UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X](Amendment No. 1)
Filed by a Party other than the Registrant [ ]
| Filed by Registrant ☒ | Filed by a Party other than the Registrant ☐ |
Check the appropriate box:
| Preliminary Proxy Statement | |
| ☐ | Confidential, for |
| ☐ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material |
DSS, INC.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Feefiling fee (Check the appropriate box):
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Copies to: Darrin M. Ocasio, Esq. Sichenzia Ross Ference, LLP 1185 Avenue of the Americas New York, NY 10036 Tel: (212)-930-9700 |
DSS, INC.
275 Wiregrass Pkwy
6 FRAMARK DRIVE,West Henrietta, New York 14586
VICTOR, NY 14564[ ], 2022
NOTICE OF 2021 ANNUALSPECIAL MEETING OF STOCKHOLDERS
TO BE HELD [______], 2022
[__] A.M. EASTERN STANDARD TIME
To ourOur Stockholders:
The 2021 Annual Meeting of Stockholders of DSS, Inc. (the “Company”) has entered into a Stock Purchase Agreement, dated February 28, 2022 (the “Stock Purchase Agreement”) with Alset EHome International, Inc. (“Alset EHome”) pursuant to which the Company will purchase 100% of the common stock of True Partner International Limited (the “True Partner International Common Stock”) and 62,122,908 shares of common stock, par value $0.01, of True Partner Capital Holding Limited, a Cayman Islands company (the “True Partner Common Stock,” and together with the True Partner International Common Stock, the “True Partner Shares”), “we”from Alset EHome (the “True Partner Transaction”).
Upon consummation of the True Partner Transaction (the “True Partner Closing”), “us”in exchange for the True Partner Shares, the Company will issue to Alset EHome, an aggregate of 17,570,948 newly issued shares of the Company’s common stock, par value $0.02 per share (the “DSS-TP Shares”).
Additionally, on February 25, 2022, the Company entered into an Assignment and Assumption Agreement wherein the Company agreed to purchase a Convertible Promissory Note between Alset International Limited, a Republic of Singapore limited company (“Alset International”) as lender and American Medical REIT, Inc., a Maryland corporation (“AMRE”) as borrower, with a principal amount of $8,350,000 and accrued but unpaid interest of $367,400 through May 15, 2022 (the “Note”), in exchange for the issuance of 21,366,177 shares of common stock of the Company at $0.408 per share, which equals $8,717,400, or “our”the aggregate amount due under the Note (the “AMRE Transaction”).
The Company is holding a special meeting of its stockholders in order to obtain the stockholder approvals necessary to complete the True Partner Transaction, Alset Singapore Transaction and related matters. The Special Meeting will be held on [___________] 2022, at [__] a.m., Eastern Time. The Special Meeting will held at 1400 Broadfield Blvd., Suite 100, Houston, TX 77084 on Tuesday, November 9, 2021,(the “Special Meeting”). The attached Notice of Special Meeting and Proxy Statement describes the business we will conduct at 9:00 am local time, for the purposes of:meeting and provides information about DSS Inc. that you should consider when you vote your shares.
At the Special Meeting, the Company’s stockholders will be asked:
| 1. | Issuance Proposal #1. To | |
| True Partner Transaction; | ||
| 2. | Issuance Proposal #2. To approve, the issuance of up to an aggregate of 21,366,177 shares of the Company’s common stock to Alset International Limited pursuant to the AMRE Transaction; | |
| 3. | Proposal # 3. Ratification of Auditors:To ratify the appointment of | |
| 4. | Proposal # 4. Amendment to Bylaws: Approval of an amendment to DSS, Inc.’s bylaws reducing the number of shares of common stock need for a quorum from a majority to thirty-five percent (35%); | |
| Proposal # 5. Amendment to Certificate of Amendment of Certificate of Incorporation: To | ||
| 6. | Proposal #5. 2020 Equity Incentive Plan Authorized Share Increase: To approve an amendment to the 2020 Employee, Director and Consultant Equity Incentive Plan (“2020 Equity Incentive Plan”) to increase the number of shares of common stock authorized to be issued pursuant to the 2020 Plan from [ ] shares to 20,000,000 shares. |
We also will transact such other business as may properly come before the meeting and any adjournments or postponements of the meeting. The foregoing items of business are described more fully described in the accompanying Proxy Statement accompanying this notice.
Statement. Any other business that may properly come before the Special Meeting will also be conducted. The Board of Directors has fixedis not aware of any other business to come before the close of business on September 14, 2021 as the record date for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting and at any adjournment or postponement thereof. These proxy materials will be mailed on or about September 30, 2021 to the stockholders of record on the record dateSpecial Meeting.
The BoardYour vote is very important, regardless of Directors recommendsthe number of shares you hold. Whether or not you plan to attend the meeting, please carefully review the enclosed Proxy Statement and then cast your vote.
We hope that you vote “FOR” the proposals set forth in this Notice of Annual Meeting of Stockholders and the Proxy Statement.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING: The Company’s Annual Reportwill join us on Form 10-K for the fiscal year ended December 31, 2020, and the Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders, along with any amendments to the foregoing materials that are required to be furnished to stockholders, will be available at www.proxyvote.com.[_________], 2022.
| /s/ Heng Fai Ambrose Chan | ||
Name: | Heng Fai Ambrose Chan | |
| Title: | Chairman of the Board | |
DSS, INC.
275 Wiregrass Pkwy
West Henrietta, NY 14586
Notice of Special Meeting of Stockholders
To Be Held on [_____________], 2022
To Our Stockholders:
NOTICE IS HEREBY GIVEN that the Special Meeting of Stockholders (the “Special Meeting”), of DSS, Inc. (the “Company”) will be held on [__________], 2022, at [__] a.m., Eastern Time, at 1400 Broadfield Blvd., Suite 100, Houston, TX 77084, for the following purposes:
| Date: | [_________], 2022 | |
| Time: | [___] Eastern Standard Time | |
| Place: | 1400 Broadfield Blvd., Suite 100, Houston, TX 77084 | |
| Purposes: | 1. | Issuance Proposal #1: To approve, the issuance of up to an aggregate of 17,570,948shares of the Company’s common stock to Alset EHome pursuant to the True Partner Transaction; |
| 2. | Issuance Proposal #2: To approve, the issuance of up to an aggregate of 21,366,177 shares of the Company’s common stock to Alset International Limited pursuant to the AMRE Transaction; | |
| 3. | Ratification of Auditors: To ratify the appointment of Turner, Stone & Company, L.L.P.as the Company’s independent registered public accounting firm for the fiscal years ending December 31, 2021 and December 31, 2022; | |
| 4. | Approval of an amendment to the Bylaws of DSS, Inc.: To approve the amendment of the Bylaws of DSS Inc. to change the quorum requirement from a majority of the stock issued and outstanding, either in person or by proxy, to at least thirty-five percent (35%) of the stock issued and outstanding, either in person or by proxy; and | |
| 5. | Proposal # 5. Amendment to Certificate of Amendment of Certificate of Incorporation: To approve an amendment to the Company’s Certificate of Amendment of Certificate of Incorporation, as amended (the “Certificate of Incorporation”) to increase the total number of shares of the Company’s authorized common stock; and | |
| 6. | Approval of 2020 Equity Incentive Plan authorized share increase: To approve an amendment to the 2020 Employee, Director and Consultant Equity Incentive Plan (“2020 Equity Incentive Plan”) to increase the number of shares of common stock authorized to be issued pursuant to the 2020 Plan from [ ] shares to 20,000,000 shares. | |
| Record Date: | The Board of Directors has fixed the close of business on April 5, 2022 as the record date for determining stockholders entitled to notice of, and to vote at, the Special Meeting or any adjournment or postponement thereof. |
WHETHER OR NOT YOU PLAN ON ATTENDING THE ANNUAL MEETING IN PERSON, PLEASE VOTE AS PROMPTLY AS POSSIBLE TO ENSURE THAT YOUR VOTE IS COUNTED.+The Company has enclosed a copy of the proxy statement and the proxy card. The proxy statement, the proxy card and the Annual Report are also available on the Company’s website at [___].
Your vote is important. Whether or not you plan to attend the meeting, we urge you to vote as soon as possible by submitting your proxy. You may vote your proxy three different ways: by mail, via the Internet, or by telephone. You may also be entitled to vote in person at the meeting. Please refer to detailed instructions included in the accompanying proxy statement.
| FOR THE BOARD OF DIRECTORS | |
| /s/ Heng Fai Ambrose Chan | |
| Heng Fai Ambrose Chan | |
| Chairman of the Board |
West Henrietta, New York
March [__], 2022
DSS, INC.
275 Wiregrass Pkwy
West Henrietta, NY 14586
Table of ContentsPROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON [____________], 2022
TABLE OF CONTENTS
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DSS, INC.Proxy Solicitation and General Information
6 FRAMARK DRIVEThis Proxy Statement and the enclosed form of proxy card (the “Proxy Card”) are being furnished to the stockholders of DSS, Inc., a New York corporation (the “Company,” “we,” “us” or “our”), in connection with the solicitation of proxies by our Board of Directors for use at the Special Meeting of Stockholders to be held on [__________], 2022, at [ ] a.m., Eastern Time, 1400 Broadfield Blvd., Suite 100, Houston, TX 77084 (the “Special Meeting”). Accordingly, we encourage stockholders to vote either online or by mailing their proxy card as described below.
At the Special Meeting, stockholders will be asked:
| 1. | Issuance Proposal #1: To approve, the issuance of up to an aggregate of 17,570,948shares of the Company’s common stock to Alset EHome pursuant to the True Partner Transaction; |
| 2. | Issuance Proposal #2: To approve, the issuance of up to an aggregate of 21,366,177 shares of the Company’s common stock to Alset International Limited pursuant to the AMRE Transaction; |
| 3. | Ratification of Auditors: To ratify the appointment of Turner, Stone & Company, L.L.P.as the Company’s independent registered public accounting firm for the fiscal years ending December 31, 2021 and December 31, 2022; |
| 4. | Amendment to Bylaws: To approve an amendment to the bylaws of DSS, Inc. to change the quorum requirement from a majority of the stock issued and outstanding, either in person or by proxy, to at least thirty-five percent (35%) of the stock issued and outstanding, either in person or by proxy; |
| 5. | Amendment to Certificate of Amendment of Certificate of Incorporation: To approve an amendment to the Company’s Certificate of Amendment of Certificate of Incorporation, as amended (the “Certificate of Incorporation”) to increase the total number of shares of the Company’s authorized common stock; and |
| 6. | Approval of 2020 Equity Incentive Plan authorized share increase: To approve an amendment to the 2020 Employee, Director and Consultant Equity Incentive Plan (“2020 Equity Incentive Plan”) to increase the number of shares of common stock authorized to be issued pursuant to the 2020 Plan from [ ] shares to 20,000,000 shares. |
| The Board of Directors has fixed the close of business on April 5, 2022 as the record date for determining stockholders entitled to notice of, and to vote at, the Special Meeting or any adjournment or postponement thereof. |
VICTOR, NEW YORK 14564Voting Rights and Votes Required
PROXY STATEMENT FOR THE COMPANY’S
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 9, 2021
Date, TimeThe close of business on April 5, 2022 has been fixed as the record date for the determination of stockholders entitled to receive notice of and Place
We are furnishing this proxy statement (the “Proxy Statement”) to vote at the holdersSpecial Meeting. As of the close of business on such date, we had outstanding and entitled to vote [________] shares of our common stock, par value $0.02 per share. You may vote your shares of common stock in person or by proxy. You may submit your proxy by telephone, via the internet or by completing the enclosed proxy card and mailing it in the envelope provided. Stockholders who hold shares in “street name” should refer to their proxy card or the information forwarded by their bank, broker or other nominee for instructions on the voting options available to them. To vote in person, you may attend the Special Meeting and deliver your completed proxy card electronically or vote your shares in-person during the meeting.
The presence at the Special Meeting, whether in person or by valid proxy, of a majority of the shares of our common stock entitled to vote will constitute a quorum, permitting us to conduct our business at the Special Meeting. The record holder of each share (the “Common Stock”of common stock entitled to vote at the Special Meeting will have one vote for each share so held. Abstentions and broker non-votes will count for quorum purposes.
If a broker that is a record holder of common stock does not return a signed proxy, the shares of common stock represented by such proxy will not be considered present at the Special Meeting and will not be counted toward establishing a quorum. If a broker that is a record holder of common stock does return a signed proxy, but is not authorized to vote on one or more matters (with respect to each such matter, a “broker non-vote”), the shares of common stock represented by such proxy will be considered present at the Special Meeting for purposes of determining the presence of a quorum. A broker that is a member of the New York Stock Exchange is prohibited, unless the stockholder provides the broker with written instructions, from giving a proxy on non-routine matters. Consequently, your brokerage firm or other nominee will have discretionary authority to vote your shares with respect to routine matters but may not vote your shares with respect to non-routine matters.
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Voting of Proxies
Most stockholders have three ways to submit a proxy: by telephone, via the Internet or by completing the enclosed proxy card and mailing it in connectionthe envelope provided. To submit a proxy by telephone or via the Internet, follow the instructions set forth on each proxy card you receive. To submit a proxy by mail, sign and date each proxy card you receive, mark the boxes indicating how you wish to vote and return the proxy card in the postage-paid envelope provided. Do not return the proxy card if you submit your proxy via the Internet or by telephone.
Our Board of Directors recommends a vote FOR the each of the proposals set forth in the Notice of Special Meeting of Stockholders and the Proxy Statement.
Revocation of Proxies
Any proxy given pursuant to this solicitation may be revoked by a stockholder at any time before it is exercised by providing written notice to our Secretary at DSS, Inc., 275 Wiregrass Pkwy, West Henrietta, New York, 14586 by delivery to us of a properly executed proxy bearing a later date, or by attending the meeting and voting in person at the Special Meeting.
Solicitation of Proxies
We will bear the cost of this solicitation, including amounts paid to banks, brokers and other nominees to reimburse them for their expenses in forwarding solicitation materials regarding the Special Meeting to beneficial owners of our common stock. The solicitation will be by mail, with the materials being forwarded to stockholders of record and certain other beneficial owners of our common stock, and by our officers and other regular employees (at no additional compensation). We have not engaged a proxy solicitor to distribute our proxy materials and solicit proxies. Our officers and employees may solicit proxies from stockholders by personal contact, by telephone, or by other means if necessary in order to assure sufficient representation at the Special Meeting.
The Company has engaged Alliance Advisors LLC, to assist in the solicitation of proxies on behalfand provide related advice and informational support, for a services fee, plus customary disbursements, which are not expected to exceed $25,000 in total.
American Stock Transfer & Trust Company is our transfer agent.
American Election Services, LLC shall act as inspector of the Board of Directors (the “Board”) of DSS, Inc. (together with its consolidated subsidiaries (unless the context otherwise requires), referred to herein as “DSS,” “we,” “us,” “our” or the “Company”) for useelections at the 2021 Annual Meeting of Stockholders (the “Annual Meeting”) to be held at 1400 Broadfield Blvd., Suite 100, Houston, TX 77084, on November 9, 2021,Special Meeting.
