A special meeting of ~~Stockholders~~stockholders (the ~~“Annual~~“Special Meeting”) of Document Security Systems, Inc., a New York corporation (the “Company”, or “DSS” or “us” or “we”~~, “us”~~ or “our”) will be held ~~on Tuesday, June 28, 2016,~~ at ~~11:00 a.m. (Eastern Standard Time)~~_____________on Monday, July 27, 2020 at ~~200 Canal View Boulevard, Suite 300, Rochester, New York 14623~~________a.m. local time for the ~~purposes of:~~following purpose:

In this proxy statement, the term “Company” or “DSS” or “us” or “we” or “our” means Document Security Systems, Inc. and its direct and indirect subsidiaries, unless the context otherwise provides. The ~~foregoing items of~~accompanying proxy statement sets forth additional information regarding the Special Meeting, and provides you with detailed information regarding the business ~~are more fully described~~to be considered at the Special Meeting. We encourage you to read the proxy statement carefully and in ~~the Proxy Statement accompanying this notice.~~its entirety.

The ~~Board of Directors has fixed the~~ close of business on ~~Friday, April 29, 2016~~June 18, 2020 has been fixed as the record date (the “Record Date”) for the determination of stockholders entitled to notice of, and to vote at, the ~~Annual Meeting and at~~meeting or any adjournment ~~or postponement~~ thereof. Stockholders holding a majority of the votes cast at the Special Meeting must vote in favor of Proposal 1, Proposal 2 and Proposal 3 to be approved by stockholders.

~~This year, we are again implementing~~Your vote is very important, regardless of the ~~“Notice~~number of shares you own. Whether or not you expect to attend the Special Meeting in person, please mark, sign, date and ~~Access” method approved by~~return the ~~Securities and Exchange Commission that allows companies to provide~~enclosed proxy ~~materials to stockholders via~~as promptly as possible in the ~~Internet. The Internet will be used as our primary means of furnishing~~enclosed postage-prepaid envelope. If you attend the meeting you may vote in person, even if you returned a proxy. These proxy materials to our stockholders. Consequently, stockholders will not receive paper copies of our proxy materials. We will instead send stockholders a notice with instructions for accessing the proxy materials and voting via the Internet. The notice also provides information on how stockholders may obtain paper copies of our proxy materials if they so choose. This makes the proxy distribution process more efficient and less costly.

A Notice of Internet Availability of Proxy Materials, which contains specific instructions on how to access those materials via the Internet and vote online, as well as instructions on how to request paper copies, will be mailed ~~to our stockholders~~ on or about ~~May 16, 2016. The Company’s Annual Report and the Proxy Statement, along with any amendments~~________ to the ~~foregoing materials that are required to be furnished to~~ stockholders ~~will be available at https://materials.proxyvote.com/25614T.~~of record on the Record Date.

WHETHER OR NOT YOU PLAN ON ATTENDING THE ~~ANNUAL~~SPECIAL MEETING IN PERSON, PLEASE VOTE USING THE PROXY CARD AS PROMPTLY
AS POSSIBLE TO ENSURE THAT YOUR VOTE IS COUNTED.THE DSS BOARD OF DIRECTORS HAS DETERMINED AND BELIEVES THAT EACH OF THE PROPOSALS OUTLINED ABOVE IS ADVISABLE TO, AND IN THE BEST INTERESTS OF, DSS AND ITS STOCKHOLDERS AND HAS APPROVED EACH SUCH PROPOSAL. THE DSS BOARD OF DIRECTORS RECOMMENDS THAT DSS STOCKHOLDERS VOTE “FOR” EACH SUCH PROPOSAL.

The proxy materials describe the proposals on which our Board of Directors would like you, as a stockholder, to vote on at the Annual Meeting. The materials provide you with information on these proposals so that you can make an informed decision. We intend to mail a Notice of Internet Availability of Proxy Materials (the “Notice”) to all stockholders of record entitled to vote at the Annual Meeting.

Stockholders who owned shares of common stock of the Company, par value $0.02 per share (the “Common Stock”), as of April 29, 2016, the Record Date, may attend and vote at the Annual Meeting. Each share is entitled to one vote. There were 51,881,948 shares of Common Stock outstanding as of the Record Date. All shares of Common Stock shall vote together as a single class.

The proxy card enables you to appoint the persons named therein as your representative to vote your shares at the Annual Meeting, and to provide specific instructions as to how you wish your shares to be voted. By completing and returning the proxy card, you are authorizing these persons to vote your shares at the Annual Meeting in accordance with your instructions on the proxy card. By providing specific voting instructions for each proposal identified on the proxy card, your shares will be voted in accordance with your wishes whether or not you attend the Annual Meeting. Even if you plan to attend the Annual Meeting, we suggest that you complete and return your proxy card before the Annual Meeting date just in case your plans change. If a routine proposal comes up for vote at the Annual Meeting that is not on the proxy card, your appointed representative will vote your shares, under your proxy, according to their best judgment.

You are being asked to vote on the election of the Company’s Board of Directors, on the ratification of the Company’s independent registered public accountants for the fiscal year ending December 31, 2016, for approval of executive compensation as disclosed in this Proxy Statement of the Company’s executive officers who are named in this Proxy Statement’s Summary Compensation Table, and for approval of an amendment to the Company’s certificate of incorporation to effect a 1-for-4 reverse stock split. We may also transact any other business that properly comes before the Annual Meeting.

Our Board of Directors unanimously recommends that the stockholders vote “For” the nominees for director, “For” the ratification of the Company’s independent registered public accountants for the fiscal year ending December 31, 2016, “For” approval of the executive compensation disclosed in this Proxy Statement of the Company’s executive officers who are named in this Proxy Statement’s Summary Compensation Table, and “For” approval of an amendment to the Company’s certificate of incorporation to effect a 1-for-4 reverse stock split.

~~What is the difference between holding shares as a stockholder of record and holding shares as a beneficial owner?~~

Most of our stockholders hold their shares in an account at a brokerage firm, bank, broker dealer or other nominee holder, rather than holding share certificates in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.

If on the Record Date, your shares were registered directly in your name with our transfer agent, American Stock Transfer and Trust Company, LLC, you are a stockholder of record who may vote at the Annual Meeting. As the stockholder of record, you have the right to direct the voting of your shares via the internet or telephone or, if you request, by returning a proxy card to us. You may also vote in person at the Annual Meeting. Whether or not you plan to attend the Annual Meeting, please vote via the internet or telephone, or if you request, complete, date and sign a proxy card and provide specific voting instructions to ensure that your shares will be voted at the Annual Meeting.

If on the Record Date, your shares were held in an account at a brokerage firm, bank, broker-dealer or other similar organization, you are considered the beneficial owner of shares held “in street name”, and the Notice is being forwarded to you by that organization. The organization holding your account is considered the shareholder of record for purposes of voting at the Annual Meeting. As the beneficial owner, you have the right to instruct your nominee holder on how to vote your shares and to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote these shares in person at the Annual Meeting unless you receive a valid proxy from your brokerage firm, bank, broker dealer or other nominee holder. To obtain a valid proxy, you must make a special request of your brokerage firm, bank, broker dealer or other nominee holder. If you do not make this request, you can still vote by following the voting instructions contained in the Notice; however, you will not be able to vote in person at the Annual Meeting.

~~Stockholders of record (also called registered stockholders) may vote by any of the following methods:~~

~~A. By mail: if you request or receive proxy materials by mail, you may vote by completing the proxy card with your voting instructions and returning it in the postage-paid envelope provided.~~

~~If we receive your proxy card prior to the Annual Meeting date and you have marked your voting instructions on the proxy card, your shares will be voted:~~

~~B. By Internet: read the proxy materials and follow the instructions provided in the Notice.~~

~~C. By toll-free telephone: read the proxy materials and call the toll free number provided for in the proxy voting instructions.~~

~~If your shares are held in the name of a broker, bank, broker dealer or other nominee holder of record, you may vote by any of the following methods:~~

A. By Mail: If you request or receive printed copies of the proxy materials by mail, you may vote by completing the proxy card with your voting instructions and returning it to your broker, bank, broker dealer or other nominee holder of record prior to the Annual Meeting.

~~B. By Internet: You may vote via the Internet by following the instructions provided in the Notice mailed to you by your nominee holder.~~

~~C. By toll-free telephone: You may vote by calling the toll free telephone number found in the proxy voting instructions.~~

D. In Person: If you are a beneficial owner of shares held in street name and you wish to vote in person at the Annual Meeting, you must obtain a valid proxy from the nominee organization that holds your shares.

~~Why did I receive a Notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?~~

Pursuant to rules adopted by the Securities and Exchange Commission, the Company has elected to provide access to its proxy materials over the Internet. Accordingly, the Company is sending such Notice to the Company’s stockholders of record and beneficial owners. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice. In addition, stockholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. The Company encourages you to take advantage of the availability of the proxy materials on the Internet.

You may have multiple accounts at the transfer agent and/or with brokerage firms. Please sign and return all proxy cards, and provide your voting instructions, to ensure that all of your shares are voted for each of the proposals.

~~You may revoke your proxy and change your vote at any time before the polls close at the Annual Meeting. You may do this by:~~

Please note, however, that if your shares are held of record by a brokerage firm, bank, broker dealer or other nominee, you must instruct your broker, bank, broker dealer or other nominee that you wish to change your vote by following the procedures on the voting form provided to you by the broker, bank, broker dealer or other nominee. If your shares are held in street name, and you wish to attend the Annual Meeting and vote at the Annual Meeting, you must bring to the Annual Meeting a legal proxy from the broker, bank, broker dealer or other nominee holding your shares, confirming your beneficial ownership of the shares and giving you the right to vote your shares.

Consistent with state law and our bylaws, the presence, in person or by proxy, of at least a majority of the shares entitled to vote at the meeting will constitute a quorum for purposes of voting on a particular matter at the meeting. Once a share is represented for any purpose at the meeting, it is deemed present for quorum purposes for the remainder of the meeting and any adjournment thereof unless a new record date is set for the adjournment. Shares held of record by stockholders or their nominees who do not vote by proxy or attend the meeting in person will not be considered present or represented and will not be counted in determining the presence of a quorum. Signed proxies that withhold authority or reflect abstentions and “broker non-votes” will be counted for purposes of determining whether a quorum is present. “Broker non-votes” are proxies received from brokerage firms or other nominees holding shares on behalf of their clients who have not been given specific voting instructions from their clients with respect to matters being voted on. Broker non-votes will be counted for purposes of establishing a quorum to conduct business at the meeting, but not for determining the number of shares voted FOR, AGAINST, ABSTAINING or WITHHELD FROM with respect to any matters.

We strongly encourage you to provide instructions to your bank, brokerage firm, or other nominee by voting your proxy. This action ensures that your shares will be voted in accordance with your wishes at the meeting.

~~Proxies, ballots and voting tabulations identifying stockholders are kept confidential and will not be disclosed except as may be necessary to meet legal requirements.~~

We plan to announce preliminary voting results at the Annual Meeting. We will also file a Current Report on Form 8-K with the Securities and Exchange Commission within four business days of the Annual Meeting disclosing the final voting results.

You can contact our corporate headquarters, at (585) 325-3610, or send a letter to: Investor Relations, Document Security Systems, Inc., 200 Canal View Boulevard, Suite 300, Rochester, New York 14623, with any questions about proposals described in this Proxy Statement or how to execute your vote.

~~This Proxy Statement is furnished~~We are furnishing this proxy statement (the “Proxy Statement”) to the holders of our Common Stock, par value $0.02 per share (the “Common Stock”), in connection with the solicitation of proxies byon behalf of the Board of Directors (the “Board”) of Document Security Systems, Inc. ~~(the~~(together with its consolidated subsidiaries (unless the context otherwise requires), referred to herein as “Document Security Systems,” “DSS,” “we,” “us,” “our” or the “Company”), for use at ~~the Annual Meeting~~a special meeting of ~~Stockholders of the Company~~stockholders (the ~~“Annual~~“Special Meeting”) to be held at ~~200 Canal View Boulevard, Suite 300, Rochester, New York 14623~~[_____________] on ~~Tuesday, June 28, 2016,~~Monday, July 27, 2020 at ~~11:00 a.m. (Eastern Standard Time)~~________a.m. local time, and at any ~~adjournments or postponements~~adjournment thereof. ~~Solicitation~~

The Special Meeting of ~~proxies may~~stockholders will be ~~made by directors, officers,~~held for the following purposes:

The acquisition outlined in Proposal 1 is structured so that Impact BioMedical will become a ~~solicitor or other employees~~wholly-owned subsidiary of DSS BioHealth Security, Inc., a Delaware corporation and wholly owned subsidiary of the ~~Company. Compensation may be paid to a proxy solicitor should the~~ Company ~~determine that such services are required. This solicitation of proxies is being made by the Company which will bear all costs associated with the mailing~~(“DBHS”) in exchange for DSS Common Stock and Series A Preferred Stock (the “Share Exchange”). As of the date of this proxy ~~materials and~~statement, the ~~solicitation~~Board is not aware of ~~proxies. Whether or not you expect to attend~~any other matters that will come before the ~~Annual~~Special Meeting. However, if any other matters properly come before the Special Meeting, ~~in person, and if you request and receive proxy materials by mail, please return your executed proxy card in~~ the ~~enclosed envelope and the shares represented thereby~~persons named as proxies will ~~be voted~~vote on them in accordance with your instructions. The Notice of Internet Availability of Proxy Materials (the “Notice”) will be mailed to all stockholders on or about May 16, 2016. The proxy voting instructions accompanying the Notice describe the process for voting your shares via the Internet or by telephone. For stockholders who request mailings of the proxy materials, we will begin mailing the proxy materials to stockholders on or about May 19, 2016.their best judgment.

Any stockholder executing a proxy that is solicited has the power to revoke it prior to the voting of the proxy. Revocation may be made by i) attending the ~~Annual~~Special Meeting and voting the shares of stock in person, ~~or by~~ii) delivering to the Secretary of the Company at the principal office of the Company prior to the ~~Annual~~Special Meeting a written notice of revocation or a later-dated, properly executed ~~proxy.~~proxy, iii) signing another proxy card with a later date and returning it before the polls close at the Special Meeting, or iv) voting again via the internet or by toll free telephone by following the instructions on the proxy card.

Only the holders of record of our Common Stock at the close of business on ~~April 29, 2016~~the record date, _____________, 2020 (the “Record Date”) ~~will be~~, are entitled to notice of and to vote at the ~~Annual Meeting.~~meeting. On the Record Date, there were _____________ shares of our Common Stock outstanding. Stockholders are entitled to one vote for each share of Common Stock held on the Record Date.

InWhen a proxy is properly executed and returned (and not subsequently properly revoked), the ~~case of~~shares it represents will be voted in accordance with the Company receiving a signed proxy (“Proxy”) from a registered stockholder containing voting instructions “FOR” the election of each of the nominated directors, and “FOR” Proposals 2, 3 and 4, the persons named in the Proxy (Robert Bzdick, Secretary of the Company, and Jeffrey Ronaldi, Chief Executive Officer of the Company),directions indicated thereon, or, ~~either one of them who acts (the “Proxy Representative”),~~if no direction is indicated thereon, it will ~~vote:~~be voted:

The affirmative vote of a majority of the votes cast is required for approval of Proposals 1, 2 and 3.

Broker Non-Votes: If you hold your shares through a bank, broker or other nominee and do not provide voting instructions to that entity, it may vote your shares only on “routine” matters. For “non-routine” matters, the beneficial owner of such shares is required to provide instructions to the bank, broker or other nominee in order for them to be entitled to vote the shares held for the beneficial owner. Proposal 1 (approval of the Share Exchange) will be treated as a non-routine matter. The approval of Proposal 2 (Adjournment Proposal) and Proposal 3 (the Virtual Meeting Proposal) will be treated as routine matters. If you hold your shares in street name and you do not instruct your bank, broker or other nominee how to vote for the approval of the Share Exchange, no votes will be cast on your behalf with respect to this proposal.

If you hold your shares in street name, it is critical that you cast your vote if you want it to count on all matters to be decided at the Special Meeting.

Broker non-votes are counted for purposes of determining whether or not a quorum exists for the transaction of business at the Special Meeting. Broker non-votes, as well as abstentions from voting, will not, however, be treated as votes cast and, therefore, will have no effect on the outcome of Proposal 1 (approval of the Share Exchange), Proposal 2 (approval of the Adjournment Proposal) or Proposal 3 (approval of the Virtual Meeting Proposal). As stated above, Proposals 2 and 3 will be treated as routine matters, which means that brokers will be able to use their discretion to vote on behalf of the beneficial owner absent instructions from such owners. Therefore, no broker non-votes are expected to exist with respect to these proposals.

You can contact our corporate headquarters, at (585) 325-3610, or send a letter to: Investor Relations, Document Security Systems, Inc., 200 Canal View Boulevard, Suite 104, Rochester, New York 14623, with any questions about proposals described in this Proxy Statement or how to execute your vote.

On April 27, 2020, the Board of Directors of Company (the “Board”) approved and the Company entered into the Share Exchange Agreement with DSS BioHealth Security, Inc., a Nevada corporation and wholly owned subsidiary of the Company (“DBHS”), Singapore eDevelopment Limited, a Singapore corporation (“Singapore eDevelopment”) that is listed on the Singapore Exchange, and Global BioMedical Pte Ltd, a Singapore corporation and wholly owned subsidiary of Singapore eDevelopment (“Global BioMedical”). Pursuant to the Share Exchange Agreement and upon an affirmative vote for this Proposal, DBHS will acquire of all of the outstanding capital stock (the “Impact Shares”) of Impact BioMedical Inc., a Nevada corporation and wholly owned subsidiary of Global BioMedical (“Impact”), in exchange for DSS Common Stock and Series A Preferred Stock, with Impact becoming a direct wholly owned subsidiary of the DBHS (the “Share Exchange”).

