Current Report Filing (8-k)
May 11 2021 - 8:31AM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d)
of
The Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): May 7, 2021
DOCUMENT
SECURITY SYSTEMS, INC.
(Exact
name of registrant as specified in its charter)
New
York
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001-32146
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16-1229730
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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6
Framark Drive
Victor,
New York 14564
(Address
of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code: (585) 325-3610
N/A
(Former
name or former address, if changed since last report.)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
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Trading
Symbol(s)
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Name
of each exchange on which registered
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Common
Stock, $0.02 Par Value
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DSS
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The
NYSE American LLC
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Indicate
by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act
of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging
growth company [ ]
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item
1.01 Entry into a Material Definitive Agreement.
The
information contained in Item 2.01 of this Current Report on Form 8-K is incorporated in its entirety herein by reference.
Item
2.01 Completion of Acquisition or Disposition of Assets.
On
May 7, 2021, Document Security Systems, Inc. (the “Company”) completed the sale of 100% of the capital stock of DSS
Digital Inc., the Company’s wholly-owned subsidiary (“DSS Digital”), to Proof Authentication Corporation (the
“Buyer”) pursuant to a stock purchase agreement (the “Purchase Agreement”). Pursuant to the terms of the
Purchase Agreement, the Buyer purchased DSS Digital for a purchase price of $5,000,000, consisting of $3 million in cash; $1.5
million in potential earn-out if certain performance targets are met during an earn-out period commencing on the one-year anniversary
of the closing and ending the day before the six-year of the closing; and $0.5 million in trade credit or license fee rebates.
In
connection with the sale of DSS Digital, the Company and Buyer also entered into certain ancillary agreements, including a referral
agreement and transition services agreement. Pursuant to the referral agreement, the Buyer engaged the Company as a non-exclusive
finder with respect to the sale of DSS Digital products to certain key customers. In consideration for the services rendered by
the Company under the referral agreement, the Buyer shall compensate the Company on sales made to certain customers introduced
by the Company to the Buyer within twelve months from the date of introduction at a rate of 30% of the purchase price of such
sale. The referral agreement has a term of three years and may be renewed upon written consent by the parties, unless earlier
terminated. Pursuant to the transition services agreement, the Buyer shall grant the Company a non-exclusive, royalty-free, personal,
non-sub-licensable and non-transferable limited license to provide the AuthentiGuard technology to certain existing customers
of the Company for a term of three years, which may be extended upon written consent by the parties.
The
foregoing description of the terms and conditions of the Purchase Agreement do not purport to be complete and are qualified in
their entirety by reference to the full text of the Purchase Agreement, a copy of which is attached as an exhibit hereto.
Item
8.01 Other Events.
On
May 11, 2021, the Company issued a press release relating to the sale of DSS Digital. A copy of this press release is filed as
Exhibit 99.1 hereto, and incorporated herein by reference.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits:
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
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DOCUMENT
SECURITY SYSTEMS, INC.
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May
11, 2021
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By:
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/s/
Frank D. Heuszel
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Name:
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Frank
D. Heuszel
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Title:
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Chief
Executive Officer
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