11. Short-Term and Long-Term Debt

Promissory Notes - On May 20, 2021, Premier Packaging entered into master loan and security agreement (“BOA Note”) with Bank of America, N.A. (“BOA”) to secure financing approximating $3,710,000 to purchase and use as collateral, a new Heidelberg XL 106-7+L printing press. The aggregate principal balance outstanding under the BOA Note shall bear interest at a variable rate on or before the loan closing. As of June 30, 2026, and December 31, 2025, the outstanding principal on the BOA Note was $1,647,000 and $1,916,000, respectively and had an interest rate of 4.63%. As of June 30, 2026, $544,000 was included in the Current portion of long-term debt, net, and the remaining balance of approximately $1,103,000 is recorded as Long-term debt. As of December 31, 2025, $544,000 was included in the current portion of long-term debt, net, and the remaining balance of approximately $1,372,000 recorded as long-term debt. This note matures in April of 2029. Interest expense for the six months ended June 30, 2026 and 2025 approximated $42,000 and $54,000, respectively. The BOA Note contains certain covenants that are analyzed annually. As of June 30, 2026, Premier is in compliance with these covenants.

On August 1, 2021, AMRE Shelton, LLC., (“AMRE Shelton”) a subsidiary of AMRE, entered into a loan agreement (“Shelton Agreement”) with Patriot Bank, N.A. (“Patriot Bank”) in an amount up to $6,155,000, with the amount financed approximating $5,105,000. The Shelton Agreement contains monthly payments of principal and an initial interest of 4.25%. The interest will be adjusted commencing on July 1, 2026 and continuing for the next succeeding 5-year period shall be determined one month prior to the change date and shall be an interest rate equal to two hundred fifty (250) basis points above the Federal Home Loan Bank Boston 5-Year/25-Year amortizing advance rate, but in no event less than 4.25% for the term of 120 months with a balloon payment approximating $2,829,000 due at term end. The funds borrowed were used to purchase a 40,000 square foot, 2.0 story, Class A+ multi-tenant medical office building located on a 13.62-acre site, which serves as collateral for the Shelton Agreement. The purchase price has been allocated as $4,640,000, $1,600,000, and $325,000 for the facility, land, and tenant improvements, respectively. Also included in the value of the property is $585,000 of intangible assets with an estimated useful life of approximating 3 years. The net book value of these assets as of June 30, 2026, and December 31, 2025, approximated $6,190,000 and $6,231,000, respectively. As of June 30, 2026, the outstanding principal and interest of approximately $4,109,000, net of $2,000 in deferred financing costs. As of June 30, 2026, approximately $225,000 is classified as Current portion of long-term debt, net with the remaining $3,884,000 classified as long-term debt, net on the consolidated balance sheet. Interest expense for the six months ended June 30, 2026 and 2025 approximated $89,000 and $93,000, respectively. As of December 31, 2025 approximately $226,000 of principal and accrued interest is classified as current portion of long-term debt, net, and the remaining balance of approximately $4,001,000 recorded as long-term debt, net of $4,000 in deferred financing costs. This agreement matures in July of 2031.

On October 13, 2021, LVAM entered into loan agreement with BMIC (“BMIC Loan”), a related party, whereas LVAM borrowed the principal amount of $3,000,000, with interest to be charged at a variable rate to be adjusted at the maturity date. The BMIC loan contains an auto renewal period of three months, with a current maturity date of July 2026. As of June 30, 2026, and December 31, 2025, the outstanding principal and interest of approximately $33,000 and $33,000, respectively, are included in Current portion of long-term debt – related party, net on the consolidated balance sheet.

On October 13, 2021, LVAM entered into a loan agreement with Lee Wilson Tsz Kin (“Wilson Loan”), a related party, whereas LVAM borrowed the principal amount of $3,000,000, with interest to be charged at a variable rate to be calculated at the maturity date. The Wilson Loan matures on October 12, 2022, and contains an auto renewal period of three months with a current maturity date of July 2026. As of June 30, 2026, and December 31, 2025, the outstanding principal and interest of approximately $145,000 and $145,000, respectively, are included in Current portion of long-term debt – related party, net on the consolidated balance sheet.