The aggregate consideration for the Impact Shares will be the following to be issued to Global BioMedical by DSS: (i) 483,334 newly issued shares of Common Stock of DSS, nominally valued at $3,132,000, or $6.48 per share; and (ii) 46,868 newly issued shares of a new series of perpetual Series A Convertible Preferred Stock of DSS (“Series A Preferred Stock”) with a stated value of $46,868,000, or $1,000 per share, for a total consideration valued at $50 million. The Series A Preferred Stock will have such terms, rights, obligations and preferences of the Series A Preferred Stock set forth in the Designation of Series A Convertible Preferred Stock of the Company (the “Certificate of Designations”), to be filed with the Secretary of State of the State of New York prior to the closing of the Share Exchange. The terms of the Share Exchange Agreement and the Share Exchange were previously reported in the Form 8-K filed by the Company on March 13, 2020.

As previously reported, on May 7, 2020, following the date of the Share Exchange Agreement we effected a 30-1 reverse stock split. As a result, the number of Common Stock shares to be issued by DSS pursuant to the Share Exchange have been appropriately adjusted.

Under the Certificate of Designations, each share of Series A Preferred Stock will be convertible into shares of Common Stock of DSS, subject to a 19.9% beneficial ownership conversion limitation (“Beneficial Ownership Limitation”) based on the total issued outstanding shares of Common Stock of DSS beneficially owned by Global BioMedical. Holders of the Series A Preferred Stock will have no voting rights, except as required by applicable law or regulation, and no dividends will accrue or be payable on the Series A Preferred Stock. The holders of Series A Preferred Stock will be entitled to a liquidation preference at a liquidation value of $1,000 per share, and the Company will have the right to redeem all or any portion of the then outstanding shares of Series A Preferred Stock, pro rata among all holders, at a redemption price per share equal to such liquidation value per share.

In addition, under the Certificate of Designation, the Company will have the right to convert all or any portion of the then outstanding shares of Series A Preferred Stock, pro rata among all holders, into an aggregate number of shares of Common Stock as is determined by (i) multiplying the number of shares to be converted by the liquidation value per share, and then (ii) dividing the result by the applicable conversion price then in effect.

Document Security Systems, Inc. is a global company involved in the development and delivery of better products and technology to individuals and industry. We operate nine business lines through subsidiaries located around the globe.

Of the nine business lines, four have historically been the core business lines of the Company:

In addition to these four core business lines, in 2019 and early 2020 we established five new wholly owned subsidiaries:

In November 2019, we announced the Company’s new strategic business plan, which focuses on strengthening our organization, investing in our core lines of business, improving top line revenues and net margins, controlling costs and creating new long-term recurring revenue streams. One of the core elements of the strategic business plan includes implementing business diversification initiatives as described in more detail below.

Implementing Business Diversification Initiatives – We plan to both internally develop and to acquire profitable new businesses, which will in some cases be complimentary to our core businesses and addressable markets. In other instances, we intend to explore opportunities for expansion into new business lines in which we believe we can successfully compete, which are scalable, and which generate sustainable reoccurring revenue. Management has already taken steps toward this diversification by performing initial research and cost analysis into specific new business lines, and in 2019 we formed the five new subsidiaries as described in more detail above, in an effort to grow and expand our technologies and market reach, including DSS BioHealth Security, Inc., referred to in this proxy statement as DBHS.

DSS BioHealth Security, Inc. This business will be principally involved in the bio-medical sector, including investing in companies that hold bio-medical intellectual property and/or have, or are securing, strategic alliances, partnerships and distribution rights for bio-medical and security products, technologies or enterprises. This new division will focus on open-air defense initiatives that seek to curb transmission of airborne infectious diseases such as tuberculosis and influenza, among others, in open areas.

Consistent with this growth initiative, on March 12, 2020, the Company announced that the Board approved and Company had entered into a binding term sheet (the “Term Sheet”) to acquire Impact BioMedical, a company engaged in the development and marketing of biohealth security technologies, pursuant to which Impact BioMedical would become a wholly-owned subsidiary of DSS BioHealth Security, Inc. Pursuant to the Term Sheet, the proposed share exchange transaction was capped at a purchase price capped at $50 million, subject to completion of due diligence and an independent valuation.

On April 27, 2020, prior to the execution of the Share Exchange Agreement, Impact BioMedical’s ownership of a suite of antiviral and medical technologies was valued at $382 million through a required independent valuation that was completed by Destum Partners. Because the valuation was higher than the previously agreed value, the purchase price to be paid be the Company was capped at a value of $50 million.

On April 27, 2020, the Company issued a press release announcing the completion of the required independent valuation, allowing the Company to proceed with the Share Exchange Agreement. Following the press release, all the members of the Board voted to approve the Share Exchange transaction and authorize the execution of the Share Exchange Agreement and ancillary agreements, including this proxy statement to seek stockholder approval.

Each share of our Common Stock that is issued and outstanding at the effective time of the Share Exchange will remain issued and outstanding after the acquisition of Impact BioMedical. However, because additional shares of our Common Stock will be issued as a result of the Share Exchange, the aggregate equity interest of our current common stockholders will be diluted from 100% of our issued and outstanding Common Stock prior to the Share Exchange to approximately 81% of our issued and outstanding Common Stock immediately after the completion of the Share Exchange. Furthermore, any conversion by Global BioMedical of the Series A Preferred Stock for shares of Common Stock, will also have the effect of diluting the equity interest of our current common stockholders. However, as discussed above, any such conversion by Global Biomedical is subject to the Beneficial Ownership Limitation. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of Shares of Series A Preferred Stock then outstanding will be entitled to be paid out of the assets of the Company available for distribution to its stockholders, before any payment will be made to holders of our Common Stock.

Our Board has determined that the acquisition of Impact BioMedical is in the best interests of our stockholders, and recommends that you vote FOR the approval of the issuance of shares of our Common Stock and the Series A Preferred Stock for such purpose and FOR adjournment of the meeting if necessary to solicit additional proxies.

The Share Exchange is intended to qualify as a tax-free exchange under Section 351 of the Internal Revenue Code for United States federal income tax purposes. Our current stockholders will not recognize any gain or loss for federal income tax purposes as a result of the Share Exchange. Such tax treatment is not a condition to completion of the Share Exchange.

In the event that the Company issues a dividend to its shareholders of shares of Impact BioMedical (the “Bonus Shares”), the U.S. federal income tax treatment of such issuance of the Bonus Shares to our shareholders is unclear at this stage. Accordingly, stockholders are encouraged to consult their own tax advisors as to the specific U.S. federal, state and local, and non-U.S. tax consequences to them of a possible distribution of the Bonus Shares. For more information, see the section titled “Anticipated Dividend of Impact BioMedical Shares” below.

We do not believe the Share Exchange to be subject to the reporting and waiting provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 which prevents transactions meeting certain size tests, and not otherwise exempt, from being completed until required information and materials are furnished to the Antitrust Division of the U. S. Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) and the related waiting period expires or is terminated early. Accordingly, no filings have been made or are presently contemplated with the DOJ and FTC in relation to the Share Exchange.

The closing of the purchase and sale of the Impact Shares contemplated under the Share Exchange Agreement is subject to a number of customary and other conditions, including both the Company and Singapore eDevelopment having obtained approvals from their respective shareholders, Singapore eDevelopment having obtained requisite approval from the Singapore Exchange, and receipt by DSS of audited financial statements of Impact BioMedical, which are included in this proxy statement soliciting the vote of our stockholders.

The Share Exchange Agreement contains customary representations, warranties and covenants of the parties as well as certain indemnification provisions.

Where the law permits, a party to the Share Exchange Agreement could elect to waive one or more conditions required to complete the Share Exchange. We cannot be certain when (or if) the conditions to the Share Exchange will be satisfied or waived or that the Share Exchange will be completed.

If the ~~giver~~required approvals are received at the Special Meeting we anticipate that the Share Exchange will occur shortly following the Special Meeting. However, we cannot assure you when or if the Share Exchange will occur.

In considering the recommendation of the Board of Directors of the Company with respect to issuing shares of DSS Common Stock and Series A Preferred Stock pursuant to acquire Impact and the other matters to be acted upon at the Special Meeting, our Stockholders should be aware that our Chairman of the Board has interests in the Share Exchange that may be different from, or in addition to, the interests of DSS stockholders generally.

Mr. Chan is the Chief Executive Officer and largest shareholder of Singapore eDevelopment, as well as the Chairman of the Board and largest shareholder of the Company.

Mr. Chan also beneficially owns shares of DSS Common Stock which have approximately [ ]% of the voting rights of DSS stockholders as of the Record Date of the Special Meeting. Mr. Chan will beneficially own shares of DSS Common Stock equal to [ ] to the total shares of DSS Common Stock to be issued to the owners of Impact BioMedical in the Share Exchange. Upon completion of the Share Exchange, Mr. Chan will beneficially own approximately [ ]% of the total outstanding shares of DSS Common Stock.

Due to the related-party nature of the transaction, the Audit Committee discussed and evaluated Mr. Chan’s financial interest and material facts as Executive Chairman of Singapore eDevelopment, and subsequently approved, and recommended the Board approve, the Share Exchange Agreement and the transactions contemplated thereby.

The Company’s long-term plans include seeking to take Impact BioMedial public after the share exchange in an initial public offering (“IPO”). Prior to doing so, and in concert with this public offering, the Company anticipates a proposed dividend of Impact BioMedical shares to its shareholders, whereby for every one DSS share of Common Stock held, the shareholder would be entitled to a bonus of four Impact Shares, or as already referenced, the Bonus shares. The planned Bonus shared dividend would be divided into two tranches; the shareholders of record of a date to be determined but prior to initial public offering would be eligible for two shares for every share of DSS which they hold, and a second dividend of an additional two shares of Impact BioMedical if they were the shareholders of record on the second shareholder of record date of the IPO date of Impact BioMedical. The issuance of the Bonus shares would occur after the registration and the IPO of Impact BioMedical’s shares. While this statement represents the current intentions of DSS management and of its Board, there can beno assurance, however, that Impact BioMedical will be taken public and/or that any such Bonus Share distribution will occur.

We estimate that fees and expenses related to the Share Exchange, consisting of fees and expenses of our financial advisor, attorneys, and accountants, proxy statement printing and distribution and related charges, Securities and Exchange Commission (the “SEC”) and NYSE Amex filing fees, will total approximately $[____], whether or not the Share Exchange is completed.

Holders of our Common Stock will not have appraisal or dissenters’ rights in connection with the acquisition of Impact or the other proposals to be considered at the Special Meeting.

There will be no change in the Company’s Board of Directors as a result of the completion of the Share Exchange.

There are risks and uncertainties that we face in connection with the proposed acquisition of Impact. Among the risks are the following:

These are just some of the risks we face in connection with the proposed Share Exchange. For a more complete discussion of these and other risks related to the acquisition and the combined company; see the section entitled “Certain Risks Associated with the Share Exchange” and “About Impact BioMedical” below.

In deciding whether to approve the issuance of Common Stock and Series A Preferred Stock to acquire Impact BioMedical in the Share Exchange and the other proposals related to the Share Exchange transaction, you should carefully consider the following risks. You should also review and consider the various risks and uncertainties related to our business which we have identified and discussed in our Registration Statement on Form S-1 filed with the SEC on May 21, 2020. If any of these risks actually occur, our business, financial condition or results of operations could be seriously harmed. In that event, the market price for our Common Stock could decline and you may lose all or part of your investment.

In connection with the Share Exchange, the owners of Impact BioMedical will receive shares of our Common Stock which will represent approximately 19% of our Common Stock which will be outstanding upon completion of the Share Exchange. Accordingly, the percentage of ownership which your Common Stock holdings represents prior to the Share Exchange will be diluted due to the issuance of our Common Stock in the Share Exchange. This exchange ratio is not adjustable based on the market price of our Common Stock.

You may not realize a benefit from the Share Exchange commensurate with the ownership dilution you will experience in connection with the Share Exchange.

If DSS does not realize strategic and financial benefits related to the acquisition of Impact BioMedical, DSS stockholders will have experienced dilution of their ownership interests in DSS without receiving any commensurate benefit, or only partial benefits from the Share Exchange.

The market price of our Common Stock following the Share Exchange may decline as a result of the acquisition of Impact BioMedical and its subsidiaries.

The market price of DSS Common Stock may decline as a result of the Share Exchange for a number of reasons if:

Failure to complete the Share Exchange or delays in completing the Share Exchange could negatively impact our stock price, financial condition, future business and operations.

If the Share Exchange is not completed for any reason, we may be subject to a number of material risks, including the following:

The Common Stock which will be issued in connection with the Share Exchange is being offered without registration under the Securities Act of 1933 pursuant to rules governing limited offers and sales without registration pursuant to the exemption available for sales without registration under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D. If we should fail to comply with each and every one of the requirements of the available exemptions from registration, the investors may have the right to rescind their acquisition of such shares in connection with the Share Exchange.

The following description of the material information about the Share Exchange, including the summary of the material terms and provisions of the Share Exchange Agreement, is qualified in its entirety by reference to the more detailed appendices to this Proxy ~~provides voting instructions~~Statement. We urge you to ~~cast a vote “AGAINST” any or~~read all of the ~~nominated directors~~appendices to this Proxy Statement in their entirety.

The Share Exchange Agreement has been included as Appendix A to provide you with information regarding its terms. It is not intended to provide any other factual information about us. Such information can be found elsewhere in this Proxy Statement and in the other public filings we make with the SEC, which are available without charge at www.sec.gov.

Impact BioMedical leverages on its scientific know-how and intellectual property rights to provide solutions that have been plaguing the biomedical field for decades. Together with scientific partners, Impact BioMedical aims to drive mission-oriented research to advance drug discovery and development for the prevention, inhibition, and treatment of neurological, oncology and immuno-related diseases.

Impact BioMedical’s research and development efforts are headed by Mr. Daryl Thompson in his capacity as Director of Scientific Initiatives in Global BioLife Inc. (“Global BioLife”). Mr. Thompson has initiated research regarding universal therapeutics as part of an attempt to help cure some of the world’s deadliest diseases.

Impact BioMedical has two wholly owned subsidiaries and six partially owned subsidiaries. It is the single largest and controlling shareholder of Global BioLife, with an effective ownership of 63.64%. The other shareholders of Global BioLife include Holista CollTech Limited (“Holista CollTech”) (the majority shareholder of Singapore eDevelopment is also a significant shareholder in Holista CollTech) and an entity formed by the chief scientist overseeing Global BioLife’s projects.

Global BioLife has biomedical intellectual property, including intellectual property assigned to it by one of its shareholders. Global BioLife is a company devoted to research in four main areas: (i) the “Linebacker” project, which aims to develop a universal therapeutic drug platform; (ii) a new sugar substitute called “Laetose,”; (iii) a multi-use fragrance called “3F” (Functional Fragrance Formulation); and (iv) Equivir/Nemovir, a blend of natural polyphenols designed as an antimicrobial medication.

“Linebacker,” has demonstrated promising results in treating a range of diseases including neurological, anti-microbial, anti-viral and oncology diseases. Unlike the traditional approach to treat individual diseases with specific drugs, the Linebacker platform seeks to offer a breakthrough therapeutic option for multiple diseases. Linebacker is designed to work by inhibiting a cascade of inflammatory responses responsible for many diseases. Its design is in direct contrast to the traditional approach of targeting individual diseases with specific drugs. Charles River Laboratories International, Inc., an independent company that provides services to help pharmaceutical and biotechnology companies, government agencies and leading academic institutions around the globe, has performed the studies needed for Global BioLife Linebacker research and drug development efforts.

Impact BioMedical has also developed a low-calorie, low glycemic level, natural modified sugar through Global BioLife. The product, “Laetose,” is a functional sugar with a calorie count 30% to 50% lower than regular sugar. Laetose is designed to possess low glycemic properties and mitigate inflammation. This product is at the commercialization stage. The company is presently seeking to license Laetose. Global BioLife established a joint venture, Sweet Sense, Inc. (“Sweet Sense”), with Quality Ingredients, LLC for the development, manufacture, and global distribution of the new sugar substitute. On November 8, 2019, the Company purchased 50% of Sweet Sense Inc. from Quality Ingredients, LLC for $91,000. Sweet Sense is now an 81.8% owned subsidiary of the Impact BioMedical.

Through Global BioLife, Singapore eDevelopment has established a collaboration with U.S.-based Chemia Corporation to develop specialized fragrances to counter mosquito-borne diseases such as Zika and Dengue, among other medical applications. The 3F mosquito fragrance product, which is made from specialized oils sourced from botanicals that mosquitos avoid, has shown promising results in repelling mosquitos in laboratory testing. Global BioLife is seeking to commercialize this product. Together with Chemia, Impact BioMedical is attempting to license 3F. Any potential profits from the 3F project will be split between Global BioLife and Chemia pursuant to the terms of the Royalty Agreement, dated as of August 15, 2018, by and between Global BioLife and Chemia Corporation, and the Addendum thereto, dated as of November 27, 2018 and Amendment No. 1 to Royalty Agreement, dated as of November 8, 2019.

Equivir was created for use in biological emergencies. Equivir is a patented medication, and our research has indicated that it has broad antiviral efficacy against multiple types of infectious disease. The ability of Equivir to inhibit viruses makes it a promising candidate.

Global BioLife and Sweet Sense have engaged a consulting firm in the biopharmaceutical and life sciences industry, to assist in our goal of licensing each of Linebacker, Laetose, 3F and Equivir/Nemovir.

Impact BioMedical does not have offices, and at the present time, office space is provided to the Impact BioMedical by an affiliate of Singapore eDevelopment at no cost.

The business model of Impact BioMedical revolves mainly around two approaches – Licensing and Sales Distribution.

The licensing strategy envisions that Impact BioMedical’s subsidiaries would develop valuable and unique patented technologies which would then be licensed to pharmaceutical companies or venture capitalists in exchange for an agreed payment (consisting of a fee or royalty). Impact BioMedical believes that interest in licensing certain projects may rise over time as validating data becomes available.