Questions and any adjournment thereof. On September 30, 2021, the Company effected a merger pursuant to which the Company and its wholly-owned subsidiary, DSS, Inc., merged. Following the merger, the Company was the surviving corporation and the Company’s name was amended from Document Security Systems, Inc. to DSS, Inc.Answers
MattersThe following are some questions that you, as a stockholder of the Company, may have about the Special Meeting, the proposals being considered at the Special Meeting, as applicable, and brief answers to those questions. These questions and answers may not address all questions that may be Consideredimportant to you as a stockholder of the Company. We encourage you to read carefully the more detailed information contained elsewhere in this proxy statement.
| Q: | Why am I receiving this proxy statement? |
The Annual Meeting will be held for the following purposes:
| A: | These proxy materials describe the proposals on which the Company would like you to vote and also give you information on these proposals so that you can make an informed decision. We are furnishing our proxy materials to all stockholders of record entitled to vote at the Special Meeting. As a stockholder, you are invited to attend the Special Meeting and are entitled and requested to vote on the proposals described in this proxy statement. |
| Q: | When and where is the Special Meeting? |
| A: | The Meeting will take place on [________], 2022, starting at [ ], Eastern Time at 1400 Broadfield Blvd., Suite 100, Houston, TX 77084. |
| Q: | Who is entitled to vote at the Special Meeting? |
| A: | Only stockholders who our records show owned shares of our common stock as of the close of business on April 5, 2022, which is the record date for the Special Meeting (the “Record Date”), may vote at the Special Meeting. You will have one vote for each share of the Company’s common stock that you owned as of the Record Date. On the Record Date, we had [__] shares of common stock outstanding. |
| Q: | How are votes counted? |
| A: | Each share of our common stock entitles its holder to one vote per share. |
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| Q: | What am I being asked to vote on? |
| A: | You will be voting on the following proposals. |
| 1. | Issuance Proposal #1. To | |
| 2. | Issuance Proposal #2. To approve, the issuance of up to an aggregate of 21,366,177 shares of the Company’s common stock to Alset International Limited pursuant to the AMRE Transaction; | |
| 3. | Ratification of Auditors: To ratify the appointment of | |
As of the date of this Proxy Statement, the Board is not aware of any other matters that will come before the Annual Meeting. However, if any other matters properly come before the Annual Meeting, the persons named as proxies will vote on them in accordance with their best judgment.
Important Notice Regarding the Availability of this Proxy Statement
We have opted to provide our materials pursuant to the full set delivery option in connection with the Annual Meeting. Under the full set delivery option, a Company delivers all proxy materials to its stockholders. The approximate date on which this Proxy Statement and form of proxy are first being provided to stockholders, or being made available through the Internet for those stockholders receiving their proxy materials electronically, is October 1, 2021. This delivery can be by mail or, if a stockholder has previously agreed, by e-mail. In addition to delivering proxy materials to stockholders, the Company must also post all proxy materials on a publicly accessible website and provide information to stockholders about how to access that website. Accordingly, you should have received our proxy materials by mail or, if you previously agreed, by e-mail. These proxy materials include the Notice of Annual Meeting of Stockholders, Proxy Statement, and proxy card. These materials are available free of charge at www.proxyvote.com
Any stockholder executing a proxy that is solicited has the power to revoke it prior to the voting of the proxy. Revocation may be made by i) attending the Annual Meeting and voting the shares of stock in person, ii) delivering to the Secretary of the Company at the principal office of the Company prior to the Annual Meeting a written notice of revocation or a later-dated, properly executed proxy, iii) signing another proxy card with a later date and returning it before the polls close at the Annual Meeting, or iv) voting again via the internet or by toll free telephone by following the instructions on the proxy card.
GENERAL INFORMATION ABOUT VOTING
Only the holders of record of our Common Stock at the close of business on the record date, September 14, 2021 (the “Record Date”), are entitled to notice of and to vote at the meeting. On the Record Date, there were 79,745,886 shares of our Common Stock outstanding. Stockholders are entitled to one vote for each share of Common Stock held on the Record Date.
Quorum
At all meetings of the Board, the presence at the commencement of a meeting of shareholders of the Company in person or by proxy of shareholders holding of record a majority of the total number of shares of the Company then issued and outstanding and entitled to vote shall be necessary and sufficient to constitute a quorum for the transaction of any business.
When a proxy is properly executed and returned (and not subsequently properly revoked), the shares it represents will be voted in accordance with the directions indicated thereon, or, if no direction is indicated thereon, it will be voted:
| 6. | Approval of 2020 Equity Incentive Plan authorized share increase: To approve | |
| The Board of Directors has fixed the close of business on [ ], 2022 as the record date for determining stockholders entitled to notice of, and to vote at, the Special Meeting or any adjournment or postponement thereof. |
| Q: | How does the Company’s Board of Directors recommend that I vote on the proposals set forth in the Notice of Special Meeting of Stockholders and the Proxy Statement? |
| A: | Our Board of Directors recommends that you vote “FOR” each of the proposals set forth in the Notice of Special Meeting of Stockholders and the Proxy Statement. |
| Q: | Do I have dissenters’ rights if I vote against the proposals? |
| A: | There are no dissenters’ rights available to the Company’s stockholders with respect to any matter to be voted on at the Special Meeting. |
| Q: | What do I need to do now? |
| A: | We encourage you to read this entire proxy statement, and the documents we refer to in this proxy statement Then complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying reply envelope or grant your proxy electronically over the Internet or by telephone, so that your shares can be voted at the Special Meeting. If you hold your shares in “street name,” please refer to the voting instruction forms provided by your broker, bank or other nominee to vote your shares. |
| Q: | What quorum is required for the Special Meeting? |
| A: | A quorum will exist at the Special Meeting if the holders of record of a majority of the issued and outstanding shares of the Company’s common stock are present in person or by proxy. Shares of the Company’s common stock that are voted to abstain are treated as shares that are represented at the Special Meeting for purposes of determining whether a quorum exists; broker non-votes are not counted for the purpose of determining the presence of a quorum at the Special Meeting as the Proposals to be considered would not be evaluated as routine by the NYSE. |
| Q: | Who will tabulate the votes? |
| A: | American Election Services, LLC will assist in the solicitation of proxies and act as inspector of elections at the Special Meeting. |
| Q: | What vote is required in order for the proposals to be approved? |
| A: | The following table sets forth the required vote for each proposal: |
| Proposal | Required Vote | |||
| 1. | To approve, the issuance of up to an aggregate of 17,570,948shares of the Company’s common stock to Alset EHome pursuant to the True Partner Transaction | Majority of the shares present In-person or by proxy | ||
| 2. | To approve, the issuance of up to an aggregate of 21,366,177 shares of the Company’s common stock to Alset International Limited pursuant to the AMRE Transaction; | Majority of the shares present in-person or by proxy | ||
| 3. | To ratify the appointment of Turner, Stone & Company, L.L.P. as the Company’s independent registered public accounting firm for the fiscal years ending December 31, 2021 and December 31, 2022; | Majority of the shares present in-person or by proxy | ||
| 4. | To approve an amendment to the bylaws of DSS, Inc. to change the quorum requirement from a majority of the stock issued and outstanding, either in person or by proxy, to at least thirty-five percent (35%) of the stock issued and outstanding, either in person or by proxy; | Majority of the shares present in-person or by proxy | ||
| 5. | To approve an amendment to the Company’s Certificate of Amendment of Certificate of Incorporation, as amended (the “Certificate of Incorporation”) to increase the total number of shares of the Company’s authorized common stock; and | Majority of the outstanding shares | ||
| 6. | To approve an amendment to the 2020 Employee, Director and Consultant Equity Incentive Plan (“2020 Equity Incentive Plan”) to increase the number of shares of common stock authorized to be issued pursuant to the 2020 Plan from [ ] shares to 20,000,000 shares. | Majority of the shares present in-person or by proxy |
Director nominees must receive a majority of the votes cast on such director’s election, which means that the nominee must receive more “FOR” votes than “WITHHOLD” votes.
| Q: | What are broker non-votes? |
| A: | Broker non-votes are shares held by brokers that do not have discretionary authority to vote on the matter and have not received voting instructions from their clients. Brokers holding shares of record for customers generally are not entitled to vote on “non-routine” matters, unless they receive voting instructions from their customers. Proposals 1 and 2 to approve the issuance of shares pursuant to the described transactions, Proposal 4, to approve an amendment to the bylaws, Proposal 5, to approve an amendment to the Certificate of Incorporation; and Proposal 6, to approve an amendment to the 2020 Equity Incentive Plan to increase the number of shares authorized to be issued under the 2020 Plan, and any adjournments thereof are “non-routine matters.” Proposal 3 to ratify the Auditors is a “routine” matter.
The determination of “routine” and “non-routine” matters is determined by brokers and those firms responsible to tabulate votes cast by beneficial owners of shares held in street name and other nominees. Firms casting such votes have generally been guided by rules of the New York Stock Exchange when determining if proposals are considered “routine” or “non-routine”. When a matter to be voted on is the subject of a contested solicitation, banks, brokers and other nominees do not have discretion to vote your shares with respect to any proposal to be voted on. |
| Q: | How do I vote my shares if I am a record holder? |
| A: | If you are a record holder of shares (that is, the shares are registered with our transfer agent in your name and not the name of your broker or other nominee), you are urged to submit your proxy as soon as possible, so that your shares can be voted at the meeting in accordance with your instructions. Registered stockholders have three ways to submit a proxy: by telephone, via the Internet or by completing the enclosed proxy card and mailing it in the envelope provided. To submit a proxy by telephone or via the Internet, follow the instructions set forth on each proxy card you receive. To submit a proxy by mail, sign and date each proxy card you receive, mark the boxes indicating how you wish to vote and return the proxy card in the postage-paid envelope provided. Do not return the proxy card if you submit your proxy via the Internet or by telephone. |
| Q: | How do I vote my shares if I hold my shares in “street name” through a bank, broker or other nominee? |
| A: | If you hold your shares as a beneficial owner through a bank, broker or other nominee, you should have received instructions on how to vote your shares from your broker, bank or other nominee. Please follow their instructions carefully. You must provide voting instructions to your bank, broker or other nominee by the deadline provided in the materials you receive from your bank, broker or other nominee to ensure your shares are voted in the way you would like at the Special Meeting. Also, if you wish to vote in person at the Special Meeting, you must request a legal proxy from the bank, broker or other nominee that holds your shares and present that proxy and proof of identification at the Special Meeting. |
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| Q: | If my bank, broker or other nominee holds my shares in “street name,” will such party vote my shares for me? |
| A: | For all “non-routine” matters, not without your direction. Your broker, bank or other nominee will be permitted to vote your shares on any “non-routine” proposal only if you instruct your broker, bank or other nominee on how to vote. Under applicable stock exchange rules, brokers, banks or other nominees have the discretion to vote your shares on routine matters if you fail to instruct your broker, bank or other nominee on how to vote your shares with respect to such matters. The proposals to be voted upon by our stockholders described in this proxy statement, except for the ratification of the appointment of our independent registered public accounting firm, are “non-routine” matters, and brokers, banks and other nominees therefore cannot vote on these proposals without your instructions. You should follow the procedures provided by your broker, bank or other nominee regarding the voting of your shares of the Company’s common stock. Without instructions, a broker non-vote will result, and your shares will not be voted, on all “non-routine” matters. |
| Q: | What is a proxy? |
| A: | A proxy is your legal designation of another person, referred to as a “proxy,” to vote shares of stock. The written document describing the matters to be considered and voted on at the Special Meeting is called a “proxy statement.” |
| Q: | If a stockholder gives a proxy, how are the shares voted? |
| A: | When proxies are properly dated, executed and returned, the shares represented by such proxies will be voted at the Special Meeting in accordance with the instructions of the stockholder. If no specific instructions are given on properly-executed returned proxies, however, the shares will be voted in accordance with the recommendations of our Board of Directors as described above. If any matters not described in this proxy statement are properly presented at the Special Meeting, the proxy holders will use their own judgment to determine how to vote your shares. |
| Q: | What happens if I do not vote or return a proxy? |
| A: | A quorum will exist at the Special Meeting only if the holders of record of a majority of the issued and outstanding shares of the capital stock of the Company entitled to vote at the Special Meeting are present in-person or by proxy. Your failure to vote on the proposals, by failing to either submit a proxy or attend the Special Meeting if you are a stockholder of record, may result in the failure of a quorum to exist at the Special Meeting. |
| Q: | What happens if I abstain? |
| A: | If you abstain, whether by proxy or in-person at the Special Meeting, or if you instruct your broker, bank or other nominee to abstain your abstention will not be counted for or against the proposals, but will be counted as “present” at the Special Meeting in determining whether or not a quorum exists. |
| Q: | Can I revoke my proxy or change my vote? |
| A: | You may change your vote at any time prior to the vote at the Special Meeting. To revoke your proxy instructions and change your vote if you are a holder of record, you must (i) vote again on a later date on the Internet or by telephone (only your latest internet proxy submitted prior to the Special Meeting will be counted), (ii) advise our Secretary at our principal executive offices (275 Wiregrass Pkwy, West Henrietta, New York, 14586) in writing before the proxy holders vote your shares, (iii) deliver later dated and signed proxy instructions (which must be received prior to the Special Meeting) or (iv) attend the Special Meeting and vote in-person. If you hold shares in “street name,” you should refer to the instructions you received from your broker, bank or other nominee. Attendance in and of itself at the Special Meeting will not revoke a proxy. For shares you hold beneficially but not of record, you may change your vote by submitting new voting instructions to your broker or nominee or, if you have obtained a valid proxy from your broker or nominee giving you the right to vote your shares, by attending the Special Meeting and voting. |
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| Q: | What should I do if I receive more than one set of voting materials? |
| A: | You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, date, sign and return (or vote via the Internet with respect to) each proxy card and voting instruction card that you receive to ensure that all of your shares are counted. |
| Q: | What is “householding”? |
| A: | We have adopted a procedure approved by the U.S. Securities and Exchange Commission (the “SEC”) called “householding” for stockholders who have the same address and last name and do not participate in electronic delivery of proxy materials. In some instances, only one copy of the proxy materials is being delivered to multiple stockholders sharing an address, unless we have received instructions from one or more of the stockholders to continue to deliver multiple copies. This procedure reduces our printing costs and postage fees. We will deliver promptly, upon oral or written request, a separate copy of the applicable materials to a stockholder at a shared address to which a single copy was delivered. If you wish to receive a separate copy of the proxy materials you may call us at [(___) _________] or send a written request DSS, Inc., 275 Wiregrass Pkwy, West Henrietta New York, 14586, Attention: Secretary. If you have received only one copy of the proxy materials, and wish to receive a separate copy for each stockholder in the future, you may call us at the telephone number or write us at the address listed above. Alternatively, stockholders sharing an address who now receive multiple copies of the proxy materials may request delivery of a single copy, also by calling us at the telephone number or writing to us at the address listed above. |
| Q: | Where can I find the voting results of the Special Meeting? |
| A: | The Company intends to announce preliminary voting results at the Special Meeting and publish final results in a Current Report on Form 8-K that will be filed with the SEC following the Special Meeting. All reports the Company files with the SEC are publicly available when filed |
| Q: | What if I have questions about lost stock certificates or need to change my mailing address? |
| A: | You may contact our transfer agent, American Stock Transfer and Trust Company, LLC at 1 (800) 937-5449 (U.S.) or by email at help@astfinancial.com. |
| Q: | Who can help answer my additional questions about the proposals or the other matters discussed in this proxy statement? |
| A: | If you have questions about the proposals or other matters discussed in this proxy statement, you may contact the Company by mail at DSS, Inc., 275 Wiregrass Pkwy, West Henrietta, New York, 14586, Attention: Secretary. |
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PROPOSAL 1- ISSUANCE PROPOSAL TO APPROVE THE ISSUANCE OF UP TO 17,570,948 SHARES OF COMMON STOCK OF THE COMPANY IN CONNECTION WITH THE TRUE PARTNER TRANSACTION
We are asking our stockholders to approve the issuance of up to 17,570,948 Shares our Common Stock to Alset EHome International, Inc. (“Alset EHome”) pursuant to and upon the terms and subject to the conditions set forth in the Stock Purchase Agreement entered into by the Company and Alset EHome on February 28, 2022.
Pursuant to Stock Purchase Agreement, the Company will purchase a total of 62,122,908 shares of common stock, par value $0.01 (the “True Partner Shares”), of True Partner Capital Holding Limited, a Cayman Islands company ( “True Partner”), from Alset EHome and a subsidiary of Alset EHome (the “True Partner Transaction”).
Upon consummation of the True Partner Transaction (the “True Partner Closing”), in exchange for the True Partners Shares, the Company will issue to Alset EHome, an aggregate of 17,570,948 newly issued shares of the Company’s common stock, par value $0.02 per share (the “DSS-TP Shares”).
