DSS Announces Letter to Shareholders

Rhea-AI Summary

DSS, Inc. (NYSE American: DSS) announces a letter to shareholders highlighting its transformative journey since 2019. The company's assets have surged from $16.2 million to over $219 million, fueled by acquisitions and divestitures. DSS plans an acquisition of True Partner Capital, boosting its securities business with $1.7 billion in assets under management. The company has raised over $121 million through public offerings and is pursuing spinoffs to enhance shareholder value. With strong growth in medical real estate and direct selling, DSS anticipates significant revenue increases in 2022.

Positive

• Increased assets from approximately $16.2 million to over $219 million since 2019.
• Successful acquisition of True Partner Capital, enhancing securities operations.
• Raised over $121 million through three public offerings, strengthening financial position.
• Medical REIT acquiring quality healthcare assets, now generating yields around 8%.
• Direct selling segment projected to generate over $50 million in revenue by 2022.

Negative

• None.

ROCHESTER, N.Y., Feb. 28, 2022 (GLOBE NEWSWIRE) -- DSS, Inc. (“DSS” or the “Company”) (NYSE American: DSS), a multinational company with ten operating business lines in diverse, high-growth industries, today announced a letter to shareholders.

Dear Shareholders:

We believe 2022 will be a breakout year for DSS. The tireless work of our dedicated team since embarking on our strategy to transform the Company in late 2019 has led to significant value creation and placed us on a solid trajectory for accelerated growth. The momentum of our success and ongoing evolution continues unabated in 2022 as is evidenced by the January acquisition, pending shareholder approval, of True Partner Capital Holding Limited (True Partners Capital), an active global volatility arbitrage fund with assets under management in excess of $1.7 billion and an investment base spanning high net worth individuals, pensions, endowments, and family offices.

When we began executing on our current strategy of restructuring and recapitalization, the Company had approximately $16.2 million in assets and only a handful of struggling or undercapitalized businesses. In just two years, we divested underperforming assets, added eight distinct business lines, and grew assets to more than $219 million, which includes $69 million in cash as of our September 30, 2021 quarterly filing with the SEC.

Today we have approximately 40 subsidiaries operating across ten attractive market segments, with seven of those business lines now with significant operations and generating revenue. Our diverse book of clients and investments has given us strong competitive advantages globally in many industries; we intend to aggressively capitalize on these advantages moving forward.

With the sweeping change to our organizational structure, operating companies, and business plan over the past two years, we embarked on an important rebranding effort in 2021. We are excited to now operate under the new name, DSS, Inc., which more accurately reflects our broad and increasingly diverse portfolio of current and future businesses.

We are fortunate to have attracted tremendous talent to lead each of our business units. When building out our business units, we look for established industry leaders with long track records and the expertise to add meaningful value to our DSS ecosystem.

The combination of the right assets – contemporary, scalable businesses with reoccurring revenue potential – and the right people provide a strong foundation and incredible position for the Company’s future as we move into 2022. Underpinning this incredible positioning are a multitude of major successes in 2021 that we believe will be key drivers of new value creation in the coming year and beyond.

Strengthening Financial Position

Within the past year, we built an incredibly strong war chest through three successful public offerings which raised total gross proceeds of more than $121 million. We have put this capital to work in several ways.

A portion of this capital has been deployed into American Medical REIT (AMRE), a subsidiary of DSS Securities, Inc., which acquired its first four medical facilities in 2021, totaling approximately 360,000 sq. ft. of quality healthcare assets across the US and more than $74 million in assets. This division is now generating average yields of approximately eight percent, and we have a massive pipeline of opportunities to further grow AMRE in the quarters ahead – including an LOI for a property that could more than double its total assets.

While other areas within commercial real estate have been impacted by the ongoing pandemic, medical real estate has demonstrated considerable resiliency and demand. With a now formidable foundation in place, we are in a great position to further pursue opportunities to expand AMRE as we continue to execute on our strategic growth plans. Ultimately, this is a business we intend to spinoff in an IPO at an optimal time, enabling us to further share our success with our shareholders.

