RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

12 Months Ended

Dec. 31, 2021

Accounting Changes and Error Corrections [Abstract]

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

NOTE 2 – RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

The Company has restated the accompanying financial statements for the year ended December 31, 2021, along with certain notes to such restated financial statements. The adjustments recorded were related to the correction of an error identified by management. The nature and impact of this adjustment on the Company’s previously issued financial statements is summarized as follows and the effects by impacted line items are detailed in the tables below. Impacted amounts and associated disclosures are restated within the accompanying notes to the financial statements.

The Company’s Premier Packaging subsidiary relocated to a new manufacturing and warehouse facility in March 2022 resulting in a consolidation of its warehousing function from its previous manufacturing facility and multiple third-party locations. Due to this relocation, Premier Packaging performed a physical count of its inventory as of June 30, 2022, which is in addition to its annual inventory physical count that took place beginning on December 30, 2021 and concluded on January 1, 2022 for inclusion in its December 31, 2021 financial statements. As a result of this count, abnormal adjustments from the physical count to the recorded values within the Company’s ERP system were identified. Upon further investigation, it was discovered that several unintentional errors were made when converting the inventory quantities into the unit of measure in the Company’s ERP system for inclusion in the December 31, 2021 financial statements. The resulting errors accumulated to an overstatement of Premier Packaging’s inventory by approximately $2,119,000 and its cost of revenue excluding depreciation and amortization to be understated by approximately $2,119,000. Management and the Audit Committee of the Company has concluded that restatement of its December 31, 2021 financial statements, filed on March 31, 2022, is required.

The following tables summarize the effect of the restatement on each financial statement line items as of the December 31, 2021

DSS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

	As Previously Reported			Adjustments			As Restated
Consolidated Balance Sheets as of December 31, 2021
Inventory	$	10,380,000		$	(2,119,000	)	$	8,261,000
Total current assets		82,424,000			(2,119,000	)		80,305,000
Total assets		284,826,000			(2,119,000	)		282,707,000
Accumulated deficit		(132,384,000	)		(2,119,000	)		(134,503,000	)
Total stockholders’ equity		200,304,000			(2,119,000	)		198,185,000
Total liabilities and stockholders’ equity		284,826,000			(2,119,000	)		282,707,000
Consolidated Statements of Operations Income (Loss) for the year ended December 31, 2021
Cost of revenue, exclusive of depreciation and amortization	$	12,271,000		$	2,119,000		$	14,390,000
Total costs and expenses		41,684,000		$	2,119,000			43,803,000
Operating loss		(21,409,000	)	$	(2,119,000	)		(23,528,000	)
(Loss) income from continuing operations before income taxes		(38,082,000	)	$	(2,119,000	)		(40,201,000	)
(Loss) income from continuing operations		(34,050,000	)	$	(2,119,000	)		(36,169,000	)
Net (loss) income		(31,921,000	)	$	(2,119,000	)		(34,040,000	)
Net (loss) income attributable to common stockholders		(31,000,000	)	$	(2,119,000	)		(33,119,000	)
Basic earnings per share		(0.64	)		(0.04	)		(0.68	)
Diluted earnings per share		(0.64	)		(0.04	)		(0.68	)
Consolidated Statements of Cash Flows for the year ended December 31, 2021
Net (loss) income from continuing operations	$	(34,050,000	)	$	(2,119,000	)	$	(36,169,000	)
Inventory		(8,425,000	)		2,119,000		$	(6,306,000	)
Consolidated Statements of Changes in Stockholders’ Equity for the year ended December 31, 2021
Net loss, accumulated deficit	$	(31,000,000	)	$	(2,119,000	)	$	(33,119,000	)
Accumulated deficit		(132,382,000	)	$	(2,119,000	)	$	(134,501,000	)