About True Partner
True Partner is a Hong Kong and U.S. based fund management group listed on the Hong Kong Stock Exchange with a focus on volatility trading in liquid markets. True Partner and its subsidiaries (together as the “True Partner Group”) manages funds and managed accounts on a discretionary basis using a global volatility relative value trading strategy involving the active trading of liquid exchange listed derivatives (including equity index options, large cap single stock options, as well as futures, exchange traded funds and equities) across major markets (including the U.S., Europe and Asia) and different time zones. The True Partner Group’s trading decisions are supported by our in-house proprietary trading platform (embedded with option pricing and volatility surface models) designed for our specific way of trading and which enables real-time pricing of implied volatilities, quantitative comparisons, risk management as well as speedy execution of trades.
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Rationale for the True Partner Transaction
Following the closing of the True Partner Transaction, True Partner will be integrated into DSS Securities, Inc. (“DSS Securities”), a wholly-owned subsidiary of the Company. In addition, the True Partner Transaction, and the integration of True Partner into DSS Securities, will greatly enhance the portfolio of the Finance and Asset Management Division of the Company and will allow the Company’s Securities Division to significantly expand its asset management service and capability.
Stockholder Approval Requirement
Our common stock is listed on the NYSE and, as a result, we are subject to the rules of the NYSE. We believe that the Exchange Offer will result in the issuance of more than 20% of our currently outstanding shares of common stock to a related party. As a result, stockholder approval of the issuance is required by Section 312.03 of the NYSE Listing Company Manual. Section 312.03 of the NYSE Listed Company Manual requires an issuer to obtain stockholder approval prior to the issuance of common stock, or of securities convertible into or exercisable for common stock, in any transaction or series of related transactions, if (i) the common stock has, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of such stock or securities convertible into or exchangeable for common stock or (ii) the number of shares of common stock to be issued is, or will be upon issuance, equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of common stock or securities convertible into or exercisable for common stock.
Stockholder approval of this Proposal No. 1 will constitute stockholder approval for purposes of NYSE Section 312.03.
Effect of the Issuance Proposal No. 1 on Current Stockholders
If the Issuance Proposal No. 1 is adopted, the issuance of such DSS-TP Shares would result in dilution to our stockholders, and would afford our stockholders a smaller percentage interest in the voting power, liquidation value and aggregate book value of the Company.
Interests of Certain Persons In Matters to be Acted Upon
Mr. Heng Fai Ambrose Chan, our director and Executive Chairman, is also Chairman of the Board, Chief Executive Officer, and the largest beneficial owner of the outstanding shares of Alset EHome. As a result, Mr. Chan has an interest in this Proposal 1. Upon the issuance of DSS-TP Shares, Mr. Chan will beneficially own 43,749,580 shares or approximately 43% of the Company’s common stock.
Change of Control of the Company
Currently, Mr. Chan, our Director and Executive Chairman and the Chairman of the Board and Chief Executive Officer of Alset EHome, beneficially owns 26,178,632 or 31.3% of our outstanding common stock. Pursuant to Proposal I, the Company will issue 17,570,948 shares of the Company’s common stock to Alset EHome, and pursuant to Proposal II, the Company will issue 21,366,177 shares to Alset International.
Following the issuance of the shares pursuant to both of the Issuance Proposals, Mr. Chan will beneficially own 65,115,757 or approximately 53% of the Company’s outstanding common stock. Accordingly, the transactions described in the Issuance Proposals herein will result in a change of control of the Company.
Required Stockholder Vote and Recommendation of Our Board of Directors
Proposal 1 requires the affirmative vote of a majority of the votes castshares of our common stock present and in person or by proxy at the meeting for this proposal. AbstentionsMeeting and broker non-votes, if any, are notentitled to vote thereon as of the Record Date, provided that a quorum is present. An abstention is effectively treated as votesa vote cast and therefore will have no effect on this proposal. A broker may vote on the ratification of the independent registered public accounting firm if a beneficial owner does not provide instructions; therefore, no broker non-votes are expected to exist in connection withagainst this proposal.
The advisory vote on executive compensation will be decided by the affirmative vote of a majority of the votes cast on this proposal at the meeting. However, the stockholder vote on this matter will not be binding on our Company or the Board of Directors, and will not be construed as overruling or determining any decision by the Board on executive compensation.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
Abstentions and Broker Non-Votes
Broker Non-Votes: If you hold your shares through a bank, broker or other nominee and do not provide voting instructions to that entity, it may vote your shares only on “routine” matters. For “non-routine” matters, the beneficial owner of such shares is required to provide instructions to the bank, broker or other nominee in order for them to be entitled to vote the shares held for the beneficial owner. The proposed ratification of the appointment of Freed Maxick CPA, P.C. as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021 is considered a “routine” matter. Accordingly, brokers are entitled to vote uninstructed shares only with respect to the ratification of the appointment of Freed Maxick CPAs, P.C as our independent registered public accounting firm.
If you hold your shares in street name, it is critical that you cast your vote if you want it to count on all matters to be decided at the Annual Meeting.
Abstentions: Abstentions will be counted for purposes of determining whether a quorum is present for the Annual Meeting and will not count as votes cast, and therefore do not affect the vote outcome.
***
You can contact our corporate headquarters, at (585) 500-4669, or send a letter to: Investor Relations, DSS, Inc., 6 Framark Dr., New York, Victor, New York 14564, with any questions about proposals described in this Proxy Statement or how to execute your vote.
“FOR” THIS PROPOSAL NO. 1 — ELECTION OF DIRECTORS1.
Seven directors are to be elected at the Annual Meeting to serve until the next annual meeting of the Company’s stockholders. Unless otherwise instructed, the persons named in the accompanying proxy intend to vote the shares represented by the proxy for the election of the nominees listed below. Although it is not contemplated that any nominee will decline or be unable to serve as a director, in such event, proxies will be voted by the proxy holder for such other persons as may be designated by the Board of Directors, unless the Board of Directors reduces the number of directors to be elected.
PROPOSAL NO. 2- ISSUANCE OF UP TO AN AGGREGATE OF 21,366,177 SHARES OF THE COMPANY’S COMMON STOCK TO ALSET INTERNATIONAL LIMITED PURSUANT TO THE AMRE TRANSACTION
The following table setsProposal
We are asking our stockholders to approve the issuance of up to 21,366,177 Shares our Common Stock to Alset International Limited (“Alset International”) pursuant to and upon the terms and subject to the conditions set forth in the nominees for directorsAssignment and Assumption Agreement entered into by the Company and Alset International on February 25, 2022.
Pursuant to Assignment and Assumption Agreement, the BoardCompany will purchase the Convertible Promissory Note issued by American Medical REIT, Inc. with a principal amount of Directors. Certain biographical information about the nominees as$8,350,000 and accrued but unpaid interest of $367,400 through May 15, 2022 (the “Note”) from Alset International (the “AMRE Transaction”).
Upon consummation of the Record Date can be found above inAMRE Transaction, (the “AMRE Closing”) The Company will issue Alset International, an aggregate 21,366,177 shares of common stock of the section titled “Directors, Executive Officers and Corporate Governance.”
Company, at a price of $0.408 per share (the “DSS-Alset Shares”).
Nominees for DirectorsAbout American Medical REIT, Inc.
AMRE provides financing solutions to leading medical operators by acquiring licensed patient treatment facilities in various communities and delivering reliable, secure, and competitive cash returns to our investors. AMRE focuses on credit worthy single-tenant, single property transactions in the $10-$60M range and portfolio deals of larger scale, having initial rental yield in the 7-9% range and to pay a quarterly dividend up to 8% in annualized yield to the investors.
Rationale for the AMRE Transaction
AMRE currently possesses a growing portfolio of medical properties and is in a position to provide sustainable dividends and long-term value to investors. AMRE has a lucrative business model resilient to macroeconomic fluctuations that could benefit to the Company and its goals.
Stockholder Approval Requirement
Our common stock is listed on the NYSE and, as a result, we are subject to the rules of the NYSE. We believe that the Exchange Offer may result in the issuance of more than 20% of our currently outstanding shares of common stock. As a result, stockholder approval of the issuance is required by Section 312.03 of the NYSE Listing Company Manual. Section 312.03 of the NYSE Listed Company Manual requires an issuer to obtain stockholder approval prior to the issuance of common stock, or of securities convertible into or exercisable for common stock, in any transaction or series of related transactions, if (i) the common stock has, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of such stock or securities convertible into or exchangeable for common stock or (ii) the number of shares of common stock to be issued is, or will be upon issuance, equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of common stock or securities convertible into or exercisable for common stock.
Stockholder approval of this Proposal No. 2 will constitute stockholder approval for purposes of NYSE Section 312.03.
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Effect of the Issuance Proposal No. 2 on Current Stockholders
If the Issuance Proposal No. 2 is adopted, the issuance of such would result in dilution to our stockholders, and would afford our stockholders a smaller percentage interest in the voting power, liquidation value and aggregate book value of the Company.
Interests of Certain Persons In Matters to be Acted Upon
Mr. Heng Fai Ambrose Chan, our director and Executive Chairman, is also Chairman of the Board, Chief Executive Officer, and the largest beneficial owner of the outstanding shares of Alset EHome. As a result, Mr. Chan has an interest in this Proposal No. 2. Upon the issuance of Shares, Mr. Chan will own 47,544,809 or approximately 45% shares of the Company’s outstanding common stock.
Required Stockholder Vote and Recommendation of Our Board of Directors
Director nominees must receiveProposal 2 requires the affirmative vote of a majority of the votesshares of our common stock present and in person or by proxy at the Meeting and entitled to vote thereon as of the Record Date, provided that a quorum is present. An abstention is effectively treated as a vote cast on such director’s election, which means that the nominee must receive more “FOR” votes than “WITHHOLD” votes.against this proposal.
OUR BOARD OF DIRECTORS RECOMMENDS ATHAT YOU VOTE “FOR” THE ELECTION OF ALL THE NOMINEES NAMED ABOVE.
“FOR” THIS PROPOSAL NO. 2.
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PROPOSAL NO. 2 —3 RATIFICATION OF THE APPOINTMENT OF TURNER, STONE & COMPANY, LLP AS THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEARS ENDED DECEMBER 31, 2021 AND DECEMBER 31, 2022
The Company’s stockholders are being asked to ratify the Board of Directors’ appointment of Freed Maxick CPAs, P.C.Turner, Stone & Company, L.L.P. as the Company’s independent registered public accounting firm for fiscal year 2021.years ending December 31, 2021 and December 31, 2022.
In the event that the ratification of this selection is not approved by an affirmative majority of the votes cast on the proposal at the Annual Meeting, the Board of Directors will review its future selection of the Company’s independent registered public accounting firm.
Representatives of Freed Maxick CPAs, P.C.Turner, Stone & Company, L.L.P. are not expected to attend the Annual Meeting.
Audit fees consist of fees for professional services rendered for the audit of the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K, the review of financial statements included in the Company’s Quarterly Reports on Form 10-Q, and for services that are normally provided by the auditor in connection with statutory and regulatory filings or engagements. The aggregate fees billed for professional services rendered by our principal accountant, Freed Maxick CPAs, P.C.Turner, Stone & Company, L.L.P., for audit and review services for the fiscal years ended December 31, 20202021 and 20192020 were approximately $370,000$75,000 and $154,600,$0, respectively.
The aggregate fees billed for audit related services by our principal accountant, Freed Maxick CPAs, P.C.,Turner, Stone & Company, L.L.P. pertaining to comfort letters related to our registered offerings during the years, consents for related registration statements and the audit of the Company’s employee benefit plan and review of the stand-alone financial statements for one of the Company’s subsidiaries, for the years ended December 31, 20202021 and 20192020 were approximately $98,000$3,000 and $51,450,$0, respectively.
The aggregate fees billed for professional services rendered by our principal accountant, Freed Maxick CPAs, P.C.,Turner, Stone & Company, L.L.P. for tax compliance, tax advice and tax planning during the years ended December 31, 20202021 and 20192020 were approximately $30,000$0 and $29,500,$0, respectively.
There were nowas $16,000 in fees billed for professional services rendered by our principal accountant, Freed Maxick CPAs, P.C.Turner, Stone & Company, L.L.P., for other related services during the years ended December 31, 20202021 and 2019.$1,500 for 2020.
Administration of the Engagement; Pre-Approval of Audit and Permissible Non-Audit Services
The Company’s Audit Committee Charter requires that the Audit Committee establish policies and procedures for pre-approval of all audit or permissible non-audit services provided by the Company’s independent auditors. Our Audit Committee, approved, in advance, all work performed by our principal accountant, Freed Maxick CPAs, P.C.Turner, Stone & Company, L.L.P. These services may include audit services, audit-related services, tax services and other services. The Audit Committee may establish, either on an ongoing or case-by-case basis, pre-approval policies and procedures providing for delegated authority to approve the engagement of the independent registered public accounting firm, provided that the policies and procedures are detailed as to the particular services to be provided, the Audit Committee is informed about each service, and the policies and procedures do not result in the delegation of the Audit Committee’s authority to management. In accordance with these procedures, the Audit Committee pre-approved all services performed by Freed Maxick CPAs, P.C.
Turner, Stone & Company, L.L.P.
Required Stockholder Vote and Recommendation of Our Board of Directors
Ratification of the appointment of our independent registered public accounting firm requires the affirmative vote of a majority of the votes cast at the Annual Meeting, whether in person or by proxy, provided that a quorum is present. An abstention will not be counted for or against the proposal, and therefore will not affect the vote outcome.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
“FOR” THE RATIFICATION OF THE APPOINTMENT OF FREED MAXICK CPAs, P.C.TURNER, STONE & COMPANY, LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEARYEARS ENDING DECEMBER 31, 2021.2021 AND DECEMBER 31, 2022
PROPOSAL NO. 3 - ADVISORY VOTE ON EXECUTIVE COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) requires the Company’s stockholders to have the opportunity to cast a non-binding advisory vote regarding the approval of the compensation disclosed in this Proxy Statement of the Company’s Named Executive Officers included in the summary compensation table and related disclosures. As discussed in the “Executive Compensation” section below, the Company has disclosed the compensation of the Named Executive Officers pursuant to rules adopted by the SEC.
We believe that our compensation policies for the Named Executive Officers are designed to attract, motivate and retain talented executive officers and are aligned with the long-term interests of the Company’s stockholders. This advisory stockholder vote, commonly referred to as a “say-on-pay vote,” gives you as a stockholder the opportunity to approve or not approve the compensation of the Named Executive Officers that is disclosed in this Proxy Statement by voting for or against the following resolution (or by abstaining with respect to the resolution):
RESOLVED, that the stockholders of DSS, Inc. approve all of the compensation of the Company’s executive officers who are named in the Summary Compensation Table of the Company’s 2021 Proxy Statement, as such compensation is disclosed in the Company’s 2021 Proxy Statement pursuant to Item 402 of Regulation S-K, which disclosure includes the Proxy Statement’s Summary Compensation Table and other executive compensation tables and related narrative disclosures.
Because your vote is advisory, it will not be binding on either the Board of Directors or the Company. However, the Company’s Compensation and Management Resources Committee will take into account the outcome of the stockholder vote on this proposal at the Annual Meeting when considering future executive compensation arrangements. In addition, your non-binding advisory votes described in this Proposal 3 will not be construed: (1) as overruling any decision by the Board of Directors, any Board committee or the Company relating to the compensation of the Named Executive Officers, or (2) as creating or changing any fiduciary duties or other duties on the part of the Board of Directors, any Board committee or the Company.