Certain affiliates of Impact BioMedical have relationships with developing global distribution networks. Impact BioMedical currently intends to engage in private labelling to go into production of products for sales generation. Impact BioMedical plans to expand its geographical presence globally and intends to launch more products to add on over time. In addition, the company intends to launch a new retail e-commerce site in 2020 to allow Impact BioMedical to take orders and deliver products.

Impact BioMedical has no employees; certain services are provided to Impact BioMedical and its subsidiaries by the employees of Impact BioMedical’s ownership, including employees of affiliates of Singapore eDevelopment. Services are provided to Global BioLife and its subsidiaries by GRDG Sciences, LLC pursuant to the Stockholders’ Agreement, dated as of April 26, 2017 among Global BioLife, Global BioMedical, Inc., Holista CollTech and GRDG Sciences, LLC (as amended). At the present time, Global BioLife pays GRDG Sciences, LLC $23,319 per month for services provided by GRDG Sciences, LLC.

In addition to the Impact BioMedical’s major projects, the company has several other early stage research projects that Impact BioMedical believes have potential for further research and development.

Duotics is a new class of compounds that has the potential to treat infectious diseases caused by viruses, bacteria, and parasites, and defeat Anti-Microbial Resistance. GRDG has used its proprietary methods in molecular mapping and disease modeling to develop strategies intended to not only inhibit resistant microbes that cause infectious diseases, but to also prevent future resistance to treatment. Duotics harness the strategies used by nature to prevent and inhibit infections by stopping the survival and growth of disease. This project envisions leveraging top research institutions in the world, including Biosafety Level 3 and 4 testing facilities, to scientifically prove the effectiveness of this new class of compounds. If successful, this technology has the potential to integrate well into existing health programs.

GRDG has developed a technology with the potential to be deployed as a medical food or an Over the Counter (OTC) medication to treat and possibly prevent migraines. Using the proprietary methods of identifying neurological pathways and known remedies, the solution could be both effective, and unlike current migraine medication, free from adverse side effects. GRDG intends to leverage its network of connections with world-class laboratories to formulate, validate and test the medication for effectiveness in animals and humans.

GRDG intends to work in collaboration with research institutions to enhance a cannabinoid extract for the treatment of cancers and cancer-associated pain. GRDG will look to use the expertise of collaborating research institutions to synthesize, test and validate the compounds. The result of this one-year program will be looking at two therapeutic drugs that have been evaluated for in-vitro efficacy against Pancreatic, Lung, Breast, and Prostate Cancer; in-vivo efficacy against Pancreatic Cancer in an animal model; in-vivo efficacy against Pancreatic Cancer-induced pain in an animal model; and in-vivo Pharmacokinetic and toxicity in animals to include vital organ and blood plasma concentrations after administration, major cytokine activity, renal function, blood chemistry/hematology, cellular morphology, Mitotic index, and Maximum Tolerated Dose. These tests, conducted in rats, will attempt to determine how much of the drugs can be administered safely, the effects of the drugs on metabolism and organs, and their effective doses for the respective purposes.

The biohealth business is highly competitive. Existing and future competitors may introduce products and services in the same markets we serve, and competing products or services may have better performance, lower prices, better functionality and broader acceptance than our products. This competition could result in increased sales and marketing expenses, thereby materially reducing our operating margins, and could harm our ability to increase, or cause us to lose, market share.

Most, if not all, of our current and potential competitors may have significantly greater resources or better competitive positions in certain product segments, geographic regions or user demographics than we do. These factors may allow our competitors to respond more effectively than us to new or emerging technologies and changes in market conditions.

Impact BioMedical’s competitors may develop products, features or services that are similar to its own or that achieve greater acceptance, may undertake more far-reaching and successful product development efforts or marketing campaigns, or may adopt more aggressive pricing policies. Certain competitors could use strong or dominant positions in one or more markets to gain competitive advantage against Impact BioMedical in its target market or markets. As a result, Impact BioMedical’s competitors may acquire and engage customers or generate revenue at the expense of our own efforts.

In the United States, the drug, device and cosmetic industries have long been subject to regulation by various federal and state agencies, primarily as to product safety, efficacy, manufacturing, advertising, labeling and safety reporting. The U.S. Food and Drug Administration, or FDA, has broad regulatory powers. Extensive testing and documentation is required for FDA approval of new drugs and devices, increasing the expense of product introduction. Significant expenses are also evident in major markets outside of the United States.

The costs of human health care have been and continue to be a subject of study, investigation and regulation by governmental agencies and legislative bodies around the world. In the United States, attention has been focused on drug prices and profits and programs that encourage doctors to write prescriptions for particular drugs, or to recommend, use or purchase particular medical devices. The regulatory agencies under whose purview Impact BioMedical may operate in the future have administrative powers that may subject partners to whom Impact BioMedical licenses products to actions such as product withdrawals, recalls, seizure of products and other civil and criminal sanctions.

In addition, business practices in the health care industry have come under increased scrutiny, particularly in the United States, by government agencies and state attorneys general, and resulting investigations and prosecutions carry the risk of significant civil and criminal penalties.

Partners to whom we license products in the future may need to rely on global supply chains, and production and distribution processes, that are complex, subject to increasing regulatory requirements, and may be faced with unexpected changes that may affect sourcing, supply and pricing of materials used in products which we have or will develop. These processes also are subject to lengthy regulatory approvals.

If we do not adequately protect Impact BioMedical’s intellectual property rights, its operations may be materially harmed.

Impact BioMedical relies on and expect to continue to rely on agreements with parties with whom we have relationships, as well as patent, trademark and trade secret protection laws, to protect our intellectual property and proprietary rights. We cannot assure you that we can adequately protect its intellectual property or successfully prosecute potential infringement of its intellectual property rights. Also, we cannot assure you that others will not assert rights in, or ownership of, trademarks and other proprietary rights of Impact BioMedical or that we will be able to successfully resolve these types of conflicts to our satisfaction. Impact BioMedical’s failure to protect its intellectual property rights may result in a loss in potential revenue and could materially harm our operations and financial condition.

New legislation, regulations or rules related to obtaining patents or enforcing patents could significantly increase our operating costs and decrease any potential revenue we might otherwise make.

Impact BioMedical spends a significant amount of resources on its [?] patent assets. If new legislation, regulations or rules are implemented either by Congress, the U.S. Patent and Trademark Office (the “USPTO”) or the courts that impact the patent application process, the patent enforcement process or the rights of patent holders, these changes could negatively affect its expenses, potential revenue and could negatively impact the value of its assets.

Safety and effectiveness concerns can have significant negative impacts on sales and results of operations, lead to litigation and cause reputational damage.

Concerns about product safety, whether raised internally or by litigants, regulators or consumer advocates, and whether or not based on scientific evidence, can result in safety alerts, product recalls, governmental investigations, regulatory action on the part of the FDA (or its counterpart in other countries), private claims and lawsuits, payment of fines and settlements, declining sales and reputational damage. These circumstances can also result in damage to brand image, brand equity and consumer trust in products. Product recalls could in the future prompt government investigations and inspections, the shutdown of manufacturing facilities, continued product shortages and related sales declines, significant remediation costs, reputational damage, possible civil penalties and criminal prosecution.

Significant challenges or delays in our innovation and development of new products, technologies and indications could have an adverse impact on our long-term success.

Impact BioMedical’s continued growth and success depend on our ability to innovate and develop new and differentiated products and services that address the evolving health care needs of patients, providers and consumers. Development of successful products and technologies may also be necessary to offset revenue losses should our products lose market share due to various factors such as competition and loss of patent exclusivity. We cannot be certain when or whether Impact BioMedical will be able to develop, license or otherwise acquire companies, products and technologies, whether particular product candidates will be granted regulatory approval, and, if approved, whether the products will be commercially successful. Impact BioMedical pursues product development through internal research and development as well as through collaborations, acquisitions, joint ventures and licensing or other arrangements with third parties. In all of these contexts, developing new products, particularly biotechnology products, requires a significant commitment of resources over many years. Only a very few biopharmaceutical research and development programs result in commercially viable products. The process depends on many factors, including the ability to discern patients’ and healthcare providers’ future needs; develop new compounds, strategies and technologies; achieve successful clinical trial results; secure effective intellectual property protection; obtain regulatory approvals on a timely basis; and, if and when they reach the market, successfully differentiate its products from competing products and approaches to treatment. New products or enhancements to existing products may not be accepted quickly or significantly in the marketplace for healthcare providers, and there may be uncertainty over third-party reimbursement. Even following initial regulatory approval, the success of a product can be adversely impacted by safety and efficacy findings in larger patient populations, as well as market entry of competitive products.

The Share Exchange Agreement provides that at the closing of the Share Exchange, DBHS will acquire of all of the Impact Shares in exchange for DSS Common Stock and Series A Preferred Stock.

The terms of the Share Exchange Agreement and the Share Exchange were previously reported in the Form 8-K filed by the Company on March 13, 2020. As previously reported, on May 7, 2020, following the date of the Share Exchange Agreement we effected a 30-1 reverse stock split. As a result, the number of Common Stock shares to be issued by DSS pursuant to the Share Exchange have been appropriately adjusted.

The Share Exchange will be completed when the purchase and sale of the Impact Shares occurs at a closing (the “Closing”) to be held not later than two business days after the last of the conditions to the Closing have been satisfied or waived. As a result of the Share Exchange, DBHS will own 100% of Impact BioMedical and its subsidiaries.

Subject to the conditions to the Share Exchange Agreement, we anticipate that the completion of the Share Exchange will occur promptly after the approval of Proposal 1 at the Special Meeting. However, the completion of the Share Exchange could be delayed if there is a delay in satisfying conditions to the Share Exchange. There can be no assurances as to whether, or when, we will obtain the required approvals or complete the Share Exchange. If the Share Exchange is not completed on or before one hundred eight (180) days after April 27, 2020, either we or Global BioMedical may terminate the Share Exchange Agreement, unless the failure to complete the Share Exchange by that date is due to the material breach of the Share Exchange Agreement by the party seeking to terminate the agreement. See “Closing Conditions to the Share Exchange” immediately below.

The completion of the Share Exchange is subject to various conditions. While we anticipate that all of these conditions will be satisfied, there can be no assurance as to whether or when all of the conditions will be satisfied or, where permissible, waived.

The obligations of each party to effect the Share Exchange are subject to the following conditions:

For the full text of the closing conditions that each individual party’s obligations are subject to, see the Share Exchange Agreement which has been included as Appendix A to provide you with information regarding its terms.

The Share Exchange Agreement customary representations, warranties and covenants of the parties as well as certain indemnification provisions. For the full text of the representations and warranties, see the Share Exchange Agreement which has been included as Appendix A to provide you with information regarding its terms.

Each party to the Share Exchange Agreement has agreed that it will not voluntarily undertake any course of action inconsistent with the provisions or intent of the Share Exchange Agreement and will use its reasonable best efforts to take, or cause to be taken, all action and to do, or cause to be done, all things reasonably necessary to expeditiously satisfy the closing conditions to the Share Exchange Agreement.

From the date of the Share Exchange Agreement, each party to the Share Exchange Agreement will not authorize or permit any, affiliates and other representatives or those of any of their subsidiaries, directly or indirectly, to (i) encourage, facilitate or continue inquiries; (ii) enter into discussions or negotiations with, or provide any information to; or (iii) enter into any agreements or other instruments (whether or not binding) regarding an inquiry, proposal or offer from any person concerning, (x) a merger, consolidation, liquidation, recapitalization, share exchange or other business combination transaction involving Impact BioMedical or any of its subsidiaries; (y) the ~~proposals,~~issuance or acquisition of shares of capital stock or other equity securities of Impact BioMedical or any of its subsidiaries; or (z) the ~~Proxy Representative will vote such shares accordingly. If the giver~~sale, lease, exchange or other disposition of any significant portion of the ~~Proxy~~properties or assets of Impact BioMedical and its subsidiaries.

The Share Exchange Agreement may be terminated prior to the closing on certain conditions, including:

In the event of the termination of the Share Exchange Agreement pursuant to one of the conditions listed above by one of the parties, the Share Exchange Agreement shall become void and have no effect, and there shall be no liability under the Share Exchange Agreement on the part of the parties except (i) in the event of breach of conditions listed above; (ii) in the event of breach by Singapore eDevelopment or Global Medical of confidentiality provisions contained in the Share Exchange Agreement; or (iii) as set forth in ARTICLE X – MISCELLANEOUS of the Share Exchange Agreement which has been included as Appendix A to provide you with information regarding its terms. Nothing in the Share Exchange Agreement shall relieve any party from liability for any willful breach of any provision contained in the Share Exchange Agreement.

The Share Exchange Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party thereto. No waiver by any party of any of the provisions thereof shall be effective unless explicitly set forth in writing and signed by party so waiving. No waiver by any Party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver.

No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from the Share Exchange Agreement shall operate or be construed as a waiver; nor shall any single or partial exercise of any right, remedy, power or privilege thereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

The foregoing summary of the Share Exchange Agreement is subject to, and qualified in its entirety by, the terms of the Share Exchange Agreement, a copy of which is attached hereto asAppendix A.

We are providing the following financial information to assist you in your analysis of the financial aspects of our proposed acquisition of Impact BioMedical and its subsidiaries. This information is only a summary and you should read it in conjunction with our historical consolidated financial statements, and the historical financial statements of Impact BioMedical and the other information included elsewhere in this proxy statement.

The following table sets forth selected historical financial information derived from Impact BioMedical’s audited financial statements as of and for the year ended December 31, 2019 and as of December 31, 2018 and unaudited financial statements for the period from January 1, 2020 through March 31, 2020. The historical results presented below are not necessarily indicative of the results to be expected for any future period.

Impact BioMedical Inc (the “Company”) was incorporated in the State of Nevada as a for-profit company on October 16, 2018 and established a fiscal year end of December 31st. The Company issued 1,000 shares to Global BioMedical Pte. Ltd., which is wholly–owned by Singapore eDevelopment Limited (“SeD Ltd”), a multinational public company, listed on the Singapore Exchange Securities Trading Limited (“SGXST”).

The Company is committed to both funding research and developing intellectual property portfolio. Global BioLife, Inc. (“Global BioLife”), one of the Company’s subsidiaries and the main operating company of the group, focuses on research in three main areas: (i) development of a universal therapeutic drug platform; (ii) a new sugar substitute; and (iii) a multi-use fragrance. Global BioLife established a joint venture, Sweet Sense, Inc. (“Sweet Sense”), with Quality Ingredients, LLC for the development, manufacture, and global distribution of the new sugar substitute and owns 50% of Sweet Sense. On November 8, 2019, the Company purchased 50% of Sweet Sense, Inc. from Quality Ingredients, LLC for $91,000. Sweet Sense is now an 81.8% owned subsidiary of the Company.

The Common Control Transactions resulted in the basis of accounting for the financial reporting period in 2018. The consolidated financial statements were retrospectively adjusted for the operating results of Global Biolife as of January 1, 2018 for comparative purposes as the entities were under common control. ASC 805-50-45 defines the transfer of a business among entities under common control at carrying amount with retrospective adjustment of prior period financial statements when reporting entity is changed. ASC 250 defines a change in the reporting entity as a change that results in financial statements that, in effect, are those of a different reporting entity. The Management believed that the acquisitions of Global BioMedical, Inc. and Global Biolife led to change in the reporting entity.

The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include all accounts of the Company and its majority owned and controlled subsidiaries. The Company consolidates entities in which it owns more than 50% of the voting common stock and controls operations. All intercompany transactions and balances among consolidated subsidiaries have been eliminated.

The consolidated financial statements include all accounts of the entities as of the reporting period ending dates and for the reporting periods as follows:

All intercompany balances and transactions have been eliminated. Non–controlling interest represents the minority equity investment in the Company’s subsidiaries, plus the minority investors’ share of the net operating results and other components of equity relating to the non–controlling interest.

As of December 31, 2019 and 2018, the aggregate noncontrolling interest was $46,027 and a deficit of $4,934, respectively, which are separately disclosed on the Consolidated Balance Sheet.

On the date of incorporation, Global BioLife issued 800 shares to Global BioMedical. Inc., 100 shares to GRDG Sciences, LLC (“GRDG”) and 100 to Holista Colltech Limited. Based on the Global BioLife’s Stockholders Agreement signed on April 26, 2017, Global BioMedical Inc agreed to transfer 10% of it’s ownership in Global BioLife to GRDG Sciences, LLC upon successful completion of certain goals. GRDG Sciences, LLC fulfilled required goals and 100 shares was transferred on September 12, 2017.

On November 7, 2018, the Company entered into two Capital Contribution Agreements. First Capital Contribution Agreement (“GBMI Agreement”), was entered between the Company, Global BioMedical Pte. Ltd. (“Global BioMedical”), a Singapore limited company, and Global BioMedical. Inc. (“GBMI”), a Nevada corporation. Prior to this agreement Global BioMedical owned 90.91% of the issued and outstanding capital equity in GBMI and 100% of issued and outstanding shares of the Company. Based on GBMI Agreement, Global BioMedical contributed all of its ownership in GBMI to the Company. Another Capital Contribution Agreement (“SeD BioLife Agreement”) was entered between the Company, Global BioMedical and SeD BioLife International, Inc. (“SeD BioLife”), a Nevada Corporation. Prior to this agreement Global BioMedical owned 100% of the issued and outstanding capital equity in SeD BioLife. Based on the SeD BioLife Agreement, Global BioMedical contributed all its ownership in SeD BioLife to the Company.

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the balance sheets and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates.

Basic earnings (loss) per share is computed by dividing the net income (loss) attributable to the common stockholders by weighted average number of shares of common stock outstanding during the period. Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued or outstanding for the periods ended December 31, 2019 or 2018.

For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation.

The Company considers all highly liquid investments with a maturity of three months or less at the date of acquisition to be cash equivalents. There were no cash equivalents as of December 31, 2019 and December 31, 2018.

