Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 13, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | DOCUMENT SECURITY SYSTEMS INC | |
Entity Central Index Key | 0000771999 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 5,173,712 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 11,645,000 | $ 1,096,000 |
Accounts receivable, net | 2,589,000 | 4,212,000 |
Inventory | 2,396,000 | 1,366,000 |
Assets held for sale - discontinued operations | 342,000 | |
Prepaid expenses and other current assets | 1,136,000 | 460,000 |
Total current assets | 17,766,000 | 7,476,000 |
Property, plant and equipment, net | 4,141,000 | 4,328,000 |
Investments | 11,386,000 | 2,154,000 |
Marketable securities | 5,814,000 | |
Notes receivable | 529,000 | 793,000 |
Non-current assets held for sale - discontinued operations | 886,000 | 1,812,000 |
Other assets | 210,000 | 50,000 |
Right-of-use assets | 17,000 | 144,000 |
Goodwill | 1,769,000 | 2,454,000 |
Other intangible assets, net | 39,475,000 | 935,000 |
Total assets | 81,993,000 | 20,146,000 |
Current liabilities: | ||
Accounts payable | 1,402,000 | 1,492,000 |
Accrued expenses and deferred revenue | 1,272,000 | 936,000 |
Other current liabilities | 1,248,000 | 390,000 |
Current Liabilities held for sale - discontinued operations | 274,000 | 274,000 |
Revolving line of credit | 500,000 | |
Current portion of lease liability | 13,000 | 123,000 |
Current portion of long-term debt, net | 261,000 | 441,000 |
Total current liabilities | 4,470,000 | 4,156,000 |
Long-term debt, net | 3,041,000 | 2,310,000 |
Long term lease liability | 4,000 | 19,000 |
Non-current liabilities held for sale - discontinued operations | 612,000 | 807,000 |
Other long-term liabilities | 507,000 | 507,000 |
Deferred tax liability, net | 44,000 | 44,000 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity | ||
Preferred stock, $.02 par value; 200,000,000 shares authorized, 47,000 shares issued and outstanding (0 on December 31, 2019); Liquidation value $1,000 per share, $47,000,000 aggregate. | 1,000 | |
Common stock, $.02 par value; 200,000,000 shares authorized, 5,174,000 shares issued and outstanding (1,206,000 on December 31, 2019) | 103,000 | 24,000 |
Additional paid-in capital | 174,423,000 | 115,560,000 |
Non-controlling interest in subsidiary | (307,000) | |
Accumulated deficit | (100,905,000) | (103,281,000) |
Total stockholders' equity | 73,315,000 | 12,303,000 |
Total liabilities and stockholders' equity | $ 81,993,000 | $ 20,146,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.02 | $ 0.02 |
Preferred stock, shares authorized | 200,000,000 | 200,000,000 |
Preferred stock, shares issued | 47,000 | 0 |
Preferred stock, shares outstanding | 47,000 | 0 |
Preferred stock, liquidation par value | $ 1,000 | $ 1,000 |
Preferred stock, liquidation value | $ 47,000,000 | $ 47,000,000 |
Common stock, par value | $ 0.02 | $ .02 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 5,174,000 | 1,206,000 |
Common stock, shares outstanding | 5,174,000 | 1,206,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue: | ||||
Total revenue | $ 4,169,000 | $ 2,617,000 | $ 11,517,000 | $ 9,857,000 |
Costs and expenses: | ||||
Cost of revenue, exclusive of depreciation and amortization | 2,637,000 | 1,786,000 | 7,077,000 | 6,702,000 |
Selling, general and administrative (including stock based compensation) | 3,675,000 | 1,713,000 | 8,162,000 | 4,602,000 |
Depreciation and amortization | 246,000 | 298,000 | 824,000 | 844,000 |
Total costs and expenses | 6,558,000 | 3,797,000 | 16,063,000 | 12,148,000 |
Operating loss | (2,389,000) | (1,180,000) | (4,546,000) | (2,291,000) |
Other income (expense): | ||||
Interest income | 10,000 | 7,000 | 61,000 | 11,000 |
Interest expense | (29,000) | (49,000) | (101,000) | (104,000) |
Unrealized gain on marketable securities | 7,782,000 | 8,365,000 | ||
Amortization of deferred financing costs and debt discount | (8,000) | (8,000) | (2,000) | |
Income (loss) before income taxes | 5,366,000 | (1,222,000) | 3,771,000 | (2,386,000) |
Income tax expense (benefit) | ||||
Income (loss) from continuing operations | 5,366,000 | (1,222,000) | 3,771,000 | (2,386,000) |
Loss from discontinued operations | (424,000) | (29,000) | (1,702,000) | (346,000) |
Net income (loss) | 4,942,000 | (1,251,000) | 2,069,000 | (2,732,000) |
Loss attributed to noncontrolling interest | 126,000 | 307,000 | ||
Net income (loss) from continuing operations attributable to common stockholders | 5,492,000 | (1,222,000) | 4,078,000 | (2,386,000) |
Other comprehensive income (loss): | ||||
Interest rate swap loss | (15,000) | |||
Settlement of interest rate swap | 22,000 | |||
Comprehensive income (loss): | $ 4,942,000 | $ (1,251,000) | $ 2,069,000 | $ (2,725,000) |
Earnings (loss) per common share - continuing operations: | ||||
Basic | $ 1.20 | $ (1.53) | $ 1.45 | $ (3.17) |
Diluted | 0.70 | (1.53) | 1.05 | (3.17) |
Loss per common share - discontinued operations: | ||||
Basic | (0.09) | (0.04) | (0.61) | (0.46) |
Diluted | $ (0.05) | $ (0.04) | $ (0.44) | $ 0.46 |
Shares used in computing earnings (loss) per common share: | ||||
Basic | 4,582,374 | 800,881 | 2,811,336 | 753,706 |
Diluted | 7,805,629 | 800,881 | 3,893,597 | 753,706 |
Printed Products [Member] | ||||
Revenue: | ||||
Total revenue | $ 2,971,000 | $ 2,119,000 | $ 8,405,000 | $ 8,433,000 |
Technology Sales, Services and Licensing [Member] | ||||
Revenue: | ||||
Total revenue | 483,000 | 498,000 | 1,319,000 | 1,424,000 |
Direct Marketing [Member] | ||||
Revenue: | ||||
Total revenue | $ 715,000 | $ 1,793,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ 3,771,000 | $ (2,386,000) |
Adjustments to reconcile net income (loss) to net cash used by operating activities: | ||
Depreciation and amortization | 824,000 | 844,000 |
Stock based compensation | 216,000 | 331,000 |
Unrealized gain on marketable securities | (8,365,000) | |
Decrease (increase) in assets: | ||
Accounts receivable | 1,149,000 | 204,000 |
Inventory | (1,147,000) | (268,000) |
Prepaid expenses and other current assets | (671,000) | (156,000) |
Other assets | 434,000 | |
Increase (decrease) in liabilities: | ||
Accounts payable | (117,000) | 266,000 |
Accrued expenses | 252,000 | 363,000 |
Other liabilities | 859,000 | (1,453,000) |
Net cash used by operating activities | (2,795,000) | (2,981,000) |
Cash flows from investing activities: | ||
Purchase of property, plant and equipment | (103,000) | (602,000) |
Purchase of marketable securities | (6,581,000) | |
Purchase of investment | (100,000) | |
Note receivable investment | (574,000) | |
Purchase of intangible assets | 111,000 | (358,000) |
Net cash used by investing activities | (7,247,000) | (960,000) |
Cash flows from financing activities: | ||
Payments of long-term debt | (144,000) | (120,000) |
Borrowings of long-term debt | 1,272,000 | 588,000 |
Payments of revolving lines of credit, net | (500,000) | |
Borrowings from convertible of note | 500,000 | |
Issuances of common stock, net of issuance costs | 20,149,000 | 5,042,000 |
Net cash provided by financing activities | 20,777,000 | 6,010,000 |
Cash flows from discontinued operations: | ||
Cash used by operations - discontinued operations | (489,000) | (305,000) |
Cash provied (used) by investing activities | 880,000 | (221,000) |
Cash used by financing activities | (577,000) | (74,000) |
Net cash used by discontinued operations | (186,000) | (600,000) |
Net increase in cash | 10,549,000 | 1,469,000 |
Cash at beginning of period | 1,096,000 | 2,448,000 |
Cash at end of period | $ 11,645,000 | $ 3,917,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Preferred Stock | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Non - controlling Interest in Subsidiary [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 11,000 | $ 107,962,000 | $ (7,000) | $ (100,392,000) | $ 7,574,000 | ||
Balance, shares at Dec. 31, 2018 | 581,000 | ||||||
Issuance of common stock, net | $ 638,000 | 638,000 | |||||
Issuance of common stock, net, shares | 19,000 | ||||||
Stock based payments, net of tax effect | 31,000 | 31,000 | |||||
Other comprehensive loss | (1,000) | (1,000) | |||||
Net income/loss | (451,000) | (451,000) | |||||
Balance at Mar. 31, 2019 | $ 11,000 | 108,631,000 | (8,000) | (100,843,000) | 7,791,000 | ||
Balance, shares at Mar. 31, 2019 | 600,000 | ||||||
Balance at Dec. 31, 2018 | $ 11,000 | $ 107,962,000 | (7,000) | (100,392,000) | $ 7,574,000 | ||
Balance, shares at Dec. 31, 2018 | 581,000 | ||||||
Issuance of common stock, net, shares | |||||||
Net income/loss | $ (2,732,000) | ||||||
Balance at Sep. 30, 2019 | $ 18,000 | $ 113,922,000 | (103,125,000) | 10,815,000 | |||
Balance, shares at Sep. 30, 2019 | 1,005,000 | ||||||
Balance at Mar. 31, 2019 | $ 11,000 | 108,631,000 | (8,000) | (100,843,000) | 7,791,000 | ||
Balance, shares at Mar. 31, 2019 | 600,000 | ||||||
Issuance of common stock, net | $ 7,000 | 4,880,000 | 4,887,000 | ||||
Issuance of common stock, net, shares | 373,000 | ||||||
Stock based payments, net of tax effect | $ 28,000 | 28,000 | |||||
Stock based payments, net of tax effect, shares | |||||||
Other comprehensive loss | (14,000) | (14,000) | |||||
Net income/loss | (1,031,000) | (1,031,000) | |||||
Balance at Jun. 30, 2019 | $ 18,000 | 113,539,000 | (22,000) | (101,874,000) | 11,661,000 | ||
Balance, shares at Jun. 30, 2019 | 973,000 | ||||||
Issuance of common stock, net | $ 162,000 | 162,000 | |||||
Issuance of common stock, net, shares | 17,000 | ||||||
Stock based payments, net of tax effect | $ 221,000 | 221,000 | |||||
Stock based payments, net of tax effect, shares | 15,000 | ||||||
Other comprehensive loss | 22,000 | 22,000 | |||||
Net income/loss | (1,251,000) | (1,251,000) | |||||
Balance at Sep. 30, 2019 | $ 18,000 | 113,922,000 | (103,125,000) | 10,815,000 | |||
Balance, shares at Sep. 30, 2019 | 1,005,000 | ||||||
Balance at Dec. 31, 2019 | $ 24,000 | 115,560,000 | (103,281,000) | 12,303,000 | |||
Balance, shares at Dec. 31, 2019 | 1,206,000 | ||||||
Issuance of common stock, net | $ 18,000 | 4,036,000 | 4,054,000 | ||||
Issuance of common stock, net, shares | 863,000 | ||||||
Issuance of preferred stock, net | |||||||
Issuance of preferred stock, net, shares | |||||||
Stock based payments, net of tax effect | 28,000 | 28,000 | |||||
Stock based payments, net of tax effect, shares | |||||||
Net income/loss | (67,000) | (1,900,000) | (1,967,000) | ||||
Balance at Mar. 31, 2020 | $ 42,000 | 119,624,000 | (67,000) | (105,181,000) | 14,418,000 | ||
Balance, shares at Mar. 31, 2020 | 2,069,000 | ||||||
Balance at Dec. 31, 2019 | $ 24,000 | 115,560,000 | (103,281,000) | $ 12,303,000 | |||
Balance, shares at Dec. 31, 2019 | 1,206,000 | ||||||
Issuance of common stock, net, shares | |||||||
Net income/loss | $ 2,069,000 | ||||||
Balance at Sep. 30, 2020 | $ 103,000 | $ 1,000 | 174,423,000 | (307,000) | (100,905,000) | 73,315,000 | |
Balance, shares at Sep. 30, 2020 | 5,174,000 | 47,000 | |||||
Balance at Mar. 31, 2020 | $ 42,000 | 119,624,000 | (67,000) | (105,181,000) | 14,418,000 | ||
Balance, shares at Mar. 31, 2020 | 2,069,000 | ||||||
Issuance of common stock, net | $ 17,000 | 6,168,000 | 6,185,000 | ||||
Issuance of common stock, net, shares | 896,000 | ||||||
Issuance of preferred stock, net | |||||||
Issuance of preferred stock, net, shares | |||||||
Stock based payments, net of tax effect | $ 1,000 | 266,000 | 267,000 | ||||
Stock based payments, net of tax effect, shares | 30,000 | ||||||
Net income/loss | (114,000) | (792,000) | (906,000) | ||||
Balance at Jun. 30, 2020 | $ 60,000 | 126,058,000 | (181,000) | (105,973,000) | 19,964,000 | ||
Balance, shares at Jun. 30, 2020 | 2,995,000 | ||||||
Issuance of common stock, net | $ 43,000 | 13,045,000 | 13,088,000 | ||||
Issuance of common stock, net, shares | 2,159,000 | ||||||
Issuance of preferred stock, net | $ 1,000 | 35,187,000 | 35,188,000 | ||||
Issuance of preferred stock, net, shares | 47,000 | ||||||
Stock based payments, net of tax effect | 133,000 | 133,000 | |||||
Stock based payments, net of tax effect, shares | 20,000 | ||||||
Other comprehensive loss | 4,942,000 | ||||||
Net income/loss | (126,000) | 5,068,000 | 4,942,000 | ||||
Balance at Sep. 30, 2020 | $ 103,000 | $ 1,000 | $ 174,423,000 | $ (307,000) | $ (100,905,000) | $ 73,315,000 | |
Balance, shares at Sep. 30, 2020 | 5,174,000 | 47,000 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies | 1. Basis of Presentation and Significant Accounting Policies Document Security Systems, Inc. (the “Company”) operates eight (8) business lines through eight (8) DSS subsidiaries located around the globe. Of the eight subsidiaries, three of those have historically been the core subsidiaries of the Company: (1) Premier Packaging Corporation (DSS Packaging and Printing Group), (2) DSS Digital Inc., and its subsidiaries (DSS Digital Group), and (3) DSS Technology Management, Inc. (DSS Technology Management). Premier Packaging Corporation operates in the paper board folding carton, smart packaging and document security printing markets. It markets, manufactures and sells paper products designed to protect valuable information from unauthorized scanning, copying, and digital imaging. DSS Digital Inc., researches, develops, markets and sells the Company’s digital products worldwide. The primary product is AuthentiGuard®, which is a brand authentication application that integrates the Company’s counterfeit deterrent technologies with proprietary digital data security-based solutions. DSS Technology Management Inc., manages, licenses and acquires intellectual property (“IP”) assets for the purpose of monetizing these assets through a variety of value-enhancing initiatives, including, but not limited to, investments in the development and commercialization of patented technologies, licensing, strategic partnerships and commercial litigation. In 2020, under its (4) Decentralize Sharing Systems, Inc. subsidiary, created a fourth business segment, Direct Marketing. Direct marketing or network marketing is designed to sell products or services directly to the public through independent distributors, rather than selling through the traditional retail market. In addition to the four subsidiaries listed above, in 2019 and early 2020, DSS has created five new, wholly owned subsidiaries. (5) DSS Blockchain Security, Inc., a Nevada corporation, that intends to specialize in the development of blockchain security technologies for tracking and tracing solutions for supply chain logistics and cyber securities across global markets. (6) DSS Securities, Inc., a Nevada corporation, has been established to develop or to acquire assets in the securities trading or management arena, and to pursue two parallel streams of digital asset exchanges in multiple jurisdictions: (i) securitized token exchanges, focusing on digitized assets from different vertical industries and (ii) utilities token exchanges, focusing on “blue-chip” utility tokens from solid businesses. (7) DSS BioHealth Security, Inc., a Nevada corporation, is our business line which we will intend to invest in or to acquire companies related to the biohealth and biomedical field, including businesses focused on the research to advance drug discovery and development for the prevention, inhibition, and treatment of neurological, oncology and immuno-related diseases. This new division will place special focus on open-air defense initiatives, which curb transmission of air-borne infectious diseases such as tuberculosis and influenza, among others. (8) DSS Secure Living, Inc., a Nevada Corporation, intends to develop top of the line advanced technology, energy efficiency, quality of life living environments and home security for everyone for new construction and renovations of residential single and multifamily living facilities. Aside from Decentralized Sharing Systems, Inc. the activity in the these newly created subsidiaries have been minimal or in various start-up or organizational phases. On March 3, 2020, the Company, via its subsidiary DSS Securities, entered into a share subscription agreement and loan arrangement with LiquidValue Asset Management Pte Ltd., AMRE Asset Management, Inc. and American Medical REIT Inc. under which it acquired a 52.5% controlling ownership interest in AMRE Asset Management Inc. (“AAMI”) which currently