OUR BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” APPROVAL OF THE COMPENSATION OF THE COMPANY’S EXECUTIVE OFFICERS DISCLOSED IN THE SUMMARY COMPENSATION TABLE OF THIS PROXY STATEMENT.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
Our executive officers and directors as of the date of this report are as follows:
Biographical and certain other information concerning the Company’s officers and directors is set forth below. Except for Mr. Heng Fai Ambrose Chan and his son Mr. Tung Moe Chan, there are no familial relationships among any of our directors. Except as indicated below, none of our directors is a director of any other reporting companies. None of our directors has been affiliated with any company that has filed for bankruptcy within the last ten years. We are not aware of any proceedings to which any of our directors, or any associate of any such director is a party adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries. Each executive officer serves at the pleasure of the Board of Directors.
| Name | Age | Director/Officer Since | Principal Occupation or Occupations and Directorships | |||
| Frank D. Heuszel | 65 | 2018 | Mr. Frank D. Heuszel has served as a director of the Company since July 30, 2018, and from July 2018 to April 2019, he served as chairman of the Company’s Audit Committee. From April 17, 2019 until October 28, 2020, he served as both the Company’s Chief Executive Officer and Interim Chief Financial Officer. Since then, he serves only as the Chief Executive Officer and a director of the Company Mr. Heuszel has extensive expertise in a wide array of strategic, business, turnaround, and regulatory matters across several industries as a result of his executive management, educational, and operational experience. Prior to joining DSS, Mr. Heuszel had a very successful career in commercial banking. For over 35 years, Mr. Heuszel served in many senior executive roles with major US and international banking organizations. As a banker Mr. Heuszel has served as General Counsel, Director of Special Assets, Credit Officer, Chief Financial Officer and Auditor. Mr. Heuszel also operated a successful law practice focused on litigation, corporate restructures, and mergers and acquisitions, and collections. In addition to being an attorney and executive manager, Mr. Heuszel is also a Certified Public Accountant (retired), and a Certified Internal Auditor (retired). Mr. Heuszel graduated from The University of Texas at Austin and from The South Texas College of Law, Houston.
On September 29, 2020, Mr. Heuszel was elected to the Board of Directors of the publicly traded company, Sharing Services Global Corporation (“Sharing Services”), which is an OTCQB public company. He continues to serve on the Sharing Services board. DSS currently owns approximately 46.7% of the outstanding shares of Sharing Services, a diversified company dedicated to maximizing shareholder value through the acquisition and development of innovative companies, products, and technologies in the direct selling industry. |
| Todd D. Macko | 49 | 2020 | Mr. Todd Macko was promoted to Interim Chief Financial Officer effective October 28, 2020 and was appointed Chief Financial Officer on August 16, 2021. Mr. Macko previously served as the Vice President of Finance of the Company. As the Vice President of Finance, Mr. Macko’s responsibilities included assisting DSS’s Interim Chief Financial Officer in all aspects of financial and regulatory reporting. In addition, his responsibilities included the day-to-day management of the Company’s Accounting and Finance team and financial leadership in the directing and improving of accounting, reporting, audit, and tax activities. Prior to his role as Vice President of Finance for the Company, Mr. Macko joined the wholly owned subsidiary of DSS, Premier Packaging Corporation in January 2019, as its Vice President of Finance.
Mr. Macko is a Certified Public Accountant with over 25 years of public and corporate financial management, business leadership and corporate strategy. Mr. Macko brings a wealth of experience with strengths in financial planning and analysis, business process re-engineering, budgeting, merger and acquisitions, financial reporting systems, project evaluation and treasury and capital management.
Prior to joining the Company, Mr. Macko served as the Corporate Controller for Baldwin Richardson Foods, a leading custom ingredients manufacturer for the food and beverage industry from November 2015 until January 2019. Prior to that, Mr. Macko served as the Controller for The Outdoor Group, LLC., Genesis Vision, Inc., Complemar Partners, Inc., and Level 3 Communications, Inc. Mr. Macko obtained his Bachelor of Science in Accounting from Rochester Institute of Technology. | |||
| Heng Fai Ambrose Chan | 76 | 2017 | Mr. Heng Fai Ambrose Chan has served as a director of the Company since February 12, 2017 and became Chairman of the Board of Directors on March 27, 2019. He has also served as an officer of the Company’s wholly-owned subsidiary, DSS International Inc., since July of 2017. Mr. Chan is an expert in banking and finance, with years of experience in the industry. Mr. Chan has restructured 35 companies in various industries and countries over the past 40 years. Mr. Chan currently serves as the Chairman and Chief Executive Officer of Alset International Ltd. (formerly known as Singapore eDevelopment Limited (SED))(“Alset International”), a publicly traded company on the Singapore Stock Exchange. He also serves as a director of BMI Capital Partners International Ltd., a wholly-owned subsidiary of Alset International. Mr. Chan also serves on the board of Sharing Services Global Corporation, which is an OTCQB public company. Mr. Chan has served as a member of the Board of Directors of LiquidValue Development Inc. since January 10, 2017, and has served as Co-Chief Executive Officer of LiquidValue Development Inc. since December 29, 2017. Mr. Chan has also served as a non-executive director of Holista CollTech Ltd., a publicly traded company on the Australian Securities Exchange, since July 2013 Mr. Chan has served as a director of OptimumBank Holdings, Inc., a publicly traded company on the Nasdaq Capital Markets and Optimum Bank since June 2018.
Mr. Chan formerly served as (i) Managing Chairman of Heng Fai Enterprises Limited (now known as ZH International Holdings Limited) which trades on the Hong Kong Stock Exchange; (ii) the Managing Director of SGX Catalist-listed SingHaiyi Group Ltd., which under his leadership, transformed from a failing store-fixed business provider with net asset value of less than $10 million into a property trading and investment company and finally to a property development company with net asset value over $150 million before Mr. Chan ceded his controlling interest in late 2012; (iii) the Executive Chairman of China Gas Holdings Limited, a formerly failing fashion retail company listed on the Hong Kong Stock Exchange, which under his direction, was restructured to become one of the few large participants in the investment in and operation of city gas pipeline infrastructure in China; (iv) a director of Global Med Technologies, Inc., a medical company listed on NASDAQ engaged in the design, development, marketing and support information for management software products for healthcare-related facilities; (v) a director of Skywest Limited, an ASX-listed airline company; and (vi) the Chairman and Director of American Pacific Bank. In 1987, Mr. Chan acquired American Pacific Bank, a full-service U.S. commercial bank, and brought it out of bankruptcy. He recapitalized, refocused and grew the bank’s operations. Under his guidance it became a NASDAQ-listed high asset quality bank with zero loan losses for over five consecutive years before it was ultimately bought and merged into Riverview Bancorp Inc. Mr. Chan’s international business contacts and experience qualify him to serve on our Board of Directors. |
| Sassuan (Samson) Lee | 50 | 2019 | Mr. Sassuan (Samson) Lee has served as a director of the Company since August 5, 2019. He co-founded STO Global X, a technology and service provider for security token exchange solutions, in December 2017. He has also served as the Chief Crypto-Economic Advisor for Gibraltar Stock Exchange and Gibraltar Blockchain Exchange since September 2017. In November 2016, Mr. Lee founded Coinstreet Partners, a consultancy firm focused on blockchain, fintech, cryptocurrency and digital assets, and has served as its Chief Executive Officer since inception. Mr. Lee currently serves on the board of directors of Sharing Services Global Corporation, which is an OTCQB public company. Mr. Lee previously served as Managing Director at uCast Global Asia from December 2015 through November 2016. Mr. Lee also served as the Executive Vice President of the Greater China region at Movideo from June 2015 through December 2015 and as Vice President and General Manager of the Greater China and South Asia Pacific regions at NeuLion Inc. from July 2008 through June 2015. Mr. Lee received his Bachelor of Commerce degree from the University of Toronto and his MBA and MS degrees from the Hong Kong University of Science and Technology. Mr. Lee’s extensive experience and recognized expertise in the fields of technology, blockchain, cryptocurrency and fintech, combined with his experience as Chief Executive Officer and Managing Director of successful international businesses qualifies him to serve on the Company’s Board of Directors and as a member of the Audit Committee and the Nominating and Corporate Governance Committee and the Chairman of the Compensation and Management Resources Committee. | |||
| Wai Leung William Wu | 55 | 2019 | Mr. Wai Leung William Wu has served as a director of the Company since October 20, 2019. He served as the managing director of Investment Banking at Glory Sun Securities Limited since January 2019. Mr. Wu previously served as the executive director and chief executive officer of Power Financial Group Limited from November 2017 to January 2019. Mr. Wu has served as a director of Asia Allied Infrastructure Holdings Limited since February 2015. Mr. Wu previously served as a director and chief executive officer of RHB Hong Kong Limited from April 2011 to October 2017. Mr. Wu served as the chief executive officer of SW Kingsway Capital Holdings Limited (now known as Sunwah Kingsway Capital Holdings Limited) from April 2006 to September 2010. Mr. Wu holds a Bachelor of Business Administration degree and a Master of Business Administration degree of Simon Fraser University in Canada. He was qualified as a chartered financial analyst of The Institute of Chartered Financial Analysts in 1996.
Mr. Wu previously worked for a number of international investment banks and possesses over 26 years of experience in the investment banking, capital markets, institutional broking and direct investment businesses. He is a registered license holder to carry out Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). Mr. Wu has served as a member of the Guangxi Zhuang Autonomous Region Committee of the Chinese People’s Political Consultative Conference in January 2013. Mr. Wu’s experience in banking, capital markets, investment banking, Asian economic and banking dynamics, and education in corporate finance and asset management qualifies him to serve on the Company’s Board of Directors and as a member of the Audit Committee and the Compensation and Management Resources Committee. |
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Board of Directors and Committees
The Company has determined that each of Mr. John “JT” Thatch, Mr. Wai Leung William Wu, Mr. Sassuan (Samson) Lee and Mr. José Escudero qualify as independent directors (as defined under Section 803 of the NYSE American LLC Company Guide).
In fiscal 2020, each of the Company’s independent directors attended or participated in 96% or more of the aggregate of (i) the total number of meetings of the Board of Directors held during the period in which each such director served as a director and (ii) the total number of meetings held by all committees of the Board of Directors during the period in which each such director served on such committee. During the fiscal year ended December 31, 2020, the Board held four meetings and acted by written consent on six occasions.
On December 9, 2019, the Board appointed Mr. Thatch as the Lead Independent Director, effective immediately. Mr. Thatch will serve as the Lead Independent Director until his successor is duly appointed and qualified, or until his earlier removal or resignation or such time as he is no longer considered an independent director under the New York Stock Exchange listing standards. Mr. Thatch’s authority, responsibilities, and duties as the Lead Independent Director include the following: (i) preside at all meetings of the Board at which the Chairman of the Board is not present, at all meetings of the independent directors and at all executive sessions of the independent directors, (ii) have a reasonable opportunity to review and comment on Board meeting agendas, (iii) serve as a liaison between the Chairman of the Board and the other members of the Board, (iv) have the authority to call special meetings of the Board and of the independent directors, and (v) perform such other duties as the Board may from time to time delegate.
On August 19, 2021, Lo Wah Wai resigned as a member of the Board. Mr. Lo’s resignation was accepted and became effective August 20, 2021. Mr. Lo did not resign from the Board as a result of any disagreement related to the Company’s operations, policies or practices but rather due to his “heavy workload and commitment in other corporations”. The Company will not appoint a successor to Mr. Lo and the size of the Board will remain at seven directors.
The Company has separately designated an Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Audit Committee held four meetings in 2020 and did not act by written consent in 2020. The Audit Committee is responsible for, among other things, the appointment, compensation, removal and oversight of the work of the Company’s independent registered public accounting firm, overseeing the accounting and financial reporting process of the Company, and reviewing related person transactions. As of December 31, 2020, the Audit Committee was comprised of Mr. Thatch, Mr. Wu and Mr. Lee, each of whom continues to serve on the Audit Committee. Each of Mr. Wu, Mr. Thatch and Mr. Lee is qualified as a “financial expert” as defined in Item 407 under Regulation S-K of the Securities Act of 1933, as amended (the “Securities Act”) Each of the members of the Audit Committee is an independent director (as defined under Section 803 of the NYSE American LLC Company Guide). Mr. Thatch serves as Chairman of the Audit Committee. The Audit Committee operates under a written charter adopted by the Board of Directors, which can be found in the Investors/Corporate Governance section of our web site, www.dsssecure.com.
Compensation and Management Resources Committee
The purpose of the Compensation and Management Resources Committee is to assist the Board in discharging its responsibilities relating to executive compensation, succession planning for the Company’s executive team, and to reviewing and making recommendations to the Board regarding employee benefit policies and programs, incentive compensation plans and equity-based plans. The Compensation and Management Resources Committee held two meetings in 2020.
The Compensation and Management Resources Committee is responsible for, among other things, (a) reviewing all compensation arrangements for the executive officers of the Company and (b) administering the Company’s stock option plans. The Compensation and Management Resources Committee consists of Mr. José Escudero, Mr. Wai Leung William Wu and Mr. Sassuan (Samson) Lee, with Mr. Lee as the Chairman. Each of the members of the Compensation and Management Resources Committee is an independent director (as defined under Section 803 of the NYSE American Company Guide). The Compensation and Management Resource Committee operates under a written charter adopted by the Board of Directors, which can be found in the Investors/Corporate Governance section of our web site, www.dsssecure.com.
The duties and responsibilities of the Compensation and Management Resources Committee in accordance with its charter are to review and discuss with management and the Board the objectives, philosophy, structure, cost and administration of the Company’s executive compensation and employee benefit policies and programs; no less than annually, review and approve, with respect to the Chief Executive Officer and the other executive officers (a) all elements of compensation, (b) incentive targets, (c) any employment agreements, severance agreements and change in control agreements or provisions, in each case as, when and if appropriate, and (d) any special or supplemental benefits; make recommendations to the Board with respect to the Company’s major long-term incentive plans applicable to directors, executives and/or non-executive employees of the Company and approve (a) individual annual or periodic equity-based awards for the Chief Executive Officer and other executive officers and (b) an annual pool of awards for other employees with guidelines for the administration and allocation of such awards; recommend to the Board for its approval a succession plan for the Chief Executive Officer, addressing the policies and principles for selecting a successor to the Chief Executive Officer, both in an emergency situation and in the ordinary course of business; review programs created and maintained by management for the development and succession of other executive officers and any other individuals identified by management or the Compensation and Management Resources Committee; review the establishment, amendment and termination of employee benefits plans, review employee benefit plan operations and administration; and any other duties or responsibilities expressly delegated to the Compensation and Management Resources Committee by the Board from time to time relating to the Committee’s purpose.
The Compensation and Management Resources Committee may request any officer or employee of the Company or the Company’s outside counsel to attend a meeting of the Compensation and Management Resources Committee or to meet with any members of, or consultants to, the Compensation and Management Resources Committee. The Company’s Chief Executive Officer does not attend any portion of a meeting where the Chief Executive Officer’s performance or compensation is discussed, unless specifically invited by the Compensation and Management Resources Committee.
The Compensation and Management Resources Committee has the sole authority to retain and terminate any compensation consultant to be used to assist in the evaluation of director, Chief Executive Officer or other executive officer compensation or employee benefit plans, and has sole authority to approve the consultant’s fees and other retention terms. The Compensation and Management Resources Committee also has the authority to obtain advice and assistance from internal or external legal, accounting or other experts, advisors and consultants to assist in carrying out its duties and responsibilities, and has the authority to retain and approve the fees and other retention terms for any external experts, advisors or consultants.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is responsible for overseeing the appropriate and effective governance of the Company, including, among other things, (a) nominations to the Board of Directors and making recommendations regarding the size and composition of the Board of Directors and (b) the development and recommendation of appropriate corporate governance principles. The Nominating and Corporate Governance Committee consists of Mr. John “JT” Thatch, the Chairman of the committee, Mr. Sassuan (Samson) Lee and Mr. José Escudero, each of whom is an independent director (as defined under Section 803 of the NYSE American LLC Company Guide). The Nominating and Corporate Governance Committee held one meeting in 2020 and did not act by written consent in 2020. The Nominating and Corporate Governance Committee operates under a written charter adopted by the Board of Directors, which can be found in the Investors/Corporate Governance section of our web site, www.dsssecure.com. The Nominating and Corporate Governance Committee adheres to the Company’s By-Laws provisions and Securities and Exchange Commission rules relating to proposals by stockholders when considering director candidates that might be recommended by stockholders, along with the requirements set forth in the committee’s Policy with Regard to Consideration of Candidates Recommended for Election to the Board of Directors, also available on our website. The Nominating and Corporate Governance Committee of the Board of Directors is responsible for identifying and selecting qualified candidates for election to the Board of Directors prior to each annual meeting of the Company’s stockholders. In identifying and evaluating nominees for director, the Committee considers each candidate’s qualities, experience, background and skills, as well as other factors, such as the individual’s ethics, integrity and values which the candidate may bring to the Board of Directors.