BioLife Sugar, Inc. (“BioLife”), a subsidiary consolidated under the Company, entered into a joint venture agreement on April 25, 2018 with Quality Ingredients, LLC (“QI”). The agreement created Sweet Sense which is 50% owned by BioLife and 50% owned by QI. Management believes its 50% investment represents significant influence over Sweet Sense and accounts for the investment under the equity method of accounting. As of December 31, 2018, BioLife contributed $55,000 to the joint venture and recorded its proportionate share losses totaling $49,687 recorded as loss on investment in security by equity method in the Consolidated Statements of Operations. As of November 08, 2019, the total investment in joint venture was equal to $91,000 and the proportionate losses totaled $90,001.

On November 8, 2019, Impact BioMedical Inc., a subsidiary of the Company, purchased 50% of Sweet Sense from QI for $91,000. Consequently, Sweet Sense is now an 81.8% owned subsidiary of the Company, and therefore, is now consolidated into the consolidated financial statements.

Research and development costs are expensed as incurred. Total research and development costs were $340,628 and $634,312 for the years ended December 31, 2019 and 2018, respectively.

Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carry-forwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records an estimated valuation allowance on its deferred income tax assets if it is more likely than not that these deferred income tax assets will not be realized.

The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company has not recorded any unrecognized tax benefits. The Company’s policy is to recognize interest and penalties related to income taxes in income tax expense.

Subsequent events are events or transactions that occur after the balance sheet date but before the financial statements are available to be issued.

The Company’s financial statements do not recognize subsequent events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after the balance sheet date and before financial statements are available to be issued.

The Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)FASB ASU 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities– The changes to the current U.S. GAAP model primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments.

In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception (“ASU 2017-11”). ASU 2017-11 is intended to simplify the accounting for financial instruments with characteristics of liabilities and equity. Among the issues addressed are: (i) determining whether an instrument (or embedded feature) is indexed to an entity’s own stock; (ii) distinguishing liabilities from equity for mandatorily redeemable financial instruments of certain nonpublic entities; and (iii) identifying mandatorily redeemable noncontrolling interests. The Company adopted ASU 2017-11 on January 1, 2019 and determined that this ASU did not have a material impact on the consolidated financial statements.

Prepaid expenses for the years ended December 31, 2019 and 2018 include mostly research and development fees paid to GRDG in the amounts of $30,700 and $22,761, respectively.

On October 16, 2018, 1,000 shares of common stock were issued to Global BioMedical Pte. Ltd.

On November 21, 2018 the Company increased its authorized shares from 10,000 to 100,000,000 common shares with a par value of $0.001 per share. No preferred shares have been authorized or issued.

Based on Shareholders Agreement entered into on April 26, 2017, the Company should fund the scientific operations of GRDG, a company involved in research and development of biomedical products and owned by Daryl Thompson, a director of many subsidiaries of the Company, to do the development and research works on the biomedical products for the Company. Initial monthly payments were agreed to be $20,994 plus any additional amounts that would be necessary and agreed by the Board of Directors. The monthly payments were adjusted for the increase in rent of GRDG office and general inflation. Current monthly payments equal to $23,319. The Company incurred expenses of $303,071 and $ 285,573 for the years ended December 31, 2019 and 2018, respectively. On December 31, 2019 and December 31, 2018, the Company owed this related party $0 and had prepaid monthly fees of $30,700 and $22,761, respectively.

SeD Development Management, LLC, an indirect subsidiary of SeD Ltd, provides ~~voting instructions~~administrative and accounting services to ~~“ABSTAIN”~~the Company and its subsidiaries. The Company incurred expenses of $6,000 and $4,000 for the years ended December 31, 2019 and 2018, respectively. On December 31, 2019 and December 31, 2018, the Company owed this related party $0.

At December 31, 2019, Impact BioMedical, Inc. had not entered into any leases, as the Company had no employees.

On August 15, 2018, the Company entered into Royalty Agreement with Chemia Corporation (“Chemia”) pursuant to which Chemia transferred to the Company all of its right to 3F (Functional Fragrance Formulation). 3F consists of 3F Mosquito Repellant and 3F Anti-Viral formulations. Based on the Royalty Agreement, the Company should cover all the costs to prepare and finalize necessary patent application and other intellectual property related to 3F. Chemia agreed to support the Company in efforts leading to development of 3F intellectual property and it’s licensing. Based on Royalty Agreement any payments received from ~~voting~~development, sales, licensing or transfer of 3F technology will be paid 50% to the Company and 50% to Chemia. On November 27, 2018, Company and Chemia signed an Addendum to Royalty Agreement (“Addendum”), according to which the Company granted Chemia a royalty-based limited license for purposes of making and selling fragrances embodying the 3F technology. Based on the Addendum, Chemia should pay the Company 5% of net sales in royalty. On November 8, 2019, both companies entered into Amendment no.1 to Royalty Agreement, based on which certain expenses bore by the Company towards patent application and licensing should be reimbursed to the Company before any royalty payments are made. As on December 31 2019 and 2018 there were no reimbursements or royalties paid to the Company and the Company cannot be assured that Chemia’s efforts will end up in any future sales of the technology.

On December 22, 2017, the “Tax Cuts and Jobs Act” (TCJA) was signed into law that significantly reformed the Internal Revenue Code of 1986, as amended. The TCJA reduces the corporate tax rate to 21 percent beginning with years starting January 1, 2018. The deferred tax assets and liabilities have been adjusted to the newly enacted U.S. corporate rate and the related impact to the tax expense has been recognized in the current year.

The components of income tax expense and the effective tax rates for the years ended December 31, 2019 and 2018 are as follows:

A reconciliation of our income tax expense at federal statutory income tax rate of 21% to our income tax expense at the effective tax rate is as follows:

As of December 31, 2019 and 2018, the Company has net operating loss carry-forwards of $2,526,804and $1,872,784, respectively. The Company does not have other temporary differences. As of December 31, 2019 and 2018, the total deferred tax assets carry-forward were $681,663 and $515,390, respectively. The deferred tax assets could be carried forward for 20 years. The full utilization of the deferred tax assets in the future is dependent upon the Company’s ability to generate taxable income. Considering the development stage of the Company, management believed that it was probable that the Company would not use tax assets in the near future. Accordingly, a valuation allowance of an equal amount has been established. As of the years ended December 31, 2019 and 2018, the valuation allowance were $681,663 and $515,390, respectively. During the year ended December 31, 2019, the valuation allowance increased by $166,273. No deferred tax assets were recorded on years ended December 31, 2019 and 2018.

The federal income tax returns of the Company are subject to examination by the IRS, generally for three years after they are filed. The tax returns for the years ended December 31, 2018 and 2017 are still subject to examination by the taxing authorities.

On March 31, 2020 the Company issued 13,896,069 shares of common stock to its sole shareholder Global BioMedical Pte. Ltd. in consideration of the $2,779,214 invested in the Company.

On March 12, 2020 Singapore eDevelopment Ltd., Global BioMedical Pte Ltd., Document Security Systems, Inc (“DSS”) and DSS BioHealth Security Inc. (“DSS BioHealth”) signed Term Sheets and subsequently on April 21, 2020, these four companies entered into Share Exchange Agreement, based on which Global BioMedical Pte Ltd. agreed to sell all of the issued and outstanding shares of the Company to DSS BioHealth in exchange for the combination of common and preferred shares of DSS. The closing of this transaction is contingent upon DSS shareholders’ approval and all parties meeting the conditions of the Share Exchange Agreement. Our Company’s Chairman, who is also the largest shareholder of Singapore eDevelopment Ltd., is the beneficial owner of approximately 36.97% of the outstanding shares of DSS and is the Chairman of the Board of Directors of DSS. The Company is currently supporting Global BioMedical Pte Ltd. in meeting the closing conditions.

The consolidated financial statements include all accounts of the entities as of the reporting period ending dates and for the reporting periods as follows:

As of March 31, 2020 and December 31, 2019, the aggregate noncontrolling interest was $40,527 and $46,027, respectively, which are separately disclosed on the Consolidated Balance Sheet.

On the date of incorporation, Global BioLife issued 800 shares to Global BioMedical. Inc., 100 shares to GRDG Sciences, LLC (“GRDG”) and 100 to Holista Colltech Limited. Based on the Global BioLife’s Stockholders Agreement signed on April 26, 2017, Global BioMedical Inc agreed to transfer 10% of its ownership in Global BioLife to GRDG Sciences, LLC upon successful completion of certain goals. GRDG Sciences, LLC fulfilled required goals and 100 shares was transferred on September 12, 2017.

The Company considers all highly liquid investments with a maturity of three months or less at the date of acquisition to be cash equivalents. There were no cash equivalents as of March 31, 2020 and December 31, 2019.

On November 8, 2019, the Company purchased 50% of Sweet Sense from QI for $91,000. Consequently, Sweet Sense is now an 81.8% owned subsidiary of the Company, and therefore, is now consolidated into the consolidated financial statements.

Research and development costs are expensed as incurred. Total research and development costs were $71,967 and $106,123 for the three months ended March 31, 2020 and 2019, respectively.

Subsequent events are events or transactions that occur after the balance sheet date but before the financial statements are available to be issued.

The Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)FASB ASU 2016- 01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities– The changes to the current U.S. GAAP model primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments.

Prepaid expenses for the three months ended March 31, 2020 and year ended December 31, 2019 include mostly research and development fees paid to GRDG in the amounts of $23,319 and $30,700, respectively.

On October 16, 2018, 1,000 shares of common stock were issued to Global BioMedical Pte. Ltd.

On November 21, 2018 the Company increased its authorized shares from 10,000 to 100,000,000 common shares with a par value of $0.001 per share. No preferred shares have been authorized or issued.

On March 31, 2020 the Company issued 13,896,069 shares of common stock to its sole shareholder Global BioMedical Pte. Ltd.

Based on Shareholders Agreement entered into on April 26, 2017, the Company should fund the scientific operations of GRDG, a company involved in research and development of biomedical products and owned by Daryl Thompson, a director of many subsidiaries of the Company, to do the development and research works on the biomedical products for the Company. Initial monthly payments were agreed to be $20,994 plus any additional amounts that would be necessary and agreed by the Board of Directors. The monthly payments were adjusted for the increase in rent of GRDG office and general inflation. Current monthly payments equal to $23,319. The Company incurred expenses of $79,516 and $ 70,258 for the three months ended March 31, 2020 and 2019, respectively. On March 31, 2020 and December 31, 2019 the Company owed this related party $0 and had prepaid monthly fees of $30,700 and $18,116, respectively.

SeD Development Management, LLC, an indirect subsidiary of SeD Ltd, provided administrative and accounting services to the Company and its subsidiaries. The Company incurred expenses of $0 and $1,500 for the three months ended March 31, 2020 and 2019, respectively. On March 31, 2020 and December 31, 2019, the Company owed this related party $0. As of January 1, 2020, both parties agreed to stop paying the service fee.

At March 31, 2020, Impact BioMedical, Inc. had not entered into any leases, as the Company had no employees.

On August 15, 2018, the Company entered into Royalty Agreement with Chemia Corporation (“Chemia”) pursuant to which Chemia transferred to the Company all of its right to 3F (Functional Fragrance Formulation). 3F consists of 3F Mosquito Repellant and 3F Anti-Viral formulations. Based on the Royalty Agreement, the Company should cover all the costs to prepare and finalize necessary patent application and other intellectual property related to 3F. Chemia agreed to support the Company in efforts leading to development of 3F intellectual property and it’s licensing. Based on Royalty Agreement any payments received from development, sales, licensing or transfer of 3F technology will be paid 50% to the Company and 50% to Chemia. On November 27, 2018, Company and Chemia signed an Addendum to Royalty Agreement (“Addendum”), according to which the Company granted Chemia a royalty-based limited license for purposes of making and selling fragrances embodying the 3F technology. Based on the Addendum, Chemia should pay the Company 5% of net sales in royalty. On November 8, 2019, both companies entered into Amendment no.1 to Royalty Agreement, based on which certain expenses bore by the Company towards patent application and licensing should be reimbursed to the Company before any royalty payments are made. As on March 31, 2020 and December 31 2019 there were no reimbursements or royalties paid to the Company and the Company cannot be assured that Chemia’s efforts will end up in any future sales of the technology.

Pursuant to the terms of the Share Exchange Agreement, DSS BioHealth Security, Inc., will purchase Impact BioMedical for $50 million (483,334 in Common Stock and a perpetual convertible preferred stock @ $6.48/share) for 100% of the business.

The following selected unaudited pro forma condensed combined financial information was prepared using the purchase method of accounting. The unaudited pro forma condensed combined balance sheet data assume that the share exchange took place on March 31, 2020 and combine Impact BioMedical’s historical balance sheet at March 31, 2020 with DSS’s historical balance sheet at March 31, 2020. The unaudited pro forma condensed combined statement of operations data for the year ended December 31, 2019 and for the three months ended March 31, 2020 assumes the Share Exchange took place on [ ] and combines statement of operations for the year and three months ended December 31, 2019 and March 31, 2020, respectively.

The selected unaudited pro forma condensed combined financial data are presented for illustrative purposes only and are not necessarily indicative of the combined financial position or results of operations of future periods or the results that actually would have been realized had the entities been a single entity during these periods.

Document Security Systems Common Stock currently trades on the NYSE Amex under the symbol “DSS.” The closing bid price of DSS Common Stock on the NYSE Amex on [____] was $[___] per share.

The Company has not paid cash dividends on its Common Stock and has no intention to do so at the current time.

Impact BioMedical, Inc.’s shares of common stock are not publicly traded, and Impact does not currently file reports with the SEC.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ISSUANCE OF OUR COMMON STOCK AND SERIES A PREFERRED STOCK IN CONNECTION WITH THE ACQUISITION OF IMPACT BIOMEDICAL AND ITS SUBSIDIARIES.

Our stockholders are being asked to consider and vote upon an adjournment of the Special Meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of approval of the proposed Share Exchange as described in Proposal 1.

Approval of the adjournment of the Special Meeting requires an affirmative vote of a majority of the votes cast on the proposal at the Special Meeting.

Abstentions and broker non-votes will not be counted towards, and will have no effect on, the vote total for this proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO APPROVE THE ADJOURNMENT OF THE SPECIAL MEETING, IF A QUORUM IS PRESENT, TO SOLICIT ADDITIONAL PROXIES IF THERE ARE NOT SUFFICIENT VOTES TO APPROVE PROPOSAL 1, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF THE ADJOURNMENT UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.

ALLOW FOR PARTICIPATION IN STOCKHOLDER MEETINGS BY MEANS OF VIRTUAL MEETING TECHNOLOGY

Our Board has approved an amendment, or Virtual Meeting Bylaw Amendment, to our Fifth Amended and Restated Bylaws, or bylaws, that allows us to hold virtual stockholder meetings in accordance with the March 7 Executive Order 202 – Declaring a Disaster Emergency in the State of New York - and its successor Executive Orders, or in accordance with any applicable law, now or in the future. Specifically, the Virtual Meeting Bylaw Amendment revises Section 5.1 of the bylaws to provide that our Board of Directors may, in its sole discretion, if permitted by law, determine that a future stockholder meeting will not be held at any physical location, but instead be held as a virtual meeting, and that if authorized by our Board of Directors, and subject to such guidelines and procedures as our Board of Directors may adopt, stockholders and proxy holders not physically present at a future meeting of stockholders may, by means of remote communication (a) participate in a meeting of stockholders; and (b) be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of virtual meeting technology, provided that (i) we implement reasonable measures to verify that each person deemed present and permitted to vote at a virtual meeting is a stockholder or proxy holder; (ii) we implement reasonable measures to provide such stockholders and proxy holders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with those proceedings; and (iii) if any stockholder or proxy holder votes or takes other action at the virtual meeting, a record of that vote or other action must be maintained by us.

Meetings of our stockholders may not be in a convenient location for many of our stockholders. We believe that the Virtual Meeting Bylaw Amendment will give our Board the flexibility to take action to enhance the opportunity of the Company’s stockholders to attend and participate in stockholder meetings. However, even if our Board is permitted to designate stockholder meetings be held virtually, we currently intend that stockholder meetings will continue to be held in person at a physical location so that all stockholders will continue to be entitled to attend stockholder meetings in person if they prefer to do so. The Virtual Meeting Bylaw Amendment is not intended to have any effect on the ability of stockholders to vote their shares by proxy, via telephone, the Internet, or by completion of a proxy card, any time before a meeting of stockholders.

Although the adoption and implementation of the Virtual Meeting Bylaw Amendment did not require the approval of the Company’s stockholders, we are submitting the Virtual Meeting Bylaw Amendment to the Company’s stockholders for ratification of our Board of Directors’ approval thereof, in order to provide the Company’s stockholders an opportunity to express their views on this matter. The stockholder vote on this matter will be considered advisory in nature and not binding on us, but will be considered by our Board of Directors when it determines whether to exercise the authority granted by the Virtual Meeting Bylaw Amendment and whether to retain the provisions of the Virtual Meeting Bylaw Amendment when considering other possible future amendments to our bylaws.

The description of the Virtual Meeting Bylaw Amendment set forth above ~~proposals,~~is qualified in its entirety by reference to the text of the Virtual Meeting Bylaw Amendment, which is attached as Appendix B to this Proxy ~~Representative will abstain from voting~~Statement.

The affirmative vote of a majority of the shares accordingly. For registered stockholders, if no specific voting instructions are given to the Proxy Representative, then the Proxy Representative will vote “FOR” Proposals 1, 2, 3 and 4 and according to their judgment on any other mattersof common stock properly ~~submitted for a vote~~cast at the ~~Annual Meeting.~~Special Meeting is required to approve this proposal.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPROVAL BY THE BOARD OF DIRECTORS OF THE VIRTUAL MEETING BYLAW AMENDMENT ALLOWING FOR PARTICIPATION IN STOCKHOLDER MEETINGS BY MEANS OF VIRTUAL MEETING TECHNOLOGY.