has a 93% equity interest in American Medical REIT Inc. (“AMRE”) (see Note 4). AAMI is a real estate investment trust (“REIT”) management company that sets the strategic vision and formulate investment strategy for AMRE. It manages the REIT’s assets and liabilities and provides recommendations to AMRE on acquisition and divestments in accordance with the investment strategies. American Medical REIT, Inc is a Maryland corporation, 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. AMRE was formed to originate, acquire, and lease a credit-centric portfolio of licensed medical real estate. AMRE is planned to qualify as a Real Estate Investment Trust for federal income tax purposes, which will provide. AMRE’s investors the opportunity for direct ownership of Class A licensed medical real estate. As of September 30, 2020 has not yet closed on any acquisition. On August 21, 2020, Document Security Systems, Inc. (the “Company”), completed its acquisition of Impact BioMedical, Inc. (“Impact BioMedical”), pursuant to a Share Exchange Agreement by and among the Company, DSS BioHealth Security, Inc. (“DSS BioHealth”), Alset International Limited (formally Singapore eDevelopment Ltd.), and Global Biomedical Pte Ltd. (“GBM”), which was previously approved by the Company’s shareholders (the “Share Exchange”). Under the terms of the Share Exchange, the Company issued 483,334 shares of the Company’s common stock, par value $0.02 per share, nominally valued at $6.48 per share, and 46,868 newly issued shares of the Company’s Series A Convertible Preferred Stock (“Series A Preferred Stock”). As a result of the Share Exchange, Impact BioMedical is now a wholly owned subsidiary of DSS BioHealth, the Company’s wholly owned subsidiary (see Note 4). Impact BioMedical strives to leverage its scientific know-how and intellectual property rights to provide solutions that have been plaguing the biomedical field for decades. By tapping into the scientific expertise of its partners, Impact BioMedical has undertook a concerted effort in the research and development (R&D), drug discovery and development for the prevention, inhibition, and treatment of neurological, oncological and immune related diseases. In August 2020 the Company’s wholly owned subsidiary, DSS Securities, Inc. entered into a corporate venture to form and operate a real estate title agency, under the name and flagging of Alset Title Company, Inc, a Texas corporation (“ATC”). DSS Securities, Inc. shall own 70% of this venture with the other two shareholders being attorneys necessary to the state application and permitting process. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8.03 of Regulation S-X for smaller reporting companies. Accordingly, these statements do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying balance sheets and related interim statements of operations and comprehensive loss and cash flows include all adjustments considered necessary for their fair presentation in accordance with U.S. GAAP. All significant intercompany transactions have been eliminated in consolidation. Interim results are not necessarily indicative of results expected for the full year. For further information regarding the Company’s accounting policies, refer to the audited consolidated financial statements and footnotes thereto included in the Company’s Form 10-K for the fiscal year ended December 31, 2019. Principles of Consolidation - Use of Estimates - Reclassifications Cost and Equity Method Investments – Cost Method Investments, Investments—Equity Method and Joint Ventures Marketable Securities Fair Value of Financial Instruments ● 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 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 carried at cost less impairment; however, the fair value is not considered readily determinable based on the lack of liquidity for the shares owned. Impairment of Long-Lived Assets and Goodwill Related Party Liabilities - Contingent Legal Expenses - Business Combinations - Discontinued Operations Reverse Stock Split Earnings Per Common Share Concentration of Credit Risk - During the nine months ended September 30, 2020, two customers accounted for approximately 21% and 16%, respectively, of the Company’s consolidated revenue and accounted for 36% and 12%, respectively, of the Company’s accounts receivable balance as of September 30, 2020. The risk with respect to accounts receivables is mitigated by credit evaluations the Company performs on its customers, the short duration of its payment terms for most of its customer contracts and by the diversification of its customer base. Income Taxes Recent Accounting Pronouncements In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment”, which eliminates the two-step process that required identification of potential impairment and a separate measure of the actual impairment. The annual assessment of goodwill impairment will be determined by using the difference between the carrying amount and the fair value of the reporting unit. The standards update is effective for goodwill impairment tests in fiscal years beginning after December 15, 2019 and has been adopted by the Company effective January 1, 2020. Impact of COVID-19 Outbreak Additionally, it is reasonably possible that estimates made in the financial statements have been, or will be, materially and adversely impacted in the near term as a result of these conditions, including losses on inventory; impairment losses related to goodwill and other long-lived assets and current obligations Continuing Operations and Going Concern – To continue as a going concern, during the nine months ended September 30, 2020, the Company through multiple underwriting agreements with Aegis Capital Corp., acting as representative of the several underwriters, provided the issuance and sale by the Company in an underwritten public offering (the “Offering”) shares of the Company’s common stock. The net offering proceeds to the Company approximated $20.1 million. The Company’s management intends to take actions necessary to continue as a going concern. Management’s plans concerning these matters includes, among other things, continued growth among our operating segments, and tightly controlling operating costs and reducing spending growth rates wherever possible to return to profitability. 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. During the nine months ended September 30, 2020, material steps were taken to materially reduce or eliminate cash burns in the IP Monetization program, the DSS Digital Group and the DSS Plastics group. At the Company’s current operating levels and capital usage, we believe that without any further acquisition or investments, our $11.6 million in aggregate cash and equivalents as of September 30, 2020, would allow us to fund our eight business lines current and planned operations through October 2021. Based on this, the Company has concluded that substantial doubt of its ability to continue as a going concern has been alleviated. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 2. Revenue The Company recognizes its products and services 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 also derives revenue from royalties from third parties which are typically based on licensees’ net sales of products that utilize the Company’s technology, or on a per item usage of the technology on the customers’ printed products. The Company recognizes license revenue at the time it is reported by the licensee. From time to time, the Company generates license revenues through litigation settlements. For these, the Company recognizes revenue upon the execution of the agreement, when collectability is reasonably assured, or upon receipt of the minimum upfront fee for term agreement renewals, and when all other revenue recognition criteria have been met. As of September 30, 2020, 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. 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 105 for certain customers. The Company carries its trade accounts receivable at invoice amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts 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. At September 30, 2020, the Company established a reserve for doubtful accounts of approximately $23,000 ($41,000 – December 31, 2019). The Company does not accrue interest on past due accounts receivable. 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 September 30, 2020. 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 pertaining to these costs are reflected as revenue. See Note 12 for disaggregated revenue information. |
Notes Receivable
Notes Receivable | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Notes Receivable | 3. Notes Receivable On October 10, 2019, the Company entered into a convertible promissory note (“TBD Note”) with Century TBD Holdings, LLC (“TBD”), a Florida limited liability company. The Company loaned the principal sum of $500,000, of which up to $500,000 and all accrued interest can be paid by an “Optional Conversion” of such amount up to 19.8% (non-dilutable) of all outstanding membership interest in TBD. This TBD Note accrues interest at 6% and matures on October 9, 2021. As of September 30, 2020 and December 31, 2019 this TBD Note had outstanding principal and interest of approximately $529,000 and $507,000, respectively. On October 9, 2019 and November 11, 2019 the Company’s subsidiary Decentralized Sharing Systems, Inc. entered into two, separate on demand, secured, convertible notes with RBC Life Sciences, Inc. (RBC), a Nevada corporation. The first Note, dated October 9 th The second Note (Note #2) dated November 11, 2019, established a secured, convertible, revolving line of credit to RBC up to an aggregate principal sum of $800,000, funded at the sole discretion of lender, and accruing at annual non-default interest rate of 10% with a scheduled maturity date of November 11, 2024, payable to Decentralized Sharing Systems’ wholly owned subsidiary, HWH World, Inc.. Accrued interest on the outstanding principal balance was scheduled to be paid monthly commencing on December 25, 2019. Further, any amount of principal repaid during the term of the note was allowed to be re-advanced at any time prior to the earlier of the acceleration of note to maturity or its maturity date. This note also contains an “Optional Conversion” feature that allows the Company, at any time, before or after the occurrence of an Event of Default, at its option, to convert the outstanding principal balance, plus accrued interest into a number of newly issued shares of its common stock equal to 100% of the outstanding shares of common stock of RBC’s direct and indirect subsidiaries. This Note #2 was also secured by a 2nd lien on all of the assets of RBC, behind the first lien securing Note #1, and a first lien on all of the assets of RBC’s multiple subsidiaries and the full guarantee of these subsidiaries. As of December 31, 2019, this Note #2 had an advanced and outstanding principal balance of $81,575. On January 24, 2020, as a result of the borrower’s default on Note #1, Decentralized Sharing Systems, Inc. made demand for repayment of the outstanding balance of the Note #1. In partial resolution, Decentralized Sharing Systems, Inc and RBC agreed to accept and tender, respectively, pursuant to the Uniform Commercial Code Article 9, collateral in partial satisfaction of debt under the terms of Note#1. The Company chose to not exercise its option convert the outstanding principal and interest into equity, but instead elected to accept this specific collateral. On February 7, 2020, RBC agreed to the deed-in-lieu of specific assets in satisfaction of part of the amount owing under Note #1. On April 8, 2020, the Company initiated Uniform Commercial Code Article 9 foreclosure proceedings against the remaining assets of RBC and its subsidiaries which culminated with an Article 9 public sale on April 23, 2020. Again, the Company chose to forego the optional conversion of the outstanding principal and interest into 100% ownership, as was allowed in the terms of the note. Instead it elected to pursue through a public foreclosure sale collateral that secured Note #2. At that April Article 9 public sale, HWH World, Inc was the high bidder, and the company received a Bill of Sale for all of the remaining assets of RBC. As a result of this foreclosure sale and the Note #1, collateral accepted in lieu of partial debt, the Company now owns and controls most of the former assets of RBC and its subsidiaries. During the second quarter of 2020, the Company completed its evaluation of the assets acquired through foreclosure of Note 1 and 2 above and determined the value received supported the recoverability of the carrying value of the two notes. In accordance with Financial Accounting Standards Board Codification 310 Receivables Goodwill and Other, the assets value will be recorded at the carrying value of the debt, allocated based on the value identified. The carrying values of Note 1 and Note 2 were reclassed as property, plant, and equipment and other intangible assets in the amounts of $201,000 and $637,000 respectively within the accompanying financial statements. These amounts are being depreciated and amortized over their useful lives. |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Business Combination | 4. Business Combination On March 3, 2020, the Company entered into a binding term sheet (the “Term Sheet”) with LiquidValue Asset Management Pte Ltd (“LVAM”), AMRE Asset Management Inc. (“AAMI”) and American Medical REIT Inc. (“AMRE”), regarding a share subscription and loan arrangement. The Term Sheet set forth the terms of a proposed transaction to establish a medical real estate investment trust in the United States and AAMI providing certain services related to the financial and capital structure of AMRE. Pursuant to the Term Sheet, the Company has subscribed 5,250 ordinary shares of AAMI at a purchase price of $0.01 per share for total consideration of $52.50. Concurrently, AAMI will issue 2,500 shares to LVAM, and 1,250 shares to AMRE Tennessee, LLC, AAMI’s executive management’s holding company (collectively, the “Subscription Shares”). As a result, the Company now holds 52.5% of the outstanding shares of AAMI, with LVAM and AMRE Tennessee, LLC, holding 35% and 12.5% of the remaining outstanding shares of AAMI, respectively. At the completion of the share subscription, AAMI has a 93% equity interest in AMRE. Also at the completion of the transaction, AAMI had no assets or liabilities. LVAM is an 82% owned subsidiary of Singapore eDevelopment Limited whose Chief Executive Office and largest shareholder is Heng Fai Ambrose Chan, the Chairman of the Board and largest shareholder of the Company. Further, pursuant to and in connection with the Term Sheet, effective on March 3, 2020, the Company entered into a Promissory Note with AMRE, pursuant to which AMRE has issued the Company a promissory note for the principal amount of $800,000.00 (the “Note”). The Note matures on March 3, 2022 and accrues interest at the rate of 8.0% per annum and shall be payable in accordance with the terms set forth in the Note. Under the Note, AMRE may prepay or repay all or any portion of the Note at any time, without a premium or penalty. If not sooner prepaid, the entire unpaid principal balance of the Note including accrued interest will be due and payable in full on March 3, 2022. AMRE’s failure to pay any amount due on the Note within five days of when payment is due constitutes an event of default under the Note, pursuant to which the Company can declare the Note due and payable. The Note also provides the Company an option to provide AMRE an additional $800,000 on the same terms and conditions as the Note, including the issuance of warrants as described below. As further incentive to enter into the Note, AMRE issued the Company warrants to purchase 160,000 shares of AMRE common stock (the “Warrants”). The Warrants have an exercise price of $5.00 per share, subject to adjustment as set forth in the Warrants, and expire on March 3, 2024. Pursuant to the Warrants, if AMRE files a registration statement with the Securities and Exchange Commission for an initial public offering (“IPO”) of AMRE’s common