Document Security Systems, Inc. Enters into Letter of Intent To Acquire Impact Biomedical, Inc.
March 12 2020 - 8:46AM
Document Security Systems, Inc. (DSS) (NYSE American: DSS), a
leader in anti-counterfeit, authentication and diversion protection
technologies, today announced that it has entered into a binding
term sheet to (“Term Sheet”) acquire Impact Biomedical, Inc.
(IMPACT), a company engaged in the development and marketing of
biohealth security technologies, in a proposed share exchange
transaction with a purchase price capped at $50 million, subject to
completion of due diligence and an independent valuation.
According to the terms of the Term Sheet between the parties, DSS
will issue up to 14.5 M shares of common stock and a perpetual
convertible preferred stock to which DSS will have certain
customary rights and requirements, including appointing members of
the Board of Directors of IMPACT. The preferred stock will be
convertible at $0.216 per share and have a 19.9% blocker.
The Term Sheet and closing conditions are
subject to both DSS and GBM having obtained approvals from their
respective shareholders and relevant stock exchanges, whereby an
independent audit of IMPACT shall be included in the pending proxy
for shareholder vote. The Term Sheet further lay out the intention
to give a dividend of IMPACT shares to the shareholders (excluding
the controlling shareholders of DSS and the chairman’s group of
companies). The proposed bonus being, for every one DSS share held,
the shareholder will be entitled to a bonus of two IMPACT shares.
Following that, IMPACT is to pursue an initial public offering.
Frank D. Heuszel, CEO of DSS stated, “We are
pleased to proceed with this exciting expansion of our security
product coverage into biohealth security technologies with IMPACT’s
impressive technology mix. This acquisition comports with DSS
Chairman Heng Fai Ambrose Chan’s vision of enhancing the value of
DSS with complementary and poignant product offerings, especially
in these challenging days of the need for products that assist in
the mitigation of Coronavirus, such as Impact Biomedical’s Equivir
product which has been shown in studies to be effective as an
antiviral against a broad range of viruses including in vitro
efficacy against multiple strains of Influenza (H1N1, H3N2, H5N1,
H7N9, Influenza B, Parainfluenza 3), Human Rhinovirus-14, Human
Coronavirus-A, and Ebola. Equivir’s abilities to inhibit viruses
via multiple targets have prompted further studies to test Equivir
as a potential treatment of COVID-19, the disease caused by the
pandemic novel coronavirus SARS-CoV2.We are heading into a new era
of security where we are constantly adapting to the dynamic and
ever changing landscape.
Mr. Chan leadership and belief in DSS’ ongoing
mission are paramount in this acquisition and we look forward to
proceeding down the path to closing and assimilating the IMPACT
business in kind.”
Jason Grady, DSS’s Chief Operating Officer,
commented: “DSS is continuing to pursue its strategy of
diversification and this acquisition represents the dedicated
efforts of our team to identify assets that we expect will be
accretive to our business while approaching the structural
acquisition thereto with creativity and an eye towards creating
lasting shareholder value. We are pleased to advance our business
expansion efforts with IMPACT to continue leading the way in
industry security technologies.”
About Document Security Systems, Inc.
(DSS)
For over 15 years, DSS has protected
corporations, financial institutions, and governments from
sophisticated and costly fraud. DSS' innovative anti-counterfeit,
authentication, and brand protection solutions are deployed to
prevent attacks which threaten products, digital presence,
financial instruments, and identification. AuthentiGuard®, the
company's flagship product, provides authentication capability
through a smartphone application so businesses can empower a wide
range of employees, supply chain personnel, and consumers to track
their brands and verify authenticity. For more information on DSS
visit http://www.dsssecure.com.
Investor Contact:
Bret ShapiroCoreIR(516) 222-2560ir@dsssecure.com
Safe Harbor Disclosure
This press release contains forward-looking
statements that are made pursuant to the safe harbor provisions
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Such forward-looking statements include, but are not
limited to, statements related to the Company's ability to complete
the financing, its intended use of proceeds and other statements
that are not historical facts. Forward-looking statements are based
on management’s current expectations and are subject to risks and
uncertainties that may cause actual results or events to differ
materially from those projected. These risks and uncertainties,
many of which are beyond our control, include: the risk that the
public offering of common stock may not close; risks relating to
our growth strategy; our ability to obtain, perform under and
maintain financing and strategic agreements and relationships;
risks relating to the results of development activities; our
ability to attract, integrate and retain key personnel; our need
for substantial additional funds; patent and intellectual property
matters; competition; as well as other risks described in the
section entitled “Risk Factors” in the prospectus and in the
section entitled “Risk Factors” and elsewhere in our Annual Report
on Form 10-K filed with the SEC on March 15, 2019 and in our other
filings with the SEC, including, without limitation, our reports on
Forms 8-K and 10-Q, all of which can be obtained on the SEC website
at www.sec.gov. Readers are cautioned not to place undue reliance
on the forward-looking statements, which speak only as of the date
on which they are made and reflect management’s current estimates,
projections, expectations and beliefs. We expressly disclaim any
obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements contained herein to
reflect any change in our expectations or any changes in events,
conditions or circumstances on which any such statement is based,
except as required by law.
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