The Company has adopted a Code of Ethics that establishes the standards of ethical conduct applicable to all directors, officers and employees of the Company. A copy of the Code of Ethics covering all of our employees, directors and officers, is available on the Corporate Governance section of our web site at www.dsssecure.com.
Information about our Executive Officers
On April 17, 2019, Frank D. Heuszel became the Chief Executive Officer and Interim Chief Financial Officer of the Company. On October 28, 2020, Mr. Heuszel became solely the CEO and transferred the Interim Chief Financial Officer title to Todd D. Macko, who was appointed Chief Financial Officer on August 16, 2021. The biography for Mr. Heuszel and Mr. Macko is contained herein in the information disclosures relating to the Company’s directors above.
Involvement in Certain Legal Proceedings
None of our directors or executive officers has been involved in any legal proceedings in the past 10 years that would require disclosure under Item 401(f) of Regulation S-K.
The following table sets forth cash compensation and the value of stock options awards granted to the Company’s non-employee independent directors, who were not also named executive officers, for their service in fiscal 2020:
| Name | Fees Earned or Paid in Cash | Stock Awards (1) | All Other Compensation (2) | Total | ||||||||||||
| Current Directors | ||||||||||||||||
| Heng Fai Ambrose Chan | $ | - | $ | - | $ | 4,305,757 | $ | 4,305,757 | ||||||||
| John “JT” Thatch | $ | 22,000 | $ | - | $ | - | $ | 22,000 | ||||||||
| Wah Wai Lowell Lo | $ | - | $ | - | $ | - | $ | - | ||||||||
| Sassuan (Samson) Lee | $ | 19,000 | $ | 6,725 | $ | - | $ | 25,725 | ||||||||
| José Escudero | $ | 18,000 | $ | 6,725 | $ | - | $ | 24,725 | ||||||||
| Wai Leung William Wu | $ | 18,500 | $ | 6,725 | $ | - | $ | 25,225 | ||||||||
| Tung Moe Chan | $ | - | $ | - | $ | - | $ | - | ||||||||
Each independent director (as defined under Section 803 of the NYSE American Company Guide) is entitled to receive base cash compensation of $12,000 annually, provided such director attends at least 75% of all Board of Director meetings, and all scheduled committee meetings. Each independent director is entitled to receive an additional $1,000 for each Board of Director meeting he attends, and an additional $500 for each committee meeting he attends, provided such committee meeting falls on a date other than the date of a full Board of Directors meeting. Each of the independent directors is also eligible to receive discretionary grants of options or restricted stock under the Company’s 2020 Equity Incentive Plan. Non-independent members of the Board of Directors do not receive compensation in their capacity as directors, except for reimbursement of travel expenses.
On September 23, 2019, the Company entered in an executive employment agreement with Mr. Heng Fai Ambrose Chan, an Executive Chairman of the Board, Director of the Company, Chief Executive Officer of the Company’s wholly-owned subsidiary DSS Cyber Security Pte. Ltd., Chief Executive Officer of DSS International Inc. and Chief Executive Officer of DSS Asia Ltd., a wholly-owned subsidiary of DSS International Inc. Pursuant to the agreement, Mr. Chan was entitled to receive an annual base salary of $250,000, payable quarterly in either cash or common stock, subject to availability of shares under a shareholder-approved stock plan. The calculation of each quarterly payment of common stock was to be the Company’s average trading price for the last ten trading days of that quarter. Under his original executive employment agreement, Mr. Chan was eligible to receive an annual performance bonus, in an amount up to 100% of his base salary, based upon the Company’s achievement of certain net income and gross revenue milestones. Mr. Chan had the option to have the bonus paid in Company common stock. In the event of a change in control of the Company or the termination of Mr. Chan’s employment without cause, Mr. Chan is entitled to receive four-months of prorated salary, payable monthly.
On November 19, 2020, the Company entered into an amendment to Mr. Chan’s executive employment agreement, retroactive to January 1, 2020, pursuant to which his annual salary was set to $1.00 and he was eligible for a bonus payable annually, based on the annual market capitalization growth the Company, calculated as 5% of the market capitalization growth. Pursuant to the amendment to the executive employment agreement, Mr. Chan was also eligible for a bonus based on 5% of the net asset value change, calculated based on the net asset value of the Company on December 31st of each year. Mr. Chan continues to have the option to have the bonus paid in Company common stock. For the year ended December 31, 2020, Mr. Chan was paid a bonus in the amount of $4,305,757.
Leadership Structure and Risk Oversight
Currently, the positions of Chief Executive Officer and Chairman of the Board are held by two different individuals. Mr. Heng Fai Ambrose Chan currently serves as Chairman of the Board and Mr. Frank D. Heuszel currently serves as Chief Executive Officer and as a member of the Board. Although no formal policy currently exists, the Board determined that the separation of these positions would allow our Chief Executive Officer to devote his time to the daily execution of the Company’s business strategies and the Board Chairman to devote his time to the long-term strategic direction of the Company. Our senior management manages the risks facing the Company under the oversight and supervision of the Board. While the full Board is ultimately responsible for risk oversight at our Company, three of our Board committees assist the Board in fulfilling its oversight function in certain areas of risk. The Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to risk in the areas of financial reporting and internal controls. The Nominating and Corporate Governance Committee assists the Board in fulfilling its oversight responsibilities with respect to risk in the area of corporate governance. The Compensation and Management Resources Committee assists the Board in discharging its responsibilities relating to executive compensation, succession planning for the Company’s executive team, and to review and make recommendations to the Board regarding employee benefit policies and programs, incentive compensation plans and equity-based plans. Other general business risks such as economic and regulatory risks are monitored by the full Board. While the Board oversees the Company’s risk management, management is responsible for day-to-day oversight of risk management processes.
Our Board considered whether our compensation program encouraged excessive risk taking by employees at the expense of long-term Company value. Based upon its assessment, the Board does not believe that our compensation program encourages excessive or inappropriate risk-taking. The Board believes that the design of our compensation program does not motivate imprudent risk-taking.
The Nominating and Corporate Governance Committee of the Board of Directors is responsible for identifying and selecting qualified candidates for election to the Board of Directors prior to each annual meeting of the Company’s stockholders. A copy of the Nominating and Corporate Governance Committee Charter is available on the Investors/Corporate Governance/Charters section of our web site, www.dsssecure.com. In addition, stockholders who wish to recommend a candidate for election to the Board of Directors must submit a written notice of such recommendation to the Company and strictly comply with all the requirements set forth in the Nominating and Corporate Governance Committee Policy With Regard to Consideration of Candidates Recommended for Election to the Board of Directors, a copy of which is also available on the Investors/Charters section of our web site. The standards for considering nominees to the Board are included in the Corporate Governance Committee Charter. In identifying and evaluating nominees for director, the Committee considers each candidate’s qualities, experience, background and skills, as well as other factors, such as the individual’s ethics, integrity and values which the candidate may bring to the Board of Directors. Any stockholder who desires the Committee to consider one or more candidates for nomination as a director should either by personal delivery or by United States mail, postage prepaid, deliver a written notice of recommendation addressed to: DSS, Inc., Nominating and Corporate Governance Committee, 6 Framark Drive, Victor, New York 14564. Each written notice must set forth: (a) the name and address of the stockholder making the recommendation and of the person or persons recommended, (b) a representation that the stockholder is a holder of record of the stock of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice, (c) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder, (d) such other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC, (e) the consent of such person(s) to serve as a director(s) of the Company if nominated and elected, and (f) a description of how the person(s) satisfy the criteria for consideration as a candidate referred to above.
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Communication with DirectorsPROPOSAL NO. 4- APPROVAL TO AMEND THE BYLAWS OF DSS, INC. TO CHANGE THE QUORUM REQUIREMENT FROM A MAJORITY OF THE STOCK ISSUED AND OUTSTANDING, EITHER I PERSON OR BY PROXY, TO AT LEAST THIRTY-FIVE PERCENT (35%) OF THE STOCK ISSUED AND OUTSTANDING, EITHER IN PERSON OR BY PROXY
Amendment to Bylaws
Article 5, Section 5.6 of the current Bylaws of the Company require the votes of the holders of a majority of the stock issued and outstanding and entitled to vote at all meetings of the stockholders for the transaction of business, present in person or represented by proxy, in order to constitute a quorum at such meetings. Under Section 608 of the New York Business Corporation Law, the Company may lower its quorum requirement to the holders of one-third of the stock issued and outstanding and entitled to vote at all meetings. Pursuant to Article 11 of the Bylaws of the Company, only the shareholders of the Company will have the power to amend the Bylaws to change the quorum for meetings of shareholders.
The Company has established procedures for stockholders or other interested parties to communicate directly with the Board of Directors. Such parties can contact the Board of Directors believes that it is in the Company’s best interest to amend the Bylaws to decrease the quorum requirement for all meetings of stockholders to the holders of thirty-five percent (35%) of the stock issued and outstanding and entitled to vote at all meetings of the stockholders for the transaction of business, present in person or represented by mail at: DSS, Inc.,proxy.
Rationale for the Amendment
The Board believes that without the proposed amendment, there is an increasing danger that the Company will not be able to obtain a quorum at future stockholder meetings, thus hindering the Company’s ability to conduct business. Due to the size and how dispersed the Company’s stockholder base is, it has become increasingly more difficult to obtain the current quorum as contained in the Bylaws at stockholder meetings, and as a result the Company’s ability to conduct business has become impaired. Without stockholder consent, the Company may not be able to, among other things, alter or amend its stock option plans, conduct certain types of mergers and acquisitions, or raise capital in certain types of transactions. The Board believes that the proposed amendment will increase the likelihood that the Company will be able to obtain a quorum.
Required Stockholder Vote and Recommendation of Our Board of Directors Attention: Heng Fai Ambrose Chan, Chairman
Approval of an amendment to the Company’s Bylaws to change the quorum requirement from a majority of the Board, 6 Framark Drive, Victor, New York 14564. All communications madestock issued and outstanding, either in person or by this means will be received by the Chairmanproxy, to at least thirty-five percent (35%) of the Board.stock issued and outstanding, either in person or by proxy, requires the affirmative vote of a majority of the votes cast at the Annual Meeting, whether in person or by proxy, provided that a quorum is present. An abstention will not be counted for or against the proposal, and therefore will not affect the vote outcome.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
EXECUTIVE COMPENSATION“FOR” THIS PROPOSAL NO. 4
Summary Compensation TableVote Required and Recommendation of Board
The following table sets forthProposal No. 4 requires the compensation earned by eachaffirmative vote of a majority of the persons serving asvotes cast at the Company’s Executive Chairman, Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and President, referred to herein collectively as the “Named Executive Officers”, or NEOs, for services rendered to us for the years ended December 31, 2020 and 2019:Meeting.
| Name and principal position | Year | Salary | Bonus | Stock Awards (1) | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation (2) | Total | |||||||||||||||||||||||||||
| Heng Fai Chan, Executive Chairman (3) | 2020 | $ | 1 | $ | 4,305,757 | $ | 4,305,758 | |||||||||||||||||||||||||||||
| 2019 | $ | 31,403 | (4) | $ | 31,403 | |||||||||||||||||||||||||||||||
| Frank D. Heuszel, Chief Executive Officer | 2020 | $ | 171,346 | $ | 112,498 | - | - | - | - | $ | 26,005 | $ | 309,848 | |||||||||||||||||||||||
| 2019 | $ | 91,615 | $ | 61,103 | $ | 31,403 | - | - | - | $ | 15,843 | (5) | $ | 199,964 | ||||||||||||||||||||||
| Jason T. Grady, Chief Operating Officer | 2020 | $ | 207,692 | $ | 112,498 | - | - | - | - | $ | 17,056 | $ | 337,246 | |||||||||||||||||||||||
| 2019 | $ | 84,615 | $ | 61,103 | $ | 31,403 | - | - | - | $ | 7,170 | $ | 184,291 | |||||||||||||||||||||||
| Philip Jones, Chief Financial Officer | 2019 | $ | 59,231 | - | - | - | - | - | $ | 2,073 | $ | 61,304 | ||||||||||||||||||||||||
| Todd D. Macko, Chief Financial Officer (6) | 2020 | $ | 155,769 | $ | 67,499 | $ | 11,000 | - | - | - | $ | 11,890 | $ | 246,158 | ||||||||||||||||||||||
| Jeffrey Rinaldi, Chief Executive Officer | 2019 | $ | 61,297 | - | - | - | - | - | - | $ | 61,297 | |||||||||||||||||||||||||
| Robert B. Bzdick, President (7) | 2020 | $ | - | - | - | - | $ | 88,667 | - | - | $ | 88,667 | ||||||||||||||||||||||||
| 2019 | $ | - | - | - | - | $ | 212,124 | - | - | $ | 212,124 | |||||||||||||||||||||||||
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
“FOR” THIS PROPOSAL NO. 4
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PROPOSAL NO 5. – APPROVAL TO AMEND THE COMPANY’S CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
Our Board of Directors has approved, subject to stockholder approval, an amendment to our Certificate of Incorporation, increasing our authorized shares of common stock from 200,000,000 shares to 500,000,000 shares. The amendment to our authorized shares of common stock will become effective upon the filing of the amendment with the Secretary of State of New York.
Rationale for Increase in Authorized Number of Shares of Common Stock
As of the Record Date, there were approximately [●] shares of the Company’s common stock issued and outstanding and approximately [●] shares of common stock reserved for future issuance under the Company’s outstanding options, warrants and preferred stock. Thus, approximately [●] authorized shares of common stock currently remain available for issuance.
The Board of Directors believes it is in the best interest of the Company and its shareholders to increase the number of authorized shares of common stock to provide the Company with flexibility to issue shares of common stock for general corporate purposes, which could include strategic investments, strategic partnership arrangements, awards or grants under employee equity incentive plans, or equity based financing to support company execution of business strategy. The availability of additional authorized shares of common stock would allow the Company to execute any of these transactions in the future without additional shareholder approval, except as may be required in particular cases by the Company’s Certificate of Incorporation, applicable law or the rules of any stock exchange or other system on which the Company’s securities may then be listed.
| Based on the |
| ● | Additionally, the Company does not have shares available to issue options or restricted stock | |
|
In connection with his employment contract as an officer of the Company’s subsidiary, Mr. Chan received $31,403 in fully vested restricted stock with a two-year lock-up period.
EmploymentThe Board of Directors believes it would be in the best interests of the Company and Severance Agreementsits shareholders to have shares of common stock available for any of these purposes, if needed. Although the Company may require raising additional capital to fund its operations in the future, which may involve the issuance of common stock, it currently has no transactions pending.
Effects of the Increase in Authorized Common Stock
Frank D. Heuszel has servedApproving the amendment to increase the authorized number of shares of the Company’s common stock will not result in any dilution to current shareholders unless and until the Company issues such additional shares in the future. The Board of Directors selected the size of the proposed increase to provide the Company with sufficient authorized shares for use for any of the purposes described above, including any necessary financing transactions, as well as to provide it the ability to take advantage of other opportunities that may be available to it that would require the use of shares of common stock without the cost and time that would be needed to seek further amendments to its Certificate of Incorporation.