The following table sets forth beneficial ownership of Common Stock as of ~~March 31, 2016~~June [ ], 2020 by each person known by the Company to beneficially own more than 5% of the Common Stock, each director and ~~nominee for election as a director,~~ each ~~of the~~ executive ~~officers named in the Summary Compensation Table (see “Executive Compensation” below),~~officer, and by all of the Company’s directors and executive officers as a group. Each person has sole voting and dispositive power over the shares listed opposite his or her name except as indicated in the footnotes to the table and each person’s address is c/o Document Security Systems, Inc., 200 Canal View Boulevard, Suite ~~300,~~104, Rochester, New York 14623.

For purposes of this table, beneficial ownership is determined in accordance with ~~the Securities and Exchange Commission~~SEC rules, and includes investment power with respect to shares owned and shares issuable pursuant to warrants or options exercisable within 60 days of ~~March 31, 2016.~~_____________, 2020.

The percentages of shares beneficially owned are based on ~~51,881,948~~[] shares of our Common Stock issued and outstanding as of ~~March 31, 2016,~~_____________, 2020, and is calculated by dividing the number of shares that person beneficially owns by the sum of (a) the total number of shares outstanding on ~~March 31, 2016,~~_____________, 2020, plus (b) the number of shares such person has the right to acquire within 60 days of ~~March 31, 2016.~~

~~(1) Includes 1,135,321~~_____________, 2020. The percentages of shares beneficially owned after the Share Exchange are based on [____] shares of ~~the Company’s~~our Common Stock ~~76,775 shares of the Company’s Common Stock issuable upon the exercise of currently exercisable stock options, 100,000 shares of the Company’s Common Stock held by Mr. Fagenson’s wife,~~issued and an aggregate of 100,000 shares of the Company’s Common Stock held in trusts for Mr. Fagenson’s two adult children, of which Mr. Fagenson is trustee. Mr. Fagenson disclaims beneficial ownership of the 100,000 shares of the Company’s Common Stock held by his wife and the 100,000 shares of the Company’s Common Stock held in trusts for Mr. Fagenson’s two adult children.

(2) Includes 296,187 shares of the Company’s Common Stock, 207,101 shares of the Company’s Common Stock issuable upon exercise of stock options within 60 days of March 31, 2016, and 13,402 shares of the Company’s Common Stock issuable upon exercise of warrants with an exercise price of $4.80.

~~(3) Includes 1,019,982 shares of the Company’s Common Stock and 368,343 shares of the Company’s Common Stock issuable upon the exercise of stock options within 60 days of March 31, 2016.~~

~~(4) Includes 28,857 shares of the Company’s Common Stock and 116,775 shares of the Company’s Common Stock issuable upon the exercise of stock options within 60 days of March 31, 2016.~~

~~(5) Includes 15,000 shares of the Company’s Common Stock and 30,000 shares of the Company’s Common Stock issuable upon exercise of stock options within 60 days of March 31, 2016.~~

~~(7) Includes 18,750 shares of the Company’s Common Stock, and 77,870 shares of the Company’s Common Stock issuable upon the exercise of options within 60 days of March 31, 2016.~~

Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than 10% of our equity securities (“Reporting Persons”) to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Based solely on our review of copies of such reports and representations from the Reporting Persons, we believe that during the fiscal year ended December 31, 2015, all Reporting Persons were in compliance with the applicable requirements of Section 16(a) of the Exchange Act.

During 2015, the Company paid consulting fees of approximately $35,000 to Patrick White, its former CEO, under a consulting agreement. The agreement expired in March 2015, and all payments thereunder ceased at that time.

The Board conducts an appropriate review of and oversees all related party transactions on a continuing basis and reviews potential conflict of interest situations. The Board has adopted formal standards to apply when it reviews, approves or ratifies any related party transaction. In addition, the Board applies the following standards to such reviews: (i) all related party transactions must be fair and reasonable and on terms comparable to those reasonably expected to be agreed to with independent third parties for the same goods and/or services at the time they are authorized by the Board and (ii) all related party transactions should be authorized, approved or ratified by the affirmative vote of a majority of the directors who have no interest, either directly or indirectly, in any such related party transaction.

The Company’s By-laws, as amended, specify that the number of directors shall be at least three and no more than nine persons, unless otherwise determined by a vote of the majority of the Board of Directors. All of the nominees named below have been nominated by the Company to stand for election as incumbents. Each director of the Company serves for a one-year term (or until the next annual meeting of stockholders) or until such director’s successor is duly elected and qualified or until such director’s earlier resignation or removal.

Biographical and certain other information concerning the Company’s nominees for election to the Board is set forth below. There are no familial relationships among any of our directors or nominees. Except as indicated below, none of our directors is a director in any other reporting companies. None of our directors has been affiliated with any company that has filed for bankruptcy within the last ten years. We are not aware of any proceedings to which any of our directors, or any associate of any such director is a party adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries.

~~The principal occupation and business experience for each director nominee, for at least the past five years, is as follows:~~

~~Robert B. Fagenson~~ spent the majority of his career at the New York Stock Exchange, where he was Managing Partner of one of the largest specialist firms operating on the exchange trading floor. Having sold his firm and subsequently retired from that business in 2007, he has since been the Chief Executive Officer of Fagenson & Co., Inc., a 50 year old broker dealer that is engaged in institutional brokerage as well as investment banking and money management. On March 1, 2012, Fagenson & Co., Inc. transferred its brokerage operations, accounts and personnel to National Securities Corporation and now operates as a branch office of that firm. On April 4, 2012, Mr. Fagenson was elected Chairman of the Board of National Holdings Corporation which is the parent of National Securities Corporation, a full line broker dealer with offices around the United States. On January 1, 2015, Mr. Fagenson was named Chief Executive Officer of National Holdings Corporation.

During his career as a member of the New York Stock Exchange beginning in 1973, Mr. Fagenson has served as a Governor on the trading floor and was elected to the NYSE Board of Directors in 1993, where he served for six years, eventually becoming Vice Chairman of the Board in 1998 and 1999. He returned to the NYSE Board in 2003 and served as a director until the Board was reconstituted with only non-industry directors in 2004.

Mr. Fagenson has previously served on the boards of a number of public companies and is presently the Non-Executive Chairman of the Board of Directors of Document Security Systems, Inc. He has served as a director of the Company since 2004 and as the Board’s Non-Executive Chairman since 2008. He is also a director of the National Organization of Investment Professionals (NOIP).

In addition to his business related activities, Mr. Fagenson serves as Vice President and a director of New York Services for the Handicapped, Treasurer and director of the Centurion Foundation, Director of the Federal Law Enforcement Officers Association Foundation, Treasurer and director of the New York City Police Museum and as a member of the Board of the Sports and Arts in Schools Foundation. He is a member of the alumni boards of both the Whitman School of Business and the Athletic Department at Syracuse University. He also serves in a voluntary capacity on the boards and committees of many civic, social and community organizations. Mr. Fagenson received his B.S. degree in Transportation Sciences & Finance from Syracuse University in 1970. Mr. Fagenson’s extensive experience as a board member for many public companies and as a corporate executive qualifies him to serve on our board of directors.

~~Jeffrey Ronaldi~~ has served as the Company’s Chief Executive Officer and director since July 1, 2013. Mr. Ronaldi had previously served as Lexington Technology Group, Inc.’s Chief Executive Officer since November 9, 2012. He also has served since July 2011 as Managing Director at HPR Capital, LLC; since January 2008 he has also served as Managing Partner of CTD Group, LLC and since June 2005, he has served as Managing Director of SSL Services, LLC. From November 2008 to November 2010, he served as Chief Executive Officer at Turtle Bay Technologies, an intellectual property management firm that provides strategic capital, asset management services and guidance for intellectual property owners. Since August 2008, Mr. Ronaldi has provided consulting services to Juridica Investments Ltd., a closed-end investment fund listed on the Alternative Investment Market (AIM) of the London Stock Exchange. Mr. Ronaldi’s experience with Turtle Bay Technologies and management of intellectual property qualifies him to serve on our board of directors.

~~Robert B. Bzdick~~ ~~joined the Company on February 17, 2010 as Chief Operating Officer~~outstanding after the Company’s acquisition of its wholly-owned subsidiary, Premier Packaging Corporation, for which Mr. Bzdick was the Chief Executive Officer. Mr. Bzdick became a director of the Company in March 2010 and Chief Executive Officer in December 2012. Mr. Bzdick resigned as Chief Executive Officer of the Company and was appointed President of the Company on July 1, 2013. Prior to founding Premier Packaging Corporation in 1989, Mr. Bzdick held positions of Controller, Sales Manager, and General Sales Manager at the Rochester, New York division of Boise Cascade, LLC (later Georgia Pacific Corporation). Mr. Bzdick has over 29 years of experience in manufacturing and operations management in the printing and packaging industry. Mr. Bzdick brings his considerable packaging and printing industry experience to the Company, which qualifies him to serve on our board of directors.proposed Share Exchange.

~~Ira A. Greenstein~~ is President of Genie Energy Ltd., an energy services company. Prior to joining Genie Energy Ltd. in December 2011, Mr. Greenstein served as President of IDT Corporation (NYSE: IDT), a provider of wholesale and retail telecommunications services and continues to serve as counsel to the Chairman. Prior to joining IDT in January 2000, Mr. Greenstein was a partner in the law firm of Morrison & Foerster LLP from February 1997 to November 1999, where he served as the chairman of the firm’s New York Business Department. Concurrent to his tenure at Morrison & Foerster, Mr. Greenstein served as General Counsel and Secretary of Net2Phone, Inc. from January 1999 to November 1999. Prior to 1997, Mr. Greenstein was an associate in the New York and Toronto offices of Skadden, Arps, Meagher & Flom LLP. Mr. Greenstein also served on the Securities Advisory Committee to the Ontario Securities Commission from 1992 through 1996. From 1991 to 1992, Mr. Greenstein served as second counsel to the Ontario Securities Commission. Mr. Greenstein serves on the boards of Ohr Pharmaceutical, Inc., NanoVibronix Inc. and Regal Bank of New Jersey. Mr. Greenstein is a member of the Dean’s Council of the Columbia Law School Center on Corporate Governance. Mr. Greenstein received a B.S. from Cornell University and a J.D. from Columbia University Law School. Mr. Greenstein was appointed to our Board of Directors in September 2004.

Mr. Greenstein provides the Company with significant public company management experience, particularly in regards to legal and corporate governance matters, mergers and acquisitions, and strategic planning. In addition, Mr. Greenstein’s extensive legal experience has provided the Company insights and guidance throughout the Company’s patent litigation initiatives. All of this experience qualifies him to serve on our board of directors.

~~Warren Hurwitz~~ has served as a director of the Company since July 1, 2013. Mr. Hurwitz has served since March 2005 as a partner of Altitude Capital Partners, a private investment fund that he co-founded that is focused on investing in, enforcing and protecting the rights of intellectual property assets. Prior to Altitude Capital Partners, Mr. Hurwitz was a Senior Vice President at HSBC Capital (USA), the U.S. private equity arm of HSBC Group, from May 2001 through June 2004 and has held various positions within HSBC Markets (USA) Inc. from June 1994 through May 2001. Mr. Hurwitz received his B.A. degree in Economics from the State University of New York at Albany and his MBA from Fordham University. Mr. Hurwitz’s experience with Altitude Capital Partners and the investment, enforcement and protection of intellectual property rights qualify him to serve on our board of directors.

~~Joseph Sanders~~has served as a director of the Company since October 1, 2015. Mr. Sanders graduated with a BS in Business Administration and Finance from the University of Southern California and went on to receive an MBA in Finance from Loyola Marymount University. He received his license as a financial advisor in 1981, and then worked as a financial analyst at Hughes Aircraft for two years. Thereafter, between 1983 and 2001, Mr. Sanders served as a financial advisor at Dean Witter, EF Hutton, Shearson Lehman, Bateman Eichler, AG Edwards, Sutro and Morgan Stanley. Since 2001, Mr. Sanders has served as a Registered Investment Advisor with a firm now known as Newport Coast Securities. All of this experience qualifies him to serve on our board of directors.

There are no legal proceedings that have occurred within the past ten years concerning our directors which involved a criminal conviction, a criminal proceeding, an administrative or civil proceeding limiting one’s participation in the securities or banking industries, or a finding of securities or commodities law violations.

~~THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF ALL THE NOMINEES DESCRIBED ABOVE.~~

Each independent director (as defined under Section 803 of the NYSE MKT LLC Company Guide) is entitled to receive base cash compensation of $12,000 annually, provided such director attends at least 75% of all Board of Director meetings, and all scheduled committee meetings. Each independent director is entitled to receive an additional $1,000 for each Board of Director meeting he attends, and an additional $500 for each committee meeting he attends, provided such committee meeting falls on a date other than the date of a full Board of Directors meeting. Each of the independent directors is also eligible to receive discretionary grants of options or restricted stock under the Company’s 2013 Employee, Director and Consultants Equity Incentive Plan. Non-independent members of the Board of Directors do not receive cash compensation in their capacity as directors, except for reimbursement of travel expenses.

~~The following table sets forth cash compensation and the value of stock options awards granted to the Company’s non-employee independent directors for their service in 2015:~~

~~Board of Directors and Committees~~VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The Company has determined that each of the following directors, Messrs. Hurwitz, Fagenson, Sanders and Greenstein, qualify as independent directors (as defined under Section 803 of the NYSE MKT LLC Company Guide).

~~In fiscal 2015, each of the Company’s directors attended or participated in 75% or more of the aggregate of (i) the total~~ number of meetings of the Board of Directors held during the period in which each such director served as a director and (ii) the total number of meetings held by all committees of the Board of Directors during the period in which each such director served on such committee. During the fiscal year ended December 31, 2015, the Board held four meetings and acted by written consent on twelve occasions. The Board’s independent directors met in executive session on one occasion outside the presence of the non-independent directors and management.

The Company has separately designated an Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Audit Committee held four meetings in 2015. The Audit Committee is responsible for, among other things, the appointment, compensation, removal and oversight of the work of the Company’s independent registered public accounting firm, overseeing the accounting and financial reporting process of the Company, and reviewing related person transactions. The Audit Committee is currently comprised of Robert Fagenson and Warren Hurwitz. It is anticipated that each of Mr. Fagenson and Mr. Hurwitz will be re-appointed to serve as members of the Audit Committee at the Company’s Annual Meeting of Directors. Robert Fagenson is qualified as a “financial expert” as defined in Item 407 under Regulation S-K of the Securities Act of 1933, as amended. Each of the members of the Audit Committee is an independent director (as defined under Section 803 of the NYSE MKT LLC Company Guide). The Audit Committee operates under a written charter adopted by the Board of Directors, which can be found in the Investors/Corporate Governance section of our web site, www.dsssecure.com.

The purpose of the Compensation and Management Resources Committee is to assist the Board in discharging its responsibilities relating to executive compensation, succession planning for the Company’s executive team, and to review and make recommendations to the Board regarding employee benefit policies and programs, incentive compensation plans and equity-based plans. The Compensation and Management Resources Committee held two meetings in 2015.

The Compensation and Management Resources Committee is responsible for, among other things, (a) reviewing all compensation arrangements for the executive officers of the Company and (b) administering the Company’s stock option plans. The Compensation and Management Resources Committee currently consists of Ira Greenstein and Robert Fagenson. Each of the members of the Compensation and Management Resources Committee is an independent director (as defined under Section 803 of the NYSE MKT LLC Company Guide). It is anticipated that Mr. Fagenson and Mr. Greenstein will be re-appointed to serve as members of the Compensation and Management Resources Committee at the Company’s Annual Meeting of Directors. The Compensation and Management Resource Committee operates under a written charter adopted by the Board of Directors, which can be found in the Investors/Corporate Governance section of our web site, www.dsssecure.com.

The duties and responsibilities of the Compensation and Management Resources Committee in accordance with its charter are to review and discuss with management and the Board the objectives, philosophy, structure, cost and administration of the Company’s executive compensation and employee benefit policies and programs; no less than annually, review and approve, with respect to the Chief Executive Officer and the other executive officers (a) all elements of compensation, (b) incentive targets, (c) any employment agreements, severance agreements and change in control agreements or provisions, in each case as, when and if appropriate, and (d) any special or supplemental benefits; make recommendations to the Board with respect to the Company’s major long-term incentive plans, applicable to directors, executives and/or non-executive employees of the Company and approve (a) individual annual or periodic equity-based awards for the Chief Executive Officer and other executive officers and (b) an annual pool of awards for other employees with guidelines for the administration and allocation of such awards; recommend to the Board for its approval a succession plan for the Chief Executive Officer, addressing the policies and principles for selecting a successor to the Chief Executive Officer, both in an emergency situation and in the ordinary course of business; review programs created and maintained by management for the development and succession of other executive officers and any other individuals identified by management or the Compensation and Management Resources Committee; review the establishment, amendment and termination of employee benefits plans, review employee benefit plan operations and administration; and any other duties or responsibilities expressly delegated to the Compensation and Management Resources Committee by the Board from time to time relating to the Committee’s purpose.

The Compensation and Management Resources Committee may request any officer or employee of the Company or the Company’s outside counsel to attend a meeting of the Compensation and Management Resources Committee or to meet with any members of, or consultants to, the Compensation and Management Resources Committee. The Company’s Chief Executive Officer does not attend any portion of a meeting where the Chief Executive Officer’s performance or compensation is discussed, unless specifically invited by the Compensation and Management Resources Committee.

The Compensation and Management Resources Committee has the sole authority to retain and terminate any compensation consultant to be used to assist in the evaluation of director, Chief Executive Officer or other executive officer compensation or employee benefit plans, and shall have sole authority to approve the consultant’s fees and other retention terms. The Compensation and Management Resources Committee also has the authority to obtain advice and assistance from internal or external legal, accounting or other experts, advisors and consultants to assist in carrying out its duties and responsibilities, and has the authority to retain and approve the fees and other retention terms for any external experts, advisors or consultants.

