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Acquisitions | 12 Months Ended
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Dec. 31, 2022
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | 8. Acquisitions American Pacific Bancorp. On September 9, 2021, the Company finalized a stock purchase agreement (the “SPA”) with American Pacific Bancorp (“APB”), which provided for an investment of $40,000,000 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 to the terms and conditions contained in the SPA, the shares issued at a purchase price of $6.00 per share. As a result of this transaction, DSS owns approximately 53% of APB, and as a result its operating results have been included in the Company’s financial statements beginning September 9, 2021. The Company incurred approximately $36,000 in cost associated with the acquisition of APB which were recorded as general and administrative expenses. The acquisition of APB meets the definition of a business with inputs, processes and outputs, and therefore, the Company has concluded to account for this transaction in accordance with the acquisition method of accounting under Topic 805. Since acquisition, APB has incurred approximately $194,000 of net losses, of which approximately $96,000 of loss incurred is attributable to non-controlling interest. The next largest shareholder of APB is Alset EHome International, Inc. (“AEI”). AEI’s Chairman and CEO, Heng Fai Chan, and a member of the AEI’s Board of Directors, Wu Wai Leung William, each serve on both the AEI Board and the Board of the Company. The CEO of the Company, Mr. Frank D. Heuszel, also has an approximate 2% equity position of APB. The Company has completed the valuation of good will and non-controlling interest, which approximate $29,744,000 and $33,099,000, respectively. Goodwill is driven by other intangible assets that do not qualify for separate recognition and is not deductible for tax purposes. Net assets acquired were approximately $3,400,000 and included approximately $1,250,000 in cash, $1,900,000 in marketable securities, $330,000 in notes receivable and $101,000 of accounts payable and accrued liabilities. APB and the company in which APB owns marketable securities share a common director. Sharing Services Global Corp. (“SHRG “) As of and through June 30, 2020, the Company classified its investment in Sharing Services Global Corp. (“SHRG”), a publicly traded company, as marketable equity security and measured it at fair value with gains and losses recognized in other income. In July 2020, through continued acquisition of common stock, as detailed below, the Company obtained greater than 20% ownership of SHRG, and thus has the ability to exercise significant influence over it. The Company accounted for its investment in SHRG using the equity method in accordance with ASC Topic 323, Investments—Equity Method and Joint Ventures recognizing our share of SHRG’s earnings and losses within our consolidated statement of operations. On July 22, 2020, Chan Heng Fai Ambrose, the Chairman of the Company’s board of directors, assigned to DSS 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, causing the Company’s ownership in SHRG to exceed 20%. The warrants have an average exercise price of $0.20, immediately vested and may be exercised at any time commencing on the date of issuance and ending three years from such date. As of July 22, 2020, the carrying value of the Company’s equity method investment exceeded our share of the book value of the investee’s underlying net assets by approximately $9,192,000 which represents primarily intangible assets in the form of a distributor lists and goodwill arising from acquisitions. These intangible assets have been valued at approximately $1,148,000 and $8,044,000, respectively. As of September 30, 2021, the Company held 91,460,978 class A common shares equating to a 46.8% ownership interest in SHRG. On December 23, 2021, DSS purchased 50,000,000 shares at $0.06 per share via a private placement. With this purchase, DSS increased its ownership of voting shares to 141,853,537, increase its ownership from approximately 47% of SHRG to approximately 58%, at December 31, 2021. SHRG share price on December 22, 2021 was $0.09 per share, thus the fair value of shares owned on December 22, 2021 approximated $12,767,000. On January 24, 2022, the Company exercised 50,000,000 warrants received as part of a consulting agreement with SHRG at the exercise price of $0.0001, increasing its total number of shares owned to 191,853,537, bringing its ownership percentage of voting shares to approximately 65%. During the fourth quarter of 2022, SHRG purchased back a significant number of its outstanding voting shares, increase the Company’s ownership percentage of voting shares to approximately 73% at December 31, 2022. The acquisition of SHRG meets the definition of a business with inputs, processes, and outputs, and therefore, the Company has concluded to account for this transaction in accordance with the acquisition method of accounting under Topic 805. The following summary, prepared on a proforma basis, combines the consolidated results of operations of the Company with those of SHRG as if the acquisition took place on January 1. The pro forma consolidated results include the impact of certain adjustments. SCHEDULE OF BUSINESS ACQUISITION, PRO FORMA INFORMATION