The expansion of our medical real estate holdings is in part supported by our banking and financing business line, primarily through our majority-owned American Pacific Bancorp, Inc. (APB) subsidiary. APB issued nearly $26 million in new loans since September 2021 and has assembled a diversified portfolio of strong credit quality. In addition to commercially licensed medical real estate financing, APB’s portfolio includes governmental bond anticipation note financing, C&I inventory and equipment financing, and land development loans.

Our $40 million third quarter investment in APB has been extremely successful, driving the expansion of our reoccurring scalable business income model in multiple ways. We now have nearly half of the fresh funds we injected generating interest and fee income, and we expect to have another $15 million loaned out in the near-term as we build our portfolio of high-quality commercial loans.

The momentum of our success has continued in early 2022 with the pending acquisition of approximately fifteen percent of True Partner Capital, which is traded on the Hong Kong Stock Exchange (8657:HK).

With more than $1.7 trillion in assets under management and an investor base spanning high net worth individuals, pensions, endowments, and family offices, True Partner Capital helps expand our burgeoning securities business and should fuel multiple new growth opportunities.

Impact BioMedical: Addressing Unmet Needs in $750B+ Health & Wellness Markets

Impact BioMedical, the cornerstone of our biohealth group, progressed on multiple fronts in 2021, including key patent awards, the advancement of key programs, the release of positive study results, and several projects now in global licensing discussions. We anticipate announcing our first licensing deal in the near future.

In July 2021, Impact BioMedical entered a collaboration to research its plant-based preservation booster, Procombin. Personal care as well as household and institutional cleaning formulators are dealing with a dwindling set of options for safe and effective preservatives and preservation boosters. Procombin was developed to address this challenge by using plant-based solutions to increase the effectiveness of antibiotics and antimicrobial agents. Major contract negotiations are underway for the potential use of Procombin in a wide range of consumer products, ranging from household cleaning products to shampoos and conditioners.

Impact BioMedical has laid the groundwork for a future that is focused on scientifically tested, high-impact solutions to global problems that humans are facing from food preservation to antibiotics to creating new ways to develop medicines – Impact BioMedical is on the cutting edge of biotechnology.

To truly unlock the value of Impact BioMedical, we continue to pursue our plans to spin it out in an IPO. Once we receive the necessary regulatory approvals for the IPO, our board will declare the special dividend and record date.

In addition to Impact BioMedical, we expanded our biohealth business in 2021 through investments in Vivacitas Oncology, Inc. (Vivacitas) and Puradigm, LLC. (Puradigm). These investments give us positions in both the oncology space as well as the air purification and pathogen prevention market.

Our March 2021 investment in Vivacitas, a clinical-stage company focused on difficult-to-treat cancers, further demonstrated our commitment to addressing unmet needs in healthcare. With a rich pipeline of promising assets, Vivacitas provides significant upside potential.

We launched DSS PureAir, Inc. in May 2021 concurrently with our investment in Puradigm, the developer of innovative proactive air and surface purifications solutions. Even before COVID-19, the market for air purifiers was strong, and now growth is accelerating even more. Our partnership with Puradigm enables us to rapidly enter this growing global market with best-in-class products and distribution rights in North America, as well as exclusive distribution rights in Singapore, Hong Kong, Taiwan, Korea, Malaysia, and other Asian markets.

Direct Selling – A $170 Billion Opportunity

One of our more exciting developments of the past year was in our direct selling segment, a $170 billion industry with high margins and net profits exploding with the shift to in home shopping (catalyzed by the ongoing COVID-19 Pandemic) and the evolution of the gig economy. Through our December 2021 investment in Sharing Services Global (OTCQB: SHRG) we gained controlling interest with nearly 60 percent ownership. The SHRG platform leverages the capabilities and expertise of various companies that market and sell products direct to the consumer and generated nearly $45 million in revenue in the twelve months ended September 30, 2021.

With SHRG now officially part of the DSS family, we believe we are in a great position to accelerate its customer acquisition, new product development, and portfolio of offerings as we capitalize on a wealth of growth opportunities and potential synergies in this exciting, multi-billion-dollar industry.

Building upon the success already achieved by the SHRG team, we plan to explore opportunities to enter new markets while continuing to expand SHRG’s independent representative network, both domestically and globally, which currently stands at more than 10,000 members. In addition to capitalizing on organic growth opportunities, we are actively exploring some very exciting potential acquisitions to further accelerate our growth in this attractive and sizeable global market.