The Nominating and Corporate Governance Committee is responsible for overseeing the appropriate and effective governance of the Company, including, among other things, (a) nominations to the Board of Directors and making recommendations regarding the size and composition of the Board of Directors and (b) the development and recommendation of appropriate corporate governance principles. The Nominating and Corporate Governance Committee currently consists of Ira Greenstein and Robert Fagenson, each of whom is an independent director (as defined under Section 803 of the NYSE MKT LLC Company Guide). It is anticipated that Mr. Greenstein and Mr. Fagenson will be re-appointed at the Company’s Annual Meeting of Directors to serve as members of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee held one meeting in 2015. The Nominating and Corporate Governance Committee operates under a written charter adopted by the Board of Directors, which can be found in the Investors/Corporate Governance section of our web site, www.dsssecure.com. The Nominating and Corporate Governance Committee adheres to the Company’s By-Laws provisions and Securities and Exchange Commission rules relating to proposals by shareholders when considering director candidates that might be recommended by stockholders, along with the requirements set forth in the committee’s Policy with Regard to Consideration of Candidates Recommended for Election to the Board of Directors, also available on our website. The Nominating and Corporate Governance Committee of the Board of Directors is responsible for identifying and selecting qualified candidates for election to the Board of Directors prior to each annual meeting of the Company’s stockholders. In identifying and evaluating nominees for director, the Committee considers each candidate’s qualities, experience, background and skills, as well as other factors, such as the individual’s ethics, integrity and values which the candidate may bring to the Board of Directors.

The Company has adopted a code of Ethics that establishes the standards of ethical conduct applicable to all directors, officers and employees of the Company. A copy of the Code of Ethics covering all of our employees, directors and officers, is available on the Investors/Corporate Governance section of our web site at www.dsssecure.com.

Currently, the positions of Chief Executive Officer and Chairman of the Board are held by two different individuals. Robert Fagenson currently serves as Chairman of the Board and Jeffrey Ronaldi currently serves as Chief Executive Officer of the Company and as a member of the Board. Although no formal policy currently exists, the Board determined that the separation of these positions would allow our Chief Executive Officer to devote his time to the daily execution of the Company’s business strategies and the Board Chairman to devote his time to the long-term strategic direction of the Company. Our senior management manages the risks facing the Company under the oversight and supervision of the Board. While the full Board is ultimately responsible for risk oversight at our Company, two of our Board committees assist the Board in fulfilling its oversight function in certain areas of risk. The Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to risk in the areas of financial reporting and internal controls. The Nominating and Corporate Governance Committee assists the Board in fulfilling its oversight responsibilities with respect to risk in the area of corporate governance. Other general business risks such as economic and regulatory risks are monitored by the full Board. While the Board oversees the Company’s risk management, management is responsible for day-to-day oversight of risk management processes.

Our Board considered whether our compensation program encouraged excessive risk taking by employees at the expense of long-term Company value. Based upon its assessment, the Board does not believe that our compensation program encourages excessive or inappropriate risk-taking. The Board believes that the design of our compensation program does not motivate imprudent risk-taking.

The Nominating and Corporate Governance Committee of the Board of Directors is responsible for identifying and selecting qualified candidates for election to the Board of Directors prior to each annual meeting of the Company’s stockholders. A copy of the Nominating and Corporate Governance Committee Charter is available on the Investors/Corporate Governance/Charters section of our web site, www.dsssecure.com. In addition, stockholders who wish to recommend a candidate for election to the Board of Directors must submit a written notice of such recommendation to the Company and strictly comply with all the requirements set forth in the Nominating and Corporate Governance Committee Policy With Regard to Consideration of Candidates Recommended for Election to the Board of Directors, a copy of which is also available on the Investors/Charters section of our web site. The standards for considering nominees to the Board are included in the Corporate Governance Committee Charter. In identifying and evaluating nominees for director, the Committee considers each candidate’s qualities, experience, background and skills, as well as other factors, such as the individual’s ethics, integrity and values which the candidate may bring to the Board of Directors. Any stockholder who desires the Committee to consider one or more candidates for nomination as a director should either by personal delivery or by United States mail, postage prepaid, deliver a written notice of recommendation addressed to: Document Security Systems, Inc., Nominating and Corporate Governance Committee, 200 Canal View Boulevard, Suite 300, Rochester, New York 14623. Each written notice must set forth: (a) the name and address of the stockholder making the recommendation and of the person or persons recommended, (b) a representation that the stockholder is a holder of record of the stock of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice, (c) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder, (d) such other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC, (e) the consent of such person(s) to serve as a director(s) of the Company if nominated and elected, and (f) a description of how the person(s) satisfy the criteria for consideration as a candidate referred to above.

The Company has established procedures for stockholders or other interested parties to communicate directly with the Board of Directors. Such parties can contact the Board of Directors by mail at: Document Security Systems, Inc., Board of Directors, Attention: Robert Fagenson, Chairman of the Board, 200 Canal View Boulevard, Suite 300, Rochester, New York 14623. All communications made by this means will be received by the Chairman of the Board.

The following Audit Committee Report shall not be deemed to be “soliciting material,” “filed” with the SEC, or subject to the liabilities of Section 18 of the Exchange Act. Notwithstanding anything to the contrary set forth in any of the Company’s previous filings under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, that might incorporate by reference future filings, including this Proxy Statement, in whole or in part, the following Audit Committee Report shall not be incorporated by reference into any such filings.

The Audit Committee is comprised of two independent directors (as defined under Section 803 of the NYSE MKT LLC Company Guide). The Audit Committee operates under a written charter adopted by the Board of Directors, which can be found in the Investors/Corporate Governance section of our web site, www.dsssecure.com.

~~We have reviewed and discussed with management the Company’s audited consolidated financial statements as of and for the fiscal year ended December 31, 2015.~~

~~We have reviewed and discussed with management and the independent registered public accounting firm the quality and the acceptability of the Company’s financial reporting and internal controls.~~

We have discussed with the independent registered public accounting firm the overall scope and plans for their audit as well as the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting.

We have discussed with management and the independent registered public accounting firm such other matters as required to be discussed with the Audit Committee under Professional Standards, the corporate governance standards of the NYSE MKT LLC Exchange and the Audit Committee’s Charter.

We have received and reviewed the written disclosures and the letter from the independent registered public accounting firm required by the Statement on Auditing Standards as adopted by the Public Company Accounting Oversight Board, and have discussed with the independent registered public accounting firm their independence from management and the Company, including the impact of permitted non-audit related services approved by the Committee to be performed by the independent registered public accounting firm.

Based on the reviews and discussions referred to above, we recommended to the Board of Directors that the financial statements referred to above be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC on March 30, 2016.

The persons who are serving as Named Executive Officers of the Company as of March 31, 2016 are Jeffrey Ronaldi, Chief Executive Officer, Robert Bzdick, President, and Philip Jones, Chief Financial Officer. The biographies for each of Jeffrey Ronaldi and Robert Bzdick are contained herein in the information disclosures relating to the Company’s nominees for director.

Philip Jones, 47, joined the Company in 2005 as Controller and Principal Accounting Officer and has been the Company’s Chief Financial Officer since May 2009. Mr. Jones also serves as the Company’s Treasurer. Prior to joining the Company, Mr. Jones held financial management positions at Zapata Corporation, a public holding company, and American Fiber Systems, a private telecom company. In addition, Mr. Jones was a CPA at PriceWaterhouseCoopers and Arthur Andersen. Mr. Jones holds a Bachelor’s Degree in Economics from SUNY Geneseo and an MBA from the Rochester Institute of Technology. Mr. Jones is on the board of directors of U-Vend, Inc.

There are no familial relationships among any of our officers or directors. None of our executive officers has been affiliated with any company that has filed for bankruptcy within the last ten years. We are not aware of any proceedings to which any of our executive officers or any associate of any such officer, is a party adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries.

There are no legal proceedings that have occurred within the past ten years concerning our executive officers which involved a criminal conviction, a criminal proceeding, an administrative or civil proceeding limiting one’s participation in the securities or banking industries, or a finding of securities or commodities law violations.

The following table sets forth the compensation earned by persons serving as the Company’s Chief Executive Officer and Chief Financial Officer during 2015, and its other two most highly compensated executive officer who served the Company in 2015, referred to herein collectively as the “Named Executive Officers”, or NEOs, for services rendered to us for the years ended December 31, 2015 and 2014:

Mr. Bzdick serves as the Company’s President pursuant to an employment agreement that runs until February 10, 2020 (the “Bzdick Employment Agreement”). The Bzdick Employment Agreement was originally executed on February 10, 2010, and was later amended effective October 1, 2012. Mr. Bzdick’s annual base salary under the Bzdick Employment Agreement is $200,000. The Bzdick Employment Agreement also provides for non-competition covenants by Mr. Bzdick in favor of the Company for the longer of (i) one year after termination of employment, or (ii) any period during which Mr. Bzdick receives severance payments.

On October 1, 2012, the Company entered into a letter agreement with Philip Jones (the “Jones Letter Agreement”) which became effective on July 1, 2013. Under the Jones Letter Agreement, if Mr. Jones’ employment is terminated, the Company will pay Mr. Jones severance in the amount of $150,000 in bi-weekly installments in accordance with the Company’s regular payroll practices, for a period of 12 months. Mr. Jones is an “at will” employee.

On November 9, 2015, the Company entered into an employment agreement with Jeffrey Ronaldi to serve as the Company’s Chief Executive Officer (the “Ronaldi Employment Agreement”), which expires on December 31, 2016. Under the Ronaldi Employment Agreement, Mr. Ronaldi’s annual base salary is $150,000. The agreement also contains performance incentive provisions, and six-month post-employment non-competition covenants. If the Company terminates his employment prior to his employment expiration date, then the Company would be obligated to pay his base salary through December 31, 2016.

Peter Hardigan’s employment as Chief Operating Officer of the Company terminated on July 31, 2015. The Company did not owe Mr. Hardigan any severance payment upon his separation from the Company. Mr. Hardigan is subject to certain non-competition covenants for a period of twelve months following his termination.

~~The following table summarizes the equity awards we have made to our Named Executive Officers, which were outstanding as of December 31, 2015:~~

(1) One half of these options shall vest in 12 equal quarterly tranches, with the first tranches having vested as of February 15, 2013, and May 15, 2013 and the remaining tranches vesting on each of August 15, November 15, February 15 and May 15 thereafter through August 15, 2015. Following the completion of the Merger on July 1, 2013, the remaining one half of these options shall vest in 12 equal tranches, with a tranche to vest on the last day of each calendar quarter commencing on September 30, 2013.

~~(2) One-third of these options vested on the date of grant, one-third on 3/5/2015, and one-third on 3/5/2016.~~

~~As of December 31, 2015, securities issued and securities available for future issuance under our 2013 Employee, Director and Consultant Equity Incentive Plan (the “2013 Plan”) is as follows:~~

~~The warrants listed in the table above were issued to third party service providers in partial or full payment for services rendered.~~

The Company’s stockholders are being asked to ratify the Board of Directors’ appointment of Freed Maxick CPAs, P.C. as the Company’s independent registered public accounting firm for fiscal 2016.

In the event that the ratification of this selection is not approved by an affirmative majority of the votes cast on the proposal at the Annual Meeting, management will review its future selection of the Company’s independent registered public accounting firm.

A representative of Freed Maxick CPAs, P.C. is expected to be present at the Annual Meeting and will have an opportunity to make a statement if he or she desires to do so. It is also expected that such representative will be available to respond to appropriate questions.

Audit fees consist of fees for professional services rendered for the audit of the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K, including the review of financial statements included in the Company’s Quarterly Reports on Form 10-Q, and for services that are normally provided by the auditor in connection with statutory and regulatory filings or engagements. The aggregate fees billed for professional services rendered by our principal accountant, Freed Maxick CPAs, P.C., for audit and review services for the fiscal years ended December 31, 2015 and 2014 were approximately $123,500 and $143,600, respectively.

The aggregate fees billed for other related services by our principal accountant, Freed Maxick CPAs, P.C., pertaining to registration statements and consultation on financial accounting or reporting standards for the years ended December 31, 2015 and 2014 were approximately $8,500 and $70,900, respectively.

The aggregate fees billed for professional services rendered by our principal accountant, Freed Maxick CPAs, P.C., for tax compliance, tax advice and tax planning during the years ended December 31, 2015 and 2014 were approximately $30,200 and $33,400, respectively.

~~There were no fees billed for professional services rendered by our principal accountant, Freed Maxick CPAs, P.C., for other related services during the years ended December 31, 2015 and 2014.~~

~~Administration of the Engagement; Pre-Approval of Audit and Permissible Non-Audit Services~~

The Company’s Audit Committee Charter requires that the Audit Committee establish policies and procedures for pre-approval of all audit or permissible non-audit services provided by the Company’s registered public independent auditing firm. Our Audit Committee, approved, in advance, all work performed by our principal accountant, Freed Maxick CPAs, P.C. These services may include audit services, audit-related services, tax services and other services. The Audit Committee may establish, either on an ongoing or case-by-case basis, pre-approval policies and procedures providing for delegated authority to approve the engagement of the independent registered public accounting firm, provided that the policies and procedures are detailed as to the particular services to be provided, the Audit Committee is informed about each service, and the policies and procedures do not result in the delegation of the Audit Committee’s authority to management. In accordance with these procedures, the Audit Committee pre-approved all services performed by Freed Maxick CPAs, P.C. The percentage of hours expended on Freed Maxick CPAs, P.C.’s engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was 0%.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF FREED MAXICK CPAs, P.C. AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2016.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) requires the Company’s stockholders to have the opportunity to cast a non-binding advisory vote regarding the approval of the compensation disclosed in this Proxy Statement of the Company’s Named Executive Officers included in the Summary Compensation Table. The Company has disclosed the compensation of the Named Executive Officers pursuant to rules adopted by the SEC.

We believe that our compensation policies for the Named Executive Officers are designed to attract, motivate and retain talented executive officers and are aligned with the long-term interests of the Company’s stockholders. This advisory stockholder vote, commonly referred to as a “say-on-pay vote,” gives you as a stockholder the opportunity to approve or not approve the compensation of the Named Executive Officers that is disclosed in this Proxy Statement by voting for or against the following resolution (or by abstaining with respect to the resolution):

RESOLVED, that the stockholders of Document Security Systems, Inc. approve all of the compensation of the Company’s executive officers who are named in the Summary Compensation Table of the Company’s 2016 Proxy Statement, as such compensation is disclosed in the Company’s 2016 Proxy Statement pursuant to Item 402 of Regulation S-K, which disclosure includes the Proxy Statement’s Summary Compensation Table and other executive compensation tables and related narrative disclosures.

Because your vote is advisory, it will not be binding on either the Board of Directors or the Company. However, the Company’s Compensation and Management Resources Committee will take into account the outcome of the stockholder vote on this proposal at the Annual Meeting when considering future executive compensation arrangements. In addition, your non-binding advisory votes described in this Proposal 3 will not be construed: (1) as overruling any decision by the Board of Directors, any Board committee or the Company relating to the compensation of the Named Executive Officers, or (2) as creating or changing any fiduciary duties or other duties on the part of the Board of Directors, any Board committee or the Company.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” APPROVAL OF THE COMPENSATION OF THE COMPANY’S EXECUTIVE OFFICERS DISCLOSED IN THE SUMMARY COMPENSATION TABLE OF THIS PROXY STATEMENT.

~~APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION TO EFFECT A 1-FOR-4 REVERSE STOCK SPLIT~~

Our Board of Directors has approved an amendment to our Certificate of Incorporation that would effect a 1-for-4 reverse stock split of our Common Stock, subject to stockholder approval. Under the proposed amendment, every 4 outstanding shares of our Common Stock ~~would be combined and converted into one share~~at the close of ~~Common Stock. If we receive stockholder approval of~~business on _____, 2020, the amendment, the reverse stock split will become effective as of 5:00 p.m. Eastern Daylight Time on the effective date of the certificate of amendment to our Certificate of Incorporation with the office of the Secretary of State of the State of New York, which we would expect to be the date of filing. The reverse stock split should not have any economic effect onRecord Date for determining our stockholders ~~warrant holders or holders~~who are entitled to notice of ~~options, except~~and to ~~the extent that a stockholder owns less than 4 shares of Common Stock~~vote at the effective time of the reverse stock split, in which case such stockholder will receive cash in an amount equal to the product obtained by multiplying: (x) the closing sales price of our Common Stock on the effective date of the reverse stock split as reported on the NYSE MKT, by (y) the amount of the fractional share. The reverse stock split will not result in fractional shares, as discussed further below. The text of the proposed amendment to our Certificate of IncorporationSpecial Meeting, is ~~attached to this proxy statement asAppendix A~~[ _____________].

On March 15, 2016, we were notified by the NYSE MKT LLC (the “NYSE MKT”) that we were not in compliance with the continued listing standards set forth in Section 1003(f)(v) of the NYSE MKT LLC Company Guide (the “Company Guide”), which addresses~~Low Selling Price Issues.~~ The NYSE MKT stated that the Company’s most recent thirty-day average selling price per share fell below the acceptable minimum required average share price for continued listing under Section 1003(f)(v) of the Company Guide, and that the Company’s stock had been closing at or below $0.20 per share since December 11, 2015. The NYSE MKT does not provide a specific minimum average price per share in its rules for purposes of compliance with Section 1003(f)(v) of the Company Guide, but instead makes those determinations in its discretion, on a case by case basis. A primary purpose of the reverse stock split would be to reduce the outstanding shares of Common Stock so that after giving effect to the reverse stock split our Common Stock trades at a higher price per share than before the split. We believe that the reverse stock split will increase our stock price and allow us to avoid a delisting.

~~Our total market capitalization immediately after the proposed reverse stock split may be lower than immediately before the proposed reverse stock split~~

There are numerous factors and contingencies that could affect our stock price following the proposed reverse stock split, including the status of the market for our stock at the time, our reported results of operations in future periods, and general economic, market and industry conditions. Accordingly, the market price of our Common Stock may not be sustainable at the direct arithmetic result of the reverse stock split. If the market price of our Common Stock declines after the reverse stock split, our total market capitalization (the aggregate value of all of our outstanding Common Stock at the then existing market price) after the split will be lower than before the split.

