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Company is a JOKE..another losing Q.
COO Jason O'Grady can go on Red Chimp every week, but it wont change the fact that this company can't make money and management/board have no idea what they are doing. It's Chan's sandbox, no one else is allowed.
- lost over $8,000,000 in first quarter
- stock is down over 90%
- printing products division CONTINUES to lose sales. only 1 or 2 customers account for most of the businesses...this division is hurting badly
- Chairman Fai just got another 15,000,000 shares for free
- all of the other divisions are cloaked in mystery
- promises of spin-offs have never come true
- management continues to enrich themselves with absolutely no prospects of providing shareholder ANY value
- where's the CEO Fred Hueszel?
GARBAGE
This is our opinion, go get your own
These actions are almost criminal!!
The chairman and executive team have destroyed this company from a shareholder value POV.
Since these clowns have taken the company over, the shares have gone from a split-adjusted price of $65.00 to $0.39!!
SIXTY-FIVE DOLLARS >>>>> THIRTY-NINE CENTS!!
What a bunch of corporate, boiler-plate bullshit from Hueszel the Puppet and Grady the Lapdog:
“This is a strong vote of confidence from our majority shareholder, Alset EHome International (whose chairman is also Fai Chan, who is ALSO Chairman of DSS),” stated Frank D. Heuszel, DSS CEO. “The further strengthening of our balance sheet with this latest cash infusion will enable us to more rapidly capitalize on the wealth of available opportunities across our diverse business lines.”
“Over the last two years we have worked tirelessly to build a solid foundation for long-term shareholder value creation,” added Jason Grady, COO of DSS. “Now we are embarking the next phase of that strategy as we leverage this foundation to accelerate top line growth and ultimately drive bottom line performance.”
How the SEC isn't looking into this shell game is shocking. Every company involved in these transactions is controlled by Chan....its bombastic.
This is our opinion, go get your own.
What an absolute joke: DSS Enters Quantitative Investment Fund Arena
Morningstar rates all of these junk funds, NEGATIVE with ONE STAR, except one - NEGATIVE with TWO stars.
There's ONE manager for ALL of the funds! This has to be historical. OH, and he started in September.
1000-1 that anyone at DSS even knows what quantitative investing is.
None of the funds have over $6 million in net assets (laughable).
None of the DSS "American First Funds" rank higher than the 98th percentile. Our cat could do better.
All funds have negative investment flows and asset growth.
None of the funds have double-digit 3-year annual returns, almost impossible for an equity fund.
Another terrible joke on shareholders.
Morningstar:
"With only one listed portfolio manager, AmericaFirst Income Fund leaves itself vulnerable to key-person risk. The manager has not yet proven themselves effective at running the strategy, leading to a Below Average People Pillar rating. Rick Gonsalves brings over 14 years of portfolio management experience to the table. However, examining the risk-adjusted performance of the strategies they manage, shareholders have not been served well. The funds average a 1.2-star Morningstar Rating, demonstrating weak risk-adjusted-performance. Isolating the analysis to the fund at hand, Rick Gonsalves has delivered inferior performance, lagging both the category benchmark and average peer over the past 10-year period. Rick Gonsalves has not disclosed any personal investments in the fund, a concern and poor contributor to the rating. A manager's personal investment demonstrates an effort to align interests with shareholders and build a proper incentive structure."
Except for the Morningstar Facts, this is our opinion, go get your own
YouTube VIDEO: "Detecting Dishonest Management: (DSS) Document Security Systems Analysis"
This company has to be one of the biggest flimflams on the street. every single company involved in these funding events is controlled by Chan and run by Hueszel.
do not be surprised at another down-round, it appears they are building in a short to backfill with the next round of shares.
how the SEC or the NYSE has not become involved in this is incredible.
the address of this "bank" (4800 Montgomery lane in Bethesda MD), that is getting $40 million is the address of ALL of Chan's companies, it's not even a bank, it's a general office building with the office of Fan's US attorney Michael Gershon, there are no DSS operating businesses there. all smoke, mirror, vapor, and money stuffed into the pocket of Chan & Co.
name us one thing that Chan has done that favors ANYONE but himself, theres' no shareholder in this equation, never will be. even people on the peripheral knows he's a joke, but they like the gravy train he's providing
please give this deal to a first-year SEC agent that's hungry to make a score.
