By Lisa Thompson
NYSE:DSS
READ THE FULL DSS RESEARCH REPORT
On December 23, 2021, a subsidiary of DSS (NYSE:DSS) entered into an agreement with Sharing Services Global Corporation providing for an investment of up to $3 million in exchange for 50 million shares of common stock, and warrants to purchase up to 50 million shares. The warrants have a term of five years and are exercisable immediately, at $0.063. Now DSS owns 59.6% shares of the class A common stock of Sharing and will now consolidate its financials with DSS as of that date.
Sharing Services has recently been struggling to get back to profits after a loss of a significant chunk of business due to the departure of its founder after DSS invested in the company. If we merely take the last quarter of Sharing (ending September 30, 2021) and annualize it and add it to our former estimate for 2022 of DSS, we now reach $70 million in sales for 2022 with an increased loss. Direct Marketing is now expected to be 67% of 2022 total revenues. We expect that merging the direct sales business will result in synergies and reduced combined expenses. It may be until DSS reports Q1 2022 before we see how the combination has affected the income and balance sheet of DSS.
Balance Sheet
On September 30, 2021 the company had $69 million in cash, working capital of $84 million and debt of $7.2 million. At quarter end it owned $6.5 million in real estate as well as $9.2 million in marketable securities (including 127,179,311 shares of Alset International Limited (SGX:40V.SI) worth $5.1 million) plus its investment in Sharing Services Global (OTC:SHRG). After the quarter ended DSS also bought the three hospitals valued at $62 million using $13.5 million in cash and bought the additional $3 million of stock in SHRG. Its current enterprise value is approximately $8 million given its approximate current cash position.
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