~~The reverse stock split may result in some stockholders owning “odd lots” that may be more difficult to sell or require greater transaction costs per share to sell.~~

The reverse stock split may result in some stockholders owning “odd lots” of less than 100 shares of our Common Stock on a post-split basis. Odd lots may be more difficult to sell, or require greater transaction costs per share to sell, than shares in “round lots” of even multiples of 100 shares.

The proposed reverse stock split would affect all of our stockholders uniformly and would not affect any stockholder’s percentage ownership interest in the Company, except to a stockholder that owns less than 4 shares of Common Stock at the effective time of the reverse stock split, in which case such stockholder will receive cash in an amount equal to the product obtained by multiplying: (x) the closing sales price of our Common Stock on the effective date of the reverse stock split as reported on the NYSE MKT, by (y) the amount of the fractional share.

~~Effect on Options and Warrants and Shares Reserved for Issuance under Equity Incentive Plan~~

All outstanding options and warrants to purchase shares of our Common Stock as well as the number of shares available for issuance under our 2013 Employee, Director and Consultant Equity Incentive Plan would be adjusted proportionately as a result of the reverse stock split. Unless specifically stated, share amounts and share prices have not been adjusted in this proxy statement to give effect to the proposed reverse stock split.

Implementation of the reverse stock split would not change the total authorized number of shares of Common Stock. However, the reduction in the issued and outstanding shares, and the corresponding adjustment of shares issuable pursuant to warrants and options, which would be decreased by a factor of 4, would provide more authorized shares available for future issuance.

~~The amendment to our Certificate of Incorporation will not change the par value of our Common Stock, which will remain at $0.02 per share.~~

Whether shares are held in street name or directly, fractional shares of Common Stock will not be issued to stockholders. Instead, fractional shares will be rounded up to the nearest whole number, except in the case of any stockholder that owns less than 4 shares of Common Stock at the effective time of the reverse stock split. In such case, such stockholders will receive cash for such fractional share. The amount of cash to be paid for fractional shares will be equal to the product obtained by multiplying: (x) the closing sales price of our Common Stock on the effective date of the reverse stock split as reported on the NYSE MKT, by (y) the amount of the fractional share.

~~Any stockholder that holds less than 4 shares of our Common Stock will be completely cashed out as a result of the payment of fractional shares in lieu of any fractional share interests.~~

If this Proposal 4 is approved by our stockholders, we expect the reverse stock split will become effective as of 5:00 p.m. Eastern Daylight Time on the effective date of the certificate of amendment to our Certificate of Incorporation that we will file with the office of the Secretary of State of the State of New York, which we would expect to be the date of filing. We expect to file the certificate of amendment to our Certificate of Incorporation within approximately 30 days of the Annual Meeting. The mechanics of the reverse stock split will differ depending on whether shares are held beneficially in street name or whether they are registered directly in a stockholder’s name.

If a stockholder’s shares are registered directly in the stockholder’s name, the stockholder will receive a transmittal letter asking the stockholder to surrender certificates representing pre-split shares in exchange for certificates representing post-split shares. No new certificates will be issued to the stockholder until the outstanding certificate(s) together with the properly completed and executed letter of transmittal are delivered to American Stock Transfer & Trust Co., 6201 15^th~~Ave., Brooklyn, New York 11219. Stockholders should not destroy any existing stock certificates and should not submit any certificates until requested to do so.~~

Stockholders that hold their shares in street name through a broker, bank or other nominee will not be required to surrender stock certificates. To determine the reverse stock split’s effect on any shares you hold in street name, you should contact your broker, bank or other nominee.

Tax matters are complicated, and the tax consequences of the reverse stock split will depend upon the particular circumstances of each stockholder. Accordingly, each stockholder is advised to consult his, her or its tax advisor with respect to all the potential tax consequences to him, her or it of the reverse stock split.

The affirmative vote of the holders of a majority of the outstanding shares of our Common Stock entitled to be voted at the Annual Meeting shall constitute approval of the amendment to our Certificate of Incorporation to effect the 1-for-4 reverse stock split.

~~OUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS A VOTE “FOR” APPROVAL OF THE AMENDMENT TO CERTIFICATE OF INCORPORATION TO EFFECT A 1-FOR-4 REVERSE STOCK SPLIT~~

For stockholders receiving the Notice, this Proxy Statement, our Annual Report, any amendments to the foregoing materials that are required to be furnished to stockholders, and the proxy card or voting instruction form will be available on-line at https://materials.proxyvote.com/25614T on or about May 16, 2016. The Notice contains instructions on how to access the proxy materials over the Internet and vote online. These materials contain detailed information about the Annual Meeting, the proposals to be considered, our Board’s nominees for directors and other information concerning the Company.

If you received the Notice and would also like to receive a copy of the printed proxy materials, we will deliver promptly, upon written or oral request, a written copy of the Proxy Statement, the Annual Report, proxy card with voting instructions, and any amendments to the foregoing materials that are required to be furnished to stockholders. A stockholder who wishes to receive written copies of the proxy materials, now or in the future, may obtain them, without charge, by calling (800) 579-1639, by requesting the materials via the Internet at~~www.proxyvote.com, or by sending an e-mail to sendmaterial@proxyvote.com.~~

~~Stockholders may present~~There are no proposals ~~for action at meetings of stockholders only if they comply with the~~by any security holder which are or could have been included within this proxy ~~rules established by the SEC, applicable New York law and our Bylaws. No stockholder proposals were received for consideration at our 2016 Annual Meeting of Stockholders.~~statement.

We have opted to provide our materials pursuant to the full set delivery option in connection with the Special Meeting. Under ~~SEC Rule 14a-8, in order for~~the full set delivery option, a company delivers all proxy materials to its shareholders. The approximate date on which the proxy statement and proxy card are intended to be first sent or given to the Company’s stockholders is [____], 2020. This delivery can be by mail or, if a stockholder ~~proposal~~has previously agreed, by e-mail. In addition to ~~be included in~~delivering proxy materials to stockholders, the Company must also post all proxy materials on a publicly accessible website and provide information to stockholders about how to access that website. Accordingly, you should have received our proxy ~~solicitation~~ materials ~~for our 2017 Annual~~by mail or, if you previously agreed, by e-mail. These proxy materials include the Notice of Special Meeting of Stockholders, ~~it must be delivered to our Corporate Secretary~~proxy statement, and proxy card. These materials are available free of charge at our principal executive offices by January 17, 2017; provided, however, that if the date of the 2017 Annual Meeting of Stockholders is more than 30 days before or after June 28, 2017, notice by the stockholder must be delivered not later than the close of business on the later of (1) 90^th ~~day prior to the 2017 annual meeting, or (2) the 10~~^th ~~day following the first public announcement of the date of the 2017 annual meeting.~~www.proxyvote.com.

Management’s proxy holders for the next annual meeting of stockholders will have discretion to vote proxies given to them on any stockholder proposal of which we do not have notice prior to April 1, 2017.

Under our Bylaws, to be properly brought before the meeting, business must be either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before the meeting by a stockholder. In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the Company not later than 90 days prior to the meeting anniversary date of the immediately preceding annual meeting or if no annual meeting was held for any reason in the preceding year, 90 days prior to the first Wednesday in December. A stockholder’s notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the meeting (1) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (2) the name and record address of the stockholder proposing such business, (3) the class and number of shares of capital stock of the Company which are beneficially owned by the stockholder, and (4) any material interest of the stockholder in such business.

The Company will pay the cost of soliciting proxies infor the ~~accompanying form.~~Special Meeting. In addition to solicitation by mail, ~~certain~~directors, officers and regular employees of the Company and other authorized persons ~~such as a proxy solicitor~~ may solicit the return of proxies by telephone, telegram or personal ~~interview and may~~interview. The Company will request brokerage houses, custodians, nominees and fiduciaries to forward soliciting material to their principals and will agree to reimburse them for their reasonable out-of-pocket expenses.

The Company has engaged The Proxy Advisory Group, LLC to assist in the solicitation of proxies and provide related advice and informational support, for a services fee and the reimbursement of customary disbursements, which are not expected to exceed $15,000 in total.

~~The Board~~We are currently subject to the information requirements of ~~Directors currently knows~~the Securities Exchange Act of no1934, as amended, and in accordance therewith file periodic reports, Proxy Statements and other information with the SEC relating to our business, tofinancial statements and other matters. Copies of such reports, Proxy Statements and other information may be ~~brought before~~copied (at prescribed rates) at the ~~Annual Meeting other than as set forth above. If other matters properly come before~~public reference room maintained by the SEC at 100 F Street NE, Washington DC 20549. For further information concerning the SEC’s public reference room, you may call the SEC at 1-800-SEC-0330. Some of this information may also be accessed on the World Wide Web through the SEC’s Internet address at http://www.sec.gov.

Requests for documents relating to the Company ~~at the Annual Meeting, it is the intention of the persons named in the solicited proxy to vote the proxy on such matters in accordance with their best judgment.~~should be directed to:

~~Stockholders are urged to vote according to the instructions provided without delay.~~DOCUMENT SECURITY SYSTEMS, INC.

~~The undersigned, being the Chief Executive Officer of Document Security Systems, Inc. (the “Corporation”), hereby certifies as follows:~~DSS BIOHEALTH SECURITY INC.

	1.	~~The name of the Corporation is Document Security Systems, Inc. The name under which the Corporation was formed was Thoroughbreds, U.S.A., Inc.~~

	2.	The Certificate of Incorporation was originally filed on May 30, 1984 in the name of Thoroughbreds, U.S.A., Inc. A Certificate of Amendment was filed on June 10, 1985. A Certificate of Amendment was filed on July 8, 1986 changing the name of the Corporation to New Sky Communications, Inc. A Certificate of Amendment was filed on February 3, 2003 changing the name of the Corporation to Document Security Systems, Inc. A Certificate of Correction of the Certificate of Amendment was filed on October 20, 2003.

	3.	~~The Certificate of Incorporation is hereby amended to add a new Section 7, relating to a reverse stock split, as follows:~~

		7.a Reverse Stock Split. Effective at 5:00 p.m. (Eastern Time), on the date of filing of this Certificate of Amendment of the Certificate of Incorporation with the Secretary of State of the State of New York (the “Effective Time”), the shares of the Corporation’s Common Stock issued and outstanding prior to the Effective Time shall automatically be reclassified into a smaller number of shares such that each 4 shares of the Corporation’s issued and outstanding Common Stock immediately prior to the Effective Time are reclassified into one validly issued, fully paid and nonassessable share of Common Stock, without any further action by the Corporation or the holder thereof. No fractional shares of the Corporation’s Common Stock will be issued as a result of the reverse stock split. Instead, stockholders of record who otherwise would be entitled to receive fractional shares, will be entitled to a rounding up of their fractional share to the nearest whole share, except in the case of any stockholder that owns less than 4 shares of the Corporation’s Common Stock at the Effective Time. In such case, such stockholder will receive cash for such fractional share.

		7.b Each certificate that, immediately prior to the Effective Date, represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time shall, from and after the Effective Time, automatically and without the necessity of presenting the same for exchange, represent that number of whole shares of Common Stock after the Effective Time into which the shares of Common Stock formerly represented by such certificate shall have been reclassified (as well as the right to receive a whole share in lieu of a fractional share of Common Stock, except as provided in Section 7.a hereof), provided, however, that each person of record holding a certificate that represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time shall receive, upon surrender of such certificate, a new certificate evidencing and representing the number of whole shares of Common Stock after the Effective Time into which the shares of Common Stock formerly represented by such certificate shall have been reclassified (including the right to receive a whole share in lieu of a fractional share of Common Stock, except as provided in Section 7.a hereof).29

[X]	Preliminary Proxy Statement
[ ]	Confidential, for ~~the use~~Use of the Commission ~~only~~Only (as permitted by Rule 14a-6(e)(2))
[ ]	Definitive Proxy Statement
[ ]	Definitive Additional Materials
[ ]	Soliciting Material Pursuant to ~~§240.14a-12~~ Rule 14a-12.

	1.(1)	~~Considering~~To approve the issuance of shares of DSS Common Stock and ~~voting upon a proposal to elect six directors~~Series A Preferred Stock in connection with the acquisition of Impact BioMedical Inc., pursuant to the ~~Company’s Board~~Share Exchange Agreement, a copy of ~~Directors~~which is attached asAppendix A to ~~hold office until~~ the ~~next Annual Meeting;~~accompanying proxy statement.

	2.(2)	~~Considering and voting upon~~To authorize an adjournment of the Special Meeting, if necessary, if a ~~proposal~~quorum is present, to ~~ratify Freed Maxick CPAs, P.C. as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016;~~solicit additional proxies if there are not sufficient votes in favor of Proposal 1;

	3.(3)	~~Conducting~~ To ratify the approval by our Board of Directors of an ~~advisory vote on executive compensation;~~amendment to our bylaws to allow for participation in stockholder meetings by means of virtual meeting technology, as more fully described in Proposal 3; ; and

	4.(4)	~~Approving an amendment to the Company’s Certificate of Incorporation to effect a 1-for-4 reverse stock split; and~~

	5.	~~To transact~~Transacting such other business as may properly come before the meeting or any adjournment thereof.

	~~By order of the Board of Directors~~
/s/ Heng Fai Ambrose Chan
Heng Fai Ambrose Chan
	~~Robert Fagenson~~
	Chairman of the Board

	●	~~as you instruct, and~~

	●	~~as your proxy representative may determine in their discretion with respect to any other matters properly presented for a vote at the Annual Meeting.~~

	●	~~sending a written notice to the Secretary of the Company stating that you would like to revoke your proxy of a particular date;~~

	●	~~signing another proxy card with a later date and returning it before the polls close at the Annual Meeting;~~

	●	~~submitting a vote at a later time via Internet or telephone before the closure of those voting facilities at 11:59 p.m. (Eastern Time) on June 27, 2016; or~~

	●	~~attending the Annual Meeting and voting in person.~~


[ ]	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

	(1)	Title of each class of securities to which transaction ~~applies:~~ applies.

	(2)	Aggregate number of securities to which transaction applies:

	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 ~~(set~~(Set forth the amount on which the filing fee is calculated and state how it was determined):

	(4)	Proposed maximum aggregate value of transaction:

	(5)	Total fee paid:

[ ]	Fee paid previously with preliminary materials.

[ ]	Check box if any part of the fee is offset as provided by Exchange Act Rule ~~0-1l (a)~~0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

	(1)	Amount Previously Paid:

	(2)	Form, Schedule or Registration Statement No.:

	(3)	Filing Party:

	(4)	Date Filed:

	●	The election of directors will be determined by an affirmative vote of a majority of the votes cast for each director at the meeting. Withheld votes and broker non-votes, if any, are not treated as votes cast, and therefore will have no effect on the proposal to elect directors.

	●	The advisory vote on executive compensation will be decided by the affirmative vote of a majority of the votes cast on this proposal at the meeting. Withheld votes and broker non-votes, if any, are not treated as votes cast, and therefore will have no effect on this proposal. However, the stockholder vote on this matter will not be binding on our Company or the Board of Directors, and will not be construed as overruling or determining any decision by the Board on executive compensation.

	●	The affirmative vote of the holders of a majority of the total outstanding shares of our common stock as of the Record Date is necessary to approve the 1-for-4 reverse stock split. Withheld votes and broker non-votes, if any, are not treated as votes cast, and therefore will effectively be a vote against this proposal.

	●	The ratification of the appointment of our independent registered public accounting firm requires the affirmative vote of a majority of the votes cast at the meeting for this proposal. Withheld votes and broker non-votes, if any, are not treated as votes cast, and therefore will have no effect on this proposal.

	1.	To approve the issuance of shares of DSS Common Stock and Series A Preferred Stock (in connection with the acquisition of Impact BioMedical Inc., a Nevada corporation (“Impact BioMedical”), pursuant to the Share Exchange Agreement, a copy of which is attached asAppendix A (the “Share Exchange Agreement”);

	2.	To authorize an adjournment of the Special Meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of Proposal 1; and

	3.	To ratify the approval by our Board of Directors of an amendment to our bylaws to allow for participation in stockholder meetings by means of virtual meeting technology (the “Virtual Meeting Proposal”), as more fully described in Proposal 3;

	(1)	FOR ~~the election~~approval of the ~~persons named herein as nominees for directors of the Company;~~Share Exchange;

	(2)	FOR ~~ratification~~ an adjournment of ~~Freed Maxick CPAs, P.C. as~~ the ~~Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016;~~Special Meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of Proposal 1; and

	(3)	FOR ~~approval of executive compensation disclosed in this Proxy Statement~~the ratification of the ~~Company’s executive officers who are named in this Proxy Statement’s Summary Compensation Table;~~
	~~(4)~~	~~FOR~~ approval by our Board of Directors of an amendment to our bylaws to allow for participation in stockholder meetings by means of virtual meeting technology (the “Virtual Meeting Proposal”), as more fully described in Proposal 3;

	1.	Premier Packaging Corporation (DSS Packaging and Printing Group) operates in the ~~certificate of incorporation to effect a 1-for-4 reverse stock split;~~paper board folding carton, smart packaging and document security printing markets.

	~~(5)~~2.	~~According~~Plastic Printing Professionals, Inc. (DSS Plastics Group) operates in the security printing and plastic ID systems market.

	These two companies develop, manufacture and sell paper and plastic products designed to protect valuable information from counterfeit, unauthorized scanning, copying, and digital imaging, and to provide intelligent, interactive, augmented packaging for the consumer.

	3.	DSS Digital Inc. (DSS Digital Group) researches, develops, markets and sells the Company’s digital products worldwide; their ~~judgment~~primary product is AuthentiGuard®, which is a brand authentication application that integrates the Company’s counterfeit deterrent technologies with proprietary digital data security-based solutions.

	4.	DSS Technology Management, Inc. (DSS Technology Management) manages, licenses and acquires intellectual property, or IP, assets for the purpose of monetizing these assets through a variety of value-enhancing initiatives, including, but not limited to, investments in the development and commercialization of patented technologies, licensing, strategic partnerships and commercial litigation.

