,600,000, and $325,000 for the facility, land, and tenant improvements, respectively. Also included in the value of the property is $585,000 of intangible assets with an estimated useful life of approximating 3 years. The net book value of these assets as of June 30, 2025, and December 31, 2024, approximated $6,332,000. As of June 30, 2025, the outstanding principal and interest of approximately $4,328,000, net of $12,000 in deferred financing costs. As of June 30, 2025, approximately $221,000 is classified as Current portion of long-term debt on assets held -for-sale, net with the remaining $4,107,000 classified as Non-current liabilities held for sale assets on the consolidated balance sheet. Interest expense for the six months ended June 30, 2025 and 2024 approximated $93,000 and $98,000, respectively. As of December 31, 2024, the outstanding principal and interest of approximately $4,424,000, net of $27,000 in deferred financing costs, is classified as Current portion of long-term debt on assets held-for-sale, net on the consolidated balance sheet. This agreement matures in July of 2031.

On October 13, 2021, LVAM entered into loan agreement with BMIC ("BMIC Loan"), a related party, whereas LVAM borrowed the principal amount of $3,000,000, with interest to be charged at a variable rate to be adjusted at the maturity date. The BMIC loan contains an auto renewal period of three months, with a current maturity date of July 2025. As of June 30, 2025, and December 31, 2024, the outstanding principal and interest of approximately $464,000 and $463,000, respectively, are included in Current portion of long-term debt – related party, net on the consolidated balance sheet.

On October 13, 2021, LVAM entered into a loan agreement with Lee Wilson Tsz Kin ("Wilson Loan"), a related party, whereas LVAM borrowed the principal amount of $3,000,000, with interest to be charged at a variable rate to be calculated at the maturity date. The Wilson Loan matures on October 12, 2022, and contains an auto renewal period of three months with a current maturity date of July 2025. As of March 31, 2025, and December 31, 2024, the outstanding principal and interest of approximately $145,000 and $145,000, respectively, are included in Current portion of long-term debt – related party, net on the consolidated balance sheet.

On November 2, 2021, AMRE LifeCare entered into a loan agreement ("LifeCare Agreement") with Pinnacle Bank, ("Pinnacle Bank") in the amount of $40,300,000. The LifeCare Agreement supported the acquisition of three medical facilities located in Fort Worth, Texas, Plano, Texas (sold in March 2025), and Pittsburgh, Pennsylvania for a purchase price of $62,000,000. These assets are classified as investments, real estate on the consolidated balance sheet, and serves as collateral for the LifeCare Agreement. The purchase price has been allocated as $32,100,000, $12,100,000, and $1,500,000 for the facility, land and site improvements, respectively. Also included in the value of the property is $15,901,000 of intangible assets with estimated useful lives ranging from 1 to 11 years. The net book value of the assets acquired as of June 30, 2025 is approximately $24,722,000. The LifeCare Agreement calls for the principal amount of the in equal, consecutive monthly instalments based upon a twenty-five (25) year amortization of the original principal amount of the LifeCare Agreement at an initial rate of interest equal to the interest rate determined in accordance as of July 29, 2022 provided, however, such rate of interest shall not be less than 4.28%, with the first such instalment being payable on August 29, 2022 and subsequent instalments being payable on the first day of each succeeding month thereafter until the maturity date, at which time any outstanding principal and interest is due in full. The affective interest rate at June 30, 2025 was 7.9%. As of June 30, 2025, and December 31, 2024, the outstanding principal and interest of the LifeCare agreement approximates $39,034,000 and $46,069,000, respectively, and is included in Current portion of long-term debt on assets held-for-sale, net on the consolidated balance sheet. Interest expense for the six months ended June 30, 2025 and 2024 approximated $1,572,000 and $1,954,000, respectively. This note is in default and demand was made for final payment to be made by December 22, 2023. As of June 30, 2025, this amount is past due.

On March 17, 2022, AMRE Winter Haven, LLC ("AMRE Winter Haven") and Pinnacle Bank ("Pinnacle") entered into a term loan ("Pinnacle Loan") whereas Pinnacle lent to AMRE Winter Haven the principal sum of $2,990,000, maturing on March 7, 2024 (later extended to July 7, 2024) to acquire a medical facility located in Winter Haven, Florida for a purchase price of $4,500,000. The assets acquired are classified as investments, real estate on the consolidated balance sheet, and serves as collateral for the Pinnacle Loan. The purchase price has been allocated as $3,200,000, $1,000,000, and $222,000 for the facility, land and site and tenant improvements, respectively. Also included in the value of the property is $29,000 of intangible assets with an estimated useful life of approximately 5 years. The net book value of the assets acquired as of June 30, 2025 is approximately $4,396,000. Payments are to be made in equal, consecutive installments based on a 25-year amortization period with interest at 4.28%. The first installment is due January 1, 2023. This AMRE Winter Haven note is currently due and has an effective interest rate of 9.6%. The outstanding principal and interest, approximates $3,051,000 and is included in Current portion of long-term debt on assets held-for-sale, net long-term debt, net on the accompanying consolidated balance sheet at June 30, 2025. The outstanding principal and interest, approximates $3,040,000 and is included in Current portion of long-term debt on assets held-for-sale, net long-term debt, net on the accompanying consolidated balance sheet at December 31, 2024. Interest expense approximates $142,000 and $148,000 for the six months ended June 30, 2025 and 2024, respectively. This note was assumed by SMS Financial on August 15, 2024. This note is in default and demand was made for final payment to be made by December 22, 2023. As of June 30, 2025, this amount is past due.

On March 30, 2023, Premier Packaging, a subsidiary of the Company entered into a loan and security agreement with Union Bank & Trust Company for the principal amount of $790,000 and shall accrued interest at the rate of 7.44%. Principal and interest shall be repaid in the approximate amount of $14,000 through March 2029. This loan is collateralized by a Bobst Model Novacut and is guaranteed by DSS, Inc. As of June 30, 2025, the outstanding principal and interest approximates $544,000 of which $127,000 was included in the current portion of long-term debt, net, and the remaining balance of approximately $417,000 recorded as long-term debt. As of December 31, 2024, the outstanding principal and interest approximates $605,000 of which $123,000 was included in the current portion of long-term debt, net, and the remaining balance of approximately $482,000 recorded as long-term debt. Interest expense for the six months ended June 30, 2025 and 2024 approximated $22,000 and $25,000, respectively.

A summary of scheduled principal payments of long-term debt, not including revolving lines of credit, subsequent to June 30, 2025, are as follows:

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| | | | |
|:---|:---|:---|:---|
| **Year** | **Notes payable** | **Notes payable - related party** | **Total** |
| 2025 | $36717000 | $616000 | $37333000 |
| 2026 | 902000 |  | 902000 |
| 2027 | 947000 |  | 947000 |
| 2028 | 995000 |  | 995000 |
| 2029 | 494000 |  | 494000 |
| Thereafter | 3206000 | - | 3206000 |
|  | $43261000 | $616000 | $43877000 |

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**11. Lease Liability**

The Company has operating leases predominantly for operating facilities. As of June 30, 2025, the remaining lease terms on our operating leases range from less than **1** one to nine years. Renewal options to extend our leases have not been exercised due to uncertainty. Termination options are not reasonably certain of exercise by the Company. There is no transfer of title or option to purchase the leased assets upon expiration. There are no residual value guarantees or material restrictive covenants. There are no significant finance leases as of June 30, 2025.

Future minimum lease payments as of June 30, 2025 are as follows:

Maturity of Lease Liability:

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| | |
|:---|:---|
|  | Totals |
| 2025 | $421000 |
| 2026 | 839000 |
| 2027 | 808000 |
| 2028 | 824000 |
| 2029 | 840000 |
| Thereafter | 4074000 |
| Total lease payments | 7806000 |
| Less: Imputed Interest | (1202000) |
| Present value of remaining lease payments | $6604000 |
| Current | $593000 |
| Noncurrent | $6011000 |
| Weighted-average remaining lease term (years) | 9.1 |
| Weighted-average discount rate | 3.8% |

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Total cash paid for leases during the six months ended June 30, 2025 and 2024 approximated $440,000 and $498,000, respectively.

**12. Commitments and Contingencies**

***License Agreement* –** On March 19, 2022, Impact BioMedical entered into a License Agreement ("Equivir License") with a third-party ("Licensee") where the Licensor is granted the right, amongst other things, to develop, commercialize, and sell the Company's Equivir technology. In exchange, the Licensee shall pay the Company a royalty of 5.5% of net sales. Under the terms of the Equivir Agreement, the Company shall reimburse the Licensee for 50% of the development costs provided that the development costs shall not exceed $1,250,000. As of June 30, 2025 and December 31, 2024, a liability of $0 has been recorded in relation to the Equivir License.

***Royalty Agreement*** - On August 15, 2018, the Impact BioMedical entered into Royalty Agreement with Chemia Corporation ("Chemia") pursuant to which Chemia transferred to the Company all of its right to 3F (Functional Fragrance Formulation). This agreement has a 20-year term and auto renews for a period of 1 year unless mutually agreed upon by both parties. 3F consists of 3F Mosquito Repellant and 3F Anti-Viral formulations. Based on the Royalty Agreement, the Company should cover all the costs to prepare and finalize necessary patent application and other intellectual property related to 3F. Chemia agreed to support the Company in efforts leading to development of 3F intellectual property and it is licensing. Based on Royalty Agreement any payments received from development, sales, licensing or transfer of 3F technology will be paid 50% to the Company and 50% to Chemia. On November 27, 2018, Company and Chemia signed an Addendum to Royalty Agreement ("Addendum"), according to which the Company granted Chemia a royalty-based limited license for purposes of making and selling fragrances embodying the 3F technology. Based on the Addendum, Chemia should pay the Company 5% of net sales in royalty. On November 8, 2019, both companies entered into Amendment no.1 to Royalty Agreement, based on which certain expenses borne by the Company towards patent application and licensing should be reimbursed to the Company before any royalty payments are made. For the six months ended June 30, 2025 and 2024, there were no reimbursements or royalties paid to the Company and the Company cannot be assured that Chemia's efforts will end up in any future sales of the technology.

**13. Stockholders' Equity**

***DSS, Inc.***

***Equity transactions*** - On January 4, 2024 the Company effected a reverse stock split of 1 for 20. As of December 31, 2023 there were 140,264,240 shares of our Common Stock issued and outstanding, which was converted to 7,066,772.

On December 10, 2024, DSS entered into a securities purchase agreement with Alset Inc., a related party, pursuant to which the Company agreed to sell and issue in a private placement an aggregate of 820,597 shares of the Company's common stock for approximately $803,000.

On December 10, 2024, DSS entered into a securities purchase agreement with Heng Fai Ambrose Chan, the Chaiman of the Board of Directors and a related party, pursuant to which the Company agreed to sell and issue in a private placement an aggregate of 205,149 shares of the Company's common stock for approximately $197,000.

On February 6, 2025, as a bonus for compensation awarded to Heng Fai Holdings Limited ("HFHL"), a Hong Kong Company, which is beneficially owned by Mr. Heng Fai Ambrose Chan, Director of DSS, Inc., and pursuant to DSS, Inc's. 2020 Employee, Director and Consultant Equity Incentive Plan (the "Plan"), HFHL was awarded 1,000,000 shares of the Company's common stock, approximating $870,000, under the Plan, for services rendered. The issuance was approved by the board of directors on January 31, 2025.

On March 21, 2025, DSS, the parent company of Impact Biomedical, Inc. completed the sale of 499,800 shares of Impact Biomedical common stock. These shares were acquired by DSS during Impact's initial public offering on September 16, 2024. The sale of these shares, which were previously held by DSS as part of its ownership interest in Impact, was completed for a total value of $1,500,000, which represents the consideration received from the transaction. With this sale, the shares are now publicly held and are no longer held by DSS.

On April 4, 2025, DSS, the parent company of Impact Biomedical, Inc. completed the sale of 890,800 shares of Impact Biomedical common stock. These shares were acquired by DSS during Impact's initial public offering on September 16, 2024. The sale of these shares, which were previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $845,000, which represents the consideration received from the transaction. With this sale, the shares are now publicly held and are no longer held by DSS.

On April 4, 2025, DSS, the parent company of Impact Biomedical, Inc. completed the sale of 115,600 shares of Impact Biomedical common stock. These shares were acquired by DSS during Impact's initial public offering on September 16, 2024. The sale of these shares, which were previously held by DSS as part of its ownership interest in Impact, was completed for a total approximate value of $63,000, which represents the consideration received from the transaction. With this sale, the shares are now publicly held and are no longer held by DSS.

***Stock-Based Compensation -*** The Company records stock-based payment expense related to options and warrants based on the grant date fair value in accordance with FASB ASC 718. Stock-based compensation includes expense charges for all stock-based awards to employees, directors, and consultants. Such awards include option grants, warrant grants, and restricted stock awards. During the six months ended June 30, 2025 and 2024, there were none.

***Impact BioMedical, Inc.***

***Equity Transactions*** - On May 10, 2023, the Company, the Company's Board of Directors approved an amendment to the Articles of Incorporation of the Company to increase the total number of shares of Common Stock to 4,000,000,000 shares with a par value of $0.001. Each share of Common Stock when issued, shall have one (1) vote on all matters presented to the stockholders. Our Amended and Restated Articles of Incorporation also authorized 100,000,000 shares of preferred stock, par value $0.001 per share. On May 11, 2023, the Company effected a forward split. As a result, there were 3,877,282,251 shares of our Common Stock and no shares of preferred stock issued and outstanding. Prior to the split, there were 125,073,621 shares of our Common Stock and no shares of preferred stock issued and outstanding. On October 31, 2023, the Company effected a reverse stock split of 1 for 55. Also on October 31, 2023, DSS BioHealth Securities, Inc., the Company's largest shareholder converted 60,496,041 shares of Common Stock into 60,496,041 shares of Series A Convertible Preferred Shares, reducing its ownership of the Company's Common Stock from approximately 88% to approximately 12%. As of September 30, 2024 and December 31, 2023, there were 11,503,955 and 10,000,000, respectively, shares of our Common Stock and 60,496,041 shares of preferred stock issued and outstanding.