- this is our OPINION, go get your own
Fai Chan has destroyed this company. We decided to liquidate our position with a very small gain some time ago and we'll never be involved in another company this moron is involved in.
He's not a visionary, he's a clown that uses other people's money to enrich himself. Shame on us for having an ounce of faith in this carney. He's taken everyone for a ride, and we can only hope that karma comes back and delivers harsh and long-enduring retribution.
This is our opinion, go get your own.
Holy Crap...solar farms??? Do these guys know they're about 15 years too late on this?? Solar farms...LOL!!!
The Street thinks this company is a joke and it's reflected in the price and popular opinion.
Company STILL not growing, STILL not profitable, STILL needing to do additional raises. Market cap has grown to over $103 MILLION with massive dilution coming.
REITS, biotech, MLM, crypto, packaging, brand protection, travel agency, securities.
What's next guys...Cable Service? Landscaping? E-Waste? Electric Vehicles?
This company has become an aquarium.
This is our opinion, go get your own.
This is just an outright misleading/incorrect statement in today's press release, isn't it?
March 31, 2021: "Revenue increased 12% to $17.4 million in 2020, up from $15.6 million in 2019."
April 6, 2020: "Revenues for the year ended December 31, 2019, revenue increased 5% to approximately $19.4 million as compared to revenues of $18.5 million for the year ended December 31, 2018."
Oh without a doubt it's broader! But SHRG shareholders aren't going to benefit in any way. DSS already owns 63 million shares and they will own the rest at below $0.30 in our opinion, so there's absolutely no upside to owning SHRG.
DSS, on the other hand, will OWN SHRG revenue and income and thus will benefit from the expansion of sales agents, SKU's and market territories that you are alluding to.
This is our opinion, go get your own.
Well, it's about time they made their move.
DSS jammed a $30 million convertible into the SHRG cap table.
If we had to guess, the note probably converts somewhere around $0.20 - $0.25, which is where SHRG was trading when the note was signed.
At what WE think is the number, $0.225, the note will convert into approximately 133.33 million shares of SHRG that DSS will then own.
Combine that with what DSS currently owns (62.4 million) and you get a total ownership position of 195.7 million.
Total Outstanding shares of SHRG???
196,800,000
Acquisition, DONE. "Passport to Happiness" indeed.
This will add $6MM immediately to the bottom line of DSS, giving it an EPS of around $0.22. Nothing else DSS owns is profitable, so throw a 50 multiple on the EPS and you a price target of around $11.00, in our opinion.
We're long DSS, but we would NOT be long SHRG, the top of SHRG has been determined and we do NOT think it's over $0.30.
Our position in SHRG is ZERO.
This is our opinion, go get your own.
OK, I guess we have to step in and help here. The BUY is NOT SHRG, there will be no material premium to today's prices on SHRG. In fact, it's OVERBOUGHT.
DSS has a $30 million convertible on the company. Do you really think that the note converts at $0.40 $0.50, $0.60??? C'mon now.
OF COURSE NOT!! If we had to guess, the note probably converts somewhere around $0.20 - $0.25, which is where the stock was trading when the note was signed.
At what WE think is the number, $0.225, the note will convert into approximately 133.33 million shares of SHRG that DSS will then own.
Combine that with what DSS currently owns (62.4 million) and you get a total ownership position of 195.7 million.
Total Outstanding shares of SHRG???
196,800,000
Acquisition, DONE.
This will add $6MM immediately to the bottom line of DSS, giving it an EPS of around $0.22. Nothing else DSS owns is profitable, so throw a 50 multiple on the EPS and you a price target of around $11.00, in our opinion.
We're long DSS, but we would NOT be long SHRG, the top has been determined and we do NOT think it's over $0.30.
Our position in SHRG is ZERO.
This is our opinion, go get your own.