stock and the IPO price per share offered to the public is less than $10.00 per share, the exercise price of the Warrants shall be adjusted downward to 50% of the IPO price. The Warrants also grants piggyback registration rights to the Company as set forth in the Warrants. As of September 30, 2020, this Note had outstanding principal and interest of approximately $834,000. Upon consolidation this Note is eliminated. U.S. GAAP requires that for each business combination, one of the combining entities shall be identified as the acquirer, and the existence of a controlling financial interest shall be used to identify the acquirer in a business combination. The Company has determined that its aforementioned 52.5% equity interest in AAMI provides existence of a controlling financial interest and has concluded to account for this transaction in accordance with the acquisition method of accounting under FASB ASC Topic 805, “ Business Combinations” On August 21, 2020, Document Security Systems, Inc. (the “Company”), completed its acquisition of Impact BioMedical, Inc. (“Impact BioMedical”), pursuant to a Share Exchange Agreement by and among the Company, DSS BioHealth Security, Inc. (“DSS BioHealth”), and related parties Alset International Limited (“Alset Intl”, formally Singapore eDevelopment Limited), and Global Biomedical Pte Ltd. (“GBM”) (See Note 5), which was previously approved by the Company’s shareholders (the “Share Exchange”).Under the terms of the Share Exchange, the Company issued 483,334 shares of the Company’s common stock, par value $0.02 per share, nominally valued at $6.48 per share, and 46,868 newly issued shares of the Company’s Series A Convertible Preferred Stock (“Series A Preferred Stock”), with a stated value of $46,868,000, or $1,000 per share, for a total consideration valued at $50 million. As a result of the Share Exchange, Impact BioMedical is now a wholly owned subsidiary of DSS BioHealth, the Company’s wholly owned subsidiary and operating results of the acquisition will be included in the Company’s financial statements beginning August 21, 2020. The Company has concluded to account for this transaction in accordance with the acquisition method of accounting under FASB ASC Topic 805, “Business Combinations” (“Topic 805”). Activity from August 21, 2020 to September 30, 2020 was not significant. The following summary, prepared on a proforma basis, combines the consolidated results of operations of the Company with those of Impact Biomedical as if the acquisition took place on January 1. The pro forma consolidated results include the impact of certain adjustments. 2020 2019 Sales $ 11,517,000 $ 9,857,000 Net Income $ 1,616,059 $ (3,223,000 ) Basic earnings per share $ 0.48 $ (2.55 ) Diluted earnings per share $ 0.15 $ (0.37 ) We are currently in the process of completing the purchase price accounting and related allocations associated with the acquisition of Impact BioMedical. Due to several factors, including a discount for illiquidity, the value of the Series A Preferred Stock was discounted from $46,868,000 to $35,187,000, thus reducing the final consideration given to approximately $38,319,000. The Company is in the process of completing valuations and useful lives for certain Technology and In Process Research & Development assets acquired in the transaction and the purchase price allocation will be completed with finalization of those valuations. We expect the preliminary purchase price accounting to be completed during the three months ending December 31, 2020. For the purposes of these financial statements, the consideration given is classified as Other Intangible Assets, Net. No amortization was recorded during the three months ended September 30, 2020. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2020 | |
Investments, All Other Investments [Abstract] | |
Investments | 5. Investments Alset International Limited As of March 31, 2020, the Company owned 83,174,129 ordinary shares of Alset International Limited (“Alset Intl”, formally Singapore eDevelopment Limited) a company incorporated in Singapore and publicly listed on the Singapore Exchange Limited, at an exercise price of SGD$0.04 (US$0.029) per share and warrants to purchase an additional 44,005,182 ordinary shares at an exercise price of SGD$0.04 (US$0.029) per share. On June 25, 2020, the Company exercised those warrants bringing its total ownership to 127,179,311 shares or approximately 10% of the outstanding shares of Alset Intl at September 30, 2020. As of June 30, 2020 the Company carried its investment in Alset Intl at cost, less impairments under ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities”. During the third quarter 2020, the Company determined that the investments has a readily determinable fair value based on the volume of shares traded on the Singapore Exchange which evidences a ready market for shares, as well as a consistent and observable market price. Accordingly, this investment is now 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 Company’s marketable equity securities are measured at fair value with gains and losses recognized in other income (expense). At the time of change the Company recorded an unrealized gain of approximately $2.1 million. 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 share of Alset Intl as well as the largest shareholder of the Company. The fair value of the marketable security as of September 30, 2020 was approximately $5,583,000. Sharing Services Global Corp. (“SHRG”) As of June 30, 2020, the Company, had acquired and owned approximately 17% of the issued and outstanding shares of Sharing Services Global Corp. (“SHRG”), a publicly traded company, as marketable equity security investment. In the 3 rd nd Net sales $ 21,899,160 Gross profit $ 16,000,134 Operating loss $ (1,146,919 ) Loss before income taxes $ (1,234,868 ) Income taxes $ (141,491 ) Net loss $ (1,093,377 ) On July 21 st nd On July 22, 2020, Chan Heng Fai Ambrose, the Chairman of the Company’s board of directors, assigned a Stock Purchase and Share Subscription Agreement by and between Mr. Chan and SHRG, pursuant to which the Company purchased 30,000,000 shares of Class A Common Stock and 10,000,000 warrants to purchase Class A Common Stock for $3 million. The warrants have an average exercise price of $0.20, immediately vested and may be exercised at any time commencing on the date of issuance and ending three year from such date. These shares and warrants are also subject to a one-year trading restriction pursuant to the terms of a Lock-Up Agreement entered into between Mr. Chan and the Company and assigned to the Company. The Company had acquired in a series of open-market transactions, between March 2020 and September 2020 an aggregate of 13,957,378 of additional common shares, at an average purchase price of $0.06 per share. The Company, during this same period, had also purchased 18,500,000 shares of SHRG in private purchases at an average purchase price of $0.08 per share. As noted above, DSS, via four (4) of the Company’s existing board members, currently holds four (4) of the five (5) SHRG board of director seats. Mr. JT Thatch, DSS’s Lead Independent Director and as well the CEO of SHRG is on the SHRG Board, along with Mr. Fai Heng Chan, DSS’s Executive Chairman of the board of directors (joined the SHRG Board effective May 4, 2020), Mr. Sassuan “Sam” Lee, DSS Independent Director (joined the SHRG Board effective September 29, 2020) and Mr. Frank D. Heuszel, the CEO of the Company (joined the SHRG Board effective September 29, 2020). BMI Capital International LLC 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 has the option to purchase an additional 10% of the outstanding membership interest. This option expires on September 10, 2022. 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 this joint venture. Alset Title Company On or about August 28, 2020, the Company’s wholly owned subsidiary, DSS Securities, Inc. entered into a corporate venture to form and operate a real estate title agency, under the name and flagging of Alset Title Company, Inc, a Texas corporation (“ATC”). DSS Securities, Inc. shall own 70% of this venture with the other two shareholders being attorneys necessary to the state application and permitting process. ATC have initiated or have pending applications to do business in a number of states, including Texas, Tennessee, Connecticut, Florida, and Illinois. For the purpose of organization and the state application process, the Company’s CEO, who is a licensed attorney, has a stated non-compensated 15% ownership interest in the venture. There was no activity for the nine months ended September 30, 2020. |
Short-Term and Long-Term Debt
Short-Term and Long-Term Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Short-Term and Long-Term Debt | 6. Short-Term and Long-Term Debt Revolving Credit Lines On July 26, 2017, Premier Packaging entered into a Loan Agreement and accompanying Term Note Non-Revolving Line of Credit Agreement with Citizens pursuant to which Citizens agreed to lend up to $1,200,000 to permit Premier Packaging to purchase equipment from time to time that it may need for use in its business. The aggregate principal balance outstanding under the Equipment Acquisition Line of Credit shall bear interest thereon at a per annum rate of 2% above the LIBOR Advantage Rate until the Conversion Date (as defined in the Term Note Non-Revolving Line of Credit). Effective on the Conversion Date, the interest shall be adjusted to a fixed rate equal to 2% above the bank’s Cost of Funds, as determined by Citizens. Current maturities of long-term debt are based on an estimated 48-month amortization which will be adjusted upon conversion. As of September 30, 2020, the Term Note had a balance of $801,000. The Company pays a monthly amount of $13,000 in principal and interest. On December 1, 2017, the Company’s subsidiary Plastic Printing Professionals entered into a Loan Agreement and accompanying Term Note Non-Revolving Line of Credit Agreement with Citizens which was converted into two term notes under which the Company will make monthly payments of $14,000 until November 30, 2023. Interest under the term notes is payable monthly at 5.37%. On July 20, 2020 the Company paid of this note. Equipment Line of Credit Promissory Notes - The Citizens credit facilities to each of the Company’s subsidiaries, Premier Packaging, contain various covenants including fixed charge coverage ratio, tangible net worth and current ratio covenants which are tested annually at December 31. For the year ended December 31, 2019, Premier Packaging was in compliance with the annual covenants. On October 24, 2018, the Company’s subsidiary, DSS Asia Limited entered into a $100,000 unsecured promissory note with HotApps International Pte Ltd in conjunction with the acquisition of Guangzhou HotApps Technology Ltd., a Chinese subsidiary of HotApps International Pte Ltd, by DSS Asia Limited. The promissory note does not accrue interest and had a maturity date of October 24, 2020. This note was paid in full on October 9, 2020. On March 2, 2020, AMRE entered into a $200,000 unsecured promissory note with LVAM. The Note calls for interest to be paid annually on March 2 with interest fixed at 8.0%. If not paid sooner, the entire unpaid principal balance is due in full on March 2, 2022. As further incentive to enter into this Note, AMRE granted LVAM warrants to purchase shares of common stock of AMRE (the “Warrants”). The amount of warrants granted is the equivalent of the Note Principal divided by the Exercise Price. The Warrants are exercisable for four years and are exercisable at $5.00 per share (the “Exercise” Price). The value of the warrants is not considered to be material. The holder is a related party owned by the Chairman of the Company’s board of directors. During Q2 2020, the Company received loan proceeds for Premier Packaging, DSS Digital, and AAMI in the amount of approximately $1,072,000 under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. These funds were used for payroll, benefits, rent, mortgage interest, and utilities. As of August 4, 2020 pursuant to the terms of the SBA PPP program, the Company submitted applications for Premier Packaging and DSS Digital for a requested 100% loan forgiveness. AAMI, pursuant to the terms of the SBA PPP program, submitted its application for 100% loan forgiveness in October 2020. Those applications are currently pending. Based on the uncertainty surrounding the forgiveness, the amounts are recorded as long-term debt on the accompanying consolidated balance sheets at September 30, 2020. If not forgiven, these loans calculate interest at 1% and have a two-year repayment period. |
Lease Liability
Lease Liability | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Lease Liability | 7 . The Company has operating leases predominantly for operating facilities. As of September 30, 2020, the remaining lease terms on our operating leases range from less than one to two years. DSS Plastics Group which finalized the sale of its assets on August 14, 2020 is not included in the lease liability calculation (see Note 10). 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 September 30, 2020. Future minimum lease payments as of September 30, 2020 are as follows: Maturity of Lease Liability Totals 2020 $ 11,000 2021 6,000 2022 1,000 2023 - 2024 - Total lease payments 18,000 Less: Imputed Interest (1,000 ) Total lease liability $ 17,000 Current $ 13,000 Noncurrent $ 4,000 Weighted-average remaining lease term (years) 0.8 Weighted-average discount rate 5.4 % |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies The Apple Litigation On November 26, 2013, DSSTM filed suit against Apple, Inc. (“Apple”) in the United States District Court for the Eastern District of Texas, for patent infringement (the “Apple Litigation”). The complaint alleges infringement by Apple of DSSTM’s patents that relate to systems and methods of using low power wireless peripheral devices. DSSTM is seeking a judgment for infringement, injunctive relief, and compensatory damages from Apple. On October 28, 2014, the case was stayed by the District Court pending a determination of Apple’s motion to transfer the case to the Northern District of California. On November 7, 2014, Apple’s motion to transfer the case to the Northern District of California was granted. On December 30, 2014, Apple filed two Inter Partes Review (“IPR”) petitions with the Patent Trial and Appeal Board (“PTAB”) for review of the patents at issue in the case. The PTAB instituted the IPRs on June 25, 2015. The California District Court then stayed the case pending the outcome of those IPR proceedings. Oral arguments of the IPRs took place on March 15, 2016, and on June 17, 2016, PTAB ruled in favor of Apple on both IPR petitions. DSSTM then filed an appeal with the U.S. Court of Appeals for the Federal Circuit (the “Federal Circuit”) seeking reversal of the PTAB decisions. Oral arguments for the appeal were held on August 9, 2017. On March 23, 2018, the Federal Circuit reversed the PTAB, finding that the PTAB erred when it found the claims of U.S. Patent No. 6,128,290 to be unpatentable. The Federal Circuit affirmed its decision on July 12, 2018, when it denied Apple’s petition for panel rehearing of the Federal Circuit’s Opinion and Judgment issued on March 23, 2018. On July 27, 2018, the District Court judge lifted the Stay resuming the litigation, which had a trial date set for the week of February 24, 2020. On January 14, 2020, the Court in the case DSS Technology Management, Inc. v. Apple, Inc., 4:14-cv-05330-HSG pending in the Northern District of California issued an order that denied DSS’ motion to amend its infringement contentions. In the same Order, the Court granted Apple’s motion to strike DSS’ infringement expert report. DSS filed a motion for leave to file a motion for reconsideration of the Court’s order denying DSS the right to amend its infringement contentions and motion to strike DSS infringement expert report. On February 18, 2020, the Court denied DSS’s motion for leave to file a motion for reconsideration. On February 24, 2020, the Court signed a Final Judgment stipulating that Apple was “entitled to a judgment of non-infringement