DSS Reports Record $5.4M Net Income, $1.20 per Share, in Third Quarter 2020
October 26 2020 - 9:23AM
Document Security Systems, Inc. (“DSS” or the “Company”) (NYSE
American: DSS), a multinational company operating businesses
focusing on brand protection technology, blockchain security,
direct marketing, healthcare, real estate, and securitized digital
assets, today announced its financial results for the third quarter
ended September 30, 2020.
“This was a truly transformational quarter for
DSS with a $1.20 per share in net income from continuing operations
and shareholder equity increasing nearly five-fold to $73.3
million,” stated Frank D. Heuszel, CEO of DSS. “We also
demonstrated our vision of sharing the economic benefits of our
success with our shareholders in the third quarter, after
completing the acquisition of Impact BioMedical, by declaring a
special share dividend. With multiple multi-million-dollar contract
wins, game-changing research and development collaborations and
partnerships, and a track record of execution, I believe we are
well positioned to accelerate growth in the quarters ahead.”
Business Highlights:
- Completed acquisition of Impact
BioMedical.
- Strengthened balance sheet with
addition of $9.9 million from two separate offerings in July,
resulting in cash of $11.6 million as of September 30, 2020.
- Published results from Impact
BioMedical’s in-vitro testing of Equivir and Linebacker against
COVID-19, demonstrating success as a treatment, as well as a
prophylactic protecting the cells from infection by the virus.
Impact BioMedical also demonstrated 10-fold reduction in viral
population of COVID-19 in surface disinfectant efficacy testing of
its proprietary 3F Biofragrance.
- Signed global personal protective
equipment (PPE) exporter as an early adopter of the Company's new
AuthentiGuard as a Service (AGaaS) anti-counterfeiting
technology.
- Launched AGaaS app on The App
Store.
- Premier Packaging subsidiary signed
multi-year contract valued at $3.2 million per annum with one of
world’s largest photography and image sharing companies; total
contract valued at nearly $10 million.
- Impact BioMedical initiated
bioplastics research collaboration with one of the world’s largest
platstics manufacturers to develop five new types of advanced
microbial-resistant plastics.
- Began efficacy testing of
pan-coronavirus vaccine under new wholly owned subsdidiary, Innate
Immune, Inc.
- Expanded board to eight members and
appointed Chan Tung Moe, Group Chief Development Officer of
Singapore Exchange-listed Alset International Limited, as a new
director.
- Increased ownership in Sharing
Services Global Corp. (OTCQB: SHRG) to 62,457,378 class A
common shares, representing 32.2% ownership, as of September 30,
2020.
- Chan Heng Fai, Chairman of DSS,
through Global BioMedical Pte Ltd., converted 4,293 shares of its
Series A Preferred Stock of DSS into 662,500 restricted shares of
the Common Stock of the Company at an above-market conversion price
of $6.48 per share.
- Board of Directors approved special
dividend of two shares of Impact BioMedical for every one share of
DSS common stock held on the Record Date of September 7, 2020,
contingent on effectiveness of a registration statement under the
Securities Act of 1933 to be filed with the Securities and Exchange
Commission.
“We are beginning to execute on our new business
model,” commented Jason Grady, Chief Operating Officer of DSS.
“I am very pleased with our progress and confident that
shareholders will continue to see improvements in our top and
bottom line as we execute on our business strategy.”
Third Quarter
2020 Financial
Highlights
- Revenue for the third quarter of
2020 was $4.2 million, up 59% from $2.6 million in the third
quarter of 2019.
- Printed products segment revenue
was $3.0 million in the third quarter of 2020, up 40% from $2.1
million in the third quarter of 2019.
- Technology sales, services, and
licensing segment revenue was $483,000, down 3% from the prior year
period.
- Direct marketing revenue increased
$715,000 in the third quarter, showing strong growth in the
Company’s entrance into the direct marketing industry and its
associated opportunities.
- Net income from continuing
operations during the third quarter of 2020 increased to $5.4
million, or $1.20 per share, up from a net loss from continuing
operations of approximately $1.2 million ($1.53 per share) during
the third quarter of 2019. The increase in net income during the
three months ended September 30, 2020 as compared to the same
period in 2019 primarily reflect the company’s unrealized gains on
its marketable securities of $7.8 million.
- Costs and expenses for the third
quarter of 2020 totaled $6.6 million, as compared to $3.8 million
during the same period of 2019, driven by increases in sales,
marketing, general and administrative expenses, along with an
increase in professional fees primarily driven by increase in
consulting fees incurred by the Direct Marketing business segment
and acquisition activities.
- Stockholders’ equity increased 496%
to $73.3 million as of September 30, 2020, up from $12.3 million at
December 31, 2019.
A full analysis of results for the quarter ended
September 30, 2020 is available in the Company’s Form 10-Q which
was filed on October 23, 2020 and is available on the Company’s
website at www.dsssecure.com or through the
Securities and Exchange Commission’s Edgar database
at www.sec.gov.
About Document Security Systems, Inc.
DSS is a multinational company operating
businesses focused on brand protection technology, blockchain
security, direct marketing, healthcare, real estate, and
securitized digital assets. Its business model is based on a
distribution sharing system in which shareholders will receive
shares in its subsidiaries as DSS strategically spins them out into
IPOs. Its historic business revolves around counterfeit deterrent
and authentication technologies, smart packaging, and consumer
product engagement. DSS is led by its Chairman and largest
shareholder, Mr. Fai Chan, a highly successful global business
veteran of more than 40 years specializing in corporate
transformation while managing risk. He has successfully
restructured more than 35 corporations with a combined value of $25
billion.
For more information on DSS
visit http://www.dsssecure.com.
Investor Contact:
Dave Gentry, CEORedChip Companies
Inc.407-491-4498Dave@redchip.com
Safe Harbor Disclosure
This press release contains forward-looking statements that are
made pursuant to the safe harbor provisions within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements include, but are not limited to,
statements related to the Company's intended use of proceeds and
other statements that are not historical facts. Forward-looking
statements are based on management's current expectations and are
subject to risks and uncertainties that may cause actual results or
events to differ materially from those projected. These risks and
uncertainties, many of which are beyond our control, include: risks
relating to our growth strategy; our ability to obtain, perform
under and maintain financing and strategic agreements and
relationships; risks relating to the results of development
activities; our ability to attract, integrate and retain key
personnel; our need for substantial additional funds; patent and
intellectual property matters; competition; as well as other risks
described in the section entitled "Risk Factors" in the prospectus
and in our other filings with the SEC, including, without
limitation, our reports on Forms 8-K and 10-Q, all of which can be
obtained on the SEC website at www.sec.gov. Readers are cautioned
not to place undue reliance on the forward-looking statements,
which speak only as of the date on which they are made and reflect
management's current estimates, projections, expectations and
beliefs. We expressly disclaim any obligation or undertaking to
release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in our
expectations or any changes in events, conditions or circumstances
on which any such statement is based, except as required by
law.
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