"It's just insane how the rich make their money."
We agree whole-heartedly, but all the foot-stomping and screaming won't stop the greed, lack of morals, disloyalty, and all the other wonderful attributes that accompany closed-door negotiations.
DSS has pulled it off to this point, another capital raise, this time $24 million. At some point, shareholders/investors have to make a decision of whether to segregate admiration and respect from the stink and hold for selfish monetary gains. It certainly wouldn't be setting a precedent.
In the market, most of the time it comes down to P&L, no matter how many bodies you have to step over...a shame really, good luck changing it.
With this raise, we assume that the completion of owning 51% of SHRG is not far off. Don't forget, SHRG had NE of $1.85MM and a C&CE balance of over $10.MM last quarter.
Our proprietary modeling projects, with the above assumptions + others (we still think Chan's crypto business is close to being monetized), estimate an internal target price of $14.50 by the 4th quarter of 2021.
For now, we're gonna continue to hold our nose and maintain our long position.
This is our opinion, go get your own.
Simply brilliant. DSS (controlled by Chan) is buying yet ANOTHER one of his own companies (HWH) for $15 million dollars (or stock equivalent). Chan continues to squeeze the crap out of capitalism.
Let's prognosticate. Normally, we would assume a purchase price based on a factor of at least 3-4X revenue, but with this company, everything's an incestual relationship/transaction in our opinion, so it could be nominally different.
We're willing to go with 2X. We'll use SHRG's profit margin of about 7% (which may be a bit low), so we'll go with 10%. Plowing those into the cruncher, we estimate a net operating income of about $750,000, which dictates a 20X purchase price on earnings.
We think that's pretty high (see above), but it comes with the assumption that the HWH product line will be absorbed into the SHRG network, propelling sales and income. We also think that revenue could be greater than $7.5 million. To maintain our opinion, we still think the Company is a slimy outfit, but this deal is not financially horrible IF we are close to our assumptions.
Post-acquisition, it could possibly make DSS..errrr...Alset slightly profitable finally. In addition, integrating this new consumer product line may have an associated revenue effect on the DSS packaging and AC biz, IF Chan involves them at all.
Overvalued at a $38MM market cap, there's still some missing pieces we need to see.
BTW, this stuff's our opinion, do your own research.
Sorry Kid, we were traveling, albeit under uber restrictive conditions of course.
Yea, we're not surprised with the Disney math. They have been quiet so we'll assume they are fundraising. Who in their right mind would give this management team money is a mystery to us. If history is any indication, we'll be getting some kind of blather here soon.
Tell CEO Jason O'Grady he has 2 weeks to get to his $100 million in revenue prediction.
We're not sure what is more appalling, how investors have interpreted this earnings release or how deceiving we feel the company is being in their press release statement of earnings.
CEO Frankie states: “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.
FIRST, the company's core businesses suffered a nine-month OPERATING LOSS of $4.5 million, an INCREASE of over $2.3 million from the same nine months of 2019.
SECOND, It is only when you factor in the UNREALIZED paper gain of their "investment" in SHRG, you get a paper profit of $8.3 million, which is MUCH less now since SHRG has come down from $0.80 to $0.22. Although this investment may foreshadow future opportunities, it has ZERO to do with the company's revenue and income.
Simply put, the company DID NOT EARN $1.20 share from operating their businesses. It's an accounting shell game to say they did without strictly and overtly stating "including unrealized gain from marketable securities", particularly when you are touting earnings in a national press release
THIRD, The company is STILL hemorrhaging losses from operations, and they are STILL at a revenue run rate of less than $20 million since inception, and there's little to no new business/income from their core business units.
The release is very misleading in our opinion and gives shareholders and investors a false sense of growth and execution as their core businesses...WHAT THEY DO...are STILL not growing and are STILL suffering huge losses.
With the addition of Heuszel and Lee to the SRGH board, it certainly looks like the cozy factor is escalating.
We wonders if a shares exchange (1 DSS for 5 SHRG) is in the works?
It would give Chan additional channels to distribute not only product, but also additional shareholders to off-load shares in his group of companies coming to US marketplace.