of U.S. Patent No. 6,128,290 as a matter of law.” On March 10, 2020 DSS filed an appeal of this Final Judgment to the United States Court of Appeals for the Federal Circuit under DSS Technology Management v. Apple, Federal Circuit Docket no. 2020-1570. DSSTM has filed its Plaintiff-Appellate brief and Apple has filed its responsive brief. DSSTM’s reply brief is due by November 16, 2020. The LED Litigation On April 13, 2017, the Company filed a patent infringement lawsuit against Seoul Semiconductor Co., Ltd. and Seoul Semiconductor, Inc. (collectively, “Seoul Semiconductor”) in the United States District Court for the Eastern District of Texas, alleging infringement of certain of the Company’s Light-Emitting Diode (“LED”) patents. The Company is seeking a judgment for infringement of the patents along with other relief including, but not limited to, money damages, costs and disbursements. On June 7, 2017, the Company refiled its patent infringement complaint against Seoul Semiconductor in the United States District Court for the Central District of California, Southern Division. On December 3, 2017, Seoul Semiconductor filed an IPR challenging the validity of certain claims of U.S. Patent No. 6,949,771. This IPR was instituted by the PTAB on June 7, 2018. On April 18, 2019, the PTAB issued a written decision determining claims 1-9 of the ‘771 patent unpatentable. The Company did not appeal that determination. On December 21, 2017, Seoul Semiconductor filed an IPR challenging the validity of certain claims of U.S. Patent No. 7,256,486. This IPR was instituted by the PTAB on June 21, 2018. On June 10, 2019, the PTAB issued a written decision determining claims 1-3 of the ‘486 patent unpatentable. On August 12, 2019, the Company filed a Notice of Appeal with the Federal Circuit Court of Appeals challenging the PTAB’s decisions. The Company subsequently filed a motion to vacate and remand the PTAB’s decision in light of intervening precedent under the Appointments Clause. That motion was granted on January 23, 2020. On January 25, 2018, Seoul Semiconductor filed an IPR challenging the validity of certain claims of U.S. Patent No. 7,524,087. This IPR was instituted by the PTAB on July 27, 2018. On July 22, 2019, the PTAB issued a written decision determining claims 1, 6-8, 15, and 17 of the ‘087 patent unpatentable. On September 23, 2019, the Company filed a Notice of Appeal with the Federal Circuit Court of Appeals challenging the PTAB’s decisions. The Company subsequently filed a motion to vacate and remand the PTAB’s decision in light of intervening precedent under the Appointments Clause. That motion was granted on February 3, 2020. These challenged patents are the patents that are the subject matter of the infringement lawsuit, which is pending but stayed pending the outcome of the IPR proceedings. On April 13, 2017, the Company filed a patent infringement lawsuit against Cree, Inc. (“Cree”) in the United States District Court for the Eastern District of Texas, alleging infringement of certain of the Company’s LED patents. The Company is seeking a judgment for infringement of the patents along with other relief including, but not limited to, money damages, costs and disbursements. On June 8, 2017, the Company refiled its patent infringement complaint against Cree in the United States District Court for the Central District of California, and thereafter filed a first amended complaint for patent infringement against Cree in that same court on July 14, 2017. The case is currently pending as of the date of this Report. On June 6, 2018, Cree filed an IPR petition challenging the validity of claims under U.S. Patent No. 7,256,486. This IPR was instituted and joined with the Seoul Semiconductor IPR. On June 7, 2018, Cree filed IPR petitions challenging the validity of certain claims U.S. Patent Nos. 7,524,087 and 6,949,771. Both IPRs were denied by the PTAB on November 14, 2018 as time barred. The challenged patent is the patent that is the subject matter of the infringement lawsuit, which is pending but stayed pending the outcome of the IPR. On August 15, 2017, the Company filed a patent infringement lawsuit against Lite-On, Inc., and Lite-On Technology Corporation (collectively, “Lite-On”) in the United States District Court for the Central District of California, alleging infringement of certain of the Company’s LED patents. The Company is seeking a judgment for infringement of the patents along with other relief including, but not limited to, money damages, costs and disbursements. The case is currently pending but is stayed pending the outcome of IPR proceedings filed by other parties. On December 7, 2017, DSS filed a patent infringement lawsuit against Nichia Corporation and Nichia America Corporation in the United States District Court for the Central District of California, alleging infringement of certain of DSS’s LED patents. The Company is seeking a judgment for infringement of the patents along with other relief including, but not limited to, money damages, costs and disbursements. The case is currently pending as of the date of this Report. On May 10, 2018, Nichia filed an IPR petition challenging the validity of claims under U.S. Patent No. 7,919,787. On May 11, 2018, Nichia filed an IPR petition challenging the validity of claims under U.S. Patent No. 7,652,297. On May 25, 2018, Nichia filed an IPR petition challenging the validity of claims under U.S. Patent No. 7,524,087. On May 29, 2018, Nichia filed an IPR petition challenging the validity of claims under U.S. Patent No. 6,949,771. On May 30, 2018, Nichia filed an IPR petition challenging the validity of claims under U.S. Patent No. 7,256,486. The 6,949,771 IPR was denied institution, but the remaining IPRs were instituted by the PTAB. On December 10, 2018, Nichia refiled IPRs relating to 6,949,771, which was denied by the PTAB on April 15, 2019. These challenged patents are the patents that are the subject matter of the infringement lawsuit, which is pending but stayed pending the outcome of the IPR proceedings. On September 17, 2019, the PTAB issued a written decision determining claims 1-14 of the ‘787 patent unpatentable. The Company did not appeal that determination. On October 30, 2019, the PTAB issued a written decision determining claims 1-17 of the ‘297 patent unpatentable. The Company did not appeal that determination. On November 19, 2019, the PTAB issued a written decision determining claims 1-5 of the ‘486 patent unpatentable. The Company has appealed that determination to the U.S. Court of Appeals for the Federal Circuit. The Company’s opening brief on this appeal is currently due September 10, 2020. On September 18, 2019, DSS filed a patent infringement lawsuit against Seoul Semiconductor Co., Ltd. and Seoul Semiconductor Inc. in the United States District Court for the Central District of California alleging infringement of U.S. Patent No. 7,315,119. The Company is seeking a judgment for infringement of the patents along with other relief including, but not limited to, money damages, costs and disbursements. The Court has conducted an initial scheduling conference and has set a procedural schedule for the case. On May 18, 2020, Seoul Semiconductor filed an IPR petition challenging the validity of claims 1-7 of the patent. The District Court has entered a stay of the District Court proceedings pending the outcome of the IPR petition. On September 19, 2019, DSS filed a patent infringement lawsuit against Cree, Inc. in the United States District Court for the Central District of California alleging infringement of U.S. Patent No. 6,784,460. The Company is seeking a judgment for infringement of the patents along with other relief including, but not limited to, money damages, costs and disbursements. On February 11, 2020, Cree filed an IPR petition challenging the validity of the patent claims. The Court has conducted an initial scheduling conference and has set a procedural schedule for the case. The District Court has entered a stay of the District Court proceedings pending the outcome of the IPR petition. On September 20, 2019, DSS filed a patent infringement lawsuit against Nichia Corp. and Nichia America Corp. in the United States District Court for the Central District of California alleging infringement of U.S. Patent No. 6,879,040. The Company is seeking a judgment for infringement of the patents along with other relief including, but not limited to, money damages, costs and disbursements. The Court has conducted an initial scheduling conference and has set a procedural schedule for the case. On May 18, 2020, Nichia filed an IPR petition challenging the validity of claims 1-4, 8, and 11 of the patents. The District Court has entered a stay of the District Court proceedings pending the outcome of the IPR petition. The Intel, Apple Litigation On November 20, 2019, DSS Technology Management was sued in the United States District Court, Northern District of California, by Intel Corporation (“Intel”) and Apple Inc. (“Apple”). The other defendants in the litigation are Fortress Investment Group LLC, Fortress Credit Co. LLC, Uniloc 2017 LLC, Uniloc USA, INC., Uniloc Luxembourg S.A.R.L., VLSI Technology LLC, INVT SPE LLC, Inventergy Global, INC., IXI IP, LLC, and Seven Networks, LLC. The complaint includes allegations regarding a February 13, 2014 Investment Agreement between DSS Technology Management and Fortress Credit Co. LLC as well as two subsequent agreements. The complaint also contains allegations regarding DSS Technology Management’s lawsuit against Intel that was filed in February 2015 in the United States District Court, Eastern District of Texas (referred to below). In the complaint, Intel and Apple allege violations of Section 1 of the Sherman Act and unfair competition under Cal. Bus. & Prof. Code § 17200 against DSS Technology Management. Additional claims are alleged against other defendants. Intel and Apple seek relief from the court including that defendants’ conduct be declared a violation of Section 1 of the Sherman Act, Section 7 of the Clayton Act, and Cal. Bus. & Prof. Code § 17200, et seq.; that Intel and Apple recover damages against defendants in an amount to be determined and multiplied to the extent provided by law, including under Section 4 of the Clayton Act; that all contracts or agreements defendants entered into in violation of the Sherman Act, Clayton Act, or Cal. Bus. & Prof. Code § 17200, et seq. be declared void and the patents covered by those transfer agreements be transferred back to the transferors; that all patents transferred to defendants in violation of the Sherman Act, Clayton Act, or Cal. Bus. & Prof. Code § 17200, et seq. be declared unenforceable; and that Intel and Apple recover their costs and expenses associated with this case, together with interest. DSS Technology Management responded to the complaint on February 4, 2020 by filing a motion to dismiss and strike the complaint as well as a motion to stay discovery. The court granted the motion to stay discovery on March 25, 2020. A hearing on the motion to dismiss and to strike the complaint was reset for July 8, 2020. On July 8, 2020 the court granted DSS’s motion to dismiss, and while the order allowed the Plaintiffs leave to amend their complaint, it did dismiss with prejudice claims against DSS based on the patents asserted by DSS that were part of the complaint. On August 4, 2020, Apple and Intel filed a first amended complaint, in which DSS is no longer named as a defendant and upon which we believe the case is closed as to DSS. The Ronaldi Litigation In April 2019 DSS commenced an action in New York State Supreme Court, Monroe County, Index No. E2019003542, against Jeffrey Ronaldi, our former Chief Executive Officer. This New York action seeks a declaratory judgment that, contrary to informal claims made by him, Mr. Ronaldi’s employment agreement with us expired by its terms and that he is not entitled to any cash bonuses or other unpaid amounts. The lawsuit also seeks an injunction against Mr. Ronaldi from interfering with any of DSS’ IP litigation. Mr. Ronaldi subsequently commenced an action against DSS in the Superior Court of California, County of San Diego, on November 8, 2019, under case number 37-2019-00059664-CU-CO-CTL, in which he alleged that DSS terminated his employment in April 2019 in order to avoid paying him certain employment-related amounts. DSS was successful in dismissing the California case and consolidating it with the action pending in Monroe County, New York. Mr. Ronaldi asserted counterclaims in the Monroe County, New York action similar to those he originally brought in California. Mr. Ronaldi claims that his termination violated an alleged employment agreement or implied-in-fact employment agreement and that he should have remained employed through 2019. Mr. Ronaldi seeks to recover: (i) $144,657.53 in wages from April 11, 2019 through December 31, 2019; (ii) $769.23 in alleged unpaid based salary for time worked before April 11, 2019; (iii) $15,384.62 in alleged paid time off compensation; (iv) $3,076.93 in alleged unpaid sick time compensation; (v) $26,076.93 in waiting-time penalties; (vi) -$91,000 in unspecified expense reimbursement; (vii) $300,000 in alleged cash bonuses ($100,000 per year) based on DSS’s performance in 2017, 2018 and 2019; and (viii) a $450,000 performance bonus based on the result of certain alleged net proceeds from patent infringement litigation. He further claims an interest in any recovery in DSS Technology Management v. Apple, Inc., Case No. 4:14-cf-05330-HSG. The parties are now engaged in discovery. The current deadline for completion of fact discovery is March 12, 2021, and a Note of Issue signaling readiness for trial is due May 28, 2021. Additionally, on March 2, 2020 DSS and DSSTM filed a second litigation action against Jeffrey Ronaldi in the State of New York, Supreme Court, County of Monroe, Document Security Systems, Inc. and DSS Technology Management, Inc. vs. Jeffrey Ronaldi, Index No.: 2020002300, alleging acts of self-dealing and conflicts of interest while he served as CEO of both DSS and DSS TM. Mr. Ronaldi filed a Notice of Removal of this civil litigation to the United States District Court for the Western District of New York where it was assigned Case No. 6:20-cv-06265-EAW. Mr. Ronaldi filed a motion seeking to compel DSS to advance his legal fees to defend the action, which motion was fully briefed as of June 30, 2020 and remains pending and undecided. The parties are awaiting the court’s scheduling of the status conference for the management of all pretrial activities and set a tentative date for trial. In addition to the foregoing, we may become subject to other legal proceedings that arise in the ordinary course of business and have not been finally adjudicated. Adverse decisions in any of the foregoing may have a material adverse effect on our results of operations, cash flows or our financial condition. The Company accrues for potential litigation losses when a loss is probable and estimable. Contingent Litigation Payments Contingent Payments |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | 9. Stockholders’ Equity Sales of Equity – On February 20, 2020, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp. (the “Underwriter”), which provided for the issuance and sale by the Company and the purchase by the Underwriter, in a firm commitment underwritten public offering (the “Offering”), of 740,741 shares of the Company’s common stock, $0.02 par value per share. Subject to the terms and conditions contained in the Underwriting Agreement, the shares were sold to the Underwriter at a public offering price of $5.40 ($0.18 per shares pre-reverse stock split) per share, less certain underwriting discounts and commissions. The Company also granted the Underwriters a 45-day option to purchase up to 111,111 additional shares of the Company’s common stock on the same terms and conditions for the purpose of covering any over-allotments in connection with the Offering. The net offering proceeds to the Company from the Offering were approximately $4 million, after deducting estimated underwriting discounts and commissions and other estimated offering expenses, and assuming no exercise of the Underwriter’s over-allotment option. The offering was closed on February 25, 2020. Heng Fai Ambrose Chan, the Chairman of the Company’s Board of Directors, purchased $2 million of shares in the Offering. On May 15, 2020, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp. (the “Underwriter”), which provided for the issuance and sale by the Company and the purchase by the Underwriter, in a firm commitment underwritten public offering (the “Offering”), of 769,230 shares of the Company’s common stock, $0.02 par value per share. Subject to the terms and conditions contained in the Underwriting Agreement, the shares were sold to the Underwriter at a public offering price of $7.80 per share, less certain underwriting discounts and commissions. The Company also granted the Underwriters a 45-day option to purchase up to 115,384 additional shares of the Company’s common stock on the same terms and conditions for the purpose of covering any over-allotments in connection with the Offering. The net offering proceeds to the Company from the Offering were approximately $6.2 million, after deducting estimated underwriting discounts and commissions and other estimated offering expenses, and assuming no exercise of the Underwriter’s over-allotment option. The offering was closed on June 26, 2020. On July 7, 2020, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp. (the “Underwriter”), which provided for the issuance and sale by the Company and the purchase by the Underwriter, in a firm commitment underwritten public offering (the “Offering”), of 1,028,800 shares of the Company’s common stock, $0.02 par value per share. Subject to the terms and conditions contained in the Underwriting Agreement, the shares were sold to the Underwriter at a public offering price of $6.25 per share, less certain underwriting discounts and commissions. The Company also granted the Underwriters a 45-day option to purchase up to 154,320 additional shares of the Company’s common stock on the same terms and conditions for the purpose of covering any over-allotments in connection with the Offering. The net offering proceeds to the Company from the Offering were approximately $6.7 million. The offering was closed on July 10, 2020. On July 28, 2020, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp. (the “Underwriter”), which provided for the issuance and sale by the Company and the purchase by the Underwriter, in a firm commitment underwritten public offering (the “Offering”), of 453,333 shares of the Company’s common stock, $0.02 par value per share. Subject to the terms and conditions contained in the Underwriting Agreement, the shares were sold to the Underwriter at a public offering price of $7.50 per share, less certain underwriting discounts and commissions. The Company also granted the Underwriters a 45-day option to purchase up to 38,533 additional shares of the Company’s common stock on the same terms and conditions for the purpose of covering any over-allotments in connection with the Offering. The net offering proceeds to the Company from the Offering were approximately $3.3 million, after deducting estimated underwriting discounts and commissions and other estimated offering expenses. The initial offering was closed on July 31, 2020, and the overallotment was exercised on August 7, 2020. In connection with the Share Exchange for Impact BioMedical described in Note 5 above, on August 18, 2020, the Company filed a Certificate of Amendment of its Certificate of Incorporation (the “Certificate of Amendment”) to increase the number of authorized shares of the Company, including 200,000,000 shares of Preferred Stock, with a par value of $0.02, of which 46,868 shares were designated Series A Preferred Stock. The Certificate of Amendment, the form of which was previously disclosed in a Schedule 14A Definitive Proxy Statement filed with the Securities and Exchange Commission on July 14, 2020. As described in Note 4 and 5, this transaction is a related party transaction. Holders of the Series A Preferred Stock have no voting rights, except as required by applicable law or regulation, and no dividends accrue or are payable on the Series A Preferred Stock. The holders of Series A Preferred Stock are entitled to a liquidation preference at a liquidation value of $1,000 per share aggregating to $46,868,000, and the Company has the right to redeem all or any portion of the then outstanding shares of Series A Preferred Stock, pro rata among all holders, at a redemption price per share equal to such liquidation value per share. The Series A Preferred Stock ranks senior to Common Stock and any other class of securities that is specifically designated as junior to the Series A Preferred Stock with respect to rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, in respect of a liquidation preference equal to its par value of $1,000. A holder of Series A Preferred Stock has the option to convert each share of Series A Preferred Stock into a number of common shares in the Company equal to the $1,000 liquidation preference divided by a conversion price of $6.48 or 154.32 shares subject to a Beneficial Ownership Limitation of 19.99%, as defined in the Share Exchange Agreement. Additionally, Company has the option to require conversion of all outstanding Series A Preferred Stock into common stock at any time, subject to the Beneficial Ownership Limitation discussed. In aggregate the Series A Preferred Shares are convertible into 7,232,670 shares of the Company’s common stock. The Company evaluated the classification of the Series A Preferred Shares under the guidance enumerated in ASC 470, 480, and 815 and determined that based on the features noted above the instruments are accounted for as permanent equity. Stock-Based Compensation - On April 3, 2020, by unanimous written consent, the Board of Directors authorized the Company to issue individual stock grants of the Company’s common stock, pursuant to the Company’s 2020 Employee, Director and Consultant Equity Incentive Plan, to certain managers and directors in the amount of 8,900 shares, at $6.60 per share which were immediately vested and issued. 5,800 of these shares where were fully vested restricted stock to members of the Company’s management team with a two-year lock-up period. On June 4, 2020, the Company entered into an agreement with an investor relations firm to provide services over a 14-month period in exchange for 21,000 shares of common stock. The shares were issued on the date of the agreement and were valued by the Company at $210,000. The value assigned to the shares is included in other assets on the accompanying consolidated balance sheets and will be expensed into stock-based compensation as it is earned. On September 23, 2020, by written consent of the Chief Executive Officer and the Chairman of the board, the Company to issue individual stock grants of the Company’s common stock, pursuant to the Company’s 2020 Employee, Director and Consultant Equity Incentive Plan, to a consultant of the Company in the amount of 20,000 shares, at $4.48 per share which were immediately vested. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 10. Discontinued Operations As a result of the insufficient cash flows from the operations of Plastic Printing Professionals, Inc. as well as the disruption of our business from the COVID-19 pandemic, on April 20, 2020, the Company executed a nonbinding letter of intent with a perspective buyer for substantially all the assets of this business line. As a result of insufficient cash flows, the disruption of our business from the Covid-19 pandemic, and with the intent to exit this business line, the Company terminated its production and office personnel and maintained only a few employees to assist in and facilitate the sale of its assets. The financial results for these subsidiaries have been presented as discontinued operations in the accompanying consolidated financial statements. The consideration paid to the Company for the sale of the assets included a one-time cash payment of $683,000 and a potential additional earn-out payment of an aggregate amount of up to $517,000 based on future quarterly gross revenue of the business to be conducted by the buyer with the sold assets. Consistent with the Company’s policy for accounting for gain contingencies, the earn out will be recorded when determined realizable which did not occur during the nine months ended September 30, 2020. The net effect of all assets disposed of with this transaction is a net loss $111,000 and is included in Loss from Discontinued Operations. The following tables show the major classes of assets and liabilities held for sale and results of operations of the discontinued operation. DOCUMENT SECURITY SYSTEMS, INC. AND SUBSIDIARIES Consolidated Balance Sheets– Assets and Liabilities Held For Sale September 30, December 31, 2020 2019 unaudited ASSETS Current assets: Inventory $ - $ 342,000 Total current assets - 342,000 Property, plant and equipment, net - 732,000 Right-of-use assets 886,000 1,081,000 LIABILITIES Current liabilities: Current portion of lease liability 274,000 274,000 Total current liabilities 274,000 274,000 Long term lease liability 612,000 807,000 DOCUMENT SECURITY SYSTEMS, INC. AND SUBSIDIARIES Consolidated Statements of Operations - Discontinued Operations (unaudited) For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Revenue: Printed products $ 243,000 $ 916,000 $ 1,626,000 $ 2,591,000 Total revenue 243,000 916,000 1,626,000 2,591,000 Costs and expenses: Cost of revenue, exclusive of depreciation and amortization 382,000 503,000 1,644,000 1,795,000 Selling, general and administrative (including stock based compensation) 130,000 310,000 715,000 910,000 Depreciation and amortization 37,000 122,000 152,000 207,000 Impairment of goodwill - - 685,000 - Total costs and expenses 549,000 935,000 3,196,000 2,912,000 Operating loss (306,000 ) (19,000 ) (1,570,000 ) (321,000 ) Other income (expense): Interest expense (7,000 ) (9,000 ) (21,000 ) (24,000 ) Loss on sale of assets held for sale (111,000 ) - (111,000 ) - Income (loss) before income taxes (424,000 ) (28,000 ) (1,702,000 ) (345,000 ) Income tax expense (benefit) - - - - Income (loss) from discontinued operations (424,000 ) (28,000 ) (1,702,000 ) (345,000 ) |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | 11. Supplemental Cash Flow Information The following table summarizes supplemental cash flows for the six months ended September 30, 2020 and 2019: 2020 2019 Cash paid for interest $ 101,000 $ 128,000 Non-cash investing and financing activities: Impact of adoption of lease accounting standards $ - $ 1,616,000 Gain from change in fair value of interest rate swap derivatives $ - $ 7,000 Common stock issued upon conversion of convertible note $ - $ 500,000 Equity issued to purchase intangible assets $ - $ 145,000 Common Shares issued for marketing services $ 210,000 $ - Common Shares issued for Impact BioMedical $ 3,132,000 $ - Series A Preferred Shares issued for Impact BioMedical $ 35,187,000 $ - Long-lived assets acquired through settlement of notes receivable $ 838,000 $ - |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | 12. Segment Information The Company’s eight businesses lines e.g Approximate information concerning the Company’s operations by reportable segment for the three and Nine months ended September 30, 2020 and 2019 is as follows. The Company relies on intersegment cooperation and management does not represent that these segments, if operated independently, would report the results contained herein: Three Months Ended September 30, 2020 Packaging and Printing Plastics Digital Technology Management Direct Marketing Corporate Total Revenue $ 2,972,000 $ - $ 483,000 $ - $ 714,000 $ - $ 4,169,000 Depreciation and amortization 165,000 - 9,000 21,000 1,000 50,000 246,000 Interest expense 24,000 - 2,000 - - 3,000 29,000 Stock based compensation 3,000 - 7,000 - - 122,000 132,000 Net Income (loss) from continuing operations 136,000 - 82,000 (36,000 ) (1,139,000 ) 6,323,000 5,366,000 Capital expenditures 1,000 - - - 1,000 - 2,000 Identifiable assets 10,013,000 1,209,000 657,000 1,000 1,809,000 68,304,000 81,993,000 Three Months Ended September 30, 2019 Packaging and Printing Plastics Digital Technology Management Direct Marketing Corporate Total Revenue $ 2,119,000 $ - $ 498,000 $ - $ - $ - $ 2,617,000 Depreciation and amortization 228,000 - 7,000 62,000 - - 297,000 Interest expense 24,000 - 2,000 - - 22,000 48,000 Stock based compensation 4,000 - 20,000 - - 249,000 273,000 Net loss from continuing operations (322,000 ) - 139,000 (203,000 ) - (836,000 ) (1,222,000 ) Capital expenditures - - - - - - - Identifiable assets 9,156,000 3,884,000 899,000 - - 4,611,000 18,550,000 Nine Months Ended September 30, 2020 Packaging and Printing Plastics Digital Technology Management Direct Marketing Corporate Total Revenue $ 8,394,000 $ - $ 1,331,000 $ - $ 1,792,000 $ - $ 11,517,000 Depreciation and amortization 584,000 - 28,000 48,000 1,000 163,000 824,000 Interest expense 79,000 - 9,000 - - 13,000 101,000 Stock based compensation 11,000 - 37,000 - - 168,000 216,000 Net Income (loss) from continuing operations 222,000 - (120,000 ) (325,000 ) (960,000 ) 4,954,000 3,771,000 Capital expenditures 91,000 - 9,000 - 1,000 1,000 102,000 Identifiable assets 10,013,000 1,209,000 657,000 1,000 1,809,000 68,304,000 81,993,000 Nine Months Ended September 30, 2019 Packaging and Printing Plastics Digital Technology Management Direct Marketing Corporate Total Revenue $ 8,434,000 $ 1,424,000 $ - $ - $ - $ 9,858,000 Depreciation and amortization 675,000 - 24,000 144,000 - 1,000 844,000 Interest expense 76,000 - 6,000 - - 22,000 104,000 Stock based compensation 13,000 - 62,000 - - 256,000 331,000 Net loss from continuing operations (254,000 ) - (224,000 ) (418,000 ) - (1,490,000 ) (2,386,000 ) Capital expenditures 574,000 - 24,000 - - 4,000 602,000 Identifiable assets 9,156,000 3,884,000 899,000 - - 4,611,000 18,550,000 The following tables disaggregate our business segment revenues by major source: Printed Products Revenue Information: Three months ended September 30, 2020 Packaging Printing and Fabrication $ 2,568,000 Commercial and Security Printing 403,000 Total Printed Products $ 2,971,000 Three months ended September 30, 2019 Packaging Printing and Fabrication $ 1,883,000 Commercial and Security Printing 236,000 Total Printed Products $ 2,119,000 Nine months ended September 30, 2020 Packaging Printing and Fabrication $ 7,631,000 Commercial and Security Printing 774,000 Total Printed Products $ 8,405,000 Nine months ended September 30, 2019 Packaging Printing and Fabrication $ 7,619,000 Commercial and Security Printing 814,000 Total Printed Products $ 8,433,000 Technology Sales, Services and Licensing Revenue Information: Three months ended September 30, 2020 Information Technology Sales and Services $ 24,000 Digital Authentication Products and Services 359,000 Royalties from Licensees 100,000 Total Printed Products $ 483,000 Three months ended September 30, 2019 Information Technology Sales and Services $ 46,000 Digital Authentication Products and Services 307,000 Royalties from Licensees 145,000 Total Printed Products $ 498,000 Nine months ended September 30, 2020 Information Technology Sales and Services $ 65,000 Digital Authentication Products and Services 947,000 Royalties from Licensees 307,000 Total Printed Products $ 1,319,000 Nine months ended September 30, 2019 Information Technology Sales and Services $ 151,000 Digital Authentication Products and Services 857,000 Royalties from Licensees 416,000 Total Printed Products $ 1,424,000 Direct Marketing Three months ended September 30, 2020 Direct Marketing Internet Sales $ 715,000 Total Direct Marketing $ 715,000 Three months ended September 30, 2019 Direct Marketing Internet Sales $ - Total Direct Marketing $ - Nine months ended September 30, 2020 Direct Marketing Internet Sales $ 1,793,000 Total Direct Marketing $ 1,793,000 Nine months ended September 30, 2019 Direct Marketing Internet Sales $ - Total Direct Marketing $ - |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. SUBSEQUENT EVENTS On October 7, 2020, DSS Securities took part in an IPO of Presidio Property Trust, Inc., a Maryland corporation that invests primarily in commercial properties, such as office, industrial and retail properties, as well as in residential model home properties, in regionally dominant markets across the United States. We purchased 200,000 shares at $5.00 per share for a total of $1,000,000. On October 16, 2020, Global BioMedical Pte Ltd. converted 4,293 shares of its Series A Preferred Stock of DSS having a par value of $0.02 per share in exchange for 662,500 restricted shares of the Common Stock of the Company having a par value of $.02 per share based upon a liquidation value of $1,000 and a conversion price of $6.48 per share pursuant to Section 8.2(a) of the Certificate of Designation of Series A Convertible Preferred Stock. On October 20, 2020, the Company filed its preliminary Form 14A proxy materials for the 2020 Annual Meeting of Stockholders. The purpose of the meeting is to (1.) To elect eight director nominees to the Company’s Board of Directors to hold office until the next Annual Meeting of Stockholders; (2.) To ratify Freed Maxick CPAs, P.C. as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020; (3.) To provide an advisory vote on executive compensation; (4.) To approve, pursuant to Rule 713 of the NYSE American, the potential issuance of shares of the Corporation’s common stock, par value $0.02 per share representing equal to or greater than 20% but not more than 50.99% of presently outstanding stock, issuable upon conversion of our Series A Convertible Preferred Stock, issued by the Company to Global BioMedical Pte. Ltd on August 21, 2020 in accordance with the Share Exchange Agreement dated April 27, 2020, by increasing the beneficial ownership limitation of the Series A Convertible Preferred Stock; and (5.) To approve the reincorporation of the Company from New York to Texas, pursuant to a merger of the Company with and into a newly-formed Texas corporation that will initially be a wholly-owned subsidiary of the Company, resulting in a change in name of the Company from “Document Security Systems, Inc.” to “Alset, Inc.” |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation - |
Use of Estimates | Use of Estimates - |
Reclassifications | Reclassifications |
Cost and Equity Method Investments | Cost and Equity Method Investments – Cost Method Investments, Investments—Equity Method and Joint Ventures |
Marketable Securities | Marketable Securities |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ● 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 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 carried at cost less impairment; however, the fair value is not considered readily determinable based on the lack of liquidity for the shares owned. |
Impairment of Long-Lived Assets and Goodwill | Impairment of Long-Lived Assets and Goodwill |
Related Party Liabilities | Related Party Liabilities - |
Contingent Legal Expenses | Contingent Legal Expenses - |
Business Combinations | Business Combinations - |
Discontinued Operations | Discontinued Operations |
Reverse Stock Split | Reverse Stock Split |
Earnings Per Common Share | Earnings Per Common Share |
Concentration of Credit Risk | Concentration of Credit Risk - During the nine months ended September 30, 2020, two customers accounted for approximately 21% and 16%, respectively, of the Company’s consolidated revenue and accounted for 36% and 12%, respectively, of the Company’s accounts receivable balance as of September 30, 2020. The risk with respect to accounts receivables is mitigated by credit evaluations the Company performs on its customers, the short duration of its payment terms for most of its customer contracts and by the diversification of its customer base. |
Income Taxes | Income Taxes |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment”, which eliminates the two-step process that required identification of potential impairment and a separate measure of the actual impairment. The annual assessment of goodwill impairment will be determined by using the difference between the carrying amount and the fair value of the reporting unit. The standards update is effective for goodwill impairment tests in fiscal years beginning after December 15, 2019 and has been adopted by the Company effective January 1, 2020. |
Impact of COVID-19 Outbreak | Impact of COVID-19 Outbreak Additionally, it is reasonably possible that estimates made in the financial statements have been, or will be, materially and adversely impacted in the near term as a result of these conditions, including losses on inventory; impairment losses related to goodwill and other long-lived assets and current obligations |
Continuing Operations and Going Concern | Continuing Operations and Going Concern – To continue as a going concern, during the nine months ended September 30, 2020, the Company through multiple underwriting agreements with Aegis Capital Corp., acting as representative of the several underwriters, provided the issuance and sale by the Company in an underwritten public offering (the “Offering”) shares of the Company’s common stock. The net offering proceeds to the Company approximated $20.1 million. The Company’s management intends to take actions necessary to continue as a going concern. Management’s plans concerning these matters includes, among other things, continued growth among our operating segments, and tightly controlling operating costs and reducing spending growth rates wherever possible to return to profitability. 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. During the nine months ended September 30, 2020, material steps were taken to materially reduce or eliminate cash burns in the IP Monetization program, the DSS Digital Group and the DSS Plastics group. At the Company’s current operating levels and capital usage, we believe that without any further acquisition or investments, our $11.6 million in aggregate cash and equivalents as of September 30, 2020, would allow us to fund our eight business lines current and planned operations through October 2021. Based on this, the Company has concluded that substantial doubt of its ability to continue as a going concern has been alleviated. |
Business Combination (Tables)
Business Combination (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisition, Pro Forma Information | The pro forma consolidated results include the impact of certain adjustments. 2020 2019 Sales $ 11,517,000 $ 9,857,000 Net Income $ 1,616,059 $ (3,223,000 ) Basic earnings per share $ 0.48 $ (2.55 ) Diluted earnings per share $ 0.15 $ (0.37 ) |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Sharing Services Global Corp [Member] | |
Schedule of Operating Result | The following table represents SHRG operating results for the three months ended July 31, 2020: Net sales $ 21,899,160 Gross profit $ 16,000,134 Operating loss $ (1,146,919 ) Loss before income taxes $ (1,234,868 ) Income taxes $ (141,491 ) Net loss $ (1,093,377 ) |
Lease Liability (Tables)
Lease Liability (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments | Future minimum lease payments as of September 30, 2020 are as follows: Maturity of Lease Liability Totals 2020 $ 11,000 2021 6,000 2022 1,000 2023 - 2024 - Total lease payments 18,000 Less: Imputed Interest (1,000 ) Total lease liability $ 17,000 Current $ 13,000 Noncurrent $ 4,000 Weighted-average remaining lease term (years) 0.8 Weighted-average discount rate 5.4 % |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | The following tables show the major classes of assets and liabilities held for sale and results of operations of the discontinued operation. DOCUMENT SECURITY SYSTEMS, INC. AND SUBSIDIARIES Consolidated Balance Sheets– Assets and Liabilities Held For Sale September 30, December 31, 2020 2019 unaudited ASSETS Current assets: Inventory $ - $ 342,000 Total current assets - 342,000 Property, plant and equipment, net - 732,000 Right-of-use assets 886,000 1,081,000 LIABILITIES Current liabilities: Current portion of lease liability 274,000 274,000 Total current liabilities 274,000 274,000 Long term lease liability 612,000 807,000 DOCUMENT SECURITY SYSTEMS, INC. AND SUBSIDIARIES Consolidated Statements of Operations - Discontinued Operations (unaudited) For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Revenue: Printed products $ 243,000 $ 916,000 $ 1,626,000 $ 2,591,000 Total revenue 243,000 916,000 1,626,000 2,591,000 Costs and expenses: Cost of revenue, exclusive of depreciation and amortization 382,000 503,000 1,644,000 1,795,000 Selling, general and administrative (including stock based compensation) 130,000 310,000 715,000 910,000 Depreciation and amortization 37,000 122,000 152,000 207,000 Impairment of goodwill - - 685,000 - Total costs and expenses 549,000 935,000 3,196,000 2,912,000 Operating loss (306,000 ) (19,000 ) (1,570,000 ) (321,000 ) Other income (expense): Interest expense (7,000 ) (9,000 ) (21,000 ) (24,000 ) Loss on sale of assets held for sale (111,000 ) - (111,000 ) - Income (loss) before income taxes (424,000 ) (28,000 ) (1,702,000 ) (345,000 ) Income tax expense (benefit) - - - - Income (loss) from discontinued operations (424,000 ) (28,000 ) (1,702,000 ) (345,000 ) |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Supplemental Cash Flow Information | The following table summarizes supplemental cash flows for the six months ended September 30, 2020 and 2019: 2020 2019 Cash paid for interest $ 101,000 $ 128,000 Non-cash investing and financing activities: Impact of adoption of lease accounting standards $ - $ 1,616,000 Gain from change in fair value of interest rate swap derivatives $ - $ 7,000 Common stock issued upon conversion of convertible note $ - $ 500,000 Equity issued to purchase intangible assets $ - $ 145,000 Common Shares issued for marketing services $ 210,000 $ - Common Shares issued for Impact BioMedical $ 3,132,000 $ - Series A Preferred Shares issued for Impact BioMedical $ 35,187,000 $ - Long-lived assets acquired through settlement of notes receivable $ 838,000 $ - |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Operations by Reportable Segment | Approximate information concerning the Company’s operations by reportable segment for the three and Nine months ended September 30, 2020 and 2019 is as follows. The Company relies on intersegment cooperation and management does not represent that these segments, if operated independently, would report the results contained herein: Three Months Ended September 30, 2020 Packaging and Printing Plastics Digital Technology Management Direct Marketing Corporate Total Revenue $ 2,972,000 $ - $ 483,000 $ - $ 714,000 $ - $ 4,169,000 Depreciation and amortization 165,000 - 9,000 21,000 1,000 50,000 246,000 Interest expense 24,000 - 2,000 - - 3,000 29,000 Stock based compensation 3,000 - 7,000 - - 122,000 132,000 Net Income (loss) from continuing operations 136,000 - 82,000 (36,000 ) (1,139,000 ) 6,323,000 5,366,000 Capital expenditures 1,000 - - - 1,000 - 2,000 Identifiable assets 10,013,000 1,209,000 657,000 1,000 1,809,000 68,304,000 81,993,000 Three Months Ended September 30, 2019 Packaging and Printing Plastics Digital Technology Management Direct Marketing Corporate Total Revenue $ 2,119,000 $ - $ 498,000 $ - $ - $ - $ 2,617,000 Depreciation and amortization 228,000 - 7,000 62,000 - - 297,000 Interest expense 24,000 - 2,000 - - 22,000 48,000 Stock based compensation 4,000 - 20,000 - - 249,000 273,000 Net loss from continuing operations (322,000 ) - 139,000 (203,000 ) - (836,000 ) (1,222,000 ) Capital expenditures - - - - - - - Identifiable assets 9,156,000 3,884,000 899,000 - - 4,611,000 18,550,000 Nine Months Ended September 30, 2020 Packaging and Printing Plastics Digital Technology Management Direct Marketing Corporate Total Revenue $ 8,394,000 $ - $ 1,331,000 $ - $ 1,792,000 $ - $ 11,517,000 Depreciation and amortization 584,000 - 28,000 48,000 1,000 163,000 824,000 Interest expense 79,000 - 9,000 - - 13,000 101,000 Stock based compensation 11,000 - 37,000 - - 168,000 216,000 Net Income (loss) from continuing operations 222,000 - (120,000 ) (325,000 ) (960,000 ) 4,954,000 3,771,000 Capital expenditures 91,000 - 9,000 - 1,000 1,000 102,000 Identifiable assets 10,013,000 1,209,000 657,000 1,000 1,809,000 68,304,000 81,993,000 Nine Months Ended September 30, 2019 Packaging and Printing Plastics Digital Technology Management Direct Marketing Corporate Total Revenue $ 8,434,000 $ 1,424,000 $ - $ - $ - $ 9,858,000 Depreciation and amortization 675,000 - 24,000 144,000 - 1,000 844,000 Interest expense 76,000 - 6,000 - - 22,000 104,000 Stock based compensation 13,000 - 62,000 - - 256,000 331,000 Net loss from continuing operations (254,000 ) - (224,000 ) (418,000 ) - (1,490,000 ) (2,386,000 ) Capital expenditures 574,000 - 24,000 - - 4,000 602,000 Identifiable assets 9,156,000 3,884,000 899,000 - - 4,611,000 18,550,000 |
Schedule of Disaggregation of Revenue | The following tables disaggregate our business segment revenues by major source: Printed Products Revenue Information: Three months ended September 30, 2020 Packaging Printing and Fabrication $ 2,568,000 Commercial and Security Printing 403,000 Total Printed Products $ 2,971,000 Three months ended September 30, 2019 Packaging Printing and Fabrication $ 1,883,000 Commercial and Security Printing 236,000 Total Printed Products $ 2,119,000 Nine months ended September 30, 2020 Packaging Printing and Fabrication $ 7,631,000 Commercial and Security Printing 774,000 Total Printed Products $ 8,405,000 Nine months ended September 30, 2019 Packaging Printing and Fabrication $ 7,619,000 Commercial and Security Printing 814,000 Total Printed Products $ 8,433,000 Technology Sales, Services and Licensing Revenue Information: Three months ended September 30, 2020 Information Technology Sales and Services $ 24,000 Digital Authentication Products and Services 359,000 Royalties from Licensees 100,000 Total Printed Products $ 483,000 Three months ended September 30, 2019 Information Technology Sales and Services $ 46,000 Digital Authentication Products and Services 307,000 Royalties from Licensees 145,000 Total Printed Products $ 498,000 Nine months ended September 30, 2020 Information Technology Sales and Services $ 65,000 Digital Authentication Products and Services 947,000 Royalties from Licensees 307,000 Total Printed Products $ 1,319,000 Nine months ended September 30, 2019 Information Technology Sales and Services $ 151,000 Digital Authentication Products and Services 857,000 Royalties from Licensees 416,000 Total Printed Products $ 1,424,000 Direct Marketing Three months ended September 30, 2020 Direct Marketing Internet Sales $ 715,000 Total Direct Marketing $ 715,000 Three months ended September 30, 2019 Direct Marketing Internet Sales $ - Total Direct Marketing $ - Nine months ended September 30, 2020 Direct Marketing Internet Sales $ 1,793,000 Total Direct Marketing $ 1,793,000 Nine months ended September 30, 2019 Direct Marketing Internet Sales $ - Total Direct Marketing $ - |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Details Narrative) - USD ($) | Aug. 21, 2020 | Aug. 18, 2020 | May 04, 2020 | Apr. 20, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Aug. 31, 2020 | Jul. 31, 2020 | Mar. 03, 2020 | Dec. 31, 2019 |
Significant Accounting Policies [Line Items] | ||||||||||||||||
Common stock, par value | $ 0.02 | $ 0.02 | $ .02 | |||||||||||||
Number of newly issued shares | ||||||||||||||||
Impairment of goodwill | $ 685,000 | |||||||||||||||
Earn-out payment amount | $ 517,000 | |||||||||||||||
Discontinued operation gain loss | $ 111,000 | |||||||||||||||
Reverse split stock | 1-for-30 reverse stock split | |||||||||||||||
Weighted average outstanding, shares | 3,223,000 | 1,082,000 | ||||||||||||||
Cash | $ 11,645,000 | $ 11,645,000 | $ 1,096,000 | |||||||||||||
Working capital | $ 13,300,000 | $ 13,300,000 | ||||||||||||||
Customer One [Member] | Sales Revenue, Goods, Net [Member] | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Concentration of credit risk, percentage | 21.00% | |||||||||||||||
Customer One [Member] | Accounts Receivable [Member] | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Concentration of credit risk, percentage | 36.00% | |||||||||||||||
Customer Two [Member] | Sales Revenue, Goods, Net [Member] | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Concentration of credit risk, percentage | 16.00% | |||||||||||||||
Customer Two [Member] | Accounts Receivable [Member] | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Concentration of credit risk, percentage | 12.00% | |||||||||||||||
Preferred Stock | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Number of newly issued shares | ||||||||||||||||
Weighted average diluted, assumed conversion of preferred shares | 47,000 | |||||||||||||||
Common Stock [Member] | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Number of newly issued shares | 2,159,000 | 896,000 | 863,000 | 17,000 | 373,000 | 19,000 | ||||||||||
Number of shares converted into common shares | 7,233,000 | |||||||||||||||
DSS Securities, Inc. [Member] | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Equity ownership percentage | 70.00% | |||||||||||||||
HWH Korea [Member] | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Due from related party | $ 774,000 | $ 774,000 | ||||||||||||||
Underwriting Agreement [Member] | Aegis Capital Corp [Member] | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Proceeds from net offering | $ 20,100,000 | |||||||||||||||
Impact BioMedical, Inc. [Member] | Series A Convertible Preferred Stock [Member] | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Equity ownership percentage | 19.99% | |||||||||||||||
Number of shares converted into common shares | 154.32 | |||||||||||||||
Impact BioMedical, Inc. [Member] | Series A Convertible Preferred Stock [Member] | Common Stock [Member] | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Number of shares converted into common shares | 7,232,670 | |||||||||||||||
Impact BioMedical, Inc. [Member] | Share Exchange Agreement [Member] | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Equity ownership percentage | 100.00% | |||||||||||||||
Shares issued under the term of share exchange | 483,334 | |||||||||||||||
Common stock, par value | $ 0.02 | |||||||||||||||
Shares issued price per share | 6.48 | |||||||||||||||
Impact BioMedical, Inc. [Member] | Share Exchange Agreement [Member] | Series A Convertible Preferred Stock [Member] | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Shares issued price per share | $ 1,000 | |||||||||||||||
Number of newly issued shares | 46,868 | |||||||||||||||
AMRE Asset Management Inc. [Member] | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Equity ownership percentage | 52.50% | |||||||||||||||
American Medical Reit Inc. [Member] | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Equity ownership percentage | 93.00% | |||||||||||||||
Sharing Services Global Corp [Member] | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Equity ownership percentage | 17.00% | 20.00% |
Revenue (Details Narrative)
Revenue (Details Narrative) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Reserve for doubtful accounts | $ 23,000 | $ 41,000 |
Notes Receivable (Details Narra
Notes Receivable (Details Narrative) - USD ($) | Nov. 11, 2019 | Oct. 10, 2019 | Oct. 09, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | Apr. 08, 2020 |
Debt instrument interest rate percentage | 1.00% | ||||||
Outstanding principal and interest | $ 529,000 | $ 507,000 | |||||
Debt principal amount | 834,000 | 200,000 | |||||
Property plant and equipment | 4,141,000 | 4,328,000 | |||||
Other intangible assets | 39,475,000 | 935,000 | |||||
Notes Receivable [Member] | |||||||
Property plant and equipment | $ 201,000 | ||||||
Other intangible assets | $ 637,000 | ||||||
Secured Convertible Notes [Member] | |||||||
Convertible debt | $ 200,000 | $ 200,000 | |||||
Debt instrument interest rate percentage | 6.00% | 6.00% | |||||
Debt maturity date | Nov. 11, 2019 | Nov. 11, 2019 | |||||
Newly issued common stock shares percentage | 75.00% | 75.00% | |||||
Century TBD Holdings, LLC [Member] | |||||||
Convertible debt | $ 500,000 | ||||||
Debt conversion percentage | 19.80% | ||||||
Debt instrument interest rate percentage | 6.00% | ||||||
Debt maturity date | Oct. 9, 2021 | ||||||
RBC Life Sciences, Inc [Member] | Second Note [Member] | |||||||
Convertible debt | $ 800,000 | ||||||
Debt instrument interest rate percentage | 10.00% | ||||||
Debt maturity date | Nov. 11, 2024 | ||||||
Outstanding principal and interest | $ 81,575 | ||||||
Newly issued common stock shares percentage | 100.00% | ||||||
Equity ownership percentage | 100.00% |
Business Combination (Details N
Business Combination (Details Narrative) - USD ($) | Aug. 21, 2020 | Mar. 03, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Aug. 18, 2020 | Dec. 31, 2019 |
Common stock, par value | $ 0.02 | $ 0.02 | $ .02 | |||||||||
Debt instrument interest rate percentage | 1.00% | 1.00% | ||||||||||
Debt principal amount | $ 834,000 | $ 834,000 | $ 200,000 | |||||||||
Warrant exercise price per share | $ 0.029 | $ 0.029 | $ 0.029 | |||||||||
Non-controlling interest | $ (307,000) | $ (307,000) | ||||||||||
Issuance of common stock, net, shares | ||||||||||||
Issuance of common stock, net | $ 13,088,000 | $ 6,185,000 | $ 4,054,000 | $ 162,000 | $ 4,887,000 | $ 638,000 | ||||||
Impact BioMedical, Inc. [Member] | Series A Convertible Preferred Stock [Member] | ||||||||||||
Equity ownership percentage | 19.99% | |||||||||||
Public Offering [Member] | ||||||||||||
Initial public offering percentage | 50.00% | 50.00% | ||||||||||
Public Offering [Member] | Maximum [Member] | ||||||||||||
Shares issued price per share | $ 10 | $ 10 | ||||||||||
AMRE Asset Management Inc. [Member] | ||||||||||||
Equity ownership percentage | 52.50% | |||||||||||
Incurred cost | $ 595,000 | |||||||||||
Non-controlling interest | $ 307,000 | $ 307,000 | ||||||||||
American Medical Reit Inc. [Member] | ||||||||||||
Equity ownership percentage | 93.00% | |||||||||||
Singapore eDevelopment Limited [Member] | ||||||||||||
Equity ownership percentage | 82.00% | |||||||||||
Term Sheet [Member] | LiquidValue Asset Management Pte Ltd [Member] | ||||||||||||
Equity ownership percentage | 35.00% | |||||||||||
Term Sheet [Member] | AMRE Tennessee, LLC [Member] | ||||||||||||
Equity ownership percentage | 12.50% | |||||||||||
Term Sheet [Member] | American Medical Reit Inc. [Member] | ||||||||||||
Debt instrument interest rate percentage | 8.00% | |||||||||||
Debt maturity date | Mar. 3, 2022 | |||||||||||
Debt principal amount | $ 800,000 | |||||||||||
Number of warrant to purchase shares of common stock | 160,000 | |||||||||||
Warrant exercise price per share | $ 5 | |||||||||||
Warrant expiration date | Mar. 3, 2024 | |||||||||||
Term Sheet [Member] | AMRE Asset Management Inc. [Member] | ||||||||||||
Number of ordinary shares subscribed | 5,250 | |||||||||||
Common stock, par value | $ 0.01 | |||||||||||
Value of ordinary shares subscribed | $ 53 | |||||||||||
Equity ownership percentage | 52.50% | |||||||||||
Term Sheet [Member] | AMRE Asset Management Inc. [Member] | LiquidValue Asset Management Pte Ltd [Member] | ||||||||||||
Number of common stock shares issues | 2,500 | |||||||||||
Term Sheet [Member] | AMRE Asset Management Inc. [Member] | AMRE Tennessee, LLC [Member] | ||||||||||||
Number of common stock shares issues | 1,250 | |||||||||||
Share Exchange Agreement [Member] | Impact BioMedical, Inc. [Member] | ||||||||||||
Common stock, par value | $ 0.02 | |||||||||||
Number of common stock shares issues | 483,334 | |||||||||||
Equity ownership percentage | 100.00% | |||||||||||
Shares issued price per share | $ 6.48 | |||||||||||
Share Exchange Agreement [Member] | Impact BioMedical, Inc. [Member] | Series A Convertible Preferred Stock [Member] | ||||||||||||
Shares issued price per share | $ 1,000 | |||||||||||
Issuance of common stock, net, shares | 46,868 | |||||||||||
Issuance of common stock, net | $ 46,868,000 | |||||||||||
Consideration value | 50,000,000 | |||||||||||
Back-Solve [Member] | Impact BioMedical, Inc. [Member] | Series A Convertible Preferred Stock [Member] | ||||||||||||
Issuance of common stock, net | 35,187,000 | |||||||||||
Consideration value | $ 38,319,000 |
Business Combination - Schedule
Business Combination - Schedule of Business Acquisition, Pro Forma Information (Details) - Pro Forma [Member] - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Sales | $ 11,517,000 | $ 9,857,000 |
Net Income | $ 1,616,059 | $ (3,223,000) |
Basic earnings per share | $ 0.48 | $ (2.55) |
Diluted earnings per share | $ 0.15 | $ (0.37) |
Investments (Details Narrative)
Investments (Details Narrative) - USD ($) | Sep. 10, 2020 | Aug. 28, 2020 | Jul. 22, 2020 | Jul. 21, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Jul. 25, 2020 |
Warrant exercise price per share | $ 0.029 | $ 0.029 | $ 0.029 | $ 0.029 | ||||||||||
Purchase of warrants | 44,005,182 | 127,179,311 | ||||||||||||
Warrants percentage | 10.00% | |||||||||||||
Unrealized gain loss on investments | $ 2,100,000 | |||||||||||||
Issuance of common stock, net, shares | ||||||||||||||
Number of common stock issued, value | $ 13,088,000 | $ 6,185,000 | $ 4,054,000 | $ 162,000 | $ 4,887,000 | $ 638,000 | ||||||||
Unrealized gains on marketable securities | $ 8,365,000 | |||||||||||||
Acquistion of common shares | 13,957,378 | |||||||||||||
Acquistion of average purchase price | $ 0.06 | $ 0.06 | $ 0.06 | |||||||||||
Sharing Services Global Corp [Member] | ||||||||||||||
Issuance of common stock, net, shares | 11,000,000 | 11,000,000 | ||||||||||||
Number of common stock issued, value | $ 880,000 | $ 880,000 | ||||||||||||
Shares issued price per share | $ 0.08 | $ 0.08 | ||||||||||||
Class A Common Stock Member] | Chan Heng Fai Ambrose Member] | ||||||||||||||
Warrant exercise price per share | $ 0.20 | |||||||||||||
Purchase of warrants | 10,000,000 | |||||||||||||
Issuance of common stock, net, shares | 30,000,000 | |||||||||||||
Warrants outstanding | $ 3,000,000 | |||||||||||||
Sharing Services Global Corp [Member] | ||||||||||||||
Acquistion ownership percentage | 32.20% | 17.00% | 32.20% | 32.20% | ||||||||||
Unrealized gains on marketable securities | $ 6,000,000 | |||||||||||||
Acquistion of intangible assets and goodwill | $ 9,500,000 | $ 9,500,000 | $ 9,500,000 | |||||||||||
Sharing Services Global Corp [Member] | Class A Common Stock Member] | ||||||||||||||
Acquistion ownership percentage | 20.00% | 20.00% | 20.00% | |||||||||||
Issuance of common stock, net, shares | 62,417,593 | 62,457,378 | ||||||||||||
Number of common stock issued, value | $ 11,300,000 | |||||||||||||
Sharing Services Global Corp. [Member] | ||||||||||||||
Acquistion of common shares | 18,500,000 | |||||||||||||
Acquistion of average purchase price | $ 0.08 | $ 0.08 | $ 0.08 | |||||||||||
Singapore, Dollars [Member] | ||||||||||||||
Warrant exercise price per share | $ 0.04 | |||||||||||||
Singapore eDevelopment Limited [Member] | ||||||||||||||
Number of shares owned | 83,174,129 | |||||||||||||
Warrant exercise price per share | $ 0.029 | |||||||||||||
Marketable securities | $ 5,583,000 | $ 5,583,000 | $ 5,583,000 | |||||||||||
Singapore eDevelopment Limited [Member] | Singapore, Dollars [Member] | ||||||||||||||
Warrant exercise price per share | $ 0.04 | |||||||||||||
DSS Securities, Inc. [Member] | ||||||||||||||
Acquistion ownership percentage | 14.90% | |||||||||||||
Number of common stock issued, value | $ 100,000 | |||||||||||||
Outstanding membership interest | 10.00% | |||||||||||||
Option expiration date | Sep. 10, 2022 | |||||||||||||
Acquistion description | The Company's wholly owned subsidiary, DSS Securities, Inc. entered into a corporate venture to form and operate a real estate title agency, under the name and flagging of Alset Title Company, Inc, a Texas corporation ("ATC"). DSS Securities, Inc. shall own 70% of this venture with the other two shareholders being attorneys necessary to the state application and permitting process. ATC have initiated or have pending applications to do business in a number of states, including Texas, Tennessee, Connecticut, Florida, and Illinois. For the purpose of organization and the state application process, the Company's CEO, who is a licensed attorney, has a stated non-compensated 15% ownership interest in the venture. |
Investments - Schedule of Opera
Investments - Schedule of Operating Result (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2020 | Jul. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Net sales | $ 4,169,000 | $ 2,617,000 | $ 11,517,000 | $ 9,857,000 | |||||
Operating loss | (2,389,000) | (1,180,000) | (4,546,000) | (2,291,000) | |||||
Loss before income taxes | 5,366,000 | (1,222,000) | 3,771,000 | (2,386,000) | |||||
Income taxes | |||||||||
Net loss | $ 4,942,000 | $ (906,000) | $ (1,967,000) | $ (1,251,000) | $ (1,031,000) | $ (451,000) | $ 2,069,000 | $ (2,732,000) | |
Sharing Services Global Corp. [Member] | |||||||||
Net sales | $ 21,899,160 | ||||||||
Gross profit | 16,000,134 | ||||||||
Operating loss | (1,146,919) | ||||||||
Loss before income taxes | (1,234,868) | ||||||||
Income taxes | (141,491) | ||||||||
Net loss | $ (1,093,377) |
Short-Term and Long-Term Debt (
Short-Term and Long-Term Debt (Details Narrative) - USD ($) | Aug. 04, 2020 | Jul. 31, 2020 | Mar. 02, 2020 | Jun. 27, 2019 | Oct. 24, 2018 | Dec. 01, 2017 | Sep. 30, 2020 | Dec. 31, 2019 | Mar. 31, 2020 | Jul. 26, 2017 |
Debt Instrument [Line Items] | ||||||||||
Debt interest rate | 1.00% | |||||||||
Monthly payments | $ 529,000 | $ 507,000 | ||||||||
Debt instrument, face amount | $ 834,000 | $ 200,000 | ||||||||
Warrant exercise price | $ 0.029 | $ 0.029 | ||||||||
Equipment Line of Credit [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Equipment borrowings | $ 900,000 | |||||||||
Debt instrument, carrying amount | 0 | |||||||||
Non Revolving Line of Credit Agreement [Member] | Citizens [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit, maximum borrowing amount | 801,000 | |||||||||
Monthly payments | 13,000 | |||||||||
Loan Agreement and Line of Credit Agreement [Member] | Citizens Bank [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit, maximum borrowing amount | $ 900,000 | |||||||||
Interest rate additional rate above LIBOR | 2.00% | |||||||||
Paycheck Protection Program [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt forgiveness rate | 100.00% | |||||||||
LIBOR [Member] | Loan Agreement and Line of Credit Agreement [Member] | Citizens Bank [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate additional rate above LIBOR | 2.00% | |||||||||
Citizens Bank [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit, maximum borrowing amount | $ 800,000 | |||||||||
Interest rate additional rate above LIBOR | 2.10% | |||||||||
Debt instrument, maturity date | May 31, 2021 | |||||||||
Credit facility, amount outstanding | $ 0 | |||||||||
Citizens Bank [Member] | Two Promissory Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 1,110,000 | |||||||||
Citizens Bank [Member] | LIBOR [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate additional rate above LIBOR | 2.00% | |||||||||
Premier Packaging Corporation [Member] | Citizens Bank [Member] | Two Promissory Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, maturity date | Jun. 27, 2029 | |||||||||
Debt interest rate | 4.22% | |||||||||
Monthly payments | $ 7,000 | |||||||||
Debt instrument, face amount | 1,200,000 | |||||||||
Debt instrument, final balloon payment | $ 708,000 | |||||||||
Premier Packaging Corporation [Member] | Non Revolving Line of Credit Agreement [Member] | Citizens [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit, maximum borrowing amount | $ 1,200,000 | |||||||||
Debt interest rate | 2.00% | |||||||||
Plastic Printing Professionals [Member] | Two Term Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, maturity date | Nov. 30, 2023 | |||||||||
Debt interest rate | 5.37% | |||||||||
Monthly payments | $ 14,000 | |||||||||
Guangzhou Hotapps Technology Ltd [Member] | Unsecured Promissory Note [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, maturity date | Oct. 24, 2020 | |||||||||
Unsecured promissory note | $ 100,000 | |||||||||
American Medical Reit Inc. [Member] | Unsecured Promissory Note [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt interest rate | 8.00% | |||||||||
Debt instrument, face amount | $ 200,000 | |||||||||
Warrant exercise price | $ 5 | |||||||||