On November 2, 2021, AMRE LifeCare entered into a loan agreement (“LifeCare Agreement”) with Pinnacle Bank, (“Pinnacle Bank”) in the amount of $40,300,000. The LifeCare Agreement supported the acquisition of three medical facilities located in Fort Worth, Texas, Plano, Texas (sold in March 2025), and Pittsburgh, Pennsylvania for a purchase price of $62,000,000. These assets are classified as investments, real estate on the consolidated balance sheet, and serves as collateral for the LifeCare Agreement. The purchase price has been allocated as $32,100,000, $12,100,000, and $1,500,000 for the facility, land and site improvements, respectively. Also included in the value of the property is $15,901,000 of intangible assets with estimated useful lives ranging from 1 to 11 years. The net book value of the assets acquired as of June 30, 2026 is approximately $10,167,000. The LifeCare Agreement calls for the principal amount of the in equal, consecutive monthly instalments based upon a twenty-five (25) year amortization of the original principal amount of the LifeCare Agreement at an initial rate of interest equal to the interest rate determined in accordance as of July 29, 2022 provided, however, such rate of interest shall not be less than 4.28%, with the first such instalment being payable on August 29, 2022 and subsequent instalments being payable on the first day of each succeeding month thereafter until the maturity date, at which time any outstanding principal and interest is due in full. The affective interest rate at June 30, 2026 was 7.9%. As of June 30, 2026, and December 31, 2025, the outstanding principal and interest of the LifeCare agreement approximates $38,504,000 and $37,401,000, respectively. As June 30, 2026, $30,187,000 is included Current portion of long-term debt, net and $8,317,000 is included in Accrued interest on long-term debt on the accompanying balance sheet. As December 31, 2025, $30,254,000 is included Current portion of long-term debt, net and $7,147,000 is included in Accrued interest on long-term debt on the accompanying balance sheet. Interest expense for the six months ended June 30, 2026 and 2025 approximated $1,171,000 and $1,572,000, respectively. This note is in default and demand was made for final payment to be made by December 22, 2023. As of June 30, 2026, this amount is past due.

On March 30, 2023, Premier Packaging, a subsidiary of the Company entered into a loan and security agreement with Union Bank & Trust Company for the principal amount of $790,000 and shall accrued interest at the rate of 7.44%. Principal and interest shall be repaid in the approximate amount of $14,000 through March 2029. This loan is collateralized by a Bobst Model Novacut and is guaranteed by DSS, Inc. As of June 30, 2026, the outstanding principal and interest approximates $417,000 of which $132,000 was included in the current portion of long-term debt, net, and the remaining balance of approximately $285,000 recorded as long-term debt. As of December 31, 2025, the outstanding principal and interest approximates $482,000 of which $132,000 was included in the current portion of long-term debt, net, and the remaining balance of approximately $350,000 recorded as long-term debt. Interest expense for the six months ended June 30, 2026 and 2025 approximated $17,000 and $22,000, respectively.

In August of 2025, DSS issued a $500,000 convertible promissory note to Alset, Inc. (“holder”), the Company’s largest shareholder and a related party, bearing interest at Prime (6.75% at June 30, 2026). The first 12 months’ interest is to be paid in shares of the Company; thereafter, interest is prepaid annually in cash or shares at the holder’s election. The note is convertible at the holder’s option at a fixed $0.86 per share, is payable on demand (or July 31, 2028 if not demanded), and may be redeemed by the Company on or after the first anniversary. The Company is required to reserve sufficient authorized shares and maintain the listing/quotation of its common stock. Under ASU 2020-06 and ASC 815-40, the debt host’s embedded conversion feature is indexed to the Company’s own stock and is equity-classified; accordingly, no embedded derivative is bifurcated and the instrument is accounted for as single-unit debt using the effective interest method. Interest is recognized in interest expense; when settled in shares, a credit to APIC is recorded at the fair value of shares on settlement, and any prepaid interest is recorded as a discount/prepaid and amortized to expense over the related period. The outstanding principal and interest, approximates $529,000 and is included in Convertible note payable, related party on the accompanying consolidated balance sheet at June 30, 2026. The outstanding principal and interest, approximates $512,000 and is included in Convertible note payable, related party on the accompanying consolidated balance sheet at December 31, 2025. Interest expense for the six months ended June 30, 2026 and 2025 approximated $17,000 and $0, respectively.

On March 26, 2026, the Company issued a $2,450,000 convertible promissory note to Alset International Limited (“AIL”), a related party. The note bears interest at 3.0% per annum, is payable on demand by Alset International Limited, or if the demand is not sooner made, is payable on the earliest to occur of (i) five years from issuance; (ii) the acceleration of the note upon occurrence of an event of default; (iii) upon full conversion of the note; or (iv) upon repurchase of the note by the Company. This note is convertible at any time into shares of the Company’s common stock at a conversion price of $0.74 per share. Interest is payable at maturity either in cash or shares of common stock, at the holder’s election. The note also contains a most favored nation provision allowing AIL to exchange the note for a subsequent convertible instrument issued by the Company if AIL determines that such instrument contains more favorable terms. AIL is a related party because the Company owns approximately 4% of AIL’s outstanding shares, and the Company’s Chairman is the Executive Director, Chief Executive Officer, majority shareholder of AIL, and the largest shareholder of the Company. In connection with the note, the Company issued AIL a warrant to purchase up to 16,554,055 shares of the Company’s common stock at an exercise price of $0.93 per share. The warrant expires five years from the issuance date. The Company evaluated the conversion feature, most favored nation provision, and warrant under ASC 815, ASC 815-40, and ASC 480 and concluded that no derivative liability was required. The conversion feature qualified for the scope exception for instruments indexed to and classified in the Company’s own equity, and the warrant was classified as equity because it is share-settled, contains a fixed share limit, does not require net cash settlement, and the Company has sufficient authorized and unissued shares to settle the warrant. The Company allocated the $2,450,000 proceeds between the convertible note and warrant based on their relative fair values. The warrant valuation was determined using a Black-Scholes option-pricing model. Significant valuation inputs included the Company’s common stock price of $0.91 per share, exercise price of $0.93 per share, expected term of 5.0 years, risk-free rate of 4.0%, selected volatility of 85.0%, expected dividend rate of 0.0%, and 16,554,055 warrants outstanding. Based on these inputs, the calculated warrant value was $0.63 per warrant, resulting in an indicated fair value of $10,368,000. The fair value of the convertible note was determined using valuation techniques that considered the contractual note terms, conversion feature, most favored nation provision, Company-specific credit risk, market interest rates, expected volatility, and probability-weighted conversion scenarios. The valuation considered two scenarios: a no subsequent convertible instrument issuance before expiration scenario, with an indicated value of $3,418,000. For purposes of allocating the $2,450,000 proceeds at issuance, the Company used the relative fair values of the warrant and convertible note. Accordingly, $1,843,000 was allocated to the warrant and recorded in additional paid-in capital, and $607,000 was allocated to the note. The allocation resulted in a debt discount of $1,843,000, which will be amortized to interest expense over the five-year term of the note using the effective interest method. As of June 30, 2026, the note had a principal amount of $2,450,000, unamortized debt discount of approximately $1,792,000 and a net carrying amount of approximately $658,000. The debt discount is being amortized to interest expense over the five-year contractual term of the note using the effective interest method.