With our increased position and majority ownership of SHRG, its financials will be consolidated moving forward. Based on historical performance, this alone places DSS on a solid trajectory to generate potential revenue in excess of $50 million in 2022, representing potentially more than a 150 percent increase in revenue growth year-over-year.

Expanding Consumer Packaging Business

Our Premier Packaging Corporation, Inc. (Premier) subsidiary is nearing completion of its facility expansion with operations expected to begin at the new 105,000 sq. ft. facility in early March 2022.

For over 25 years, Premier has been a market leader in providing solutions for paperboard packaging from consumer retail packaging and heavy mailing envelopes, to sophisticated custom folding cartons and complex three-dimensional direct mail solutions. Premier’s innovative products and design team delivers packaging that provides functionality, marketability, and sustainability, with its fiber-based packing solutions providing an alternative to traditional plastic packaging.

Since 2019, we have accelerated the transformation of Premier’s operations, investing in state of the art manufacturing equipment, people, and processes to increase its capacity, improve quality and delivery, and to ensure it has the resources to support its growing customer base and their evolving supply chain demands.

We will continue to add capabilities in key areas that increasing operational efficiencies to strengthen our foundation and offerings to our customers while continuing to provide world-class customer service to the customers we serve.

Securities and FinTech: A Multi-Trillion-Dollar Market

Undergirding our rapidly growing securities business line, which will be augmented with the pending True Partner Capital acquisition, are multiple, strong footholds achieved in 2021 – including strategic investments in broker dealers WestPark Capital and Sentinel Brokers; the formation of Liquid Value Asset Management Limited (LVAM), a joint venture to launch an alternative trading system and crypto exchange (USX Holdings); and the launch of our DSS AmericaFirst Quantitative Funds (DSS AmericaFirst) family.

LVAM is a proprietary algorithmic trading firm majority owned by our wholly owned subsidiary, DSS Financial Management, Inc.. Led by Wilson Lee, former co-head of Societe Generale’s equity derivatives in Asia, and Jackson Kwan, a former portfolio manager at Citadel in Chicago, LVAM aims to include short- and long-term trades while offering the unique attribute of being able to liquidate the portfolio into cash within five to ten minutes under normal market conditions. Together with the strong performance track record of the team, these attributes position LVAM as a prime vehicle for private and institutional investors seeking a highly liquid investment fund with extremely attractive risk adjusted returns relative to the volatility and unpredictability of the markets.

DSS AmericaFirst, launched in the fourth quarter of 2021, is a suite of mutual funds managed by DSS Wealth Management, Inc. DSS AmericaFirst currently consists of four mutual funds and expects to expand into numerous investment platforms including additional mutual funds, exchange-traded funds, unit investment trusts, and closed-end funds.

Additionally, we laid the foundation for digital asset securities exchange through USX Holdings Company, Inc., (USX Holdings) our joint venture collaboration with GSX Group Limited, a global digital exchange ecosystem for the issuance, trading, and settlement of tokenized securities, and Coinstreet Partners, a global decentralized digital investment banking group and digital asset financial service firm.

Together we are pursuing broker-dealer and alternative trading system registration as we prepare to launch an innovative marketplace for trading digital assets based on US equity securities. Our digital asset exchange will target corporate issuers, retail traders and investors, crypto hedge funds, proprietary trading firms, and other financial intermediaries. The transformative potential of digital securities is extremely exciting, and we plan to be a major player in the space as we pursue the massive opportunity in the US for a secondary market in securities tokens.

The World Economic Forum estimates ten percent of the world’s GDP could be tokenized by 2027 with an estimated value of $24 trillion. USX Holdings is seeking to be a strong player in this arena, providing order and trade management of digital securities through a blockchain-based back-office system.

Three-Stage Development for Exponential Growth

For each acquisition we complete, we apply a three-stage development process to maximize value creation and provide the engine for growth through increased bandwidth, horsepower, and scale. The first stage of this process begins with the asset acquisition, where we identify and acquire the right vehicles and asset structures, as well as the organizations and people capable of building revenue and scaling operations.