If this proposal is approved, the newly authorized shares of common stock would have the same rights as the Company’s Chief Executive Officer since April 11, 2019, waspresently authorized shares, including the right to cast one vote per share of common stock. Although the authorization of additional shares would not, in itself, have any effect on the rights of any holder of the Company’s Interim Chief Financial Officer since April 17, 2019 from that date until October 28, 2020. Upon his appointment,common stock, the future issuance of additional shares of common stock (other than a stock split or dividend) would have the effect of diluting the voting rights and could have the effect of diluting earnings per share and book value per share of existing shareholders.
Potential Anti-takeover Effects of Increase in Authorized Common Stock
In addition to the more traditional uses described above, the Company agreedcould issue shares of its stock as a defense against efforts to pay Mr. Heuszel cash compensationobtain control of the Company. The Board of Directors does not intend or view the increase in the amountauthorized shares of $7,500 per month for his combined servicesstock as Interim Chief Executive Officer and Chief Financial Officer. On August 27, 2019,an anti-takeover measure, nor is the Company entered into an executive employment agreement with Mr. Heuszel. Pursuantaware of any effort by any third party to the agreement, Mr. Heuszel was entitled to receive an annual base salary of $165,000, payable bi-weekly, and was entitled to be eligible to receive an annual performance bonus in an amount up to 100% of his base salary, upon the Company’s achievement of certain net income and gross revenue milestones. In the event of a change inaccumulate our securities or obtain control of the Company by means of a merger, tender offer, solicitation in opposition to management or the termination of Mr. Heuszel’s employment without cause, Mr. Heuszel was entitled to receive four-months’ salary, payable monthly. In October 2020, this Employment Contract was extended on the same general terms to expire on December 31, 2021. Commencing January 1, 2021, the Company and Mr. Heuszel have entered into a new three-year Employment Contract schedule to terminate on December 31, 2023. Under the terms of this Employment Contract, Mr. Heuszel is entitled to receive an annual base salary of $260,000, payable bi-weekly, and he is eligible to receive an annual performance bonus in an amount up to 100% of his base salary, upon the Company’s achievement of certain net income and gross revenue milestones. As in his previous employment agreement, in the event of his termination without cause, Mr. Heuszel shall receive four-months’ salary, payable monthly.otherwise.
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On September 5, 2019,
No Appraisal Rights
Our shareholders are not entitled to dissenters’ or appraisal rights under the Company entered in an executive employment agreementNew York Business Corporation Law of the State of New York with Jason Grady, the Company’s Chief Operating Officer. Pursuantrespect to the agreement, Mr. Grady is entitledproposed amendment to receive an annual base salaryour Certificate of $200,000Incorporation to increase the authorized number of shares, and is eligiblewe will not independently provide the shareholders with any such right.
No Interests of Directors and Executive Officers
Our directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in this proposal except to receive an annual performance bonus, in an amount up to 100%the extent of his base salary, upon the Company’s achievementtheir ownership of certain net income and gross revenue milestones. In the eventshares of our common stock.
Vote Required
The affirmative vote of a change in controlmajority of the Company or the termination of Mr. Grady’s employment without cause, he shall be entitled to receive four-month’s base salary.
On September 23, 2019, the Company entered in an executive employment agreement with Mr. Heng Fai Ambrose Chan, a Executive Chairman of the Board, Director of the Company, Chief Executive Officeroutstanding shares of the Company’s wholly-owned subsidiary DSS Cyber Security Pte. Ltd., Chief Executive Officer of DSS International Inc. and Chief Executive Officer of DSS Asia Ltd., a wholly-owned subsidiary of DSS International Inc. For additional information on Mr. Chan’s employment agreement, see DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE – Director Compensation.
Todd D. Macko was promotedcommon stock is required to Interim Chief Financial Officer on October 29, 2020 and appointed Chief Financial Officer on August 16, 2021. Mr. Macko’s annual base salary is $150,000 and he is eligibleapprove the amendment to receive an annual performance bonus, upon the Company’s achievementCertificate of certain net income goals, upIncorporation to 50%amend the total number of his annual base salary.
On July 31, 2018, the Company and Robert Bzdick entered into a Non-Compete Letter Agreement (the “Agreement”) whereby the parties mutually agreed that Mr. Bzdick’s employment as Presidentshares of the CompanyCompany’s authorized common stock. As a result, abstentions and Chief Executive Officer of Premier Packaging Corporation, a wholly-owned subsidiary ofbroker non-votes will have the Company, would terminate effective on August 1, 2018. The Agreement voided and replaced Mr. Bzdick’s previous employment agreement with the Company, originally dated February 12, 2010, and amended on October 1, 2012, except for the non-competition and non-solicitation covenants contained therein, which were carried forward in their entirety to the new Agreement.
Pursuant to the terms of the Agreement, Mr. Bzdick received his regular wages and contractual bonus sum accrued through the separation date, and also receives the sum of $16,000 per month, for a period of 19 months, as consideration for the two-year non-competition and non-solicitation restrictive covenants contained in the Agreement, which are identical to the restrictive covenants contained in Mr. Bzdick’s previous employment agreement, which are now incorporated by reference into the Agreement. In addition, the Company agreed to continue to pay the cost of Mr. Bzdick’s health, dental and vision insurance coverage for a period of 19 months or until he is eligible for such benefits from another employer, whichever is shorter. In the Agreement, Mr. Bzdick specifically acknowledges that, among other remedies, the Company is entitled to cease all payments under the Agreement and recoup all payments previously made in the event Mr. Bzdick revokes, violates or breaches the Agreement, or discontinues any promised act under the Agreement. Moreover, the Agreement further provides that in the event Mr. Bzdick breaches the Agreement by bringing suit or filing a claim with an administrative agency, then he must,same effect as a condition precedent, repay tovote “against” the Company in cash all consideration received pursuant to the Agreement. The Agreement also contains standard mutual release and damages clauses, and a clause that provides that in any action for breach of the Agreement, the prevailing party shall be entitled to recover attorneys’ fees from the opposing party.proposal. Your vote is therefore extremely important.
Outstanding Equity Awards at Fiscal Year-EndThe Proposed Amendment
AsThis general description of December 31, 2020, our Chief Executive Officer, Frank Heuszel, our Chief Operating Officer, Jason Grady, and our Chief Financial Officer, Todd Macko, held restricted stock awardsthis Proposal is qualified in an amounts equalits entirety by reference to $31,403, $31,403, and $11,000, respectively, which amounts representthe text of the amendment set forth in this Proposal for the increase of the total grant date fairnumber of authorized shares of common stock. If this Proposal is approved by shareholders, it will become effective upon the filing of a Certificate of Amendment with the State of New York, which the Company will intend to file promptly following the shareholder vote during the Special Meeting. If this Proposal is not approved, the Certificate of Incorporation will continue to allow for the authorization of 200,000,000 shares of common stock.
The first paragraph of ARTICLE IV of the Certificate of Incorporation shall be amended and restated to read in its entirety as follows if our shareholders vote to approve this Proposal:
The total number of shares of capital stock which this corporation shall have the authority to issue is 500,046,868 shares, consisting of (i) 500,000,000 shares of common stock, $.02 par value (“Common Stock”) and (ii) 46,868 shares of restrictedpreferred stock, awards computed in accordance with FASB ASC 718.$.02 par value (“Preferred Stock”).
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” the approval of the amendment to the Company’s Certificate of Incorporation to increase the authorized number of shares of Common Stock described above.
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SECURITY OWNERSHIPPROPOSAL NO. 6- APPROVAL OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTAN INCREASE IN THE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED
FOR ISSUANCE UNDER THE 2020 EQUITY INCENTIVE PLAN
GENERAL
The following table setsBoard has approved an amendment to the 2020 Employee, Director and Consultant Equity Incentive Plan (the “2020 Equity Incentive Plan”) to increase the number of shares of Common Stock available for issuance thereunder by 19,758,796 shares, from 241,204shares to 20,000,000 shares, and directed that the amendment be submitted to the stockholders for approval at the Special Meeting. The proposed amendment is attached hereto as Exhibit B.
The amendment to the 2020 Equity Incentive Plan is intended to ensure that the Company can continue to provide an incentive to employees, directors and consultants by enabling them to share in the Company’s future growth. If approved by the stockholders, all of the additional shares will be available for grant as incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or as nonqualified stock options, restricted stock awards, stock appreciation rights, or other kinds of equity based compensation available under the 2020 Equity Incentive Plan. If the stockholders do not approve the amendment, no shares will be added to the number of shares available for issuance under the 2020 Equity Incentive Plan.
BACKGROUND
The 2020 Equity Incentive Plan was adopted on December 9, 2019, and approved by the stockholders of the Company at a special meeting of the Company’s stockholders on the same date. 241,204shares of Common Stock were initially available for awards under the 2020 Equity Incentive Plan.
The Company uses equity-based incentive compensation as a component of its overall compensation. The purposes of the 2020 Equity Incentive Plan are to create incentives which are designed to motivate eligible employees, directors, and consultants to put forth beneficial ownershipmaximum effort toward the success and growth of the Company, and to enable the Company to attract and retain experienced individuals who by their position, ability and diligence are able to make important contributions to the Company’s success.
The Board requires additional shares available for issuance under the 2020 Equity Incentive Plan for the effective implementation of its compensation strategy. The 2020 Equity Incentive Plan currently authorizes for issuance a maximum of only 241,204 shares. As of March 14, 2022, the number of shares available for issuance under future awards under the 2020 Equity Incentive Plan was only 191,314 shares. If Proposal 5 is not approved, the Company will not be able to provide equity incentive compensation to current and future employees and, as a result, the Company may not be able to retain current employees or attract new employees.
The 19,758,796 share increase from 241,204 shares to 20,000,000 shares of Common Stock available for grant under the 2020 Equity Incentive Plan represents approximately 0.28% of the total number of outstanding shares of Common Stock as of SeptemberMarch 14, 2021 by each person known by the Company2022. After giving effect to beneficially own more than 5% of the Common Stock, each director and each of the executive officers named in the Summary Compensation Table (see “Executive Compensation” above), and by all of the Company’s directors and executive officers as a group. Each person has sole voting and dispositive power over the shares listed opposite his name except as indicated in the footnotes to the table and each person’s address is c/o DSS, Inc., 6 Framark Drive, Victor, New York 14564.
For purposes of this table, beneficial ownership is determined in accordance with the Securities and Exchange Commission rules, and includes investment power with respect to shares owned and shares issuable pursuant to warrants or options exercisable within 60 days of September 14, 2021.
The percentages of shares beneficially owned are based on 79,745,886 shares of our Common Stock issued and outstanding as of September 14, 2021, and is calculated by dividingsuch increase, the number of shares that person beneficially owns by the sum of (a)Common Stock subject to outstanding equity awards and available for issuance pursuant to future awards will represent approximately 23.8% of the total numberissued and outstanding shares of shares outstanding on September 14, 2021, plus (b) the number of sharesCommon Stock (on a fully diluted basis after giving effect to such person has the right to acquire within 60 days of September 14, 2021.future award issuances).
| Name | Number of Shares Beneficially Owned | Percentage of Outstanding Share Beneficially Owned | ||||||
| Heng Fai Ambrose Chan (1) | 24,432,095 | 30.64 | % | |||||
| John “JT” Thatch | 1,020 | * | ||||||
| Sassuan (Samson) Lee | 1,020 | * | ||||||
| José Escudero | 1,020 | * | ||||||
| Frank D. Heuszel | 2,493 | * | ||||||
| Wai Leung William Wu | 1,020 | * | ||||||
| Jason Grady | 2,493 | * | ||||||
| Todd D. Macko | 1,667 | * | ||||||
| Tung Moe Chan | - | - | ||||||
| All officers and directors as a group (9 persons) | 24,442,828 | 30.65 | % | |||||
| 5% Shareholders | ||||||||
| Global BioMedical Pte Inc. (2) | 9,956,344 | 12.49 | % | |||||
| Alset EHome International, Inc. | 12,155,591 | 15.24 | % | |||||
| * Less than 1%. | ||||||||
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
AND RELATED PERSON TRANSACTIONS
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a)Summary of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than 10%Key Terms of our equity securities (“Reporting Persons”) to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Based solely upon a review of copies of such forms filed on Forms 3, 4 and 5, and amendments thereto furnished to us, we believe that as of the date of this Report, our executive officers, directors and greater than 10 percent beneficial owners have complied on a timely basis with all Section 16(a) filing requirements, except Mr. Sassuan (Samson) Lee, Mr. José Escudero and Mr. Wai Leung William Wu each failed to file a Form 4 with respect to individual grants of 1,020 shares of the Company’s Common Stock, pursuant to the Company’s 2020 Equity Incentive Plan that each
Under the 2020 Equity Incentive Plan, the Company may grant awards of options, stock appreciation rights, restricted awards, and Other Stock-Based Awards (as defined in the 2020 Equity Incentive Plan). We refer to these collectively as “Awards.”
Awards under the 2020 Equity Incentive Plan may be granted to (i) employees of the Company or an affiliated entity, (ii) members of the Board who are not employees of the Company or an affiliated entity, and (iii) any consultant or adviser to the Company or an affiliated entity. As of March 23, 2022, executive officers and non-employee director received on April 3, 2020.directors were considered eligible to participate in the plan, in addition to the other employees, consultants and advisers of the Company. Incentive stock options within the meaning of Section 422 of the Code generally may only be granted to employees of the Company or a subsidiary.
Common Stock delivered by the Company with respect to stock option or restricted stock awards may be authorized and unissued Common Stock or Common Stock held in the treasury of the Company.
Transactions with Related PersonsAdministration
Except as disclosed herein, no director, executive officer, stockholder holding at least 5% of shares of our common stock, or any family member thereof,The Board had any material interest, direct or indirect, in any transaction, or proposed transaction since January 1, 2020, in which the amount involved in the transaction exceeds the lesser of $120,000 or one percent of the average of our total assets at the year-end for the last two completed fiscal years.
On February 25, 2020, the Company completed an underwritten public offering with gross proceeds of $4.6 million before deducting underwriting discounts and commissions and other estimated offering expenses. The offering included 740,741 shares of the Company’s common stock and 111,111 additional shares from the exercise of the underwriter’s purchase option to cover over-allotments, at the public offering price of $5.40 per share. Mr. Chan purchased 370,370 shares of Common Stock in the Offering, for an aggregate purchase price of $2,000,000.