On August 8, 2023 DSS, the Company's largest shareholder, distributed to its shareholders of record on July 10, 2023 4 shares of Impact Bio's stock for 1 share they owned. 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.

On October 31, 2023, the Company effected a reverse stock split of 1 for 55. As of December 31, 2023, and December 31, 2022, there were 3,877,282,251 shares of our Common Stock issued and outstanding which was converted to 70,496,041 shares. Also on October 31, 2023, DSS BioHealth Securities, Inc., the Company's largest shareholder converted 60,496,041 shares of Common Stock into 60,496,041 shares of Series A Convertible Preferred Shares, reducing its ownership of the Company's Common Stock from approximately 88% to approximately 12%.

On September 16, 2024, Impact Biomedical Inc., entered into an underwriting agreement (the "Underwriting Agreement") with Revere Securities, LLC., as representative (the "Representative") of the underwriters named therein (the "Underwriters"), pursuant to which the Company agreed to sell to the Underwriters in a firm commitment initial public offering (the "Offering") an aggregate of 1,500,000 of the Company's shares of common stock, par value $0.001 per share at a public offering price of $3.00 per share. On September 17, 2024, the Company closed the Offering, and as of September 30, 2024 there were 11,497,703 shares of common stock issued and outstanding. The total net proceeds to the Company from the Offering, after deducting discounts, expenses allowance and expenses, was approximately $3,726,000 (inclusive of approximately $1.5 million contributed by DSS). A final prospectus relating to this Offering was filed with the Commission on September 16, 2024. The shares of Common Stock were approved to list on the NYSE American under the symbol "IBO" and began trading there on September 16, 2024. The Company also issued warrants to the Representative and its affiliates (the "Representative's Warrants") warrants to purchase the number of shares of Common Stock in the aggregate equal to 5% of the Common Stock to be issued and sold in this offering (including any Shares of Common Stock sold upon exercise of the over-allotment option, if applicable). The Representative's Warrants are exercisable for a price per share equal to 125% of the public offering price. The warrants are exercisable at any time, in whole or in part, commencing nine (9) months from the date of commencement of sales of the offering and ending on the third anniversary thereof. As of September 30, 2024, only the 1,500,000 shares included in the Offering are freely tradable on the NYSE. The remaining outstanding common shares of Impact Biomedical of 9,997,703 are restricted from trading for 180 days from the Offering date.

On February 25, 2025, the Company completed the acquisition of certain assets owned by DSS Pure Air, Inc. (DSS PureAir"), a related party, for $1,150,000 to be paid by 545,024 shares of the Company's common stock calculated on a 10-day VWAP. Assets acquired included accounts receivable, inventory and intellectual property of the Celios air purification system.

On February 26, 2025, the Company issued 36,433 shares of the Company's common stock as payment of legal fees incurred associated with the Company's IPO, registration of shares associated with its equity incentive plan as well as other related services.

On June 30, 2025, the Company issued 100,000 shares of the Company's common stock as payment of legal fees incurred associated with the Company's merger and share exchange agreement with Dr. Ashleys Limited.

***Stock-Based Compensation –*** The Company records stock-based payment expense related to options and warrants based on the grant date fair value in accordance with FASB ASC 718. Stock-based compensation includes expense charges for all stock-based awards to employees, directors and consultants. Such awards include option grants, warrant grants, and restricted stock awards. On October 1, 2024, 880,000 option grants with a purchase price of $3.00 per share were awarded to certain officers, directors and consultants of the Company. These options have various vesting periods, and all expire on October 31, 2031. Potential proceeds of these grants is $2,640,000 and are fair valued using a Black-Scholes model at approximately $50,000. The Company record stock based compensation expense of approximately $4,000 and $19,000 for the six month and year ended June 30, 2025 and the year ended December 31, 2024, respectively, and is included in Sales, general and administrative compensation (inclusive of stock based compensation) on the accompanying Statement of Operations.

**14. Supplemental Cash Flow Information**

The following table summarizes supplemental cash flows for the six months ended June 30, 2025 and 2024:

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| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Cash paid for interest | $1963000 | $501000 |
| Non-cash investing and financing activities: |  |  |
| Shares issued in lieu of bonus cash | $870000 | $- |
| Shares issued in lieu of cash as payment for legal services | $190000 | $- |
| Stock based compensation | $4000 | $- |

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**15. Segment Information**

The Company's businesses lines are organized, managed, and internally reported as five operating segments. One of these operating segments, Product Packaging, is the Company's packaging and printing group. Product Packaging operates in the paper board folding carton, smart packaging, and document security printing markets. It markets, manufactures, and sells mailers, photo sleeves, sophisticated custom folding cartons, and complex 3-dimensional direct mail solutions. These products are designed to provide functionality and marketability while also providing counterfeit protection. A second, Biotechnology, invests in, or acquires 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 developing open-air defense initiatives, which curb transmission of air-borne infectious diseases, such as tuberculosis and influenza. Biotechnology is also targeting unmet, urgent medical needs. A third operating segment, Securities and Investment Management ("Securities") was established to develop and/or acquire assets and investments in the securities trading and/or funds management arena. Further, Securities, in partnership with recognized global leaders in alternative trading systems, intends to own and operate in the US a single or multiple vertical digital asset exchanges for securities, tokenized assets, utility tokens, stable coins and cryptocurrency via a digital asset trading platform using blockchain technology. The scope of services within this section is planned to include asset issuance and allocation (securities and cryptocurrency), FPO, IPO, ITO, PPO, STO and UTO listings on a primary market(s), asset digitization/tokenization (securities, currency, and cryptocurrency), and the listing and trading of digital assets (securities and cryptocurrency) on a secondary market(s). Also in this segment is the Company's real estate investment trust ("REIT"), organized for the purposes of acquiring hospitals and other acute or post-acute care centers from leading clinical operators with dominant market share in secondary and tertiary markets, and leasing each property to a single operator under a triple-net lease. the REIT was formed to originate, acquire, and lease a credit-centric portfolio of licensed medical real estate. The fourth segment, Direct, provides services to assist companies in the emerging growth gig business model of peer-to-peer decentralized sharing marketplaces. It specializes in marketing and distributing its products and services through its subsidiary and partner network, using the popular gig economic marketing strategy as a form of direct marketing. Direct marketing products include, among other things, nutritional and personal care products sold throughout North America, Asia Pacific and Eastern Europe. The fifth business line, Commercial Banking, is organized for the purposes of being a financial network holding company, focused providing commercial loans and on acquiring equity positions in (i) undervalued commercial bank(s), bank holding companies and nonbanking licensed financial companies operating in the United States, South East Asia, Taiwan, Japan and South Korea, and (ii) companies engaged in—nonbanking activities closely related to banking, including loan syndication services, mortgage banking, trust and escrow services, banking technology, loan servicing, equipment leasing, problem asset management, SPAC (special purpose acquisition company) consulting, and advisory capital raising services. From this financial platform, the Company shall provide an integrated suite of financial services for businesses that shall include commercial business lines of credit, land development financing, inventory financing, third party loan servicing, and services that address the financial needs of the world Gig Economy.

Approximate information concerning the Company's operations by reportable segment for the three and six months ended June 30, 2025 and 2024 is as follows. The Company relies on intersegment cooperation and management does not represent that these segments, if operated independently, would report the results contained herein:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Three Months Ended June 30, 2025** | **Product Packaging** | **Commercial Lending** | **Direct Marketing** | **Biotechnology** | **Securities** | **Corporate** | **Total** |
| Revenue | $4288000 | $9000 | $- | $7000 | $981000 | $- | $5285000 |
| Cost of revenue | 4094000 | 234000 | (7000) | 13000 | 1165000 | - | 5499000 |
| **Gross profit (loss)** | 194000 | (225000) | 7000 | (6000) | (184000) | - | (214000) |
| Operating expense | 754000 | 75000 | 34000 | 1024000 | 737000 | 426000 | 3050000 |
| **Operating income (loss)** | (560000) | (300000) | (27000) | (1030000) | (921000) | (426000) | (3264000) |
| Other income (expense) | (37000) | (170000) | (7000) | 3000 | 107000 | 922000 | 818000 |
| **Net income (loss) from continuing operations before taxes** | (597000) | (470000) | (35000) | (1027000) | (814000) | 496000 | (2607000) |

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Three Months Ended June 30, 2024** | **Product Packaging** | **Commercial Lending** | **Direct Marketing** | **Biotechnology** | **Securities** | **Corporate** | **Total** |
| Revenue | $3539000 | $44000 | $3000 | $1000 | $624000 | $- | $4211000 |
| Cost of revenue | 3598000 | - | - | 9000 | 2066000 | - | 5673000 |
| **Gross profit (loss)** | (59000) | 44000 | 3000 | (8000) | (1442000) | - | (1462000) |
| Operating expense | 823000 | 120000 | 94000 | 663000 | 998000 | 775000 | 3473000 |
| **Operating income (loss)** | (882000) | (76000) | (91000) | (671000) | (2440000) | (775000) | (4935000) |
| Other income (expense) | (29000) | 578000 | 195000 | 3000 | (127000) | (827000) | (207000) |
| **Net income (loss) from continuing operations before taxes** | (911000) | 502000 | 104000 | (668000) | (2567000) | (1602000) | (5142000) |

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Six Months Ended June 30, 2025** | **Product Packaging** | **Commercial Lending** | **Direct Marketing** | **Biotechnology** | **Securities** | **Corporate** | **Total** |
| Revenue | $8286000 | $30000 | $- | $21000 | $1900000 | $- | $10237000 |
| Cost of Revenue | 7895000 | 212000 | (7000) | 24000 | 2561000 | - | 10685000 |
| Gross profit (loss) | 391000 | (182000) | 7000 | (3000) | (661000) | - | (448000) |
| Operating expense | 1464000 | 140000 | 68000 | 2080000 | 899000 | 1891000 | 6542000 |
| Operating income (loss) | (1073000) | (322000) | (61000) | (2083000) | (1560000) | (1891000) | (6990000) |
| Other income (expense) | (75000) | (416000) | (1000) | 46000 | (970000) | 598000 | (818000) |
| Net loss from continuing operations | (1148000) | (738000) | (62000) | (2037000) | (2530000) | (1293000) | (7969000) |

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Six Months Ended June 30, 2024** | **Product Packaging** | **Commercial Lending** | **Direct Marketing** | **Biotechnology** | **Securities** | **Corporate** | **Total** |
| Revenue | $6620000 | $146000 | $3000 | $2000 | $1311000 | $- | $8082000 |
| Cost of revenue | 6365000 | 469000 | - | 19000 | 3810000 | - | 10663000 |
| Gross profit (loss) | 255000 | (323000) | 3000 | (17000) | (2499000) | - | (2581000) |
| Operating expense | 1547000 | 234000 | 154000 | 1467000 | 2122000 | 1511000 | 7035000 |
| Operating income (loss) | (1292000) | (557000) | (151000) | (1484000) | (4621000) | (1511000) | (9616000) |
| Other income (expense) | (75000) | (324000) | 186000 | (126000) | (284000) | 13000 | (610000) |
| Net income (loss) from continuing operations | (1367000) | (881000) | 35000 | (1610000) | (4905000) | (1498000) | (10226000) |

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The following tables disaggregate our business segment revenues by major source:

Printed Products Revenue Information:

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| | |
|:---|:---|
| **Three months ended June 30, 2025** | |
| Packaging Printing and Fabrication | $4150000 |
| Commercial and Security Printing | 122000 |
| Real Property Rental Income | 16000 |
| &nbsp;&nbsp;&nbsp;Total Printed Products | $4288000 |

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| | |
|:---|:---|
| **Three months ended June 30, 2024** | |
| Packaging Printing and Fabrication | $3434000 |
| Commercial and Security Printing | 87000 |
| Real Property Rental Income | 18000 |
| &nbsp;&nbsp;&nbsp;Total Printed Products | $3539000 |

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| | |
|:---|:---|
| **Six months ended June 30, 2025** | |
| Packaging Printing and Fabrication | $7966000 |
| Commercial and Security Printing | 257000 |
| Real Property Rental Income | 32000 |
| &nbsp;&nbsp;&nbsp;Total Printed Products | $8255000 |

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| | |
|:---|:---|
| **Six months ended June 30, 2024** | |
| Packaging Printing and Fabrication | $6287000 |
| Commercial and Security Printing | 278000 |
| Real Property Rental Income | 34000 |
| &nbsp;&nbsp;&nbsp;Total Printed Products | $6599000 |

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Biotechnology

---

| | |
|:---|:---|
| **Three months ended June 30, 2025** | |
| Retail internet sales | $7000 |
| &nbsp;&nbsp;&nbsp;Total Biotechnology | $7000 |

---

---

| | |
|:---|:---|
| **Three months ended June 30, 2024** | |
| Retail internet sales | $1000 |
| &nbsp;&nbsp;&nbsp;Total Biotechnology | $1000 |

---

---

| | |
|:---|:---|
| **Six months ended June 30, 2025** | |
| Retail internet sales | $21000 |
| &nbsp;&nbsp;&nbsp;Total Direct Marketing | $21000 |

---

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| | |
|:---|:---|
| **Six months ended June 30, 2024** | |
| Retail internet sales | $2000 |
| &nbsp;&nbsp;&nbsp;Total Direct Marketing | $2000 |

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Securities Revenue Information

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| | |
|:---|:---|
| **Three months ended June 30, 2025** | |
| Rental income | $699000 |
| Commission income | $282000 |
| Total Rental Income | $981000 |

---

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| | |
|:---|:---|
| **Three months ended June 30, 2024** | |
| Rental income | $420000 |
| Commission income | $204000 |
| Total Rental Income | $624000 |

---

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| | |
|:---|:---|
| **Six months ended June 30, 2025** | |
| Rental income | $1429000 |
| Total Rental Income | $1429000 |

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---

| | |
|:---|:---|
| **Six months ended June 30, 2024** | |
| Rental income | $838000 |
| Total Rental Income | $838000 |

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Commercial Lending Revenue Information:

---

| | |
|:---|:---|
| **Three months ended June 30, 2025** | |
| Net Investment Income | $9000 |
| Total Investment Income | $9000 |

---

---

| | |
|:---|:---|
| **Three months ended June 30, 2024** | |
| Net Investment Income | $44000 |
| Total Rental Income | $44000 |

---

---

| | |
|:---|:---|
| **Six months ended June 30, 2025** | |
| Net investment income | $29000 |
| Total Management fee income | $29000 |

---

---

| | |
|:---|:---|
| **Six months ended June 30, 2024** | |
| Net Investment Income | $136000 |
| Total Management fee income | $136000 |

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**16. Related Party Transactions**

The Company owns 127,179,291 shares or approximately 4% of the outstanding shares of Alset International Limited ("Alset Intl"), a company incorporated in Singapore and publicly listed on the Singapore Exchange Limited. This investment is classified as a marketable security and is classified as long-term assets on the consolidated balance sheets as the Company has the intent and ability to hold the investments for a period of at least one year. The Chairman of the Company, Mr. Heng Fai Ambrose Chan, is the Executive Director and Chief Executive Officer of Alset Intl. Mr. Chan is also the majority shareholder of Alset Intl as well as the largest shareholder of the Company. The fair value of the marketable security as of June 30, 2025 and December 31, 2024, was approximately $2,098,000 and $2,518,000, respectively. During the six months ended June 30, 2025 and 2024, the Company recorded unrealized loss of approximately $420,000 and $356,000, respectively.