Today's volume indicates something brewing....or Aegis is giving away a Cancun vacation for most DSS jammed down investors' throat today.
Flip a coin.
Current DSS Chief Operating Officer Jason Grady in a Red Chip Companies Interview posted on YouTube less than 30 days ago (August 23rd):
1.) "By the end of this year, we should have $2.0 - $3.0 MILLION of POSITIVE EBITDA"
2.) "We'd like to have $100 MILLION in revenue...a HUNDRED MILLION DOLLARS PLUS"
Video: "DSS - Rapid Growth Across Diverse Business Segments"
As of June 30, 2020 DSS has a NEGATIVE EBITDA of just under TWO MILLION
As of June 30, 2020 DSS has EIGHT MILLION in revenue.
We wouldn't blame him if discomfort is setting in. Someone had to lay on the tracks.
Yea, this is becoming embarrassing and reeks of desperation. No new accretive contracts/business or positive news for any of their legacy divisions and this appears to be a pretty transparent effort to hype the stock using the tragedy of Covid-19.
We are interested to see what kind of blowback the CEO and COO may be subject to, whether it's regulatory or just pissed of shareholders, regarding their statements of being a $100 million company by year-end 2020.
The SHRG experiment has fizzled, lost boys.
We've got nothing currently positive to say about this shop.
What up BK. We do not believe that the preferred can be integrated with the common to form a basis for market cap. However, as you know, these guys have shown to be contriving - so if there's a way to make it happen - we're sure they are looking into it. We would certainly advise consulting the expertise of a securities attorney for a definitive answer.
A friend of ours sent us the audio file of DSS's virtual presentation at LD Micro.
Wow...Wow...and Wow. We knew it was gonna be a rough ride 15 seconds into the recording.
There's no other way to say it...we're speechless, but we gonna speak. It was virtually embarrassing. It was incredible to hear two alleged corporate executives obviously read from a script and give such a horrific, paper-shuffling, English-language torturing, blathering presentation. The CEO sounded like a cross between Biden and Elmer Fudd. He made sense of the business exactly zero % of the time. We're still not sure what the "Sure Thing Frank" COO said other than a bunch of gibberish and corporate buzz-words. It's hilarious that they are positioning the company as a voracious M&A outfit when the only M&A-ing that they are doing is cleaning up Chan's idea box.
We will give them credit though. The CEO said that "we have reduced our monthly burn from $250,000 to ZERO"...yup, ZERO burn, not spending ANY money on a monthly basis. We didn't think it was possible, but when you don't know what you are doing, how can you be wrong???
We think its incredibly misleading as well when the CEO indicated that Impact Biomedical has assets worth between $380 million-$900 million. That couldn't be farther from the truth. We just don't understand why this company prefers murkiness rather than providing transparency to the market.
Oh yea, but it's good to know that the company is "American-traded".
Chan, maybe you should think twice next time before you wind these guys up and set them free in a public forum. We are recommending to the board that they start looking for more competent, successful leaders. These guys are better off under a big stripey tent.
We really wanted to be good little shareholders and were hoping that these guys were going to do it the right way. Unfortunately, they aren't giving us any logical reasons to stay long. Time to ponder.
We just read the breaking news!!
A two-week-old video of a company spokesman reading a script that has 43 views on YouTube will be airing on (according to our TV Guide):
- The Family Channel tonight at 6 p.m. in between Positively Paula and Cooking 80/20 with Robin Shea
- The Action Channel on Sunday, August 30 at 11 a.m in between Jimmy Houston Outdoors and Jimmy Houston's Adventures
Outstanding!
Ok, we'll say it. After acquiring a company publicly stated to have a value of $382 million (ahem...Destum Partners) or $933 million ("a different valuation firm") - which would dictate a book value of between $82.50 and $201.00 per share - why in this world is the stock only trading at $7.00 a share?
Is this the best-kept secret on Wall Street????
COO predicted this company could be $100 million by year-end. Now they just gotta find $85 million in revenue somewhere.
We can't wait!!
