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EX-99.1 - DOCUMENT SECURITY SYSTEMS INC | v207306_ex99-1.htm |
EX-99.2 - DOCUMENT SECURITY SYSTEMS INC | v207306_ex99-2.htm |
EX-99.3 - DOCUMENT SECURITY SYSTEMS INC | v207306_ex99-3.htm |
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): December 31, 2010
DOCUMENT
SECURITY SYSTEMS, INC.
(Exact
name of registrant as specified in its charter)
New
York
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1-32146
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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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||||
First
Federal Plaza, Suite 1525
28
East Main Street
Rochester,
NY
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14614
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (585) 325-3610
Not
Applicable
(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 (see General Instruction A.2. below):
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
¨
|
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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Item
3.02 Unregistered Sales of Equity Securities.
On December 31, 2010, Document Security
Systems, Inc. (the “Company”) entered into an agreement (the “Agreement”) with
Fletcher International, Ltd., (“Fletcher”) a company organized under the laws of
Bermuda, under which Fletcher purchased $4,000,000 of the
Company’s Common Stock (756,287shares) at approximately $5.29 per share on
December 31, 2010 ( the “Initial Investment”). In conjunction with the Initial
Investment, Fletcher received a warrant (the “Initial Warrant”) to purchase up
to $4,000,000 of the Company’s Common Stock at approximately $5.29 per share at
any time until December 31, 2019, subject to adjustment as set forth in the
Initial Warrant. Under the Agreement, Fletcher also received the
right to make additional equity investments of up to $4,000,000 in total (the
“Later Investments”) by May 2, 2011 at the volume-weighted
average price of the Company’s common stock in the calendar month
preceding each Later Investment notice date at prices no lower than
approximately $4.76 per share and no greater than approximately $6.35 per share,
subject to adjustment as set forth in the
Agreement. Fletcher received a second warrant (the
“Second Warrant”) to purchase shares of the Company’s common stock with an
aggregate purchase price of up to the total dollar amount of the Later
Investments at a per-share exercise price of 120% of the per-share price paid in
the final Later Investment to occur, subject to adjustment as set forth in the
Second Warrant. The Initial Warrant and the Second Warrant also
have a cashless exercise provision.
In connection with the Agreement, the
Company is required to file a registration statement with the Securities and
Exchange Commission (“SEC”) covering the Initial Investment of 756,287 shares
and 756,287 shares underlying the Initial Warrant, and to have such registration
statement declared effective no later than March 16, 2011.. If
Fletcher makes any Later Investment purchases of the Company’s common stock, the
Company would have similar registration requirements. In the event that any
registration statement is not timely filed or declared effective, or is not kept
effective and available in accordance with the Agreement, the Company will be
obligated to pay certain amounts to Fletcher as set forth in the
Agreement
Certain events, such as later equity
issuances by the Company (except for certain exclusions), restatements,
dividends, stock splits, changes of control, and other events specified in the
Agreement and the Warrant may result in additional shares of Common Stock being
issued to Fletcher, adjustments being made to the terms of the Later
Investments, the Initial Warrant or the Second Warrant, or other results, in
each case as set forth in the Agreement, the Initial Warrant and the Second
Warrant.
Proceeds from the transaction will be
used primarily for sales and marketing, product development, and working
capital. The Company will pay WM Smith & Co., as placement
agent, a cash placement fee of 6% for all cash investments received under the
Agreement, or in the case of the cashless exercise of warrants, common stock
equal to 6% of the shares issued to Fletcher in conjunction with the cashless
exercise.
The sales of these securities were made
in reliance upon Rule 506 and Section 4(2) of the Securities Act of 1933, as
amended (the “Act”).
The foregoing description is a summary
only, does not purport to set forth the compete terms of such documents, and is
qualified entirely by reference to the Agreement and Warrant, which are filed as
Exhibits to this Current Report.
Item
9.01 Financial Statements and Exhibits
(d) Exhibits
ExhibitNo.
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Description
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10.1
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Agreement
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10.2
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Warrant
Certificate No. 1
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10.3
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Warrant
Certificate No. 2
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
DOCUMENT
SECURITY SYSTEMS, INC.
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Dated:
January 5, 2011
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By:
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/s/
Patrick A. White
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Patrick
A. White
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Chief
Executive Officer
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