On September 10, 2020, the Company's wholly owned subsidiary DSS Securities, Inc. entered into membership interest purchase agreement with BMI Financial Group, Inc. a Delaware corporation ("BMIF") and BMI Capital International LLC, a Texas limited liability company ("BMIC") whereas DSS Securities, Inc. purchased 14.9% membership interests in BMIC for $100,000. DSS Securities also had the option to purchase an additional 10% of the outstanding membership interest which it exercised for $100,000 in January of 2021 and increased its ownership to 24.9%. The Company is currently accounting for this investment under the equity method of accounting per ASC 323. The Company's portion of net loss in BMIC during the three months ended June 30, 2025 and 2024, approximated $5,000 and $7,000, respectively. BMIC is a broker-dealer registered with the Securities and Exchange Commission, is a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"), and is a member of the Securities Investor Protection Corporation ("SIPC"). The Company's chairman of the board and another independent board member of the Company also have ownership interest in BMIC.

On February 28, 2022, the Company entered into a Stock Purchase Agreement with Alset EHome International Inc. ("AEI"), pursuant to which AEI has agreed to sell a subsidiary holding 62,336,908 shares of stock of True Partner Capital Holding Limited exchange for 17,570,948 shares of common stock of the Company (the "DSS Shares"). The Company's Executive Chairman and a significant stockholder, Heng Fai Ambrose Chan is the Chairman, Chief Executive Officer and largest shareholder of AEI.

On August 29, 2022, DSS Financial Management Inc and BMI Capital, Inc. ("BMIC"), a related party, entered into a promissory note ("Note 8") in the principal sum of $100,000 with interest of 8%, is due in three quarterly instalments beginning on September 14, 2022. All unpaid principal and interest is due on August 29, 2025. The outstanding principal and interest at June 30, 2025, and December 31, 2024 approximated $83,000, and was fully reserved for as of June 30, 2025 and December 31, 2024. DSS owns 24.9% of the outstanding common shares of BMIC.

On May 8, 2023, DSS Financial Management Inc and BMIC entered into a promissory note ("Note 9") in the principal sum of $102,000 with interest at the prime rate plus 2% (10.5% at September 30, 2024 and December 31, 2023) with a maturity date of May 7, 2026. . The outstanding principal and interest at June 30, 2025, and December 31, 2024 approximated $110,000, and was fully reserved for as of June 30, 2025 and December 31, 2024. DSS owns 24.9% of the outstanding common shares of BMIC.

On July 26, 2022, APF and VEII, Inc. ("VEII") entered into a promissory note ("Note 10") in the principal sum of $1,000,000 with interest of 8% with all unpaid principal and interest due on July 26, 2024. This note was amended so that all unpaid principal and interest is due July 26, 2025. The outstanding principal and interest as of June 30, 2025 and December 31, 2024 approximates $959,000. Approximately $959,000 of this note was reserved for as of December 31, 2024. The outstanding principal and interest on December 31, 2023, approximates $939,000, net of $20,000 of unamortized origination fees and is included in notes receivable on the accompanying consolidate balance sheet. Heng Fai Ambrose Chan, the Chairman of DSS, Inc is also the on the board of directors of VEII.

On October 13, 2021, LVAM entered into loan agreement with BMIC ("BMIC Loan"), a related party, whereas LVAM borrowed the principal amount of $3,000,000, with interest to be charged at a variable rate to be adjusted at the maturity date. The BMIC loan contains an auto renewal period of three months, with a current maturity date of July 2025. As of June 30, 2025, and December 31, 2024, the outstanding principal and interest of approximately $464,000 and $463,000, respectively, are included in Current portion of long-term debt – related party, net on the consolidated balance sheet.

On October 13, 2021, LVAM entered into a loan agreement with Lee Wilson Tsz Kin ("Wilson Loan"), a related party, whereas LVAM borrowed the principal amount of $3,000,000, with interest to be charged at a variable rate to be calculated at the maturity date. The Wilson Loan matures on October 12, 2022, and contains an auto renewal period of three months with a current maturity date of July 2025. As of March 31, 2025, and December 31, 2024, the outstanding principal and interest of approximately $145,000 and $145,000, respectively, are included in Current portion of long-term debt – related party, net on the consolidated balance sheet.

On February 6, 2025, as a bonus for compensation awarded to Heng Fai Holdings Limited ("HFHL"), a Hong Kong Company, which is beneficially owned by Mr. Heng Fai Ambrose Chan, Director of DSS, Inc., and pursuant to DSS, Inc's. 2020 Employee, Director and Consultant Equity Incentive Plan (the "Plan"), HFHL was awarded 1,000,000 shares of the Company's common stock under the Plan, for services rendered. The issuance was approved by the board of directors on January 31, 2025.

**17. Subsequent Events**

The Company has evaluated all subsequent events and transactions through August 14, 2025 the date that the condensed consolidated financial statements were available to be issued and noted no subsequent events requiring financial statement recognition or disclosure other than noted below:

On June 21, 2025, Impact BioMedical Inc. ("Impact"), Dr Ashleys Limited, a Cayman Islands exempted company limited by shares ("PubCo"), Dr Ashleys Nevada Sub, Inc., a Nevada corporation and wholly-owned subsidiary of PubCo ("Merger Sub"), Dr Ashleys Bio Labs Limited, a Cayman Islands exempted company limited by shares ("Dr Ashleys Cayman"), and Kanans Visvanats (a.k.a. Kannan Vishwanatth), a Latvian national, solely in his capacity as the sole shareholder of Dr Ashleys ("Dr Ashleys Shareholder") entered into a Merger and Share Exchange Agreement (the "Merger Agreement"). Pursuant to the Merger Agreement and subject to the terms and conditions set forth therein, (i) Merger Sub shall be merged with and into Impact with Impact being the surviving entity (the "Merger"), and (ii) simultaneous with or immediately following the Merger, PubCo shall acquire all of the issued and outstanding ordinary shares of Dr Ashleys Cayman from the Dr Ashleys Shareholder (the "Share Exchange"). This transaction is expected to close during the fourth quarter of 2025.

**ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

***FORWARD-LOOKING STATEMENTS***

Certain statements contained herein this report constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "1995 Reform Act"). Except for the historical information contained herein, this report contains forward-looking statements (identified by words such as "estimate", "project", "anticipate", "plan", "expect", "intend", "believe", "hope", "strategy" and similar expressions), which are based on our current expectations and speak only as of the date made. These forward-looking statements are subject to various risks, uncertainties and factors that could cause actual results to differ materially from the results anticipated in the forward-looking statements.

**Overview**

The Company, incorporated in the state of New York in May 1984 has conducted business in the name of DSS, Inc. On September 16, 2021, the board of directors approved an agreement and plan of merger with a wholly owned subsidiary, DSS, Inc. (a New York corporation, incorporated in August 2020), for the sole purpose of effecting a name change from Document Security Systems, Inc. to DSS, Inc. This change became effective on September 30, 2021. DSS, Inc. maintained the same trading symbol "DSS".

DSS, Inc. (together with its consolidated subsidiaries, referred to herein as "DSS," "we," "us," "our" or the "Company") currently operates nine (9) distinct business lines with operations and locations around the globe. These business lines are: (1) Product Packaging, (2) Biotechnology, (3) Commercial Lending, (4) Securities and Investment Management, (5) Direct Marketing.

Our divisions, their business lines, subsidiaries, and operating territories: (1) Our Product Packaging line is led by Premier Packaging Corporation, Inc. ("Premier"), a New York corporation. Premier operates in the paper board and fiber based folding carton, consumer product packaging, and document security printing markets. It markets, manufactures, and sells sophisticated custom folding cartons, mailers, photo sleeves and complex 3-dimensional direct mail solutions. Premier is currently located in its new facility in Rochester, NY, and primarily serves the US market. (2) The Biotechnology business line was created to invest in or acquire companies in the BioHealth and BioMedical fields, including businesses focused on the advancement of drug discovery and prevention, inhibition, and treatment of neurological, oncological, and immune related diseases. This division is also targeting unmet, urgent medical needs, and is developing open-air defense initiatives, which curb transmission of air-borne infectious diseases, such as tuberculosis and influenza. (3) Our Commercial Lending business division, driven by American Pacific Financial ("APF"), is organized for the purposes of being a financial network holding company, focused on acquiring equity positions in (i) undervalued commercial bank(s), bank holding companies and nonbanking licensed financial companies operating in the United States, South East Asia, Taiwan, Japan and South Korea, and (ii) companies engaged in—nonbanking activities closely related to banking, including loan syndication services, mortgage banking, trust and escrow services, banking technology, loan servicing, equipment leasing, problem asset management, SPAC (special purpose acquisition company) consulting services, and advisory capital raising services. (4) Securities and Investment Management was established to develop and/or acquire assets in the securities trading or management arena, and to pursue, among other product and service lines, broker dealers, and mutual funds management. Also in this segment is the Company's real estate investment trusts ("REIT"), organized for the purposes of acquiring hospitals and other acute or post-acute care centers from leading clinical operators with dominant market share in secondary and tertiary markets, and leasing each property to a single operator under a triple-net lease. the REIT was formed to originate, acquire, and lease a credit-centric portfolio of licensed medical real estate. (5) Direct Marketing, 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 Marketing's products include, among other things, nutritional and personal care products sold throughout North America, Asia Pacific, Middle East, and Eastern Europe.

The five reporting segments are as follows:

***Premier Packaging:*** ("Premier") Premier Packaging Corporation provides custom packaging services and serves clients in the pharmaceutical, nutraceutical, consumer goods, beverage, specialty foods, confections, photo packaging and direct marketing industries, among others. The group also provides active and intelligent packaging and document security printing services for end-user customers. In addition, the division produces a wide array of printed materials, such as folding cartons and paperboard packaging, security paper, vital records, prescription paper, birth certificates, receipts, identification materials, entertainment tickets, secure coupons and parts tracking forms. The division also provides resources and production equipment for our ongoing research and development of security printing, brand protection, consumer engagement and related technologies.

***Commercial Lending:*** ("Commercial Lending") through its operating company, American Pacific Financial, Inc. ("APF") represents our banking and financing business line. is organized for the purposes of being a financial network holding company, focused providing commercial loans and on acquiring equity positions in (i) undervalued commercial bank(s), bank holding companies and nonbanking licensed financial companies operating in the United States, South East Asia, Taiwan, Japan and South Korea, and (ii) companies engaged in—nonbanking activities closely related to banking, including loan syndication services, mortgage banking, trust and escrow services, banking technology, loan servicing, equipment leasing, problem asset management, SPAC (special purpose acquisition company) consulting, and advisory capital raising services. From this financial platform, the Company shall provide an integrated suite of financial services for businesses that shall include commercial business lines of credit, land development financing, inventory financing, third party loan servicing, and services that address the financial needs of the world Gig Economy.

***Biotechnology:*** ("Biotech") targets unmet, urgent medical needs and expands the borders of medical and pharmaceutical science. Biotech drives mission-oriented research, development, and commercialization of solutions for medical advances in human wellness and healthcare. By leveraging technology and new science with strategic partnerships, Biotech provides advances in drug discovery for the prevention, inhibition, and treatment of neurological, oncology and immuno-related diseases. Other exciting technologies include a breakthrough alternative sugar aimed to combat diabetes and functional fragrance formulations aimed at the industrial and medical industry.

Biotech has several important and valuable products, technology or compounds that are in continuing development and/or licensing stages:

● LineBacker: Multi-faceted therapeutic platform for metabolic, neurologic, cancer, and infectious diseases.

● 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.

● Procombin: Applications as food additive, and natural preservative for beauty and person care products as well as natural food preservative.

● VanXin: Food preservative booster made up of polyphenols that extend the shelf life.

● 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.

● 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.

● 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.

● 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.

● 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.

● 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.

● 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.

***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:

● **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.

● **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.

● **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.

● **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***: provides services to assist companies in the emerging growth gig business model of peer-to-peer decentralized sharing marketplaces. It specializes in marketing and distributing its products and services through its subsidiary and partner network, using the popular gig economic marketing strategy as a form of direct marketing. Direct marketing products include, among other things, nutritional and personal care products sold throughout North America, Asia Pacific and Eastern Europe.

***Results of operations for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024.***

This discussion should be read in conjunction with the financial statements and footnotes contained in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2024.

