DSS Posts Wider Q1 Loss

Despite revenue growth, higher expenses and investment losses weighed on DSS’s quarterly performance.

May 16, 2025

Revenue Moves in the Right Direction

DSS reported a net loss of $5.3 million in Q1 2025, slightly higher than the $5.1 million loss from the same quarter last year. The update offers a clear picture: revenue is up, but so are headwinds. Losses tied to investments, asset sales, and credit exposures weighed heavily on the quarter’s results.

Revenue climbed 28% year-over-year, hitting $5.0 million. Growth came primarily from DSS’s product packaging business, which saw a 30% lift thanks to stronger customer demand and higher volumes. Rental income also saw meaningful traction—up 79% —driven by tenant onboarding at the AMRE LifeCare Pittsburgh site.

Still, other areas didn’t hold up. Net investment income dropped 79% due to multiple loans going into non-accrual. Commission revenue also declined by 27% during a clearing house transition at DSS’s brokerage subsidiary, slowing trading temporarily.

Cost Pressures and Asset Sales Shape the Quarter

Operating expenses came in at $8.7 million, up modestly from last year. The main driver was a $871,000 stock-based bonus awarded to Heng Fai Holdings Limited, contributing to a 67% rise in sales and admin costs. This was a one-time event, but it played a significant role in the loss.

On the asset side, DSS finalized the sale of its Plano, TX property for $9.5 million. The move was strategic, but it also triggered a $684,000 loss. The company also recorded a $930,000 loss on investments, bringing other expenses to $1.6 million for the quarter.

Liquidity Position and Balance Sheet Strategy

Cash stood at $11.0 million as of March 31, with another $6.5 million in marketable securities. DSS is also holding $35.4 million in real estate assets for sale, which it’s actively working to monetize. While the company generated $12.9 million in net cash from investing activities, operating and financing outflows remained negative.

The company flagged going concern risks, given recent losses and cash burn. In response, it’s taking steps to lower expenses and streamline operations across its business lines. Asset sales will continue to play a key role in maintaining liquidity.

Segment Updates and Operational Shifts

DSS operates five business lines:

• Product Packaging


• Biotechnology


• Commercial Lending


• Securities and Investment Management


• Direct Marketing

The packaging segment continues to deliver steady revenue, but lending has introduced challenges. A number of loans have been reserved against due to repayment concerns, including some with related parties.

On the biotech side, DSS increased its R&D spend following the IPO of Impact BioMedical in late 2024. Revenue remains early-stage here, but the company is continuing to invest in product development and commercialization.

In securities, rental income from medical properties has improved, but the company remains exposed to changes in occupancy and financing. Commission revenue is recovering after a brief pause tied to operational changes.

DSS enters the second quarter with a focus on simplification—scaling down non-core assets and staying targeted with capital. The first quarter shows progress on several fronts, but also highlights the need for continued discipline as the company manages through change.