We weren't expecting any records, but whoooo boy this financial performance is pathetic.
Hoping for some kind of sell-off here ($6.50?). This isn't a $35 million company and its clear no one is buying either of the Impact valuation guesses.
Now that the shareholder meeting is over, 10Q filed, we expect some news on subsidiary Decentralized Sharing Systems, Inc. and its intentions with SHRG. Including warrants, DSS owns 72 million shares (invested ~$5.5MM, current market value is $48MM)...but why?
We're gonna speculate and say its some type of joint venture between the two, and yea, yea we know, that's the obvious one but it can't be that that's it...can it?
Well, not to brag but some say we are a combination of DeCaprio charm and Crowe ruggedness...
We never stated that this was an "overvalued scam", although there are plenty that are in that camp that probably know more than we do. (We don't think it's worth even close to $50MM..hmmm)
But as you know, sometimes we buy this company, sometimes we sell this company, sometimes we're long this company -- and sometimes we're short this company. Overall, I'd say we wear white hats with black trim.
We just would appreciate a more "transparent and non-slimy" method of running a pubco so those that don't understand this game (and there's plenty more in that camp) have a better chance of success.
We aim to help, not hinder. If you've been paying attention to the dance floor, we needn't say more.
Freebee: "On May 26, 2020, Impact Biomedical disclosed that it received a valuation of $933 million for this suite of technology from a different independent valuation firm".
Oh well then, from a "different firm"....that's solid.
Apologies. Let us clarify. They paid for the "valuation".
"...Impact Biomedical’s ownership of a suite of antiviral and medical technologies has been valued at $382 million by Destum Partners..."
To your point, the $50MM "purchase price" is not cash, it is the Company's own equity. It could have been any number they picked out of the proverbial hat. Simplified...there's zero material basis for the number at this point.
Lest you forget, these transactions are all occurring in a vacuum, it's just one of Chan's companies moving capital into another one. There's little, if any, actual outside business being done here. In our humble opinion, even the capital being used is the same, last in first out.
We just have to hope that someday, somewhere over the rainbow, bluebirds will fly.
Nothing surprises us anymore, but it's hard to believe anyone would think this baked-in merger would create any significant upside in the short-term. B-Kid does have a point to some extent, and we said weeks ago that these valuation numbers were Disney-land (#8174). Certainly, at this point, Impact isn't close to being worth the number that was paid for, $400 million or so. It's like saying "if we build a bridge to the moon, my cousin said it would be worth $20 trillion". At some point reasoning and common financial sense has to be utilized here. How are all you Robinhood boys and girls doing today?
Don't worry, we're sure that these guys have more coconut shells up their sleeves.
From August 2, 2020 LD Micro Newsletter:
Sharing Services Global Corp (SHRG) +73%.
Multi Level Marketing Can Achieve Higher Multiples Because of Covid.
Story
PLANO, Texas, July 13, 2020 (GLOBE NEWSWIRE) -- via NetworkWire – Sharing Services Global Corporation (OTCQB: SHRG) (“the Company”), formerly Sharing Services, Inc., announces revenues of $131.4 million for the fiscal year ended April 2020, representing a 53% increase of approximately $45.5 million compared to fiscal year 2019 revenues of $85.9 million
There’s always been a stigma associated with multi-level marketing. When you go to the FTC website it describes the danger of MLM right next to Pyramid Schemes. So when lawsuits dominated SHRG’s newsflow in 2019 it took the Company straight down even though it was growing fast by selling its own line of happy infused coffee and wellness products. From start up revenue in 2017 to the $131M posted above in two years from direct sales, and 24,000 distributors.
SHRG went up 73% this week, but it’s really been up all month. Covid is remaking the economy. Generational disruption enacted within months. Including jobs that will never come back. Suddenly, multi level marketing offers millions a new career. Suddenly, MLM becomes seen as an important job creator. Companies like Sharing Services will be attracting thousands of new distributors to their platform. New job creation completely centered around mobility. Meaning that SHRG could be considered a growth company, instead of misunderstood deep value. An understanding that could be worth another exponential move because Sharing Services is one of the only sub-dollar stocks I’ve ever seen that is solidly profitable. (Even after $5M in litigation charges.)