On March 3, 2020, the Company entered into a binding term sheet (the “AMRE Term Sheet”) with LiquidValue Asset Management Pte Ltd (“LVAM”), AMRE Asset Management Inc. (“AAMI”) and American Medical REIT Inc. (“AMRE”), regarding a share subscription and loan arrangement. The AMRE Term Sheet sets out the terms of a proposed joint venture to establish a medical real estate investment trust in the United States. Pursuant to the AMRE Term Sheet, the Company subscribed for 5,250 ordinary shares of AAMI at a purchase price of $0.01 per share for total consideration of $52.50. Concurrently, AAMI issued 2,500 shares to LVAM, and 1,250 shares to AMRE Tennessee, LLC, AMRE’s executive management’s holding company. As a result, the Company holds 52.5% of the outstanding shares of AAMI, with LVAM and AMRE Tennessee, LLC, holding 35% and 12.5% of the remaining outstanding shares of AAMI, respectively. Further, pursuant to and in connection with the AMRE Term Sheet, on March 3, 2020, the Company entered into a Promissory Note with AMRE, pursuant to which AMRE will issue the Company a promissory note for the principal amount of $800,000.00 (the “AMRE Note”). The AMRE Note matures on March 3, 2022 and accrues interest at the rate of 8.0% per annum, and shall be payable in accordance with the terms set forth in the AMRE Note. The AMRE Note also provides the Company an option to provide AMRE an additional $800,000 on the same terms and conditions as the AMRE Note, including the issuance of warrants as hereinafter described. As further incentive to enter into the AMRE Note, AMRE issued the Company warrants to purchase 160,000 shares of AMRE common stock (the “ANRE Warrants”). The AMRE Warrants have an exercise price of $5.00 per share, subject to adjustment as set forth in the AMRE Warrant, and expire on March 3, 2024. Pursuant to the AMRE Warrants, if AMRE files a registration statement with the Securities and Exchange Commission for an initial public offering (“IPO”) of AMRE’s common stock and the IPO price per share offered to the public is less than $10.00 per share, the exercise price of the AMRE Warrant shall be adjusted downward to 50% of the IPO price. The AMRE Warrant also grants piggyback registration rights to the Company as set forth in the AMRE Warrant. The parties to the AMRE Term Sheet, including AMRE Tennessee, LLC, also entered into a stockholders’ agreement dated as of March 3, 2020 (the “AMRE Stockholders’ Agreement”), regarding their ownership of AAMI’s common stock to regulate certain aspects of the relationship between the stockholders and provide for certain rights and obligationsdelegated administrative authority with respect to such ownership, as set forth in the AMRE Stockholders’ Agreement. LVAM is an 82% owned subsidiary of Alset Intl. whose Chief Executive Office and largest shareholder is Mr. Chan. Following the consummation of the transactions contemplated by the AMRE Term Sheet, Mr. Chan and Mr. Heuszel were appointed2020 Equity Incentive Plan to the board of directors of AAMI.Compensation Committee. The Compensation Committee has the authority to:
| ● | promulgate, amend, and rescind rules and procedures relating to the implementation of the 2020 Equity Incentive Plan; |
| ● | select the employees, Non-Employee Directors (as defined in the 2020 Equity Incentive Plan), and Consultants (as defined in the 2020 Equity Incentive Plan) who will be granted Awards; |
| ● | determine the number and types of Awards to be granted to each participant; |
| ● | determine the number of shares, or share equivalents to be subject to each Award; |
| ● | determine the Fair Market Value (as defined in the 2020 Equity Incentive Plan) of shares if no public market exists for such shares; |
| ● | determine the option price, purchase price, base price, or similar feature for any Award; |
| ● | accelerate vesting of Awards and waive any restrictions; and |
| ● | determine all the terms and conditions of all Award Agreements (as defined in the 2020 Equity Incentive Plan), consistent with the requirements of the 2020 Equity Incentive Plan. |
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AsAvailable Awards Under the 2020 Equity Incentive Plan
The types of March 31,awards that may be granted by the Compensation Committee under the 2020 Equity Incentive Plan include:
Options
Options to purchase Common Stock may be incentive stock options meeting the Company owned 83,174,129 ordinaryrequirements of Section 422 of the Code, or nonqualified options which are not eligible for such tax-favored treatment. Currently, up to [ ] shares of Alset International Limited (“Alset Intl”, formally Singapore eDevelopment Limited) a company incorporatedCommon Stock may be issued pursuant to incentive stock options under the 2020 Equity Incentive Plan. If Proposal 5 is approved by the stockholders, the number of shares of Common Stock that may be issued pursuant to incentive stock options will increase to 20,000,000. Incentive stock options will conform with the statutory and regulatory requirements specified pursuant to Section 422 of the Code, as in Singapore and publicly listedeffect on the Singapore Exchange Limited and warrants to purchase an additional 44,005,182 ordinary shares at an exercise price of SGD$0.04 (US$0.029) per share. On June 25, 2020, the Company exercised those warrants bringing its total ownership to 127,179,311 shares or approximately 7% of the outstanding shares of Alset Intl as of December 31, 2020. Historically and through June 30, 2020, the Company carried its investment in Alset Intl at cost, less impairmentsdate such incentive stock option is granted. Incentive stock options may not be granted under the measurement alternative in ASU No. 2016-01, “Recognition2020 Equity Incentive Plan after January 1, 2030, and Measurement of Financial Assets and Financial Liabilities”. During the third quarter of 2020, the Company determined that the investments had a readily determinable fair value based on the volume of shares traded on the Singapore Exchange which evidences a ready market for shares, as well as a consistent and observable market price. Accordingly, this investment is now classified as a marketable security and is classified as long-term assets on the consolidated balance sheets as the Company has the intent and abilitymay only be granted to hold the investments for a period of at least one year. The Chairmanemployees of the Company Mr. Heng Fai Ambrose Chan,or one of its subsidiaries. If options intended to be incentive stock options are granted to a participant in excess of the $100,000 annual limitation set forth in Section 422(d)(1) of the Code, the options will be incentive stock options to the maximum extent allowed and will be nonqualified stock options as to any excess over that limitation. Incentive stock options must expire not more than 10 years from the date of grant. The 2020 Equity Incentive Plan does not specify a maximum term for nonqualified options. The exercise price per share must be not less than 100% of the fair market value of a share of Common Stock on the date the option is granted for both incentive stock options and nonqualified options. Incentive stock options granted to a participant holding more than 10% of the Executive DirectorCommon Stock must expire not more than five years from the date of grant, and Chief Executive Officerthe exercise price per share must be not less than 110% of Alset Intl. Mr. Chanthe fair market value of a share of Common Stock on the date the option is alsogranted.
Restricted Awards
Restricted Awards may take the majority shareholderform of Alset Intl as wellrestricted shares.. Restricted shares are shares of Common Stock which are subject to such limitations as the largest shareholderBoard, or Compensation Committee deems appropriate, including, but not limited to, restrictions on sale or transfer. Additionally, restricted shares may be subject to forfeiture in the event the recipient terminates employment or service as a director or consultant during a specified period, or fails to meet designated performance goals, if any. Stock certificates representing restricted shares are issued in the name of the Company. The fair value of the marketable security as of December 31, 2020 was approximately $6,830,000 and during the year ended December 31, 2020recipient but are held by the Company recorded unrealized gains on this investmentuntil the expiration of approximately $3,384,200.
On July 22, 2020, Chan Heng Fai Ambrose,any restrictions, at which time the Chairman ofrestrictive legends are removed from the Company’s board of directors, assigned a Stock Purchase and Share Subscription Agreement by and between Mr. Chan and SHRG, pursuant to which the Company purchased 30,000,000 shares of Class A common stock and 10,000,000 warrants to purchase Class A common stock for $3 million. The warrants have an average exercise price of $0.20, were immediately vested and may be exercised at any time commencing oncertificates. Beginning with the date of issuance and ending three year from such date. Theseof restricted shares and warrants are alsoprior to forfeiture, the recipient is entitled to the rights of a stockholder with respect to such shares, including voting and dividend rights. Shares issued as stock dividends will be subject to the same restrictions as the related restricted shares.
Other Stock-Based Awards
The Board, or Compensation Committee may grant other awards that involve payments or grants of shares of Common Stock or are measured by or in relation to shares of Common Stock. The 2020 Equity Incentive Plan provides flexibility to design new types of stock-based or stock-related awards to attract and retain employees, directors and consultants in a one-year trading restriction pursuant tocompetitive environment.
Adjustments for Changes in Capitalization
In the termsevent of a Lock-Up Agreement entered into between Mr. Chanchange in capitalization, the Board, or Compensation Committee will make such proportionate adjustments in the aggregate number of shares for which awards may be granted under the 2020 Equity Incentive Plan, the maximum number of shares which may be awarded to any participant, and the Companynumber of shares covered by, and assigned to the Company.exercise or base price of, any outstanding awards, as the committee in its sole discretion may deem appropriate.
On August 21,Duration, Termination and Amendment of the 2020 Equity Incentive Plan
The 2020 Equity Incentive Plan will remain in effect until January 1, 2030, or, if earlier, when awards have been granted covering all available shares under the Company, completed its acquisition of Impact BioMedical,, pursuant to a Share Exchange Agreement by and among2020 Equity Incentive Plan or the Company, DSS BioHealth, and related parties Alset Intl (formerly Singapore eDevelopment Limited), and Global Biomedical Pte Ltd. (“GBM”) which was previously approved2020 Equity Incentive Plan is otherwise terminated by the Company’s shareholders (the “Share Exchange”).UnderBoard. The Board may terminate the terms2020 Equity Incentive Plan at any time, but any such termination will not affect any outstanding awards. The Board may also amend the 2020 Equity Incentive Plan from time to time, provided that no amendment may be made without stockholder approval if such approval is required by applicable law or the requirements of an applicable stock exchange or registered securities association. Pursuant to such provisions, the Share Exchange,Board has approved an increase in the Company issued 483,334 shares of the Company’s commoncapital stock par value $0.02 per share, nominally valued at $6.48 per share, and 46,868 newly issued shares of the Company’s Series A Convertible Preferred Stock (“Series A Preferred Stock”), with a stated value of $46,868,000, or $1,000 per share,authorized for a total consideration of $50 million. Due to several factors, including a discount for illiquidity, the value of the Series A Preferred Stock was discounted from $46,868,000 to $35,187,000, thus reducing the final consideration given to approximately $38,319,000. Alset Intl CEO and largest shareholder is Mr. Heng Fai Ambrose Chan, the Chairman of the Board and the largest shareholder of the Company.
On or about August 28, 2020, the Company’s wholly owned subsidiary, DSS Securities, Inc. entered into a corporate venture to form and operate a real estate title agency,issuance under the name2020 Equity Incentive Plan as described above, and flagging of Alset Title Company, Inc, a Texas corporation (“ATC”). DSS Securities, Inc. shall own 70% of this venture with the other two shareholders being attorneys necessarynow submits such amendment to the state application and permitting process. ATC has initiated or has pending applications to do business in a number of states, including Texas, Tennessee, Connecticut, Florida, and Illinois. For the purpose of organization and the state application process, the Company’s CEO, who is a licensed attorney, has a stated non-compensated 15% ownership interest in the venture. There was no activitystockholders for the twelve-months ended December 31, 2020
On September 10, 2020, the Company’s wholly owned subsidiary DSS Securities, Inc. entered into membership interest purchase agreement with BMI Financial Group, Inc. a Delaware corporation (“BMIF”) and BMI Capital International LLC, a Texas limited liability company (“BMICI”) whereas DSS Securities, Inc. purchased 14.9% membership interests in BMIC for $100,000. DSS Securities also had the option to purchase an additional 10% of the outstanding membership interest which it exercised in January of 2021 and increased its ownership to 24.9%. This investment is valued at cost as it does not have a readily determined fair value.approval.
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BMICI is a broker-dealer registered with the Securities and Exchange Commission, is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”), and is a member of the Securities Investor Protection Corporation (“SIPC”). The Company’s chairman of the board and Mr. Sassuan Lee, an independent board member of the Company, also have ownership interest in this joint venture.Aggregate Past Grants
As of December 31,March 23 2022, awards covering an aggregate of 49,890shares of Common Stock have been granted and were outstanding under the 2020 Equity Incentive Plan, and awards covering an aggregate of 50,000 were outstanding under the 2013 Equity Incentive Plan (the “2013 Stock Incentive Plan” and, together with the 2020 Equity Incentive Plan, the “Incentive Plans”).
The following table shows information regarding the distribution of existing awards under the 2020 Equity Incentive Plan among the persons and groups identified below:
| Number of Shares Subject to Awards | ||||
| Executive Officers | Existing 2020 Equity Incentive Plan | |||
| Todd D. Macko | 1,667 | |||
| Current Executive Officers as a Group | 1,667 | |||
| Current Directors who are not Executive Officers as a Group | 3,057 | |||
| Current Employees who are not Executive Officers as a Group | 4,166 | |||
| Consultants | 41,000 | |||
| Prior Officers and Directors as a Group | - | |||
| Total Awards under the Incentive Plans | 49,890 | |||
Federal Income Tax Consequences of Awards
Following is a summary of the federal income tax consequences of option and other grants under the 2020 Equity Incentive Plan. Optionees and recipients of other rights and awards granted under the 2020 Equity Incentive Plan are advised to consult their personal tax advisors before exercising an option, stock appreciation right or other award or disposing of any stock received pursuant to the exercise of an option, stock appreciation right or other award. In addition, the following summary is based upon an analysis of the Code as currently in effect, existing laws, judicial decisions, administrative rulings, regulations and proposed regulations, all of which are subject to change, and does not address state, local or other tax laws.
Incentive Stock Options
There will be no federal income tax consequences to a participant or to the Company held 64,207,378 Class A commonupon the grant of an incentive stock option. If the participant holds the option shares equatingfor the required holding period of at least two years after the date the option was granted and one year after exercise of the option, the difference between the exercise price and the amount realized upon sale or disposition of the option shares will be long-term capital gain or loss, and the Company will not be entitled to a 32.2% ownership interestfederal income tax deduction. If the participant disposes of the option shares in SHRGa sale, exchange, or other disqualifying disposition before the required holding period ends, the participant will recognize taxable ordinary income in an amount equal to the difference between the exercise price and had recorded unrealized gains on marketable securitiesthe lesser of approximately $6.1 million for the twelve-months then ended. As of July 22, 2020, the carryingfair market value of the Company’s equity method investment exceeded our shareshares on the date of exercise or the disposition price, and the Company will be allowed a federal income tax deduction equal to such amount, subject to any applicable limitations under Code Section 162(m). Any amount received by the participant in excess of the bookfair market value on the exercise date will be taxed to the participant as capital gain, and the Company will receive no corresponding deduction. While the exercise of an incentive stock option does not result in current taxable income, the excess of the fair market value of the investee’s underlying net assets by approximately $9.5 million, which represents primarily intangible assetsoption shares at the time of exercise over the exercise price will be a tax preference item that could subject a participant to alternative minimum tax in the formyear of customer and distributor lists and goodwill arising from acquisitions. The Company is still in the process of valuing the intangible assets as of December 31, 2020 and no amortization has been recorded during the period ended December 31, 2020. The aggregate fair value of the Company’s investment in SHRG at December 31, 2020 was approximately $14,774,000. DSS, via four (4) of the Company’s existing board members, currently holds four (4) of the five (5) SHRG board of director seats. Mr. JT Thatch, DSS’s Lead Independent Director and as well the CEO of SHRG is on the SHRG Board, along with Mr Chan, DSS’s Executive Chairman of the board of directors (joined the SHRG Board effective May 4, 2020), Mr. Sassuan “Sam” Lee, DSS Independent Director (joined the SHRG Board effective September 29, 2020) and Mr. Frank D. Heuszel, the CEO of the Company (joined the SHRG Board effective September 29, 2020). Prior to the record date, Mr. Lee resigned as a member of SHRG’s Board.
On March 18, 2021, the Company entered into an agreement with Alset EHome International, Inc. (“Seller”) to purchase from the Seller its wholly owned subsidiary Impact Oncology PTE Ltd. (“IOPL”) for a purchase price $2,480,000. The acquisition of IOPL has been treated as an asset acquisition as IOPL does not meet the definition of a business as defined in Topic 805. IOPL owns 2,480,000 shares of common stock of Vivacitas along with the option to purchase an additional 250,000 shares of common stock. The Sellers largest shareholder is Mr. Chan Heng Fai Ambrose, the Chairman of the Company’s board of directors and its largest shareholder.
On April 5, 2021, Decentralized Sharing Systems, Inc., a subsidiary of the Company entered into a convertible promissory note (“SHRG Note”) with Sharing Services Global Corporation (“SHRG”), a company registered in the state of Nevada. The Company loaned the principal sum of $30,000,000, with interest at a rate of 8%, and shall be due and payable in full on demand by the Company, or if the demand is not sooner made, April 5, 2024. The interest shall be prepaid annually in cash or Class A Common Shares. At any time during the term of the SHRG Note, at the sole discretion of the Company, the outstanding principal can be converted in whole or in part into whole shares of SHRG Class A Common Stock at a conversion rate of $0.20. The Company received a $3,000,000 loan origination fee associated with this note which has been recorded as an offset to the SHRG Note and will be amortized monthly in the amount of approximately $83,000 through the term of the SHRG Note. Accordingly, in April 2021, the SHRG issued to the Company 27,000,000 shares of its Class A Common Stock, including 15,000,000 shares in payment of the loan origination fee and 12,000,000 shares in prepayment of interest for the first year In addition, the Company received 150,000,000 warrants both issued and vested on April 5, 2021. These warrants have an exercise price of $0.22 and expire April 5, 2026. Under ASC 815 (“Topic 815”), the warrants received with the SHRG Note do not meet the definition of a derivative but do require treatment as an equity investment (See Note 6). Accordingly, the value of the note was allocated between current portion of notes receivable and other investments on the consolidated balance sheet. The SHRG Note was valued at $15,043,000 as of April 5, 2021, net of discount. As of June 30, 2021, the amortized value of the note approximates $15,911,000 and approximates fair value. The Company, via three (3) of the Company’s existing board members, currently holds three (3) of the five (5) SHRG board of director seats. Mr. John “JT” Thatch, DSS’s Lead Independent Director and as well the CEO of SHRG is on the SHRG Board, along with Mr. Chan, DSS’s Executive Chairman of the board of directors (joined the SHRG Board effective May 4, 2020), and Mr. Frank D. Heuszel, the CEO of the Company (joined the SHRG Board effective September 29, 2020).