On June 23, 2026, the Company issued a $1,000,000 convertible promissory note to Alset, Inc. (“Alset”), a related party, and received aggregate proceeds of $1,000,000. The note bears interest at 3.0% per annum, calculated based on the actual number of days elapsed over a 360-day year, is payable on demand by Alset, and otherwise matures on June 23, 2031. The outstanding principal and accrued interest are convertible into shares of the Company’s common stock at a conversion price of $0.45 per share, subject to required stockholder approval and customary anti-dilution adjustments. Interest is payable at maturity either in cash or shares of common stock, at the holder’s election. Beginning June 23, 2027, the Company may redeem all or a portion of the outstanding principal without penalty. Alset is a related party due to common control and overlapping directors and officers, and the transaction is disclosed in accordance with ASC 850-10-50. In connection with the note, the Company issued Alset warrants to purchase up to 17,777,776 shares of the Company’s common stock at an exercise price of $0.50 per share. The warrants are immediately exercisable and expire on June 23, 2029. The Company evaluated the conversion feature, holder demand provision, issuer redemption provision, and warrants under ASC 470-20, ASC 815-15, ASC 815-40, and ASC 480 and concluded that no derivative liability was required. The conversion feature qualified for the scope exception for instruments indexed to and classified in the Company’s own equity. The holder demand and issuer redemption provisions were determined to be clearly and closely related to the debt host. The warrants were classified as equity because they are share-settled, have a fixed exercise price and fixed share limit, do not require net cash settlement, and the Company has sufficient authorized and unissued shares to settle the warrants. Accordingly, the warrants were recorded in additional paid-in capital and are not subsequently remeasured while they continue to qualify for equity classification. The Company allocated the $1,000,000 of proceeds between the convertible note and warrants based on their relative fair values in accordance with ASC 470-20-30-1 and ASC 470-20-30-2. The warrant valuation was determined using a Black-Scholes option-pricing model. Significant valuation inputs included the Company’s common stock price of $0.61 per share, exercise price of $0.50 per share, expected term of 3.0 years, risk-free interest rate of 4.2%, selected volatility of 85.0%, expected dividend rate of 0.0%, and 17,777,776 warrants outstanding. Based on these inputs, the calculated warrant value was $0.37 per warrant, resulting in an indicated fair value of $6,651,000. The fair value of the convertible note at issuance was determined using a binomial lattice model that considered the contractual note terms, conversion feature, Company-specific credit risk, market interest rates, expected volatility, and the Company’s redemption right. Significant valuation inputs included the Company’s common stock price of $0.61 per share, conversion price of $0.45 per share, contractual term of 5.0 years, risk-free interest rate of 4.2%, selected volatility of 85.0%, and discount rate of 13.25%. Based on these inputs, the indicated fair value of the convertible note at issuance was $1,531,000. For purposes of allocating the $1,000,000 of proceeds at issuance, the Company used the relative fair values of the warrants and convertible note. Accordingly, $813,000 was allocated to the warrants and recorded in additional paid-in capital, and $187,000 was allocated to the note. The allocation resulted in an initial debt discount of $813,000, which is being amortized to interest expense over the five-year contractual term of the note using the effective interest method. As of June 30, 2026, the note had a principal amount of $1,000,000, an unamortized debt discount of approximately $812,000, and a net carrying amount of approximately $188,000.

A summary of scheduled principal payments of long-term and current debt, not including revolving lines of credit, convertible notes and notes payable – related party subsequent to June 30, 2026, are as follows:

 Schedule of Long-Term And Current Debt

A summary of scheduled principal payments of long-term and current debt, not including revolving lines of credit, convertible notes and notes payable – related party subsequent to December 31, 2025, are as follows: