DSS Inc. filed SEC Form 8-K: Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
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Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On October 18, 2024, the Audit Committee of DSS, Inc. (the “Audit Committee”) resolved that DSS, Inc.’s (the “Company”) previously issued financial statements, contained within its Annual Report on Form 10-K for the year ended December 31, 2023, originally filed on March 27, 2024 (the “Original Report”), should no longer be relied upon due to errors in such financial statements. Therefore, a restatement of these prior financial statements is required. Accordingly, the Company has restated the aforementioned financial statements by amending its annual report on Form 10-K/A for the fiscal year ended December 31, 2023, on October 22, 2024.
Restatement Background
On May 4, 2023, the Company distributed approximately 280 million shares of Sharing Service Global Corporation (“SHRG”), beneficially held by the Company, in the form of a dividend to the shareholders of the Company’s common stock. Upon completion of this distribution, the Company retained an ownership interest in SHRG of approximately 7%. Effective May 1, 2023, SHRG was deconsolidated from the consolidated financial statements (the “Deconsolidation”). The consolidated statement of operations does not include SHRG activity after April 30, 2023, and the assets and liabilities of SHRG are no longer included within the Company’s consolidated balance sheet. As referenced in the Company’s quarterly report on Form 10-Q for the second quarter of 2023, the Company recorded an approximate $29.9 million loss on deconsolidation. The Company also recorded an increase in accumulated deficit of $18.7 million and an increase in non-controlling interest of $5.1 million, to reflect the reversal of balances as of deconsolidation.
In preparation of the Company’s Form S-3 as well as the September 30, 2024, 10-Q filing, this transaction was revisited and it was determined that loss was unintentionally overstated by approximately $23.5 million driven by the increase in accumulated deficit that should have been recorded as an offset to the initial income statement loss. In addition, the Company has determined that Deconsolidation also requires the recognition of discontinued operations. Thus, management and the Audit Committee have concluded that a restatement of its Annual Report on Form 10-K/A, for the fiscal year ended December 31, 2023, is required.
The information in this Item 4.02 is furnished solely pursuant to Item 4.02. Consequently, such information is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section. Moreover, the information in this Item 4.02 shall not be deemed to be incorporated by reference into the filings of the registrant under the Securities Act of 1933.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DSS, INC. | ||
| October 22, 2024 | By: | /s/Jason Grady |
| Name: | Jason Grady | |
| Title: | Interim Chief Executive Officer | |