On September 3, 2021, the Company entered into a subscription agreement (the “Subscription Agreement”) with Alset EHome International, Inc. (“AEI”), which provided for an investment of up to $15,000,000 by AEI into the Company in exchange of an aggregate of 12,155,591 shares of the Company’s common stock, $0.02 par value per share. Subject to the terms and conditions contained in the Subscription Agreement, the shares were issued at a purchase price of $1.234 per share.exercise.
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PriorNonqualified Options
There will be no federal income tax consequences to this transaction, AEI indirectlya participant or to the Company upon the grant of a nonqualified stock option. When the participant exercises a nonqualified option, he or she will recognize ordinary income in an amount equal to the excess of the fair market value of the option shares on the date of exercise over the exercise price, and the Company will be allowed a corresponding tax deduction, subject to any applicable limitations under Code Section 162(m). Any gain that a participant realizes when the participant later sells or disposes of the option shares will be short-term or long-term capital gain, depending on how long the participant held the shares.
Restricted Shares
Unless a significant investmentparticipant makes an election to accelerate recognition of income to the grant date as described below, the participant will not recognize income, and the Company will not be allowed a compensation tax deduction, at the time restricted shares are granted. When the restrictions lapse, the participant will recognize ordinary income equal to the fair market value of the Common Stock as of that date, less any amount paid for the stock, and the Company will be allowed a corresponding tax deduction, subject to any applicable limitations under Code Section 162(m). If the participant files an election under Code Section 83(b) within 30 days after the grant date, the participant will recognize ordinary income as of the grant date equal to the fair market value of the stock as of that date, less any amount paid for the stock, and the Company will be allowed a corresponding compensation tax deduction at that time, subject to any applicable limitations under Code Section 162(m). Any future appreciation in the Company through majority-owned subsidiaries. AEI’s Chairman and CEO, Heng Fai Chan, and a member ofstock will be taxable to the AEI’s Board of Directors, Wu Wai Leung William, each serve on bothparticipant at capital gains rates. However, if the AEI Board andstock is later forfeited, such participant will not be able to recover the Board oftax previously paid pursuant to the Company. On September 2, 2021, the Audit Committee of the Company’s Board of Directors reviewed, approved and determined that it is advisable and in the best interests of the Company to complete the transaction described above. The Company’s Board of Directors approved this subscription agreement and the transaction in connection therewith on September 2, 2021.Code Section 83(b) election.
On September 9, 2021, the Company entered into a stock purchase agreement (the “SPA”) with American Pacific Bancorp (“APB”), which provided for an investmentOther Stock-Based Awards
The federal income tax consequences of up to $40,000,200 by the Company into APB for an aggregate of 6,666,700 shares of the APB’s Class A Common Stock, par value $0.01 per share. Subject toother stock-based awards will depend on the terms and conditions containedof those awards but, in general, participants will be required to recognize ordinary income in an amount equal to the cash and the fair market value of any fully vested shares of Common Stock paid, determined at the time of such payment, in connection with such awards. The Company normally will be entitled to a deduction at the time when, and in the SPA,amount that, the shares issued at a purchase price of $6.00 per share. Subsequent to the closing of this transaction, DSS became the majority owner of APB.participant recognizes ordinary income.
Review, Approval or RatificationInterests of Transactions with Related PersonsDirectors and Officers
The Board conducts an appropriate review of and oversees all related party transactions on a continuing basis and reviews potential conflict of interest situations where appropriate. The Board appliesmay grant awards under the following standards2020 Equity Incentive Plan to such reviews: (i) all related party transactions must be fair and reasonable and on terms comparablethemselves, as well as its officers, in addition to those reasonably expectedgranting awards to be agreed to with independent third parties for the same goods and/or services at the time they are authorized by the Board and (ii) all related party transactions should be authorized, approved or ratified by the affirmative vote of a majority of the directors who have no interest, either directly or indirectly, in any such related party transaction.its other employees.
Other Information
A “new plan benefits” table, as described in the SEC’s proxy rules, is not provided because all awards made under the amended and restated Option Plan are discretionary. Additionally, certain equity awards made to directors and officers since the end of the previous fiscal year are summarized under the heading “Equity Awards Since Fiscal Year End” in this Proxy Statement, and the table above titled “Aggregate Plan Grants” includes information regarding all outstanding awards made pursuant to the 2020 Equity Incentive Plan.
No additional awards are currently contemplated to be made under the 2020 Equity Incentive Plan as to which this approval would specifically relate.
Approval Required
Provided that a quorum is present, this proposal will be approved if the number of shares voted in favor of the proposal exceeds the number of shares voted against. Shares that are not represented at the Special Meeting, and abstentions and broker non-votes, if applicable, with respect to this proposal, will have no effect on the outcome of the voting on this proposal.
The Board recommends that stockholders vote “FOR” the increase in the number of shares of Common Stock authorized for issuance under the 2020 Equity Incentive Plan.
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AUDIT COMMITTEE REPORTSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following Audit Committee Report shall not be deemedtable and accompanying footnotes set forth certain information with respect to be “soliciting material,the beneficial ownership of our common stock as of March 14, 2022, referred to in the table below as the “Beneficial Ownership Date,” “filed”by:
| ● | each person who is known to be the beneficial owner of 5% or more of the outstanding shares of our common stock; | |
| ● | each member of our board of directors, director nominees and each of our named executive officers individually; and | |
| ● | all of our directors, director nominees and executive officers as a group. |
Beneficial ownership is determined in accordance with the SEC, orrules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to the liabilities of Section 18stock options or warrants held by that person that are currently exercisable or exercisable within 60 days of the Exchange Act. Notwithstanding anythingBeneficial Ownership Date and shares of restricted stock subject to vesting until the contraryoccurrence of certain events, are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person (however, neither the stockholder nor the directors and officers listed below own any stock options or warrants to purchase shares of our common stock at the present time). The percentages of beneficial ownership are based on 83,732,763 shares of common stock outstanding as of the Beneficial Ownership Date.
To our knowledge, except as set forth in anythe footnotes to this table and subject to applicable community property laws, each person named in the table has sole voting and investment power with respect to the shares set forth opposite such person’s name.
| Name | Number of Shares Beneficially Owned | Percentage of Outstanding Share Beneficially Owned | ||||||
| Heng Fai Ambrose Chan (1) | 26,178,632 | 31.3 | % | |||||
| John “JT” Thatch | 1,020 | * | ||||||
| Sassuan (Samson) Lee | 1,020 | * | ||||||
| José Escudero | 1,020 | * | ||||||
| Frank D. Heuszel | 2,493 | * | ||||||
| Wai Leung William Wu | 1,020 | * | ||||||
| Jason Grady | 2,493 | * | ||||||
| Todd D. Macko | 1,667 | * | ||||||
| Tung Moe Chan | - | - | ||||||
| All officers and directors as a group (9 persons) | 26,189,365 | 31.3 | % | |||||
| 5% Shareholders | ||||||||
| Global BioMedical Pte Inc. | 7,716,004 | 9.2 | % | |||||
| Alset EHome International, Inc. | 16,142,468 | 19.3 | % | |||||
| * Less than 1%. | ||||||||
| (1) | The beneficial ownership of Heng Fai Chan includes 26,178,632 shares of common stock, consisting of (a) 1,614,552 shares of common stock held by Heng Fai Holdings Limited, an entity controlled by Heng Fai Chan; (b) 688,941 shares of common stock held by Heng Fai Chan directly; (c) 16,667 shares of common stock held by BMI Capital Partners International Limited; (d) 7,716,004 shares of common stock held by Global Biomedical Pte. Ltd.; and (e) 16,142,468 shares of common stock held by Alset EHome International Inc. |
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As of the Company’s previous filings under the Securities Act, or the Exchange Act, that might incorporate by reference future filings, includingdate of this Proxy Statement, in whole or in part, the following Audit Committee Report shall not be incorporated by reference into any such filings.
The Audit Committee is currently comprised of three independent directors (as defined under Section 803 of the NYSE AMERICAN LLC Company Guide). The Audit Committee operates under a written charter adopted by the Board of Directors which can be founddoes not intend to present any other matter for action at the Special Meeting other than as set forth in the Investors/Notice of Special Meeting and this Proxy Statement. If any other matters properly come before the Special Meeting, it is intended that the shares represented by the proxies will be voted, in the absence of contrary instructions, in the discretion of the persons named in the Proxy Card.
WHERE YOU CAN FIND MORE INFORMATION
The SEC maintains a website that contains reports, proxies and information statements and other information regarding the Company and other issuers that file electronically with the SEC at www.sec.gov. The Company’s proxy statements, annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, as well as any amendments to those reports, are available free of charge through the SEC’s website. Stockholders may also read and copy materials that the Company files with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. Stockholders may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Additionally, you may access our filings with the SEC through the ‘Investors/Corporate Governance section of our web site, website at www.dsssecure.com.
Upon written or oral request to our Secretary at DSS, Inc. 275 Wiregrass Pkwy, West Henrietta, New York 14586, we will promptly provide separate copies of our Annual Report on Form 10-K and/or this Proxy Statement.
The Audit Committee has reviewedCompany’s Common Stock is listed on the New York Stock Exchange and discussed with managementtrades under the Company’s audited consolidated financial statements as of and for the fiscal year ended December 31, 2020.symbol “DSS.”
The Audit Committee has reviewed and discussed with management and the independent registered public accounting firm the quality and the acceptability of the Company’s financial reporting and internal controls.INFORMATION INCORPORATED BY REFERENCE
The Audit Committee has discussedWe are incorporating by reference specified documents that we file with the independent registered public accounting firm the overall scope and plans for their audit as well as the resultsSEC, which means that incorporated documents are considered part of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting.
The Audit Committee has discussed with management and the independent registered public accounting firm such other matters as required to be discussed with the Audit Committee under Professional Standards, the corporate governance standards of the NYSE AMERICAN LLC Exchange and the Audit Committee’s Charter.
The Audit Committee has received and reviewed the written disclosures and the letter from the independent registered public accounting firm requiredthis Proxy Statement. This document incorporates by the Statement on Auditing Standards as adopted by the Public Company Accounting Oversight Board, and has discussed with the independent registered public accounting firm their independence from management and the Company, including the impact of permitted non-audit related services approved by the Audit Committee to be performed by the independent registered public accounting firm.
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the financial statements referred to above be included inreference the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, Quarterly Report on Form 10-Q for the period ended September 30, 2021, and the Company’s Current Reports on Form 8-K, filed with the SEC during the fiscal year ended December 31, 2021 and on March 31, 2020.
John “JT” Thatch, Chairman & Audit Committee Member
Sassuan (Samson) Lee, Audit Committee Member
Wai Leung William Wu, Audit Committee Member
ANNUAL REPORTJanuary 19, 2022, as amended on January 21, 2022. Information contained on our website, www.dsssecure.com is not incorporated by reference in, and does not constitute part of, this proxy statement.
For stockholders receiving this Proxy Statement, our Annual Report as amended, any amendments to the foregoing materialsAll documents that are required to be furnished to stockholders, the proxy card and voting instruction form will be available on-line at www.proxyvote.com on or about October 1, 2021. The Notice contains instructions on how to access the proxy materials over the Internet. These materials contain detailed information about the Annual Meeting, the proposals to be considered, our Board’s nominees for directors and other information concerning the Company.
Stockholders may present proposals for action at meetings of stockholders only if they complywe file (but not those that we furnish) with the proxy rules established bySEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the SEC, applicable New York law and our Bylaws. No stockholder proposals were received for consideration at our 2021 Annual Meeting of Stockholders.
Under SEC Rule 14a-8, in order for a stockholder proposal to be included in our proxy solicitation materials for our 2022 Annual Meeting of Stockholders, it must be delivered to our Corporate Secretary at our principal executive offices no earlier than June 12, 2022 and no later than July 12, 2022, provided, however, that ifExchange Act after the date of next year’s annual meeting of stockholders is more than thirty (30) calendar daysthis proxy statement and before or more than sixty (60) calendar days after the anniversary of the date of the Special Meeting are incorporated by reference in this year’s meeting, notice by the stockholder must be delivered not later than the close of business on the later of (1) the 90th day prior to the 2022 Annual Meeting, or (2) the 10th day following the first public announcement ofproxy statement from the date of the 2022 Annual Meeting.
Under our Bylaws, to be properly brought before the meeting, business must be either (a) specified in the notice of meeting (or any supplement thereto) given by or at the directionfiling of the Board of Directors, (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before the meeting by a stockholder. In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the Company not less than ninety (90) calendar days nor more than one hundred twenty (120) calendar days in advance of the date of the one-year anniversary of the Corporation’s previous year’s annual meeting of stockholders. However, if no annual meeting was held in the previous year or the date of the annual meeting is more than thirty (30) calendar days before or more than sixty (60) calendar days after such anniversary date, such notice by the shareholder to be timely must be received by the Secretary of the Corporation not later than the close of business on the ninetieth (90th) calendar day prior to such annual meeting or, if later, the tenth (10th) calendar day following the day on which notice of the date of the meeting was first made. A stockholder’s notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the meeting (1) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (2) the name and record address of the stockholder proposing such business, (3) the class and number of shares of capital stock of the Company which are beneficially owned by the stockholder, and (4) any material interest of the stockholder in such business.
The Company will pay the cost of soliciting proxies for the Annual Meeting. In addition to solicitation by mail, directors, officers and regular employees of the Company and other authorized persons may solicit the return of proxies by telephone, telegram or personal interview. The Company will request brokerage houses, custodians, nominees and fiduciaries to forward soliciting material to their principals and will agree to reimburse them for their reasonable out-of-pocket expenses.
The Company has engaged The Proxy Advisory Group, LLC to assist in the solicitation of proxies anddocuments, unless we specifically provide related advice and informational support, for a services fee and the reimbursement of customary disbursements, which are not expected to exceed $12,000 in total.
The Board of Directors currently knows of no business to be brought before the Annual Meeting other than as set forth above. If other matters properly come before the Company at the Annual Meeting, it is the intention of the persons named in the solicited proxy to vote the proxy on such matters in accordance with their best judgment.
Stockholders are urged to vote according to the instructions provided without delay.
We are currently subject to the information requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewithotherwise. Information that we file periodic reports, Proxy Statements and other information with the SEC relating to our business, financial statementswill automatically update and other matters. Copies of such reports, Proxy Statements and othermay replace information may be copied (at prescribed rates) atpreviously filed with the public reference room maintained by the SEC at 100 F Street NE, Washington DC 20549. For further information concerning the SEC’s public reference room, you may call the SEC at 1-800-SEC-0330. Some of this information may also be accessed on the World Wide Web through the SEC’s Internet address at http://www.sec.gov.
Requests for documents relating to the Company should be directed to:
DSS, INC.
6 Framark Dr.
Victor, New York 14564
Attention: Frank D. HeuszelSEC.
| By | |
| /s/ Heng Fai Ambrose Chan | |
| Heng Fai Ambrose Chan, | |
Dated: March [__], 2022
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE ENCLOSED ENVELOPE.
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