LiquidValue Development Pte Ltd [Member] | Unsecured Promissory Note [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, maturity date | Mar. 2, 2022 | |||||||||
Warrant exercisable term | 4 years | |||||||||
Premier Packaging, DSS Digital, and AAMI [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 1,072,000 | |||||||||
Debt forgiveness rate | 100.00% |
Lease Liability (Details Narrat
Lease Liability (Details Narrative) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Lease description | The remaining lease terms on our operating leases range from less than one year to approximately four years. |
Lease Liability - Schedule of F
Lease Liability - Schedule of Future Minimum Lease Payments (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2020 | $ 11,000 | |
2021 | 6,000 | |
2022 | 1,000 | |
2023 | ||
2024 | ||
Total lease payments | 18,000 | |
Less: imputed interest | (1,000) | |
Total lease liability | 17,000 | |
Current | 13,000 | $ 123,000 |
Non-current | $ 4,000 | $ 19,000 |
Weighted-average remaining lease term (years) | 9 months 18 days | |
Weighted-average discount rate | 5.40% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 1 Months Ended |
Apr. 30, 2019 | |
Employment Agreement [Member] | Mr. Ronaldi [Member] | |
Employement agreement transaction description | Mr. Ronaldi seeks to recover: (i) $144,657.53 in wages from April 11, 2019 through December 31, 2019; (ii) $769.23 in alleged unpaid based salary for time worked before April 11, 2019; (iii) $15,384.62 in alleged paid time off compensation; (iv) $3,076.93 in alleged unpaid sick time compensation; (v) $26,076.93 in waiting-time penalties; (vi) -$91,000 in unspecified expense reimbursement; (vii) $300,000 in alleged cash bonuses ($100,000 per year) based on DSS's performance in 2017, 2018 and 2019; and (viii) a $450,000 performance bonus based on the result of certain alleged net proceeds from patent infringement litigation. He further claims an interest in any recovery in DSS Technology Management v. Apple, Inc., Case No. 4:14-cf-05330-HSG. The parties are now engaged in discovery. The current deadline for completion of fact discovery is March 12, 2021, and a Note of Issue signaling readiness for trial is due May 28, 2021. |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Sep. 23, 2020 | Aug. 18, 2020 | Jul. 28, 2020 | Jul. 07, 2020 | Jun. 04, 2020 | May 15, 2020 | Apr. 03, 2020 | Feb. 20, 2020 | Feb. 18, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Number of common stock shares issues | ||||||||||||||||||
Common stock, par value | $ 0.02 | $ 0.02 | $ .02 | |||||||||||||||
Preferred stock shares desginated | 200,000,000 | 200,000,000 | 200,000,000 | |||||||||||||||
Preferred stock liquidation per share | $ 1,000 | $ 1,000 | $ 1,000 | |||||||||||||||
Preferred stock liquidation value | $ 47,000,000 | $ 47,000,000 | $ 47,000,000 | |||||||||||||||
Stock compensation expense | $ 216,000 | $ 203,000 | ||||||||||||||||
Basic and diluted earnings per share | $ 0.08 | $ 0.25 | ||||||||||||||||
Number of common stock shares issues, value | $ 13,088,000 | $ 6,185,000 | $ 4,054,000 | $ 162,000 | $ 4,887,000 | $ 638,000 | ||||||||||||
Series A Convertible Preferred Stock [Member] | ||||||||||||||||||
Preferred stock liquidation value | $ 1,000 | |||||||||||||||||
Impact BioMedical, Inc. [Member] | ||||||||||||||||||
Number of authorized shares of preferred stock | 200,000,000 | |||||||||||||||||
Preferred stock par value | $ 0.02 | |||||||||||||||||
Impact BioMedical, Inc. [Member] | Series A Convertible Preferred Stock [Member] | ||||||||||||||||||
Preferred stock shares desginated | 46,868 | |||||||||||||||||
Preferred stock liquidation per share | $ 1,000 | |||||||||||||||||
Preferred stock liquidation value | $ 46,868,000 | |||||||||||||||||
Beneficial ownership percentage | 19.99% | |||||||||||||||||
Conversion price | $ 6.48 | |||||||||||||||||
Conversion shares | 154.32 | |||||||||||||||||
Common Stock [Member] | ||||||||||||||||||
Number of common stock shares issues | 2,159,000 | 896,000 | 863,000 | 17,000 | 373,000 | 19,000 | ||||||||||||
Conversion shares | 7,233,000 | |||||||||||||||||
Number of common stock shares issues, value | $ 43,000 | $ 17,000 | $ 18,000 | $ 7,000 | ||||||||||||||
Common Stock [Member] | Impact BioMedical, Inc. [Member] | Series A Convertible Preferred Stock [Member] | ||||||||||||||||||
Conversion shares | 7,232,670 | |||||||||||||||||
Mr. Heng Fai Ambrose Chan [Member] | ||||||||||||||||||
Accrued salary | $ 114,000 | |||||||||||||||||
Board of Directors Member] | Common Stock [Member] | ||||||||||||||||||
Shares vested | 8,900 | |||||||||||||||||
Share price | $ 0.66 | |||||||||||||||||
Shares restricted stock issued | 5,800 | |||||||||||||||||
Investor [Member] | ||||||||||||||||||
Number of common stock shares issues | 21,000 | |||||||||||||||||
Number of common stock shares issues, value | $ 210,000 | |||||||||||||||||
Chief Executive Officer and the Chairman of the Board [Member] | Common Stock [Member] | ||||||||||||||||||
Shares vested | 20,000 | |||||||||||||||||
Share price | $ 4.48 | |||||||||||||||||
Underwriting Agreement [Member] | Mr. Heng Fai Ambrose Chan [Member] | ||||||||||||||||||
Common stock were remitted in lieu of cash | 11,664 | |||||||||||||||||
Proceeds from net offering | $ 2,000,000 | |||||||||||||||||
Underwriting Agreement [Member] | Underwriter Member] | ||||||||||||||||||
Proceeds from net offering | $ 3,300,000 | $ 6,700,000 | $ 6,200,000 | $ 4,000,000 | ||||||||||||||
Underwriting Agreement [Member] | Underwriter Member] | Common Stock [Member] | ||||||||||||||||||
Number of common stock shares issues | 453,333 | 1,028,800 | 769,230 | 740,741 | ||||||||||||||
Common stock, par value | $ 0.02 | $ 0.02 | $ 0.02 | $ 0.02 | ||||||||||||||
Share issued price per shares | $ 7.50 | $ 6.25 | $ 7.80 | 5.40 | ||||||||||||||
Pre-reverse stock split per share | $ 0.18 | |||||||||||||||||
Underwriting Agreement [Member] | Underwriter Member] | Additional Shares [Member] | ||||||||||||||||||
Number of common stock shares issues | 38,533 | 154,320 | 115,384 | 111,111 |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Disposal of assets, loss | $ 111,000 |
Included One-Time Cash Payment [Member] | |
Consideration paid to sale of assets | 683,000 |
Based on Future Quarterly Gross Revenue [Member] | |
Additional earn-out payment | $ 517,000 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Discontinued Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Inventory | $ 342,000 | ||||
Total current assets | 342,000 | ||||
Property, plant and equipment, net | 732,000 | ||||
Right-of-use assets | 886,000 | 886,000 | 1,081,000 | ||
Current portion of lease liability | 274,000 | 274,000 | 274,000 | ||
Total current liabilities | 274,000 | 274,000 | 274,000 | ||
Long term lease liability | 612,000 | 612,000 | $ 807,000 | ||
Total revenue | 243,000 | $ 916,000 | 1,626,000 | $ 2,591,000 | |
Cost of revenue, exclusive of depreciation and amortization | 382,000 | 503,000 | 1,644,000 | 1,795,000 | |
Selling, general and administrative (including stock based compensation) | 130,000 | 310,000 | 715,000 | 910,000 | |
Depreciation and amortization | 37,000 | 122,000 | 152,000 | 207,000 | |
Impairment of goodwill | 685,000 | ||||
Total costs and expenses | 549,000 | 935,000 | 3,196,000 | 2,912,000 | |
Operating loss | (306,000) | (19,000) | (1,570,000) | (321,000) | |
Interest expense | (7,000) | (9,000) | (21,000) | (24,000) | |
Loss on sale of assets held for sale | (111,000) | (111,000) | |||
Income (loss) before income taxes | (424,000) | (28,000) | (1,702,000) | (345,000) | |
Income tax expense (benefit) | |||||
Income (loss) from discontinued operations | (424,000) | (28,000) | (1,702,000) | (345,000) | |
Printed Products [Member] | |||||
Total revenue | $ 243,000 | $ 916,000 | $ 1,626,000 | $ 2,591,000 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information - Schedule of Supplemental Cash Flow Information (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Supplemental Cash Flow Information [Abstract] | ||
Cash paid for interest | $ 101,000 | $ 128,000 |
Impact of adoption of lease accounting standards | 1,616,000 | |
Gain from change in fair value of interest rate swap derivatives | 7,000 | |
Common stock issued upon conversion of convertible note | 500,000 | |
Equity issued to purchase intangible assets | 145,000 | |
Common A Shares issued for marketing services | 210,000 | |
Common A Shares issued for Impact BioMedical | 3,132,000 | |
Series A Preferred Shares issued for Impact BioMedical | 35,187,000 | |
Long-lived assets acquired through settlement of notes receivable | $ 838,000 |
Segment Information (Details Na
Segment Information (Details Narrative) | 9 Months Ended |
Sep. 30, 2020Integer | |
Segment Reporting [Abstract] | |
Number of operating segment | 4 |
Segment Information - Schedule
Segment Information - Schedule of Operations by Reportable Segment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 4,169,000 | $ 2,617,000 | $ 11,517,000 | $ 9,857,000 |
Depreciation and amortization | 246,000 | 298,000 | 824,000 | 844,000 |
Stock based compensation | 216,000 | 331,000 | ||
Net Income (loss) from continuing operations | 5,366,000 | (1,222,000) | 3,771,000 | (2,386,000) |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 4,169,000 | 2,617,000 | 11,517,000 | 9,858,000 |
Depreciation and amortization | 246,000 | 297,000 | 824,000 | 844,000 |
Interest expense | 29,000 | 48,000 | 101,000 | 104,000 |
Stock based compensation | 132,000 | 273,000 | 216,000 | 331,000 |
Net Income (loss) from continuing operations | 5,366,000 | (1,222,000) | 3,771,000 | (2,386,000) |
Capital expenditures | 2,000 | 102,000 | 602,000 | |
Identifiable assets | 81,993,000 | 18,550,000 | 81,993,000 | 18,550,000 |
Operating Segments [Member] | Packaging and Printing [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,972,000 | 2,119,000 | 8,394,000 | 8,434,000 |
Depreciation and amortization | 165,000 | 228,000 | 584,000 | 675,000 |
Interest expense | 24,000 | 24,000 | 79,000 | 76,000 |
Stock based compensation | 3,000 | 4,000 | 11,000 | 13,000 |
Net Income (loss) from continuing operations | 136,000 | (322,000) | 222,000 | (254,000) |
Capital expenditures | 1,000 | 91,000 | 754,000 | |
Identifiable assets | 10,013,000 | 9,156,000 | 10,013,000 | 9,156,000 |
Operating Segments [Member] | Plastics [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | ||||
Depreciation and amortization | ||||
Interest expense | ||||
Stock based compensation | ||||
Net Income (loss) from continuing operations | ||||
Capital expenditures | ||||
Identifiable assets | 1,209,000 | 3,884,000 | 1,209,000 | 3,884,000 |
Operating Segments [Member] | Digital [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 483,000 | 498,000 | 1,331,000 | 1,424,000 |
Depreciation and amortization | 9,000 | 7,000 | 28,000 | 24,000 |
Interest expense | 2,000 | 2,000 | 9,000 | 6,000 |
Stock based compensation | 7,000 | 20,000 | 37,000 | 62,000 |
Net Income (loss) from continuing operations | 82,000 | 139,000 | (120,000) | (224,000) |
Capital expenditures | 9,000 | 24,000 | ||
Identifiable assets | 657,000 | 899,000 | 657,000 | 899,000 |
Operating Segments [Member] | Technology Management [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | ||||
Depreciation and amortization | 21,000 | 62,000 | 48,000 | 144,000 |
Interest expense | ||||
Stock based compensation | ||||
Net Income (loss) from continuing operations | (36,000) | (203,000) | (325,000) | (418,000) |
Capital expenditures | ||||
Identifiable assets | 1,000 | 1,000 | ||
Operating Segments [Member] | Direct Marketing [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 714,000 | 1,792,000 | ||
Depreciation and amortization | 1,000 | 1,000 | ||
Interest expense | ||||
Stock based compensation | ||||
Net Income (loss) from continuing operations | (1,139,000) | (960,000) | ||
Capital expenditures | 1,000 | 1,000 | ||
Identifiable assets | 1,809,000 | 1,809,000 | ||
Operating Segments [Member] | Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | ||||
Depreciation and amortization | 50,000 | 163,000 | 1,000 | |
Interest expense | 3,000 | 22,000 | 13,000 | 22,000 |
Stock based compensation | 122,000 | 249,000 | 168,000 | 256,000 |
Net Income (loss) from continuing operations | 6,323,000 | (836,000) | 4,954,000 | (1,490,000) |
Capital expenditures | 1,000 | 4,000 | ||
Identifiable assets | $ 68,304,000 | $ 4,611,000 | $ 68,304,000 | $ 4,611,000 |
Segment Information - Schedul_2
Segment Information - Schedule of Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Total Printed Products | $ 2,971,000 | $ 2,119,000 | $ 8,405,000 | $ 8,433,000 |
Total Technology Sales, Services and Licensing | 483,000 | 498,000 | 1,319,000 | 1,424,000 |
Direct Marketing | 715,000 | 1,793,000 | ||
Packaging Printing and Fabrication [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Printed Products | 2,568,000 | 1,883,000 | 7,631,000 | 7,619,000 |
Commercial and Security Printing [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Printed Products | 403,000 | 236,000 | 774,000 | 814,000 |
Information Technology Sales and Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Technology Sales, Services and Licensing | 24,000 | 46,000 | 65,000 | 151,000 |
Digital Authentication Products and Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Technology Sales, Services and Licensing | 359,000 | 307,000 | 947,000 | 857,000 |
Royalties from Licensees [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Technology Sales, Services and Licensing | 100,000 | 145,000 | 307,000 | 416,000 |
Direct Marketing Internet Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Direct Marketing | $ 715,000 | $ 1,793,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Oct. 20, 2020 | Oct. 16, 2020 | Oct. 07, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Aug. 18, 2020 | Dec. 31, 2019 |
Number of common stock shares issues | |||||||||||||
Number of common stock shares issues, value | $ 13,088,000 | $ 6,185,000 | $ 4,054,000 | $ 162,000 | $ 4,887,000 | $ 638,000 | |||||||
Common stock, par value | $ 0.02 | $ 0.02 | $ .02 | ||||||||||
Share based upon a liquidation value | $ 47,000,000 | $ 47,000,000 | $ 47,000,000 | ||||||||||
Series A Convertible Preferred Stock [Member] | |||||||||||||
Share based upon a liquidation value | $ 1,000 | ||||||||||||
Subsequent Event [Member] | |||||||||||||
Common stock, par value | $ 0.02 | ||||||||||||
Share exchange agreement description | The purpose of the meeting is to (1.) To elect eight director nominees to the Company's Board of Directors to hold office until the next Annual Meeting of Stockholders; (2.) To ratify Freed Maxick CPAs, P.C. as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2020; (3.) To provide an advisory vote on executive compensation; (4.) To approve, pursuant to Rule 713 of the NYSE American, the potential issuance of shares of the Corporation's common stock, par value $0.02 per share representing equal to or greater than 20% but not more than 50.99% of presently outstanding stock, issuable upon conversion of our Series A Convertible Preferred Stock, issued by the Company to Global BioMedical Pte. Ltd on August 21, 2020 in accordance with the Share Exchange Agreement dated April 27, 2020, by increasing the beneficial ownership limitation of the Series A Convertible Preferred Stock; and (5.) To approve the reincorporation of the Company from New York to Texas, pursuant to a merger of the Company with and into a newly-formed Texas corporation that will initially be a wholly-owned subsidiary of the Company, resulting in a change in name of the Company from "Document Security Systems, Inc." to "Alset, Inc." | ||||||||||||
Subsequent Event [Member] | Presidio Property Trust, Inc. [Member] | IPO [Member] | |||||||||||||
Number of common stock shares issues | 200,000 | ||||||||||||
Share price per share | $ 5 | ||||||||||||
Number of common stock shares issues, value | $ 1,000,000 | ||||||||||||
Subsequent Event [Member] | Global BioMedical Pte Ltd [Member] | Series A Convertible Preferred Stock [Member] | |||||||||||||
Number of converted shares | 4,293 | ||||||||||||
Common stock, par value | $ 0.02 | ||||||||||||
Number of restricted shares of common shares | 662,500 | ||||||||||||
Share based upon a liquidation value | $ 1,000 | ||||||||||||
Conversion price | $ 6.48 |