**Revenue**

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three months ended June 30, 2025** | **Three months ended June 30, 2024** | **% Change** | **Six months ended June 30, 2025** | **Six months ended June 30, 2024** | **% Change** |
| Product Packaging | $4288000 | $3536000 | 21% | $8287000 | $6633000 | 25% |
| Securities | 981000 | 626000 | 57% | 1900000 | 1311000 | 45% |
| Commercial Lending | 9000 | 48000 | -81% | 29000 | 136000 | -79% |
| Biotechnology | 7000 | 1000 | 600% | 21000 | 2000 | 950% |
|  | $5285000 | $4211000 | 26% | $10237000 | $8082000 | 27% |

---

For the six months ended June 30 2025, total revenue increased 27% as compared to the six months ended June 30, 2024. The increase in Printed Product revenue of approximately 25% is driven by new customer orders as well as existing customer orders exceeding their forecasts. The increases in Securities revenue of approximately 45% is driven by an increase in rental income by new tenants at AMRE LifeCare Pittsburgh facility beginning to making rental payments in the second half of 2024. The decreases in Commercial lending revenue of approximating 79% is due to a number of loans made going on non-accrual as borrowers have struggled to make expect payments. Biotechnology revenue is driven by sales of the Company's air purification Celios brand.

**Costs and Expenses**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | **Three months ended June 30, 2025** | **Three months ended June 30, 2024** | **% Change** | **Six months ended June 30, 2025** | **Six months ended June 30, 2024** | **% Change** |
| Cost of revenue |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Printed products | Product Packaging | $4094000 | $3598000 | 14% | $7895000 | $6365000 | 24% |
| &nbsp;&nbsp;&nbsp;Securities | Securities | 1165000 | 2066000 | -44% | 2561000 | 3810000 | -33% |
| &nbsp;&nbsp;&nbsp;Biotechnology | Biotechnology | 13000 | 9000 | 44% | 24000 | 19000 | 26% |
| &nbsp;&nbsp;&nbsp;Commercial lending | Commercial Lending | 234000 |  | N/A | 212000 | 469000 | -55% |
| &nbsp;&nbsp;&nbsp;Direct marketing | Direct Marketing | (7000) |  | N/A | (7000) |  | N/A |
| Sales, general and administrative compensation |  | 1122000 | 1215000 | -8% | 3167000 | 2443000 | 30% |
| Professional fees |  | 492000 | 446000 | 10% | 1131000 | 1305000 | -13% |
| Stock based compensation |  | 2000 |  | N/A | 4000 |  | N/A |
| Sales and marketing |  | 423000 | 449000 | -6% | 824000 | 943000 | -13% |
| Rent and utilities |  | 133000 | 291000 | -54% | 259000 | 427000 | -39% |
| Research and development |  | 75000 | 121000 | -38% | 178000 | 304000 | -41% |
| Other operating expenses |  | 964000 | 951000 | 1% | 1140000 | 1613000 | -29% |
| &nbsp;&nbsp;&nbsp;*Total costs and expenses* |  | $8710000 | $9146000 | -5% | $17338000 | $17698000 | -2% |

---

<u>Costs of revenue</u> includes all direct costs of the Company's printed products, including its packaging and printing sales and its direct marketing sales, materials, direct labor, transportation, and manufacturing facility costs. In addition, this category includes all direct costs associated with the Company's technology sales, services and licensing including hardware and software that are resold, third-party fees, and fees paid to inventors or others because of technology licenses or settlements, if any. Cost of revenue for our REIT line of business includes all direct cost associated with the maintenance and upkeep of the related facilities, depreciation, amortization and the costs to acquire the facilities. Our Commercial Lending operating segment has costs of revenue associated with the impairment of notes receivable for those amounts at risk of collection. Total costs of revenue remained flat for the six months ended June 30, 2025 as compared to June 30, 2024. Cost of revenue increased at our Printed products business line driven by an increase in revenue which was offset by decrease in cost of revenue within our REIT business driven by the sale of the Plano, Tx facility as well as new tenants at our Pittsburgh, PA facility paying related cost previously paid for by the Company.

<u>Sales, general and administrative compensation</u> costs, excluding stock-based compensation, increased 30% for six months ended Jun 30, 2025 as compared to 2024 is primarily due to bonus awarded to Heng Fai Holdings Limited ("HFHL"), a Hong Kong Company, which is beneficially owned by Mr. Heng Fai Ambrose Chan, Director of DSS, Inc., for services rendered. The issuance was approved by the board of directors on January 31, 2025.

<u>Professional fees</u> decreased 13% for six months ended June 30, 2025 as compared to 2024 due primarily to efforts taken to decrease these costs as the Company continues to drive savings in non-essential areas.

<u>Stock based compensation</u> includes expense charges for all stock-based awards to employees, directors, and consultants of Impact Bio. Such awards can include option grants, warrant grants, and restricted and unrestricted stock awards. These types of awards were not used prior to the Company's IPO in September 2024.

<u>Sales and marketing</u> which include internet and trade publication advertising, travel and entertainment costs, sales-broker commissions, and trade show participation expenses. Sales and marketing decreased 13% during the six months ended June 30, 2025 as compared to 2024 due to decreases in marketing, and travel costs within our Printed Products division.

<u>Rent and utilities</u> decreased 39% during the six months ended June 30, 2025 as compared to 2024 primarily due to end of the lease in office space in California for the Company's DSS Wealth Management subsidiary.

<u>Research and development</u> costs represent costs consisting primarily of independent, third-party testing of the various properties of each technology the Company owns possesses as well as research on new technologies. These costs decreased 41% the six months ended June 30, 2025 as compared to June 30, 2024, due primarily to decreased efforts in this area post Impact Bio's IPO in September 2024.

<u>Other operating expenses</u> consist primarily of equipment maintenance and repairs, office supplies, IT support, and insurance costs. These costs decreased approximately 29% during the six months ended June 30, 2025 as compared to June 30, 2024, primarily due to collections of previously written-off of accounts receivable associated with our AMRE LifeCare facilities of approximately $600,000.

**Other Income (Expense)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three months ended June 30, 2025** | **Three months ended June 30, 2024** | **% Change** | **Six months ended June 30, 2025** | **Six months ended June 30, 2024** | **% Change** |
| Interest Income | $25000 | $195000 | -87% | $33000 | $302000 | -89% |
| Other Income |  | 12000 | -100% | $9000 | $38000 | -76% |
| Interest Expense | (123000) | (142000) | -13% | $(156000) | $(190000) | -18% |
| Foreign Currency Translation Adjustment | 3000 | (9000) | -133% | $- | $(14000) | -100% |
| (Loss)/gain on equity method investment | (2000) | 8000 | -125% | $(5000) | $7000 | -171% |
| Gain (loss) on investments | 1557000 | (383000) | -507% | $627000 | $(572000) | -210% |
| Impairment of intangible assets | (600000) |  | N/A | $(600000) | $- | N/A |
| Provision for loan losses |  | (53000) | -100% | $- | $(346000) | -100% |
| (Loss)/gain on sale | (43000) | 165000 | -126% | $(727000) | $165000 | -541% |
| &nbsp;&nbsp;&nbsp;*Total other income (expense)* | $818000 | $(207000) | 495% | $(818000) | $(610000) | -34% |

---

<u>Interest income</u> is recognized on the Company's money markets, and a portion of notes receivable, identified in Note 4. The decrease in interest income is driven by several notes being put on non-accrual as the related borrowers have shown an inability to pay timely.

<u>Other income</u> for the six months ended June 30, 2025 as compared to 2024 decreased 76% due primarily to income incurred in 2024 regarding the Company's distribution agreement with BioMed Technologies that did not reoccur in 2025.

<u>Interest expenses</u> decreased 18% during the six months ended June 30, 2025, as compared to the same period in 2024, due to decreasing debt balances.

<u>Loss on equity method investment</u> is the Company's prorated portion of earnings on its investments treated under the equity method of account for the six months ended June 30, 2025 as compared to 2024.

<u>Gain (loss)on investments</u> consists of net realized losses on marketable securities which are recognized as the difference between the purchase price and sale price of the common stock investment, and net unrealized losses on marketable securities which are recognized on the change in fair market value on our common stock investment. The decrease in loss on investment for the six months ended June 30, 2025 as compared to 2024 is driven by the performance of our stock portfolio, driven by the sale of Impact Bio stock acquired at the time of its IPO (see Note 12).

<u>Impairment of intangible assets</u> is a result of the Company resigning its position as the registered investment advisor ("RIA") of the American First Mutual Funds. The related asset was acquired at the time the Company became the RIA in September 2021.

<u>Provision for loan losses</u> represents a reserve put against certain notes receivable deemed uncollectible. During the six months ended June 30, 2025, the Company reviewed the entire loan portfolio and determined no additional provisions for loan losses was necessary.

<u>Loss on sale of real estate</u> is driven by the sale of the Company's Plano, Texas facility.

**Net Loss**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three months ended June 30, 2025** | **Three months ended June 30, 2024** | **% Change** | **Six months ended June 30, 2025** | **Six months ended June 30, 2025** | **% Change** |
| **Net loss** | $(2607000) | $(4954000) | -47% | $(7902000) | $(10063000) | -21% |

---

For the six months ended June 30, 2025 the Company recorded net losses of $7,902,000 as compared to net losses of $10,603,000 for the same period in 2024. The decrease in net loss is driven increases in revenue at our Printed products and Securities divisions of approximately $1,654,000 and $589,000 respectively. The Company also saw a gain in our investments of approximately $1,662,000 during this time frame. This is offset by the bonus paid to Heng Fai Holdings Limited of approximately $871,000 during the first quarter of 2025 as well as an approximate loss of $727,000 on the sale of the Company's Plano, Tx facility.

**LIQUIDITY AND CAPITAL RESOURCES**

The Company has historically met its liquidity and capital requirements primarily through the sale of its equity securities and debt financing. As of June 30, 2025 the Company had cash of approximately $9.5 million. As of June 30, 2025, the Company believes that it will have access to sources of capital from the sale of its equity securities and debt financing, and thus believes that it has sufficient cash to meet its cash requirements for at least the next 12 months from the filing date of this Quarterly Report.

**Cash Flow from Continuing Operating Activities**

Net cash provided by operating activities was $430,000 for the six months ended June 30, 2025 as compared to cash used of $5,574,000 for six months ended June 30, 2024. This fluctuation is driven by decreases in net loss, after reconciling items, approximating $5,149,000.

**Cash Flow from Investing Activities**

Net cash provided by investing activities was $10,135,000 for the six months ended June 30, 2025 as compared to net cash provided by investing activities of $8,776,000 for the six months ended June 30, 2024. This fluctuation is driven by the sale of real estate approximating $9,500,000, the sale of marketable securities of approximately $116,000, and the sale of related party investments of approximately $1,500,000, offset by the purchase of marketable securities of approximately $1,000,000 during 2025 versus a sale of marketable securities of $0 during 2024. This is offset by receipts on Notes receivable of $4,044,000 in 2024 versus $163,000 in 2025.

**Cash Flow from Financing Activities**

Net cash used by financing activities was $12,511,000 for the six months ended June 30, 2025 as compared to net cash provided by financing activities of $902,000 for the six months ended June 30, 2024. This variance is driven by payments toward long term debt of $9,443,000 and payments on margin loans of $3,117,000 in 2025 versus payments toward long term debt of $1,269,000 in 2024 and no payments on margin loans during 2024.

Off-Balance Sheet Arrangements

We do not have any material off-balance sheet arrangements that have, or are reasonably likely to have, an effect on our financial condition, financial statements, revenues, or expenses.

**Critical Accounting Policies and Estimates**

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in our financial statements and accompanying notes. The financial statements as of December 31, 2024, describe the significant accounting policies and methods used in the preparation of the financial statements. There have been no material changes to such critical accounting policies as of the Quarterly Report on Form 10-Q for the quarter ended June 30, 2025.

**ITEM 4 - CONTROLS AND PROCEDURES**

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures for the quarter ended June 30, 2025, pursuant to Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based on this evaluation and on the material weaknesses disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024 which remained as of June 30, 2025, our principal executive officer and principal financial officer concluded that as of June 30, 2025, our disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is being recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that our disclosure controls are not effectively designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is being accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

***Plan for Remediation of Material Weaknesses***

As discussed in our Annual Report on Form 10-K for the year ended December 31, 2024, the Company has a remediation plan and is committed to maintaining a strong internal control environment and believes that these remediation efforts will represent significant improvements in our controls. The Company has started to implement these steps, however, some of these steps will take time to be fully integrated and confirmed to be effective and sustainable. Additional controls may also be required over time. Until the remediation steps set forth above are fully implemented and tested, the material weaknesses described above will continue to exist.

***Changes in Internal Control over Financial Reporting***

While changes in the Company's internal control over financial reporting occurred during the quarter ended June 30, 2025 as the Company began implementation of the remediation steps described above, we believe that there were no changes in the Company's internal control over financial reporting during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

**PART II**

**OTHER INFORMATION**

**ITEM 1 - LEGAL PROCEEDINGS**

See commentary in Note 11 Commitments and Contingencies.

**ITEM 1A - RISK FACTORS**

There have been no material changes to the discussion of risk factors previously disclosed in our most recently filed Annual Report on Form 10-K for the year ended December 31, 2024.

**ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

On January 25, 2022, the Company entered into a stock purchase agreement with Alset EHome International, Inc. (the "January 25, 2022 SPA"), pursuant to which the Company agreed to issue to Alset EHome International, Inc. ("AEI") up to 44,619,423 shares of the Company's common stock (the "Shares") for a purchase price of $0.3810 per share. On February 28, 2022, the Company entered into an Amendment to Stock Purchase Agreement, pursuant to which the Company and AEI agreed to amend certain terms of the January 25, 2022 SPA. Pursuant to the Amendment, the number of shares of the common stock of the Company that the AEI will purchase has been reduced from 44,619,423 to 3,986,877 shares for an aggregate purchase price of $1,519,000.

On January 18, 2022, the Company entered into a stock purchase agreement with AEI, pursuant to which AEI sold to the Company 100% of the shares of common stock of its wholly owned subsidiary True Partner International Limited (HK) ("TP"), and all of TP's 62,122,908 ordinary shares of True Partner Capital Holding Limited, for a purchase price of 11,397,080 newly issued shares of the Company's common stock. This agreement was terminated on February 25, 2022. On February 28, 2022, the Company entered into a Stock Purchase Agreement with Alset EHome International Inc. (the "True Partner Revised Stock Purchase Agreement"), pursuant to which AEI has agreed to sell a subsidiary holding 62,122,908 shares of stock of True Partner Capital Holding Limited in exchange for 17,570,948 shares of common stock of the Company.