|  | 2021 (unaudited) |
Revenue |  | $ | 61,784,000 |
Net (loss)/income |  | $ | (37,236,000 | )
Basic (loss)/earnings per share |  | $ | (0.72 | )
Diluted (loss)/earnings per share |  | $ | (0.72 | )
We completed the purchase price accounting and related allocations associated with the acquisition of SHRG for the year ended December 31, 2021. The valuation of Sharing Services has considered both the Market and Income Approaches. The Market Approach using the public stock of SHRG produced a mean business enterprise value using projected 2023 results. The Income Approach was based upon the use of a discounted pro forma cash flow model and produced a business enterprise value. No weighting was applied to the Market Approach using the guideline public company method or the Income Approach given the fact the Market Approach using the public stock of SHRG is the best indicator of value. As such, we have applied all weighting to the Market Approach using the public stock of SHRG. The application of these weightings produced a concluded business enterprise value of $34.26 million for SHRG. This analysis identified an impairment to SHRG’s Linden, Utah facility and land of approximately $2,843,000. The associated facility has a useful life of 28 years as of December 31, 2021. SHRG owned trademarks and formulas increased in fair value approximately $86,000 and has useful life of 5 years as of December 31, 2021. The Company had previously identified intangible assets in the form of a distributor lists and increase the fair value approximately $132,000 and had a remaining useful life of 1 year at December 31, 2021. Also, identified was goodwill valued at $3,257,000. The Company, via three (3) of the Company’s existing board members, currently holds three (3) of the seven (7) SHRG board of director seats. Mr. John “JT” Thatch, DSS’s 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). Sentinel Brokers Company, Inc. On May 13, 2021, Sentinel Brokers, LLC. (“Sentinel LLC”), subsidiary of the Company entered into a stock purchase agreement (“Sentinel Agreement”) to acquire a 24.9% equity position of Sentinel Brokers Company, Inc. (“Sentinel Co.”), a company registered in the state of New York, for the purchase price of $300,000. During the nine months ended September 30, 2021, the Company contributed and additional $750,000 capital into Sentinel, increasing its total capital investment to $1,050,000 as of September 30, 2021. Up to and through November 30, 2022, Sentinel LLC accounted for its investment in Sentinel Co. using the equity method in accordance with ASC Topic 323, Investments—Equity Method and Joint Ventures recognizing our share of Sentinel’s earnings and losses within our consolidated statement of operations. Under the terms of this agreement, the Company had the option to purchase an additional 50.1% of the outstanding Class A Common Shares. In December 2022, Sentinel LLC exercised this option to increase its equity position to 75%. The acquisition of Sentinel Co. meets the definition of a business with inputs, processes, and outputs, and therefore, the Company has concluded to account for this transaction in accordance with the acquisition method of accounting under Topic 805. The following summary, prepared on a proforma basis, combines the consolidated results of operations of the Company with those of Sentinel Co as if the acquisition took place on January 1. The pro forma consolidated results include the impact of certain adjustments. SCHEDULE OF BUSINESS ACQUISITION, PRO FORMA INFORMATION
|  | 2022 (unaudited) |  | 2021 (unaudited)
Revenue |  | $ | 49,076,804 |  |  | $ | 21,144,000 |
Net loss |  | $ | (61,680,088 | ) |  | $ | (36,202,377 | )
Basic loss per share |  | $ | (0.55 | ) |  | $ | (0.70 | )
Diluted loss per share |  | $ | (0.55 | ) |  | $ | (0.70 | )
We are currently in the process of completing the purchase price accounting and related allocations associated with the acquisition of Sentinel Co. Assets included in this acquisition are cash of $3,977,000, receivables of $344,000 and fixed assets of $1,000. The Company is in the process of completing valuations and useful lives for certain assets acquired in the transaction. We expect the preliminary purchase price accounting to be completed during the year ending December 31, 2023. Sentinel is a broker-dealer operating primarily as a fiduciary intermediary, facilitating intuitional trading of municipal and corporate bonds as well as preferred stock, and is 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”).

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