(Analyst Disclosures: None, no ownership or relationship with Company.)
(LD Micro Disclosure: The company has compensated us in the past, to present at one of our conferences.)
Ok, assume your positions! If this raise follows the MO of the last FOUR, we should expect a very exciting PR sometime within the next week or so. This will give the handful of preferred investors a chance to get out of the position they took in this current offering and have dry powder for the next one. Brilliant.
We can't imagine it will be another COVID release, but if it ain't broke, don't fix it! There's scuttlebutt that maybe we'll have some Direct Marketing updates.
Speaking of DM, we still love SHRG, a company that DSS looks to have fully committed to and is up almost 400% since our initial comments/purchase. SHRG issued a recent 8-K that from the way we interpret it, reduces their O/S by 17,500,000. We are firm in our opinion that the stock should trade at or near our 2021 valuation of $1.00-$1.25 by year-end.
We thought the stock would react more positively to the recent announcement of the "new contract", but our speculation is that it's just a renewal of an existing contract and not accretive to current revenue. This explains the retreat in price. It would have been nice if the company could have indicated the nature of the contract, but we are not surprised at the vagueness.
If this is true, and we have no reason to believe it is not, the packaging division's future has been saved from the gallows, in our opinion.
No, of course, they don't add up...and they aren't supposed to. All these numbers are fiction and vague, there's no basis for them other than projecting "what-ifs".
The valuations are just being used as fodder to support the Impact Bio stock offering coming. We, for one, certainly aren't taking them seriously. If would be nice if they would identify this mystery "different independent valuation firm"....and Bigfoot.
None of the technologies are even close to commercialization. The two that they mention are still being tested in-vitro, they don't even know if they will survive outside the test tube.
A little research indicates that Detsum Partners hasn't been doing much for over two years...not exactly a confidence builder.
As expected, do a capital raise, issue some BS press release about COVID, and flip the past two deals in one day. This is the second time they have successfully leveraged a pandemic. You gotta hand it to Chan, he knows how to exploit a crisis.
Regardless, and as we have publicly stated, this stock can be traded profitably no matter what the ethics or intentions may be.
The flip is over, the stock will now decline to a normal trading range...nothing to see here folks, move along.
Time for another shower.
We believe the shelf will be used to fund these new divisions of the Company:
1. DSS Blockchain Security, Inc
2. Decentralized Sharing Systems, Inc.
3. DSS Securities, Inc.
4. DSS BioHealth Security, Inc.
5. DSS Secure Living, Inc.
As well as enrich himself through the exercise of Singapore eDevelopment warrants.
We also believe that they will eventually sell off the Packaging and the Anti-Counterfeiting divisions. Based on SEC filings, each of these divisions is basically being kept alive by one customer, and based on past performance, there's very little upside to either.
Rarely are we surprised, but these guys at DSS are somethin' special when it comes to slimy. This is the THIRD down-round that these guys have done...it's just astounding. In our opinion, these down-rounds are capable because they are using the same money from the same investors. This isn't hard to figure out, and DSS doesn't seem to give a shit.
How'd you like that press release last night at 9:00 pm?
Or how about this neat little trick described in the 8-K yesterday?
"On June 25, 2020, the Company exercised the remaining portion of the warrant, pursuant to which the Company acquired 44,005,182 ordinary shares of SED. The total consideration paid by the Company for these ordinary shares was approximately US $1.34 million."
That's $1.34 million back into the pockets of Chan for free.
After giving effect to the warrant exercise, the Company now owns 127,179,311 ordinary shares of SED, representing approximately 10% of the outstanding shares of SED, and the warrant has been fully exercised. The Chairman of the Company, Mr. Heng Fai Ambrose Chan, is the Executive Director and Chief Executive Officer of SED.
Left pocket to right pocket, right pocket to left pocket Repeat every 3 months.
It appears that every single deal that Chan churns through the DSS NYSE shell, he will reap millions, over and above what his equity position is in all of the deals.
Again, not only do we feel the need to shower after every filing, but we are also flabbergasted that this Company can be such a carcinogen to its shareholder base and there's no pushback or request for accountability. Thank you, ma'am, may I have another?
Lastly, did you forget that these offerings are just pieces of an overall $50 million shelf offering? There's a very good possibility of another $35 million worth of dilution coming.
Finally got some time to watch a couple of the DSS webinars. I did not make it through most of them as the content was pretty hollow/scattered and the technology seemed antiquated..they didn't make a lot of sense. There's very little chance IMO that this old printing press/plastic card technology ever sees the light of day.
I think of even greater concern is that any and all users would be providing sensitive, personal data to what is essentially a Chinese-run company. They'd never misuse that information, would they??? We're not sure how this division survives without, again, Chan coming to the rescue somehow. There have been no new customer announcements in years. Sell the division and put the cash in an index fund.
For now its the Distributed Services and Impact Bio show. We think that an announcement on how some of that new capital is going to be used is just around the corner...
So the fog is starting to clear a little. These observations remain our opinion, as there has been no official info released by DSS or any other credible source (oxymoron).
The newly-formed DSS Decentralized Sharing Services subsidiary looks to officially be RBC Life (rbclife.com) and Chan will be force-feeding products through the DSS anti-counterfeiting funnel (revenue). DSS did report over $500K in revenue from this division in the 1Q, and we just HAVE to believe that Chan really wants to make this MLM work. The health & nutritional market is near and dear to his heart. This leads us to....
DSS continues to accumulate shares of SHRG. However, if you read the filings carefully, it's NOT DSS that continues to accumulate shares of SHRG, it's Decentralized Sharing Services (another spin-off candidate). Is this Chan's way of greasing the skid so SHRG integrates the RBC line of products under its shingle? Speculation abounds, but we think there's huge potential in SHRG at $0.10/share. (see our 5/29 post)
Are you starting to see a potential trend here? Chan brings his companies into the DSS machine, funds them, puts a pretty bow on them, and then looks to potentially spin them out to create independent value, something he could not do effectively in Hong Kong (digital currency next?).
Speaking of Impact Biomedical (DSS Biohealth Security, Inc.). Don't get your britches in a bunch, the $933 million valuation it received from its very, very close friend Detsum Partners is a Disneyland number. It can be any number they want to put on it until we see an approved product on the market. They have several medical technologies in the pipeline, and just need one success to make the anticipated dividend worthwhile.
Something has to pop here to justify the $20 million valuation. A still-failing packaging division and a fledgling anti-counterfeiting workshop ain't gonna impress anyone. The good thing is that the public float is still very reasonable, so any news with balls with leave skid marks.
We could wrong, but we could be right.
We're shareholders and fans of this company. Here's an excerpt from our post last week on the DSS page:
"...There is something going on with DSS and Sharing Services Global (OTCQB: SHRG), we just can't get the pieces together yet. Chan has been accumulating SHRG shares (16MM, currently about 12% of outstanding) and Sharing Services IS a direct marketing firm, so the possibilities here are certainly percolating.
SHRG is on pace for $140MM in sales and profitability. Twelve-month forward-looking net income could be in the range of $10-$12 million or $0.07-$0.085 per share. The stock closed at $0.071 today. Our brows wouldn't rise if SHRG was trading in the $1.00-$1.25 range in late 2020 should current trends continue. It would be nice to see an up-list here."
Why this company is trading at a market cap of $10 million is a mystery to us.
Here you go: https://www.sec.gov/Archives/edgar/data/771999/000149315220009556/xslF345X03/ownership.xml
Also, another quick, personal observation.
"Post current raise, they'll be around 2.8 million out in DSS, plenty of room."
We can't envision any institutions getting involved here, there's just not enough equity available and the company is being run as an oligarchy...not too mention that the board is FAR from "independent".
This will be retail-owned stock only for a while, it'll trade like a fire-hose, IMO. Not a bad thing, as these shares have displayed admirable S/T trading characteristics for some time now.
As expected, the shedding of DSS legacy businesses has begun:
"On May 22, 2020, management of Document Security Systems, Inc. (the “Company”) announced that it had committed to a restructuring plan to further reduce its operating expenses in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its potential permanent impact on the Company’s plastics business. As part of this restructuring, the management of the Company has decided to exit its plastic printing business line, which it operates under Plastic Printing Professionals, Inc. (“DSS Plastics”), a wholly-owned subsidiary of the Company, and to fully impair its goodwill related to DSS Plastics. The Company expects the exit of this business line to be completed during fiscal 2020."
Full filing here: https://www.sec.gov/Archives/edgar/data/771999/000149315220010164/form8-k.htm
The anti-counterfeiting businesses and packaging divisions may survive here, but the leash is short. Chan needs to see some positive cash flow here soon. The packaging division is floundering with ZERO growth over the past several years and the majority of their business coming from one customer. The DSS security/technology division is over 15 years old and still does under $500,000 a quarter. Hell, the new Direct Marketing business that Chan just dropped in did $573,000 last quarter.
Chan will have to force feed these two struggling divisions or cut 'em loose. Not sure he's much of a babysitter these days.
We think there's gonna be over $2.5 million from the new offering that goes to the newly-formed DSS Decentralized Sharing Services subsidiary.
Two of Decentralized’s divisions include HWH World, Inc. (a product sourcing and distribution company), and RBC Life International, Inc., or RBC (a health and wellness product company that utilizes the direct selling model of independent contractors as the sales force). Both Chan companies, as you would expect.
There is something going on with DSS and Sharing Services Global (OTCQB: SHRG), we just can't get the pieces together yet. Chan has been accumulating SHRG shares (16MM, currently about 12% of outstanding) and Sharing Services IS a direct marketing firm, so the possibilities here are certainly percolating.
SHRG is on pace for $140MM in sales and profitability. Twelve-month forward-looking net income could be in the range of $10-$12 million or $0.07-$0.085 per share. The stock closed today at $0.071 today. Our brows wouldn't rise if SHRG was trading in the $1.00-$1.25 range in late 2020 should current trends continue. It would be nice to see an up-list here.
What does that mean for DSS? Who knows, but we gotta believe Chan can do the same number-crunching as us.
Gotta catch an Uber, later.
Disclosure: We have long positions in both companies - and for what its worth, we feel most of the future dilution will take place in the DSS equity. Post current raise, they'll be around 2.8 million out in DSS, plenty of room.
DSS files for $5MM offering, so 25-30% dilution is imminent. No surprise here, the company has officially become a vehicle for Chan to create value for all of his fledgling HK companies. We feel it certainly won't be the last.
The Offering doc states Use of Proceeds as:
(1) the development and growth of our new business lines and acquisition opportunities,
(2) the Company’s general corporate and working capital needs, and
(3) costs related to the closing of unprofitable business lines and facilities. (well, according to the last 10-Q, NONE of the current business lines are profitable)
We estimate that at least $3.2 million of the net proceeds from this offering will be invested into the growth and development of our new business lines. (as mentioned in the filing, Decentralized Sharing Systems and DSS Securities)
We estimate that approximately $1.0 million of the net proceeds from this offering will be used for general corporate and working capital needs. (executive salaries)
Further, we anticipate using approximately $400,000 of the proceeds to pay for costs related to the closing of unprofitable business lines and facilities, including those permanently impacted by the pandemic shut down.
Unfortunately, it appears as though Chan's MLM and digital securities businesses will be receiving most of the financial attention with the DSS legacy businesses are in deep trouble.
None appear to be too profitable, especially the West Coast operations.
IMO, the Plastics Division goes first followed by the Packaging Division. The anti-counterfeiting subsidiary will remain, but will need a big assist from Chan's MLM operations to be retained long-term.
The acquisition of 12.0%+ equity in SHRG is also an intriguing situation to watch. The last 10-Q showed over $500,000 contribution from direct selling efforts, a market that Chan appears to be smitten with.
There remains only one slippery hand on the rudder here.