**ITEM 3 - DEFAULTS UPON SENIOR SECURITIES**

None.

**ITEM 4 - MINE SAFETY DISCLOSURES**

Not applicable.

**ITEM 5 - OTHER INFORMATION**

None.

**ITEM 6 - EXHIBITS**

---

| | |
|:---|:---|
| **Exhibit**<br> **Number** | **Exhibit Description** |
| 3.1 | [Certificate of Incorporation \*](ex3-1.htm) |
| 3.2 | [Certificate of Incorporation of Document Security Systems, Inc., as amended (incorporated by reference to exhibit 3.1 to Form 8-K dated August 25, 2016).](https://www.sec.gov/Archives/edgar/data/771999/000149315216012895/ex3-1.htm) |
| 3.3 | [Fifth Amended and Restated Bylaws \*](ex3-3.htm) |
| 10.1 | [Securities Purchase Agreement between Decentralized Sharing Systems, Inc. and Sharing Services Global Corporation for the sale of HWH Holdings, Inc. (incorporated by reference to exhibit 10.1 to exhibit 10.1 to the Company's quarterly report, dated August 13, 2024)](https://www.sec.gov/Archives/edgar/data/771999/000149315224031643/ex10-1.htm) |
| 10.2 | [Securities Purchase Agreement between Decentralized Sharing Systems, Inc. and Sharing Services Global Corporation for the sale of HWH World, Inc. (incorporated by reference to exhibit 10.2 to exhibit 10.1 to the Company's quarterly report, dated August 13, 2024)](https://www.sec.gov/Archives/edgar/data/771999/000149315224031643/ex10-2.htm) |
| 31.1 | [Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer. \*](ex31-1.htm) |
| 31.2 | [Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer. \*](ex31-2.htm) |
| 32.1 | [Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. \*](ex32-1.htm) |
| 32.2 | [Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. \*](ex32-2.htm) |
| 101.INS | Inline XBRL Instance Document\* |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document\* |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document\* |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document\* |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document\* |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document\* |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document)\* |

---

\*Filed herewith.

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **DSS, INC.** | **DSS, INC.** |
| August 14, 2025 | By: | */s/ Jason Grady* |
|  |  | Jason Grady |
|  |  | Interim Chief Executive Officer |
|  |  | (Principal Executive Officer) |
| August 14, 2025 | By: | */s/ Todd D. Macko* |
|  |  | Todd D. Macko |
|  |  | Chief Financial Officer |
|  |  | (Principal Financial and Accounting Officer) |

---

## Exhibit 3.1

**Exhibit 3.1**

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## Exhibit 3.3

**Exhibit 3.3**

**FIFTH AMENDED AND RESTATED BY-LAWS**

**OF**

**DOCUMENT SECURITY SYSTEMS, INC.**

(A New York Corporation)

**<u>ARTICLE 1 - CORPORATE OFFICES</u>**

**(1.1) <u>Location</u>.** The principal office of the Corporation shall be located at:

200 Canal View Boulevard Suite 300

Rochester, New York 14623

**(1.2) <u>Change of Location</u>.** The Board of Directors (the "Board") of Document Security Systems, Inc. (the "Corporation") may relocate the principal office of the Corporation, to a location within or without the state of incorporation, as the Board may designate, by resolution adopted by the affirmative vote of a majority of the entire Board. As used in these Fifth Amended and Restated By-Laws of the Corporation (the "By-Laws"), the term "entire Board" means the total authorized number of directors which the Corporation would have if there were no vacancies.

**(1.3) <u>Other Offices</u>.** In addition to its principal office, the Corporation may establish and maintain such other offices, either within or without the state of incorporation, as the Board may designate, by resolution adopted by the affirmative vote of a majority of the entire Board.

**<u>ARTICLE 2 – BOARD OF DIRECTORS</u>**

**(2.1) <u>Number</u>.** The number of directors of the Corporation shall be fixed from time to time by action of the shareholders or by resolution adopted by the affirmative vote of a majority of the entire Board; provided that such number of directors shall not be less than three nor more than eleven, unless and until otherwise determined by vote of a majority of the entire Board; and provided further that no decrease in the number of directors shall shorten the term of any incumbent director.

**(2.2) <u>Election of Directors</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as may otherwise be provided herein or in the Corporation's Certificate of Incorporation, as amended (such Certificate of Incorporation, and any amendments thereof, hereinafter collectively referred to as the "Certificate"), the members of the Board, who need not be shareholders of the Corporation, shall each be elected by receiving a majority of the votes cast by the holders of shares of such class entitled to vote generally in the election of directors at each succeeding annual meeting of the shareholders of the Corporation (a "Majority Vote"); provided, however, that in the event of a "Contested Election," directors shall be elected by a plurality vote. For this purpose, a "Contested Election" means an election in which nominees for election are to be voted on who have not been recommended for election by the Board or the Nominating and Corporate Governance Committee thereof or as to which the number of nominees for election at the meeting exceeds the number of directors to be elected at such meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Board shall only nominate for election or re-election to the Board and shall only fill director vacancies and elect persons to new directorships candidates who agree to tender, before they are nominated for election or re-election as directors, irrevocable resignations that will be effective upon (i) the failure to receive a Majority Vote at the next meeting at which they stand for election or re-election (unless there is a Contested Election at such meeting) and (ii) the Board's acceptance of such resignation. If a director nominee fails to receive the required vote for election or re-election, the Nominating and Corporate Governance Committee of the Board will act on an expedited basis to recommend whether the Board should accept the director's resignation and will submit such recommendation for prompt consideration by the Board. Pending such final determination by the Board as to whether to accept such resignation, the director shall have no right to participate in such determination except and solely to the extent (if any) specifically required by the Board or the Nominating and Corporate Governance Committee thereof (as applicable).

**(2.3) <u>Term of Office</u>.** A director shall hold office until the next year's annual meeting and until his or her successor has been elected and qualified, subject, however, to such director's earlier death, resignation, retirement, disqualification or removal.

**(2.4) <u>Duties and Powers</u>.** The Board shall be responsible for the control and management of the affairs, property and interests of the Corporation, and may exercise all powers of the Corporation, except as are in the Certificate or by statute expressly conferred upon or reserved to the shareholders.

**(2.5) <u>Qualification</u>.** No person shall serve as a director unless such person is at least twenty-one years of age.

**(2.6) <u>Notices</u>.** Upon taking office, each director shall file with the Secretary a written designation of the address that the director desires to be used for the purpose of giving notices to him. Until the director shall have effectively done so, he shall be deemed to have designated either the principal office of the Corporation or any other address that the sender of the notice could reasonably believe to be an appropriate address. Any designated address may be re-designated by similar filing with the Secretary. The Secretary shall give each of the other directors prompt notice of every designation or re-designation filed. The designation or re-designation shall be effective three business days after the Secretary's action or upon earlier receipt. Any notice to a director shall be valid if sent to either (a) the director's designated address or (b) any other address used in good faith unless it be shown that prejudice resulted from use of such other address. All notices must be in writing. Any notice may be delivered by hand or sent by telecommunications device, by e-mail, by regular mail, by overnight courier, or by similar means.

**(2.7) <u>Resignation</u>.** A director may resign at any time by giving notice to each of the other directors or to the Corporation. Unless otherwise specified, the notice shall be effective immediately and acceptance shall not be necessary to make it effective. A director need not assign cause for resigning.

**(2.8) <u>Newly Created Directorships; Vacancies</u>.** Newly created directorships resulting from an increase in the number of directors and any vacancies on the Board resulting from death, resignation, retirement, disqualification, removal or other reason may be filled solely by a majority vote of the remaining directors then in office, even if less than a quorum, or by a sole remaining director, and any director so chosen shall hold office for the remainder of the full term of the departed director and until his or her successor has been elected and qualified, subject, however, to such director's earlier death, resignation, retirement, disqualification or removal.

**(2.9) <u>Removal</u>.** (i) Any director, or the entire Board, may be removed by the shareholders from office at any time prior to the expiration of his or their respective terms of office, but only for cause, and only by the affirmative vote of the holders of record of outstanding shares representing a majority of the voting power of all the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, and (ii) any director may be removed from office by the affirmative vote of a majority of the entire Board, at any time prior to the expiration of his term of office, but only for cause.

**(2.10) <u>Rights of Preferred Shareholders</u>**. Notwithstanding any other provision of this Section 2, and except as otherwise required by law, whenever the holders of one or more series of Preferred Stock shall have the right, voting separately by class or series, to elect one or more directors, the term of office, the filling of vacancies, the removal from office and other features of such directorships shall be governed by the terms of such series of Preferred Stock.

**<u>ARTICLE 3 –BOARD MEETINGS; PROCEDURES; COMPENSATION; COMMITTEES</u>**

**(3.1) <u>Regular Meetings</u>.** A regular meeting of the Board shall be held immediately after the annual meeting of shareholders. The Board may provide for other regular meetings. Notice need not be given of any regular meeting.

**(3.2) <u>Special Meetings</u>.** The Chairman, the lead independent director or the Chief Executive Officer, or any two directors together, may call a special meeting. The special meeting notice does not have to specify the business to be transacted. Special meetings of the Board shall be held upon notice to the directors not less than twenty-four (24) hours before the meeting.

**(3.3) <u>Adjourned Meetings</u>.** Whether or not a quorum is present, a majority of the directors present may adjourn any meeting to such time and place as they shall decide. Notice of any adjourned meeting need not be given at any adjourned meeting, whether adjourned once or more, and any business may be transacted that might have been transacted at the meeting of which there is an adjournment. Additional business may also be transacted if proper notice shall have been given.

**(3.4) <u>Chairman; Lead Independent Director</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At all meetings of the Board, the Chairman of the Board, if any and if present, shall preside and, if there shall be no Chairman, or he shall be absent, then the lead independent director, if any and if present, shall preside, and in his absence, a chairman chosen by the directors then present shall preside.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Board shall select a lead independent director if at any time the Chairman shall be an executive officer of the Corporation or for any other reason shall not be an independent director. The lead independent director shall (i) preside at all meetings of the Board at which the Chairman of the Board is not present, at all meetings of the independent directors and at all executive sessions of the independent directors, (ii) have a reasonable opportunity to review and comment on Board meeting agendas, (iii) serve as a liaison between the Chairman of the Board and the other members of the Board, (iv) have the authority to call special meetings of the Board and of the independent directors, and (v) perform such other duties as the Board may from time to time delegate.

**(3.5) <u>Quorum and Adjournments</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At all meetings of the Board, the presence of a majority of the entire Board shall be necessary and sufficient to constitute a quorum for the transaction of business, except as otherwise provided by law, by the Certificate, or by these By-Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) A majority of the directors present at the time and place of any regular or special meeting, although less than a quorum, may adjourn the same from time to time without notice, until a quorum shall be present.

**(3.6) <u>Manner of Acting</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At all meetings of the Board, or any committee thereof, each director present shall have one vote, irrespective of the number of shares of the Corporation's capital stock, if any, he may hold.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Except as otherwise provided by statute, by the Certificate, or by these By-Laws, the action of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board. Any action authorized, in writing, by all of the directors entitled to vote thereon and filed with the minutes of the Corporation shall be the act of the Board with the same force and effect as if the same had been passed by unanimous vote at a duly called meeting of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Where appropriate communication facilities are reasonably available, any or all directors shall have the right to participate in any Board meeting, or committee meeting, by means of a conference telephone or any means of communication by which all persons participating in the meeting are able to hear each other, and such participation shall constitute presence in person at any such meeting.

**(3.7) <u>Compensation</u>.** The Board is authorized to make provision for reasonable compensation to its members for their services as directors and to fix the basis and conditions upon which this compensation shall be paid. Any director may also serve the Corporation in any other capacity and receive compensation therefor in any form.

**(3.8) <u>Contracts</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No contract or other transaction between this Corporation and any other corporation or entity shall be impaired, affected or invalidated nor shall any director be liable in any way by reason of the fact that any one or more of the directors of this Corporation is or are interested in, or is a director or officer, or are directors or officers of such other corporation or other entity, provided that such material facts are disclosed or made known to the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any director, personally and individually, may be a party to or may be interested in any contract or transaction of this Corporation, and no director shall be liable in any way by reason of such interest, provided that the fact of such interest be disclosed or made known to the Board, and provided that the Board shall authorize, approve or ratify such contract or transaction by the vote (not counting the vote of any such interested director) of a majority of a quorum, notwithstanding the presence of any such director at the meeting at which such action is taken. Such interested director or directors may be counted in determining the presence of a quorum at such meeting. This Section 3.8 shall not be construed to impair or invalidate or in any way affect any contract or other transaction which would otherwise be valid under the law (common, statutory or otherwise) applicable thereto.

**(3.9) <u>Committees</u>.** The Board, by resolution adopted by a majority of the entire Board, may from time to time designate from among its members an executive, audit, nominating, corporate governance or compensation committee and such other committees, and alternate members thereof, as they deem desirable, each consisting of three or more directors (or such lesser number as is permitted by the rules of the stock exchange or over-the-counter market on which the Corporation's stock is then traded), with such powers and authority (to the extent permitted by law) as may be provided in such resolution. Each such committee shall serve at the pleasure of the Board. At all meetings of a committee, the presence of a majority of the members of the committee shall be necessary to constitute a quorum for the transaction of business, except as otherwise provided by said resolution or by these By-Laws. Participation of any one or more members of the committee by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time, shall constitute presence in person at any such meeting. Any action authorized in writing by all of the members of a committee entitled to vote thereon and filed with the minutes of the committee shall be the act of the committee with the same force and effect as if the same had been passed by unanimous vote at a duly called meeting of the committee.

**(3.10) <u>Regulations</u>.** The Board may adopt rules and regulations not inconsistent with law, the Certificate or these By-Laws, for the conduct of its meetings and the management of all aspects of the affairs of the Corporation.

