In a release issued under the same headline earlier today by DSS,
Inc. (NYSE American: DSS), please note that in paragraph
fourteen, [With more than $1.7 trillion in assets…] should read
[With more than $1.7 billion in assets…]. The corrected release
follows:
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 billion 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. HeuszelChief Executive OfficerDSS,
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, CEORedChip Companies
Inc.407-491-4498DSS@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.
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