The second stage of our development process focuses on revenue generation, creating revenue streams, license streams, and other reoccurring, scalable revenue. We seek to build highly functional businesses during this stage of development, businesses that we transform into well-oiled machines built for efficiency and operational excellence. As we grow revenue, we enter the final stage of development where the focus turns toward positive EBITDA and profitability driven by scale and efficiencies.

While each of our business lines are in different stages of this development process, ultimately as we reach our internal goals and expectations and these businesses reach an optimal point for the most effective leverage, we intend to pursue IPOs that enable us to share our success with our shareholders. Giving back to our shareholders in this way has been part of our vision since the beginning days of our transformation, and we could potentially see two or even three such IPOs in 2022.

We believe our decentralized sharing model, the culmination of our three-stage development process, is unique and will drive shareholder value as we distribute dividends from these potential IPOs, directly benefiting each of our shareholders.

2022: A Breakout Year

Spurred by innovation, industry needs, and timely acquisitions, we are focused on and ready to empower brands of all sizes, and through our expertly cultivated processes and industry research, we can ensure the success of our projects across diverse sectors and business environments.

While we are thrilled with the multitude of successes we achieved in 2021 and at the start of 2022, we know our best days are ahead of us. We remain steadfastly committed to new value creation and firmly believe we have laid the necessary foundation for years of future success.

In closing, the successes that we have experienced over the past year in conjunction with the growth opportunities anticipated for 2022 and beyond have been made possible by the diligent efforts of our team and the support of our shareholders. On behalf of our entire team and Board of Directors, I want to thank you for your continued support in the year ahead and beyond.

Sincerely,

Frank D. Heuszel
Chief Executive Officer
DSS, Inc.

About DSS, Inc.

DSS is a multinational company operating business segments in blockchain security, direct marketing, healthcare, consumer packaging, real estate, renewable energy, securitized digital assets, securities trading and fund management, and banking, lending, and finance. Its business model is based on a distribution sharing system in which shareholders receive shares in its subsidiaries as DSS strategically unlocks value through IPO spin offs. Under new leadership since 2019, DSS has built the necessary foundation for sustainable growth through the acquisition and formation of a diversified portfolio of companies positioned to drive profitability in five high-growth sectors. These companies offer innovative, flexible, and real-world solutions that not only meet customer needs, but create sustainable value and opportunity for transformation.

For more information on DSS visit http://www.dssworld.com.

Investor Contact:

Dave Gentry, CEO
RedChip Companies Inc.
407-491-4498
DSS@redchip.com

Safe Harbor Disclosure

This press release contains forward-looking statements that are made pursuant to the safe harbor provisions within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, but are not limited to, statements related to the Company's intended use of proceeds and other statements that are not historical facts. Forward-looking statements are based on management's current expectations and are subject to risks and uncertainties that may cause actual results or events to differ materially from those projected. These risks and uncertainties, many of which are beyond our control, include: risks relating to our growth strategy; our ability to obtain, perform under and maintain financing and strategic agreements and relationships; risks relating to the results of development activities; our ability to attract, integrate and retain key personnel; our need for substantial additional funds; patent and intellectual property matters; competition; as well as other risks described in the section entitled "Risk Factors" in the prospectus and in our other filings with the SEC, including, without limitation, our reports on Forms 8-K and 10-Q, all of which can be obtained on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date on which they are made and reflect management's current estimates, projections, expectations, and beliefs. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as required by law.

FAQ

What significant changes has DSS made since 2019?

DSS has transformed from approximately $16.2 million in assets to over $219 million, divesting underperforming assets and acquiring new business lines.

What is the True Partner Capital acquisition about?

DSS plans to acquire approximately 15% of True Partner Capital, which manages over $1.7 billion in assets, boosting its securities business.

How much has DSS raised through public offerings?

DSS has raised over $121 million through three successful public offerings.

What growth is expected in DSS's direct selling segment?

DSS's direct selling segment is projected to generate over $50 million in revenue in 2022, signifying a potential growth of more than 150% year-over-year.

What are DSS's plans for 2022?

DSS targets significant revenue growth through strategic acquisitions, including True Partner Capital, and expects to explore IPOs for its subsidiaries.