**(3.11) <u>Reliance on Books and Records</u>.** A member of the Board or of any committee thereof designated by the Board as provided in these By-Laws, shall, in the performance of his duties, be fully protected in relying in good faith upon the books of account or reports made to the Corporation by any of its officers, or by an independent certified public accountant or by an appraiser selected with reasonable care by the Board or by any such committee, or in relying in good faith upon other records of the Corporation.

**<u>ARTICLE 4 - SHARES AND CERTIFICATES</u>**

**(4.1) <u>Form of Certificates</u>.** Certificates representing shares of capital stock of the Corporation shall be in the form determined by the Board. All certificates issued shall be consecutively numbered or otherwise appropriately identified.

**(4.2) <u>Share Transfer Ledger</u>.** There shall be kept a share transfer ledger in which shall be entered full and accurate records including the names and addresses of all shareholders, the number of shares issued to each shareholder and the dates of issuance. All transfers of shares shall be promptly reflected in the share transfer ledger. Unless otherwise directed by the Board, the share transfer ledger shall be kept at the principal office of the Corporation and any shareholder of the Corporation is entitled to inspect such list under the Business Corporation Law of New York.

**(4.3) <u>Transfer of Shares</u>.** Upon (a) receipt of the certificate representing the shares to be transferred, either duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, (b) payment of any required transfer taxes, and (c) payment of any reasonable charge the Board may have established, the surrendered certificate shall be canceled and a new certificate or certificates shall be issued to the person(s) entitled to it.

**(4.4) <u>Replacement Certificates</u>.** Replacement certificates will be issued at the request of the shareholder upon payment of any reasonable charge the Board may have established. In case of a lost, mislaid, destroyed or mutilated certificate, proof of the facts, by affidavit or otherwise, may also be required, as may be a bond or other proper indemnification for the Corporation and its agents.

**(4.5) <u>Record Owner to be Treated as Owner</u>.** Unless otherwise directed by a court of competent jurisdiction, the Corporation shall treat the holder of record of any share as the holder in fact and accordingly shall not recognize any equitable or other claim to or interest in the shares on the part of any other persons, whether or not it shall have express or other notice of it.

**<u>ARTICLE 5 – SHAREHOLDER MEETINGS</u>**

**(5.1) <u>Annual Meetings</u>.** The Corporation shall hold an annual meeting of shareholders no later than one year after the end of its fiscal year.

**(5.2) <u>Notice of Meetings</u>.** Written notice of each meeting of shareholders, stating the place, date and hour thereof, and, in the case of a special meeting, specifying the purpose or purposes thereof, shall be given to each shareholder entitled to vote thereat not less than ten (10) days nor more than sixty (60) days prior to the meeting, except that where the matter to be acted on is a merger or consolidation of the Corporation or a sale, lease or exchange of all or substantially all of its assets, such notice shall be given not less than twenty (20) days nor more than sixty (60) days prior to such meeting. If a meeting is adjourned to another time and place, notice need not be given of the adjourned meeting if the time and place thereof was announced at the meeting at which the adjournment is taken. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting.

**(5.3) <u>Special Meetings</u>.** A special meeting of the shareholders may be called by any two or more directors, the Chairman or Chief Executive Officer, or the holders of no less than 10% of all the outstanding shares of the Corporation's capital stock entitled to vote at the meeting.

**(5.4) <u>Adjourned Meetings</u>.** Whether or not a quorum is present, a majority in voting power of the shareholders present in person or by proxy and entitled to vote may adjourn any meeting to a time and place as they shall decide. Notice of any adjourned meeting need not be given. At any adjourned meeting, whether adjourned once or more, any business may be transacted that might have been transacted at the meeting of which it is an adjournment. Additional business may also be transacted if proper notice shall have been given.

**(5.5) <u>Organization</u>.** The Chairman of the Board shall be the chairman of the meeting. The Secretary shall be secretary of the meeting. If the Chairman is not present, the Chief Executive Officer shall preside at the meeting. If none of such persons are present, then the shareholders shall choose a chairman of the meeting. If neither the Secretary nor any assistant secretary is present, the chairman of the meeting shall appoint a secretary of the meeting.

**(5.6) <u>Quorum</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as otherwise provided herein, or by statute, or in the Certificate, at all meetings of shareholders of the Corporation, the presence at the commencement of such meetings in person or by proxy of shareholders holding of record thirty-five percent (35%) of the total number of shares of the Corporation then issued and outstanding and entitled to vote, shall be necessary and sufficient to constitute a quorum for the transaction of any business. The withdrawal of any shareholder after the commencement of a meeting shall have no effect on the existence of a quorum, after a quorum has been established at such meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Despite the absence of a quorum at any annual or special meeting of shareholders, the shareholders, by a majority of the votes cast by the holders of shares entitled to vote thereon, may adjourn the meeting. At any such adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called if a quorum had been present.

**(5.7) <u>Voting</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as otherwise provided by the Certificate or in these By-Laws, all elections of directors at any meeting of shareholders shall be determined by a majority of the votes cast in such election, and any other corporate action to be taken by vote of the shareholders at a meeting of shareholders shall be authorized by a majority of the votes cast for each proposal by the holders of record of the shares present and entitled to vote thereon.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Except as otherwise provided by the Certificate, at each meeting of shareholders, each holder of record of capital stock of the Corporation entitled to vote thereat, shall be entitled to one vote for each share of capital stock registered in his name on the books of the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each shareholder entitled to vote or to express consent or dissent without a meeting, may do so by proxy; provided, however, that the instrument authorizing such proxy to act shall have been executed in writing by the shareholder himself, or by his attorney-in-fact thereunto duly authorized in writing. No proxy shall be valid after the expiration of eleven months from the date of its execution, unless the persons executing it shall have specified therein the length of time it is to continue in force. Such instrument shall be exhibited to the Secretary at the meeting and shall be filed with the records of the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Subject to Section 5.11, any resolution in writing, signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorized or take such action at a meeting at which all shares entitled to vote thereon were present and voted, shall be and constitute action by such shareholders to the effect therein expressed, with the same force and effect as if the same had been duly passed at a duly called meeting of shareholders and such resolution so signed shall be included in the minutes of the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) There shall be one or more inspectors at any shareholders meeting, appointed by the Board to act at any such meeting or any adjournment and make a written report thereof. The Board may appoint an alternate inspector or inspectors to replace any inspector who fails to perform his job in a satisfactory way. If no alternate inspector has been appointed and the person or persons appointed as inspector is unable to act at a shareholders meeting, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The date and time of the opening and closing of the polls for each matter upon which the shareholders will vote at a shareholders meeting shall be announced by the person presiding at the meeting at the beginning of the meeting and, if no such opening and closing date and time is announced, the polls shall close at the end of the meeting, including any adjournment thereof. No ballots, proxies or consents, not any revocation thereof or changes thereto shall be accepted by the inspectors after the closing of the polls unless the New York Supreme Court at a special term held within the judicial district where the Corporation's office is located upon application by a shareholder of the Corporation, shall determine otherwise.

**(5.8) <u>Advance Notice of Business to be Brought Before a Meeting</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At an annual or special meeting of the shareholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before a meeting, nomination of persons for election to the Board must be made in accordance with the procedures set forth in Section 5.9. To be properly brought before a meeting, business other than nominations of persons for election to the Board must be (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board, (ii) otherwise properly brought before the meeting by or at the direction of the Board or (iii) otherwise properly brought before an annual meeting by a shareholder of record of the Corporation (and, with respect to any beneficial owner, if different, on whose behalf such business is proposed, only if such beneficial owner was the beneficial owner of shares of the Corporation) (A) both at the time the notice provided for in this Section 5.8 is delivered to the Secretary of the Corporation and at the time of the meeting, (B) who is entitled to vote at the meeting, and (C) who otherwise complies with this Section 5.8. Shareholders shall not be permitted to propose business to be brought before a special meeting of the shareholders, and the only matters that may be brought before a special meeting are the matters specified in the notice of meeting given by or at the direction of the persons calling the meeting pursuant to Section 5.3. For any proposed business to be properly brought before an annual meeting by a shareholder pursuant to clause (iii) above of this paragraph, the proposed business must constitute a proper matter for shareholder action under the Business Corporation Law of New York and the shareholder must have given timely notice thereof in proper written form to the Secretary of the Corporation and must provide any updates or supplements to such notice at the times and in the forms required by this Section 5.8. To be timely, a shareholder's notice of a proposal to be presented at an annual meeting must be received at the Corporation's principal executive office addressed to the attention of the Secretary of the Corporation not less than ninety (90) calendar days nor more than one hundred twenty (120) calendar days in advance of the date of the one- year anniversary of the Corporation's previous year's annual meeting of shareholders. However, if no annual meeting was held in the previous year or the date of the annual meeting is more than thirty (30) calendar days before or more than sixty (60) calendar days after such anniversary date, such notice by the shareholder to be timely must be received by the Secretary of the Corporation not later than the close of business on the ninetieth (90th) calendar day prior to such annual meeting or, if later, the tenth (10th) calendar day following the day on which public disclosure (as defined below) of the date of the meeting was first made. In no event shall the public disclosure of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a shareholder's notice as described above. A shareholder's notice to the Secretary of the Corporation shall set forth (i) as to each matter the shareholder proposes to bring before the annual meeting, a brief description of the business desired to be brought before the annual meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and the language of any proposed amendment to the By-Laws of the Corporation), and the reasons for conducting such business at the annual meeting, and (ii) as to such shareholder, the Shareholder Information (as defined below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) "Shareholder Information" with respect to a shareholder means, collectively, (i) the name and address, as they appear on the Corporation's books, of such shareholder and the name and address of the beneficial owner, if any, on whose behalf a proposal of business or action, or nomination for election of directors, as applicable, is made, (ii) the class, series and number of shares of capital stock of the Corporation which are owned beneficially and of record by such shareholder and such beneficial owner, (iii) a representation that such shareholder will notify the Corporation in writing of the class and number of such shares owned beneficially and of record by such shareholder and such beneficial owner as of the record date for the meeting (or action, as applicable) promptly following the later of the record date or the date notice of the record date is first publicly disclosed, (iv) any option, warrant, convertible security, stock appreciation right, derivative, swap or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value or volatility of any class or series or shares of the Corporation, whether or not such instrument or right shall convey any voting rights in such shares or shall be subject to settlement in the underlying class or series of capital stock of the Corporation or otherwise (a "Derivative Instrument"), directly or indirectly owned beneficially by such shareholder or beneficial owner and any other direct or indirect opportunity of such shareholder or beneficial owner to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation and a representation that such shareholder will notify the Corporation in writing of any such Derivative Instrument or other direct or indirect opportunity to profit or share in any profit in effect as of the record date for the meeting (or action, as applicable) promptly following the later of the record date or the date notice of the record date is first publicly disclosed, (v) any proxy, contract, arrangement, understanding or relationship pursuant to which such shareholder or beneficial owner has a right to vote any shares of any security of the Corporation, (vi) any rights to dividends on the shares of the Corporation owned beneficially by such shareholder or beneficial owner that are separated or separable from the underlying shares of the Corporation, (vii) any proportionate interest in shares of capital stock of the Corporation or Derivative Instruments or other direct or indirect opportunity to profit or share in any profit held, directly or indirectly, by a general or limited partnership in which such shareholder or beneficial owner is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, (viii) any performance related fees (other than an asset based fee) that such shareholder or beneficial owner is entitled to based on any increase or decrease in the price or value of shares of any class or series of the Corporation, or any Derivative Instruments or other direct or indirect opportunity to profit or share in any profit, if any, (ix) a description of any agreement, arrangement or understanding with respect to the proposal of business or action or nomination, as applicable, between or among such shareholder and such beneficial owner, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, and a representation that such shareholder will notify the Corporation in writing of any such agreements, arrangements or understandings in effect as of the record date for the meeting (or action, as applicable) promptly following the later of the record date or the date notice of the record date is first publicly disclosed, (x) a description of any material interest of such shareholder and such beneficial owner, if any, on whose behalf the proposal is made in such business or action, as applicable, and of any material benefit that such shareholder and such beneficial owner, if any, on whose behalf the proposal is made expects or intends to derive from such business or action, as applicable, (xi) a representation that such shareholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business, or nomination, as applicable, or a representation that such shareholder is a holder of record of stock of the Corporation entitled to consent to corporate action in writing without a meeting, as applicable, (xii) a representation whether such shareholder or such beneficial owner, if any, intends or is part of a group which intends (1) to deliver a proxy statement and/or form of proxy (or consent, as applicable) to holders of at least the percentage of the Corporation's outstanding capital stock required to approve or adopt the proposal, or elect the nominee, as applicable, and/or (2) otherwise to solicit proxies (or consents, as applicable) from shareholders in support of such proposal, or nomination, as applicable, and (xiii) any other information that is required to be provided by such shareholder pursuant to Section 14 of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act") (or any successor provision of the Exchange Act or the rules or regulations promulgated thereunder), in such shareholder's capacity as a proponent of a shareholder proposal or nomination, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) A shareholder providing notice of business proposed to be brought before an annual meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 5.8 shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the Secretary of the Corporation at the principal executive offices of the Corporation not later than five (5) business days after the record date for the meeting (in the case of the update and supplement required to be made as of the record date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any adjournment or postponement thereof (or, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding anything in these By-Laws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section 5.8, and no nominations shall be considered at an annual or special meeting of shareholders except in accordance with the procedures set forth in Section 5.9 below; provided, however, that the foregoing notice requirements of this Section 5.8 shall be deemed satisfied by a shareholder with respect to business other than a nomination if the shareholder has notified the Corporation of his, her or its intention to present a proposal at an annual meeting in compliance with applicable rules and regulations promulgated under the Exchange Act and such shareholder's proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Except as otherwise provided by law, the Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 5.8, and if he or she should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Notwithstanding the provisions of this Section 5.8, unless otherwise required by law, if the shareholder (or a qualified representative of the shareholder) does not appear at the annual meeting of shareholders of the Corporation to present proposed business, such proposed business shall not be transacted, notwithstanding that proxies in respect of such proposed business may have been received by the Corporation. For purposes of this Section 5.8, to be considered a qualified representative of the shareholder, a person must be a duly authorized officer, manager, partner or trustee of such shareholder or must be authorized by a writing executed by such shareholder or an electronic transmission delivered by such shareholder to act for such shareholder as proxy at the meeting of shareholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Notwithstanding the provisions of this Section 5.8 or Section 5.9, a shareholder shall also comply with all applicable requirements of the Exchange Act with respect to the matters set forth in this Section 5.8 and Section 5.9; provided, however, that any references in these By-Laws to the Exchange Act are not intended to and shall not limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Section 5.8 or Section 5.9, and compliance with this Section 5.8 and Section 5.9 shall be the exclusive means for a shareholder to make nominations or submit other business (other than, as provided in Section 5.8(d) above, matters brought properly under and in compliance with Rule 14a-8 under the Exchange Act). Nothing in this Section 5.8 shall be deemed to affect any rights of shareholders to request inclusion of proposals in the Corporation's proxy statement pursuant to applicable rules and regulations promulgated under the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) For purposes of these By-Laws, (i) "public disclosure" shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act and (ii) the terms "affiliate" and "associate" shall have the respective meanings given to such terms in Rule 12b-2 under the Exchange Act.

**(5.9) <u>Advance Notice of Nomination for Election of Directors at a Meeting</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the rights of holders of any Preferred Stock then outstanding, and in addition to the rights of shareholders provided below in Section 5.11, nominations for the election of directors may be made by the Board or a committee authorized to do so by the Board, or by any shareholder of the Corporation who was a shareholder of record (and, with respect to any beneficial owner, if different, on whose behalf such nomination is proposed, only if such beneficial owner was the beneficial owner of shares of the Corporation) (i) both at the time the notice provided for in this Section 5.9 is delivered to the Secretary of the Corporation and at the time of the meeting, (ii) who is entitled to vote for the election of directors at the applicable meeting and (iii) who otherwise complies with this Section 5.9. However, any shareholder entitled to vote in the election of directors may nominate one or more persons for election as directors at a meeting only if timely notice of such shareholder's intent to make such nomination or nominations has been given in proper written form to the Secretary of the Corporation and any updates or supplements to such notice have been provided at the times and in the forms required by this Section 5.9. To be timely, a shareholder notice of a nomination for a director to be elected at an annual meeting must be received at the Corporation's principal executive office addressed to the attention of the Secretary of the Corporation not less than ninety (90) calendar days nor more than one hundred twenty (120) calendar days in advance of the date of the one-year anniversary of the Corporation's previous year's annual meeting of shareholders. However, if no annual meeting was held in the previous year or the date of the annual meeting is more than thirty (30) calendar days before or more than sixty (60) calendar days after such anniversary date, such notice by the shareholder to be timely must be received by the Secretary of the Corporation not later than the close of business on the ninetieth (90th) calendar day prior to such annual meeting or, if later, the tenth (10th) calendar day following the day on which public disclosure of the date of the meeting was first made. In no event shall the public disclosure of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a shareholder's notice as described above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Such shareholder's notice to the Secretary of the Corporation shall set forth (i) as to each person whom the shareholder proposes to nominate for election or reelection as a director, (A) the name, age, business address and residence address of the person, (B) the principal occupation or employment of the person, (C) the class, series and number of shares of capital stock of the Corporation that are owned beneficially and of record by the person, (D) a statement as to the person's citizenship, (E) the completed and signed representation and agreement described in Section 5.9(d), (F) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such shareholder and beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and the person, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the shareholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the "registrant" for purposes of such rule and the person were a director or executive officer of such registrant, (G) any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to Section 14 of the Exchange Act, and (H) such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected, and (ii) as to such shareholder, the Shareholder Information (other than clause (x) thereof). The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as director of the Corporation, including information that could be material to a reasonable shareholder's understanding of the independence or lack of independence of such proposed nominee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) A shareholder providing notice of any nomination proposed to be made at a meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 5.9 shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the Secretary of the Corporation at the principal executive offices of the Corporation not later than five (5) business days after the record date for the meeting (in the case of the update and supplement required to be made as of the record date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any adjournment or postponement thereof (or, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) To be eligible to be a nominee for election or reelection as a director of the Corporation, a person must deliver (in accordance with the time periods prescribed for delivery of notice under this Section 5.9) to the Secretary of the Corporation at the principal executive office of the Corporation a written questionnaire with respect to the background, qualification and independence of such person (which questionnaire shall be provided by the Secretary of the Corporation upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (i) is not and will not become a party to (A) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a "Voting Commitment") that has not been disclosed to the Corporation or (b) any Voting Commitment that could limit or interfere with such person's ability to comply, if elected as a director of the Corporation, with such person's fiduciary duties under applicable law, (ii) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein, and (iii) in such person's individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with, applicable law and all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Nominations of persons for election to the Board may be made at a special meeting of shareholders at which directors are to be elected pursuant to the Corporation's notice of meeting (i) by or at the direction of the Board or any committee thereof or (ii) provided that the Board has determined that directors shall be elected at such special meeting, by any shareholder of the Corporation who was a shareholder of record (and, with respect to any beneficial owner, if different, on whose behalf such nomination is proposed, only if such beneficial owner was the beneficial owner of shares of the Corporation) (A) both at the time the notice provided for in this Section 5.9 is delivered to the Secretary of the Corporation and at the time of the meeting, (B) who is entitled to vote at the meeting and upon such election, and (C) who otherwise complies with this Section 5.9. In the event the Corporation calls a special meeting of shareholders for the purpose of electing one or more directors to the Board, any such shareholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation's notice of meeting, if the shareholder's notice required by this Section 5.9 shall be received at the Corporation's principal executive office addressed to the attention of the Secretary of the Corporation not earlier than the close of business on the one hundred twentieth (120th) calendar day prior to such special meeting and not later than the close of business on the later of the ninetieth (90th) calendar day prior to such special meeting or the tenth (10th) calendar day following the day on which public disclosure is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a shareholder's notice as described above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth herein. In connection with any annual meeting of the shareholders (or, if and as applicable, any special meeting of the shareholders), the Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if he or she should so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded. Notwithstanding the foregoing provisions of this Section 5.9, unless otherwise required by law, if the shareholder (or a qualified representative of the shareholder) does not appear at the annual or special meeting of shareholders of the Corporation to present a nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 5.9, to be considered a qualified representative of the shareholder, a person must be a duly authorized officer, manager, partner or trustee of such shareholder or must be authorized by a writing executed by such shareholder or an electronic transmission delivered by such shareholder to act for such shareholder as proxy at the meeting of shareholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) In addition to the requirements of this Section 5.9, with respect to any nomination proposed to be made at a meeting, each shareholder nominating one or more persons for election to the Board shall comply with all applicable requirements of the Exchange Act with respect to any such nominations.

**(5.10) <u>Shareholder List</u>**. The Secretary of the Corporation shall prepare and make, or cause to be prepared and made, at least ten days before every meeting of shareholders, a complete list of the shareholders, arranged in alphabetical order, and showing the address of each shareholder and the number of shares registered in the name of each shareholder. Such list shall be open to the examination of any shareholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city or other municipality or community where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any shareholder who is present. The stock ledger shall be the only evidence as to who are the shareholders entitled to examine the stock ledger, the list required by this subsection or the books of the Corporation, or to vote in person or by proxy at any meeting of shareholders.

**(5.11) <u>Shareholder Action by Written Consent</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Request for Record Date</u>. The record date for determining shareholders entitled to express consent to corporate action in writing without a meeting shall be as fixed by the Board or as otherwise established under this Section 5.11. Any person seeking to have the shareholders authorize or take corporate action by written consent without a meeting shall, by written notice addressed to the Secretary of the Corporation and delivered to the Corporation and signed by a shareholder of record, request that a record date be fixed for such purpose. Such person shall be a shareholder of record of the Corporation (and, with respect to any beneficial owner, if different, on whose behalf such action is proposed, only if such beneficial owner was the beneficial owner of shares of the Corporation) (i) both at the time the notice is delivered to the Secretary of the Corporation and as of the record date, (ii) who is entitled to consent to corporate action in writing without a meeting and (iii) who otherwise complies with this Section 5.11. The proposed action must constitute a proper matter for shareholder action under the Business Corporation Law of New York. The written notice must contain the information set forth in paragraph (b) of this Section 5.11, and updates or supplements to such notice must be provided at the times and in the forms required by paragraph (b) of this Section 5.11. Following receipt of the notice, the Board shall have ten (10) calendar days to determine the validity of the request, and if appropriate, adopt a resolution fixing the record date for such purpose. The record date for such purpose shall be no more than twenty (20) calendar days after the date upon which the resolution fixing the record date is adopted by the Board and shall not precede the date such resolution is adopted. If the Board fails within ten (10) calendar days after the Corporation receives such notice to fix a record date for such purpose, the record date shall be the day on which the first written consent is delivered to the Corporation in the manner described in paragraph (d) of this Section 5.11; except that, if prior action by the Board is required under the provisions of New York law, the record date shall be at the close of business on the day on which the Board adopts the resolution taking such prior action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Notice Requirements</u>. Any shareholder's notice required by paragraph (a) of this Section 5.11 must describe the action that the shareholder proposes to take by consent. For each such proposal other than nominations for the election of directors, every notice by a shareholder must set forth (i) as to each action that the shareholder proposes to take by consent, a brief description of the action that the shareholder proposes to take by consent, (ii) the text of the proposal (including the text of any resolutions to be effected by consent and the language of any proposed amendment to the By-Laws of the Corporation), (iii) the reasons for soliciting consents for the proposal, and (iv) as to such shareholder, the Shareholder Information.

A shareholder seeking to have the shareholders authorize or take corporate action by written consent without a meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 5.11 shall be true and correct as of the record date for determining shareholders entitled to express consent to corporate action in writing without a meeting and as of the date that is five (5) business days prior to the date the consent solicitation is commenced, and such update and supplement shall be delivered to, or mailed and received by, the Secretary of the Corporation at the principal executive offices of the Corporation not later than five (5) business days after such record date (in the case of the update and supplement required to be made as of the record date), and not later than three (3) business days prior to the date the consent solicitation is commenced (in the case of the update and supplement required to be made as of five (5) business days prior to the date the consent solicitation is commenced).

Notwithstanding anything in these By-Laws to the contrary, no action may be taken by the shareholders by written consent without a meeting except in accordance with this Section 5.11. If the Board shall determine that any request to fix a record date or to take shareholder action by written consent without a meeting was not properly made in accordance with the provisions of this Section 5.11, or the shareholder or shareholders seeking to take such action do not otherwise comply with the provisions of this Section 5.11, including paragraph (b) of this Section 5.11, then the Board shall not be required to fix a record date and any such purported action by written consent shall be null and void to the fullest extent permitted by applicable law. In addition to the requirements of this Section 5.11 with respect to shareholders seeking to take an action by written consent without a meeting, each person seeking to have the shareholders authorize or take corporate action by written consent without a meeting shall comply with all requirements of applicable law, including all requirements of the Exchange Act, with respect to such action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Date of Consent</u>. Every written consent purporting to take or authorize the taking of corporate action (each such written consent is referred to in this paragraph and in paragraph (d) as a "Consent") must bear the date of signature of each shareholder who signs the Consent, and no Consent shall be effective to take the corporate action referred to therein unless, within sixty (60) calendar days of the earliest dated Consent delivered in the manner required by this Section 5.11, Consents signed by a sufficient number of shareholders to take such action are so delivered to the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Delivery of Consent</u>. Consent must be delivered to the Corporation by delivery to its principal executive office. Delivery must be made by hand or by certified or registered mail, return receipt requested.

In the event of the delivery to the Corporation of Consents, the Secretary of the Corporation, or such other officer of the Corporation as the Board may designate, shall provide for the safekeeping of such Consents and any related revocations and shall promptly conduct such ministerial review of the sufficiency of all Consents and any related revocations and of the validity of the action to be taken by shareholder consent as the Secretary of the Corporation, or such other officer of the Corporation as the Board may designate, as the case may be, deems necessary or appropriate, including, without limitation, whether the holders of a number of shares having the requisite voting power to authorize or take the action specified in Consents have given consent; provided, however, that the Secretary of the Corporation, or such other officer of the Corporation as the Board may designate, as the case may be, may alternatively designate one or more persons, who shall not be members of the Board, to serve as inspectors ("Inspectors") with respect to such Consent and such Inspectors shall discharge the functions of the Secretary of the Corporation, or such other officer of the Corporation as the Board may designate, as the case may be, under this Section 5.11. If after such investigation the Secretary of the Corporation, such other officer of the Corporation as the Board may designate, or the Inspectors, as the case may be, shall determine that the action purported to have been taken is duly authorized by the Consents, that fact shall forthwith be certified on the records of the Corporation kept for the purpose of recording the proceedings of meetings of shareholders, and the Consents shall be filed in such records.

In conducting the investigation required by this Section 5.11, the Secretary of the Corporation, such other officer of the Corporation as the Board may designate, or the Inspectors, as the case may be, may, at the expense of the Corporation, retain special legal counsel and any other necessary or appropriate professional advisors, and such other personnel as such person or persons may deem necessary or appropriate and shall be fully protected in relying in good faith upon the advice of such counsel or advisors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Effectiveness of Consent</u>. No action by written consent without a meeting shall be effective until such date as the Secretary of the Corporation, such other officer of the Corporation as the Board may designate, or the Inspectors, as applicable, certify to the Corporation that the consents delivered to the Corporation in accordance with paragraph (d) of this Section 5.11 represent at least the minimum number of votes that would be necessary to take the corporate action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Challenge to Validity of Consen</u>t. Nothing contained in this Section 5.11 shall in any way be construed to suggest or imply that the Board or any shareholder shall not be entitled to contest the validity of any Consent or related revocations, whether before or after such certification by the Secretary of the Corporation, such other officer of the Corporation as the Board may designate, or the Inspectors, as the case may be, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation).

**<u>ARTICLE 6 - OFFICERS</u>**

**(6.1) <u>Descriptions; Election; Term of Office</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The officers of the Corporation may consist of a Chief Executive Officer, a President, a Chief Operating Officer, and a Chief Financial Officer (the aforementioned collectively hereinafter referred to as the "Executive Officers"), a Secretary, a Treasurer, and such other officers, including, but not limited to, a Chairman of the Board, and one or more Vice Presidents, as the Board may from time to time deem advisable. Any officer of the Corporation may be, but is not required to be, a director of the Corporation. Any two or more offices may be held by the same person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Executive Officers of the Corporation shall be elected and appointed by the Board at the regular annual meeting of the Board following the annual meeting of shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each Executive Officer shall hold office until the annual meeting of the Board next succeeding his election, and until his successor shall have been elected and qualified, or until his death, resignation or removal.

**(6.2) <u>Resignation</u>.** Any officer may resign at any time by giving written notice of such resignation to the Board or Chief Executive Officer of the Corporation. Unless otherwise specified in such written notice, such resignation shall take effect upon receipt thereof by the Board or Chief Executive Officer, and the acceptance of such resignation shall not be necessary to make it effective.

**(6.3) <u>Removal</u>.** Any officer may be removed by the Board, with or without cause, and a successor elected by the Board at any time, by resolution passed by a majority of the members of the entire Board, unless such officer has an agreement with the Corporation which states specific requirements for removal of such officer.

**(6.4) <u>Vacancies</u>.** A vacancy in any office by reason of death, resignation, inability to act, disqualification, or any other cause, may at any time be filled for the unexpired portion of the term by the Board, by resolution passed by a majority of the members of the entire Board.

**(6.5) <u>Continuation in Office</u>.** Unless otherwise provided by the Board, each Executive Officer, and other officers of the Corporation who serve at the pleasure of the Board, shall serve until death, incapacity, resignation or removal by the Board. Any resignation or removal shall be without prejudice to any contractual rights of the Corporation or the officer.

**(6.6) <u>Duties in General</u>.** Subject to these By-Laws, the authority and duties of all officers shall be determined by, or in the manner prescribed by, the Board. Except as may be specifically restricted by the Board, any officer may delegate any of his authority and duties to any subordinate officer.

**(6.7) <u>Duties of Chief Executive Officer</u>.** The Chief Executive Officer (CEO), or in the absence of a Chief Executive Officer, the Chief Operating Officer (COO), shall be the principal executive officer of the Corporation and, subject to the control of the Board, shall in general supervise and control all of the day-to-day business and affairs of the Corporation. The CEO may sign, with the Secretary or any other proper officer of the Corporation thereunto authorized by the Board, certificates for shares of the Corporation, any deeds, mortgages, bonds, contracts, or other instruments that the Board has authorized to be executed, except in cases where the signing and execution shall be expressly delegated by the Board, the CEO, or by these By-Laws to some other officer or agent of the Corporation or shall be required by law to be otherwise signed or executed, and in general shall perform all duties incident to the office of CEO and such other duties as may be prescribed by the Board from time to time.

**(6.8) <u>Duties of President; Vice Presidents</u>.** The President, or in the absence or incapacity of the President, a Vice President or Vice Presidents designated by the CEO or the President, shall perform the duties of the President and, when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The President shall oversee all the day-to-day operations of the Corporation's business and its subsidiaries and shall report to the CEO. The Corporation's Vice President & General Counsel, charged with the oversight of the Corporation's legal matters, shall report to the CEO. Each of the Corporation's other Vice Presidents, and the heads of each of the Corporation's other subsidiaries, shall perform the duties assigned to them by the CEO, COO or President, as applicable, and shall report to the Executive Officer designated by the CEO.

**(6.9) <u>Duties of Secretary</u>.** The Secretary shall record the minutes of the shareholders and Board meetings, see that all notices are duly given in accordance with the provisions of these By-Laws or as otherwise required, be custodian of the corporate records and of the seal of the Corporation (if any), keep a register of the post office addresses of each shareholder, have general charge of the share transfer books of the Corporation, and in general perform all duties incident to the office of Secretary and other duties as may be assigned by the CEO or the Board.

**(6.10) <u>Duties of Chief Financial Officer and Treasurer</u>.** The Corporation's Chief Financial Officer (CFO), who shall also serve as the Corporation's Treasurer, shall be charged with the oversight of the Corporation's fiscal operations and financial reporting. The CFO shall have charge and custody of and be responsible for all funds and securities of the Corporation and its subsidiaries, shall receive and give receipts for monies due and payable to the Corporation from any source whatsoever, and deposit all such monies in the name of the Corporation in the banks, trust companies or other depositories as shall be selected in accordance with these By-Laws, and in general perform all the duties incident to the office of CFO and Treasurer and such other duties as may be assigned by the CEO. The CFO shall report directly to the CEO and the Board.

**(6.11) <u>Shares of Other Corporations</u>.** Whenever the Corporation is the holder of shares of any other corporation, any right or power of the Corporation as such shareholder (including the attendance, acting and voting at shareholder meetings and execution of waivers, consents, proxies or other instruments) may be exercised on behalf of the Corporation by the appropriate Executive Officer, or his authorized designee.

**<u>ARTICLE 7 - DIVIDENDS</u>**

**(7.1) <u>Dividends</u>.** Subject to applicable law and the Certificate, dividends may be declared and paid out of any funds available therefor, as often, in such amounts, and at such time or times as the Board may determine, provided, however, that the Corporation is not insolvent when such dividend is paid or rendered insolvent by the payment of such dividend.

**<u>ARTICLE 8 - FISCAL YEAR</u>**

**(8.1) <u>Fiscal Year</u>.** The fiscal year of the Corporation shall be fixed by the Board from time to time, subject to applicable law.

**<u>ARTICLE 9 - CORPORATE SEAL</u>**

**(9.1) <u>Form</u>.** The corporate seal, if any, shall be in such form as shall be approved from time to time by the Board.

**(9.2) <u>Use</u>.** The seal, if any, may be used by causing it to be impressed directly on the instrument or writing to be sealed, or upon an adhesive substance annexed. The seal on certificates for shares or other documents may be a facsimile, engraved or imprinted.

**<u>ARTICLE 10 – INDEMNIFICATION OF DIRECTORS AND OFFICERS</u>**

**(10.1) <u>Indemnification of Directors and Officers</u>.** Except to the extent expressly prohibited by the Business Corporation Law of New York, the Corporation shall indemnify each person made or threatened to be made a party to any action or proceeding, whether civil or criminal, by reason of the fact that such person or such person's testator or intestate is or was a director, officer or employee of the Corporation, or serves or served at the request of the Corporation, any other Corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity, against judgment, fines, penalties, amounts paid in settlement and reasonable expenses, including attorneys' fees, incurred in connection with such action or proceeding, or any appeal therein, provided that no such indemnification shall be made if a judgment or other final adjudication adverse to such person establishes that his or her acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled, and provided further that no such indemnification shall be required with respect to any settlement or other non-adjudicated disposition of any threatened or pending action or proceeding unless the Corporation has given its prior consent to such settlement or other disposition.

The Corporation may advance or promptly reimburse upon request any person entitled to indemnification hereunder for all expenses, including attorneys' fees, reasonably incurred in defending any action or proceeding in advance of the final disposition thereof upon receipt of an undertaking by or on behalf of such person to repay such amount if such person is ultimately found not to be entitled to indemnification or, where indemnification is granted, to the extent the expenses so advanced or reimbursed exceed the amount to which such person is entitled, provided, however, that such person shall cooperate in good faith with any request by the Corporation that common counsel be utilized by the parties to an action or proceeding who are similarly situated unless to do so would be inappropriate due to actual or potential differing interests between or among such parties.

Nothing herein shall limit or affect any right of any person otherwise than hereunder to indemnification or expenses, including attorneys' fees, under any statute, rule, regulation, certificate of incorporation, by-law, insurance policy, contract or otherwise.

Anything in these By-Laws to the contrary notwithstanding, no elimination of these By-Laws, and no amendment of these By-Laws adversely affecting the right of any person to indemnification or advancement of expenses hereunder shall be effective until the 60<sup>th</sup> day following notice to such person or such action, and no elimination of or amendment to these By-Laws shall deprive any person of his or her rights hereunder arising out of alleged or actual occurrences, acts or failures to act prior to such 60<sup>th</sup> day.

The Corporation shall not, except by elimination or amendment of this by law in a manner consistent with the preceding paragraph, take any corporate action or enter into any agreement which prohibits, or otherwise limits the rights of any person to, indemnification in accordance with the provisions of these By-Laws. The indemnification of any person provided by these By-Laws shall continue after such person has ceased to be a director, officer or employee of the Corporation and shall inure to the benefit of such person's heirs, executors, administrators and legal representatives.

The Corporation is authorized to enter into agreements with any of its directors, officers or employees extending rights to indemnification and advancement of expenses to such person to the fullest extent permitted by applicable law, but the failure to enter into any such agreement shall not affect or limit the rights of such person pursuant to these By-Laws, it being expressly recognized hereby that all directors, officers and employees of the Corporation, by serving as such after the adoption hereof, are acting in reliance hereon and that the Corporation is stopped to contend otherwise.

In case any provision in these By-Laws shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provision shall be given the fullest possible enforcement in the circumstances, it being the intention of the Corporation to afford indemnification and advancement of expenses to its directors, officers and employees, acting in such capacities or in the other capacities mentioned herein, to the fullest extent permitted by law.

For purposes of these By-Laws, the Corporation shall be deemed to have requested a person to serve an employee benefit plan where the performance by such person of his or her duties to the Corporation also imposes duties on, or otherwise involves services by, such person to the plan or participants or beneficiaries of the plan, and excise taxes assessed on a person with respect to an employee benefit plan pursuant to applicable law shall be considered indemnifiable expenses. For purposes of these By-Laws, the term "Corporation" shall include any legal successor to the Corporation, including any corporation which acquires all or substantially all of the assets of the Corporation in one or more transactions.

**(10.2) <u>Insurance For Indemnification of Directors and Officers</u>.** The Corporation shall have the power to purchase and maintain insurance for its directors and officers subject to the provisions of Section 726 of the Business Corporation Law of New York.

**<u>ARTICLE 11 - AMENDMENTS</u>**

**(11.1) <u>By Directors</u>.** The Board shall have power to make, adopt, alter, amend and repeal, from time to time, the By-Laws of the Corporation; provided, however, that the shareholders entitled to vote with respect thereto as in Article 10 above-provided may alter, amend or repeal the By-Laws made by the Board, except that the Board shall have no power to change the quorum for meetings of shareholders or of the Board, or to change any provisions of the By-Laws with respect to the removal of directors or the filling of vacancies in the Board resulting from the removal by the shareholders. If any By-Laws regulating an impending election of directors is adopted, amended or repealed by the Board, there shall be set forth in the notice of the next meeting of shareholders for the election of Directors, the By-Laws so adopted, amended or repealed, together with a concise statement of the changes made.

**<u>ARTICLE 12 –WAIVER OF NOTICE</u>**

**(12.1) <u>Shareholders</u>.** Whenever any notice is required to be given by law, the Certificate or these By-Laws to the shareholders of the Corporation of a meeting of shareholders, a written waiver of notice submitted to the Corporation before or after the meeting or the attendance at the meeting by any shareholder, shall constitute a waiver of notice of such meeting, except when the person attends the meeting for the express purpose of objecting to the lack of notice thereof, prior to the conclusion of the meeting.

**(12.2) <u>Directors</u>.** Whenever any notice is required to be given by law, the Certificate or these By-Laws to the directors of the Corporation of a special meeting of the Board, a written waiver of notice submitted to the Corporation before or after the meeting or the attendance at the meeting by any director, shall constitute a waiver of notice of such meeting, except when the person attends the meeting for the express purpose of objecting the lack of notice thereof, prior to the commencement of the meeting.

**ADOPTED BY THE BOARD OF DIRECTORS OF THE CORPORATION AND EFFECTIVE AS OF APRIL 26, 2019.**

## Exhibit 31.1

**Exhibit 31.1**

**RULE 13a-14(a)/15d-14(a) CERTIFICATION OF CHIEF EXECUTIVE OFFICER**

I, Jason Grady, certify that:

1. I have reviewed this quarterly report on Form 10-Q of DSS, Inc. for the quarter ended June 30, 2025.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)), for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the registrant's audit committee of the board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 14, 2025

---

| |
|:---|
| */s/ Jason Grady* |
| Jason Grady |
| Interim Chief Executive Officer |
| (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**RULE 13a-14(a)/15d-14(a) CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER**

I, Todd D. Macko, certify that:

1. I have reviewed this quarterly report on Form 10-Q of DSS, Inc. for the quarter ended June 30, 2025;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)), for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the registrant's audit committee of the board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 14, 2025

---

| |
|:---|
| */s/ Todd D. Macko* |
| Todd D. Macko |
| Chief Financial Officer<br> (Principal Financial and Accounting Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER**

**PURSUANT TO 18 U.S.C. 1350**

**AS ADOPTED PURSUANT TO SECTION 906 OF**

**THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of DSS, Inc. (the *"Company*") on Form 10-Q for the quarter ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the *"Report"*), I, Jason Grady, Interim Chief Executive Officer of the Company hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The
 Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The
 information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
 of the Company at the dates and for the periods indicated.

Date: August 14, 2025

---

| |
|:---|
| */s/ Jason Grady* |
| Jason Grady |
| Interim Chief Executive Officer |
| (Principal Executive Officer) |

---

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER**

**PURSUANT TO 18 U.S.C. 1350**

**AS ADOPTED PURSUANT TO SECTION 906 OF**

**THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of DSS, Inc. (the *"Company*") on Form 10-Q for the quarter ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the *"Report"*), I, Todd D. Macko Chief Financial Officer of the Company hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;(1) The
 Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The
 information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
 of the Company at the dates and for the periods indicated.

Date: August 14, 2025

---

| |
|:---|
| */s/ Todd D. Macko* |
| Todd D. Macko |
| Chief Financial Officer |
| (Principal Financial and Accounting Officer) |

---