	1.	DSS Blockchain Security, Inc., intends to specialize in the development of blockchain security technologies for tracking and tracing solutions for supply chain logistics and cyber securities across global markets.

	2.	Decentralized Sharing Systems, Inc., seeks to provide services to assist companies in the new business model of the peer-to-peer decentralized sharing marketplaces and direct marketing. Direct marketing or network marketing is designed to sell products or services directly to the public through independent distributors, rather than selling through the traditional retail market. Of the newly established business lines, Decentralized is the first to establish a material gross revenue stream and we anticipate revenue growth. As a result, we have added this business line to our segment reporting.

	3.	DSS Securities, Inc., has been established to develop or to acquire assets in the securities trading or management arena, and to pursue two parallel streams of digital asset exchanges in multiple jurisdictions: (i) securitized token exchanges, focusing on digitized assets from different vertical industries; and (ii) utilities token exchanges, focusing on “blue-chip” utility tokens from solid businesses.

	4.	DSS BioHealth Security, Inc., will seek to invest in or to acquire companies related to the biohealth and biomedical field, including businesses focused on the ~~transaction~~research to advance drug discovery and development for the prevention, inhibition, and treatment of neurological, oncological and immuno-related diseases. This new division will place special focus on open-air defense initiatives, which curb transmission of air-borne infectious diseases such ~~matters~~as tuberculosis and influenza, among others.

	5.	DSS Secure Living, Inc., intends to develop top of the line advanced technology for energy efficiency, high quality of life living environments and home security for everyone, for new construction and renovations of residential single and multifamily living facilities.

	Aside from Decentralized Sharing Systems, Inc. the activities in these newly created subsidiaries have been minimal or ~~other business as may properly come up for vote at the Annual Meeting~~in various start-up or ~~any adjournments or postponements thereof.~~organizational phases.

	●	The issuance of our Common Stock in the Share Exchange will reduce the ownership interests and voting power of our current common stockholders. The current owners of Impact BioMedical will acquire, in the aggregate, approximately [_]% of our Common Stock which will be outstanding upon completion of the Share Exchange. Upon completion of the Share Exchange, our Chairman of the Board Chan Heng Fai Ambrose will have beneficial ownership of shares of our Common Stock which will represent approximately [_]% of our Common Stock to be outstanding.

	●	Failure to complete the Share Exchange could negatively impact our stock price.

	●	investors react negatively to the prospects of the combined company’s business and prospects after the Share Exchange;

	●	the effect of the Share Exchange on the combined company’s business and prospects is not consistent with the expectations of investors; or

	●	the combined company does not achieve the perceived benefits of the Share Exchange as rapidly or to the extent anticipated by investors.

	●	we will not realize the benefits expected from the Share Exchange;

	●	the price of our Common Stock may decline to the extent that the current market price of our Common Stock reflects a market assumption that the Share Exchange will be completed;

	●	if the non-completion of the Share Exchange were due to a breach by DSS of the Share Exchange Agreement we could be responsible for reimbursing the expenses incurred by the Impact BioMedical owners which would further deplete our working capital.

	December 31,			December 31,
	2019			2018
Asset
Cash	$	108,731		$	35,375
Prepaid Expense		30,700			22,761
Investment in Security by Equity Method					5,312
Total Asset	$	139,431		$	63,448

Liabilities
Accounts Payable	$	7,021		$	77,018
Total Liabilities	$	7,021		$	77,018

Stockholders’ Equity
Common Stock, $0.001 Par Value, 100,000,000 shares authorized, 1,000 Issued and Outstanding	$	1		$	1
Additional Paid In Capital		1,732,590			1,183,135
Accumulated Deficit		(1,646,208	)		(1,191,772	)
Total Stockholders’ Equity (Deficit)		86,383			(8,636	)
Non-Controlling Interests		46,027			(4,934	)
Total Stockholders’ Equity (Deficit)	$	132,410		$	(13,570	)

Total Liabilities & Stockholders’ Equity	$	139,431		$	63,448

	●	The Share Exchange Agreement and the transactions contemplated thereby shall have been approved by the requisite vote of (i) the Board of Directors of each of DSS and DBHS, and (ii) the stockholders of DSS at the Special Meeting;

	●	The Share Exchange Agreement and the transactions contemplated thereby shall have been approved by the requisite vote of (i) the Board of Directors of each of Singapore eDevelopment and Global BioMedical, (ii) the stockholder of the Global BioMedical, and (iii) the stockholders of Singapore eDevelopment at the Singapore eDevelopment Stockholders’ Meeting;

	●	No governmental authority shall have enacted, issued, promulgated, enforced or entered any Order which is in effect and has the effect of making the transactions contemplated by the Share Exchange Agreement illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the transactions contemplated thereunder to be rescinded following completion thereof;

	●	Global BioMedical and Singapore eDevelopment shall have received all consents authorizations, orders and approvals from certain governmental authorities as set forth in the Share Exchange Agreement, and DBHS and DSS shall have received all consents, authorizations, orders and approvals from the governmental authorities as set forth in the Share Exchange Agreement, in each case, in form and substance reasonably satisfactory to DBHS and Global BioMedical, and no such consent, authorization, order and approval shall have been revoked.

	●	The Certificate of Designations shall have been filed with the Secretary of State of the State of New York.

	●	by mutual written consent of DBHS and Global BioMedical;

	●	by either DBHS or Global Medical in the event that such party is not then in material breach of any provision of the Share Exchange Agreement and there has been a breach , inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by the counterparties that would give rise to the failure of the conditions precedent to closing that has not been cured after 10 days written notice to the counterparties;

	●	if certain other conditions as set forth in the Share Exchange Agreement shall not have been, or it becomes apparent that any of such conditions will not be, fulfilled by the date that is 180 days after the date of the Share Exchange Agreement;

	●	in the event that (i) any law makes consummation of the transactions contemplated by Share Exchange Agreement illegal or otherwise prohibited or (ii) a government authority issues an order restraining or enjoining the transactions contemplated by the Share Exchange Agreement, and such order becomes final and non-appealable;

	●	by either DBHS or Global Medical if the stockholders of DSS or Singapore eDevelopment vote on, but fail to approve, the Share Exchange Agreement at each’s respective stockholders’ meeting

	PAGE

Financial Statements
Consolidated Balance Sheets	2
Consolidated Statements of Operations	3
Consolidated Statements of Stockholders’ Equity	4
Consolidated Statements of Cash Flows	5
Notes to Consolidated Financial Statements	6

	2019			2018
Operating Expense
Research & Development	$	340,628		$	634,312
Professional Services		143,933			373,394
Marketing		5,000			25,950
Other General Expense		33,600			20,931
Total Operating Expense		523,161			1,054,587

Other Expense
Financial Services		544			683
Loss from Security Investment by Equity Method		40,314			49,688
Loss from Acquisition		90,001			-
Total Other Expense		130,859			50,371

Net Loss	$	(654,020	)	$	(1,104,958	)

Net Loss Attributable to Non-Controlling Interests		(199,584	)		(401,803	)

Net Loss Attributable to Common Stockholders	$	(454,437	)	$	(703,155	)

Net Loss Per Share - Basic and Diluted	$	(454.44	)	$	(703.15	)

Weighted Average Common Shares Outstanding - Basic and Diluted		1,000			1,000

	Common Stock				Additional					Non-			Total
	Shares		Par Value $0.001		Paid in Capital		Accumulated Deficit			controlling Interests			Stockholders Equity
Balance at January 1, 2018		1,000	$	1	$	539,731	$	(488,616	)	$	29,209		$	80,324

Proceeds from Shareholders						643,404					367,660			1,011,064

Net loss								(703,155	)		(401,803	)		(1,104,958	)

Balance at December 31, 2018		1,000	$	1	$	1,183,135	$	(1,191,772	)	$	(4,934	)	$	(13,570	)

Proceeds from Shareholders						549,455					250,545			800,000

Net Loss								(454,436	)		(199,584	)		(654,020	)

Balance at December 31, 2019		1,000	$	1	$	1,732,590	$	(1,646,208	)	$	46,027		$	132,410

	2019			2018
Cash Flows From Operating Activities
Net Loss from Operations	$	(654,020	)	$	(1,104,958	)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Loss from Acquisition		90,001			-
Loss from Investment in Security by Equity Method		40,314			49,688
Changes in Operating Assets and Liabilities
Prepaid Expense		(7,940	)		1,566
Accounts Payable		(81,157	)		(45,145	)
Net Cash Used in Operating Activities		(612,802	)		(1,098,849	)

Cash Flows From Investing Activities
Acquisition of Securities		(91,000	)		-
Cash from Acquistion		13,158			-
Investment in Joint Venture		(36,000	)		(55,000	)
Net Cash Used in Investing Activities		(113,842	)		(55,000	)

Cash Flows From Financing Activities
Proceeds from Shareholders		800,000			986,064
Net Cash Provided by Financing Activities		800,000			986,064

Net Increase (Decrease) in Cash		73,356			(167,785	)

Cash - Beginning of Year		35,375			178,160
Cash - End of Year	$	108,731		$	10,375

Non Cash Investmnet in Joint Venture	$	-		$	25,000

	State or other		Attributable			Attributable
Name of consolidated	jurisdiction of incorporation or	Date of incorporation	interest as of December 31,			interest as of December 31,
subsidiary	organization	or formation	2019			2018
Global BioMedical, Inc.	Nevada	April, 18, 2017		90.9	%		90.9	%
Global BioLife, Inc.	Nevada	April 14, 2017		63.6	%		63.6	%
Biolife Sugar, Inc	Nevada	April 23, 2018		63.6	%		63.6	%
Happy Sugar Inc	Nevada	August 17, 2018		63.6	%		63.6	%
Sweet Sense Inc.	Nevada	April 30, 2018		81.8	%		31.8	%
SeD BioLife International, Inc.	Nevada	March 29, 2017		100	%		100	%
SeD BioMedical International Inc.	Nevada	March 13, 2017		100	%		100	%
Global Sugar Solutions Inc.	Nevada	November 7, 2019		80	%		n/a

	Year Ended December 31,
	2019			2018
Current:
Federal	$	-		$	-
State		-			-
Total Current		-			-
Deferred:
Federal		(530,629	)		(393,285	)
State		(151,034	)		(122,106	)
Total Deferred		(681,663	)		(515,390	)
Valuation Allowance		681,663			515,390
Total Incom Tax Expense	$	-		$	-

Pre-tax Loss	$	(645,020	)	$	(1,104,958	)

Effective Income Tax Rate		0	%		0	%

	PAGE

Consolidated Financial Statements
Consolidated Balance Sheets (unaudited)	2
Consolidated Statements of Operations (unaudited)	3
Consolidated Statements of Stockholders’ Equity (unaudited)	4
Consolidated Statements of Cash Flows (unaudited)	5
Notes to Consolidated Financial Statements (unaudited)	6

	March 31, 2020			December 31, 2019
Asset
Cash	$	130,115		$	108,731
Prepaid Expense		23,319			30,700
Total Asset	$	153,434		$	139,431

Liabilities
Accounts Payable	$	26,601		$	7,021
Total Liabilities	$	26,601		$	7,021
Stockholders’ Equity
Common Stock, $0.001 Par Value, 100,000,000 shares authorized, 13,897,069 and 1,000 Issued and Outstanding as of March 31, 2020 and December 31, 2019, respectively	$	13,897		$	1
Additional Paid In Capital		1,802,330			1,732,590
Accumulated Deficit		(1,729,966	)		(1,646,208	)
Total Stockholders’ Equity		86,261			86,383
Non-Controlling Interests		40,572			46,027
Total Stockholders’ Equity	$	126,833		$	132,410
Total Liabilities & Shareholder’s Equity	$	153,434		$	139,431

	2020			2019
Operating Expense
Research & Development	$	71,967		$	106,123
Professional Services		51,325			4,645
Other General Expense		2,178			1,975
Total Operating Expense		125,470			112,743
Other Expense
Financial Services		107			76
Loss from Security Investment by Equity Method		-			3,206
Total Other Expense		107			3,282
Net Loss	$	(125,577	)	$	(116,024	)
Net Loss Attributable to Non-Controlling Interests		(41,819	)		(32,484	)
Net Loss Attributable to Common Stockholders	$	(83,758	)	$	(83,540	)
Net Loss Per Share - Basic and Diluted	$	(0.19	)	$	(83.54	)
Weighted Average Common Shares Outstanding - Basic and Diluted		449,260			1,000

Name of consolidated subsidiary	State or other jurisdiction of incorporation or organization	Date of incorporation or formation	Attributable interest as of March 31, 2020			Attributable interest as of December 31, 2019
Global BioMedical, Inc.	Nevada	April, 18, 2017		90.9	%		90.9	%
Global BioLife, Inc.	Nevada	April 14, 2017		63.6	%		63.6	%
Biolife Sugar, Inc	Nevada	April 23, 2018		63.6	%		63.6	%
Happy Sugar Inc	Nevada	August 17, 2018		63.6	%		63.6	%
Sweet Sense Inc.	Nevada	April 30, 2018		81.8	%		81.8	%
SeD BioLife International, Inc.	Nevada	March 29, 2017		100	%		100	%
SeD BioMedical International Inc.	Nevada	March 13, 2017		100	%		100	%
Global Sugar Solutions Inc.	Nevada	November 7, 2019		80	%		80	%

	Pre-Acquisition DSS (Purchaser)			Record Purchase		Post-acquisition DSS (Purchaser)			ImpactBio (Target)			Proforma Adjustment (Note 1)			Proforma Adjustment (Note 2)			Consolidated Financials
ASSETS
Current Assets:
Cash	$	3,802,000				$	3,802,000		$	130,000								$	3,932,000
Accounts Receivable		3,582,000					3,582,000			-									3,582,000
Inventory		1,743,000					1,743,000			-									1,743,000
Prepaid Expense and other current assets		514,000					514,000			23,000									537,000
Total Current Assets		9,641,000			-		9,641,000			153,000			-			-			9,794,000
Property plant and equipment, net		4,925,000					4,925,000			-									4,925,000
Investment		2,154,000					2,154,000			-									2,154,000
Marketable Securities		570,000					570,000			-									570,000
Investment in Target		-			50,000,000		50,000,000			-			(127,000	)		(49,873,000	)		-
Notes Receivable		1,255,000					1,255,000			-									1,255,000
Other assets		54,000					54,000			-									54,000
Right-of -use assets		1,119,000					1,119,000			-									1,119,000
Goodwill		1,769,000					1,769,000			-						78,440,000			80,209,000
Other intangible assets, net		816,000					816,000			-									816,000
Total Assets	$	22,303,000		$	50,000,000	$	72,303,000		$	153,000		$	(127,000	)	$	28,567,000		$	100,896,000

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts Payable	$	1,489,000				$	1,489,000		$	27,000								$	1,516,000
Accrued expenses and deferred revenue		706,000					706,000												706,000
Other current liabilities		390,000					390,000												390,000
Revolving line of credit		800,000					800,000												800,000
Current portion of lease liabilities		369,000					369,000												369,000
Current portion of long-term debt, net		403,000					403,000												403,000
Total Current Liabilities	$	4,157,000		$	-	$	4,157,000		$	26,000		$	-		$	-		$	4,183,000
Long-term debt, net		2,427,000					2,427,000												2,427,000
Long term lease liability		750,000					750,000												750,000
Other long-term liabilities		507,000					507,000												507,000
Deferred tax liability, net		44,000					44,000												44,000
Total Liabilities	$	7,885,000		$	-	$	7,885,000		$	26,000		$	-		$	-		$	7,911,000
																			-
Stockholders’ Equity																			-
Common Stock	$	42,000		$	10,000	$	52,000		$	14,000		$	(14,000	)				$	52,000
Convertible Preferred Stock		-			46,868,000		46,868,000			-									46,868,000
Additional Paid in Capital		119,624,000			3,122,000		122,746,000			1,802,000			(1,802,000	)					122,746,000
Accumulated Deficit		(105,181,000	)				(105,181,000	)		(1,730,000	)		1,730,000						(105,181,000	)
Total Stockholders’ Equity (Deficit)		14,485,000			50,000,000		64,485,000			86,000			(86,000	)		-			64,485,000
Non-Controlling Interests		(67,000	)				(67,000	)		41,000			(41,000	)		28,567,000			28,500,000
Total Stockholders’ Equity (Deficit)	$	14,418,000		$	50,000,000	$	64,418,000		$	127,000		$	(127,000	)	$	28,567,000		$	92,985,000
																			-
Total Liabilities & Stockholders’ Equity	$	22,303,000		$	50,000,000	$	72,303,000		$	153,000		$	(127,000	)	$	28,567,000		$	100,896,000

	DSS (Purchaser)			Impact BioMedical (Target)			Proforma Adjustment (Note 1)		Proforma Adjustment (Note 2)		Consolidated Proforma

Revenue:
Printed products	$	3,949,000		$	-		$	-	$	-	$	3,949,000
Technology sales, services and licensing		479,000			-			-		-		479,000
Direct selling		573,000			-			-		-		573,000
Total revenue	$	5,001,000		$	-		$	-	$	-	$	5,001,000
Costs and expense
Costs of revenue, exclusive of deprecation and amortization	$	3,271,000		$	-		$	-	$	-	$	3,271,000
Selling, general and administrative (including stock based compensation)		2,641,000			125,000			-		-		2,766,000
Deprecation and amortization		360,000			-			-		-		360,000
Impairment of Goodwill		685,000			-			-		-		685,000
Total Operating Expense		6,957,000			125,000			-		-		7,082,000
Operating Loss		(1,956,000	)		(125,000	)		-		-		(2,081,000	)
Other Income (expense)
Interest Income		24,000			-			-		-		24,000
Interest Expense		(39,000	)		-			-		-		(39,000	)
Gain on Marketable Securities		4,000			-			-		-		4,000
Amortization of deferred financing costs a debt discount		-			-			-		-		-
Financial Services		-						-		-		-
Loss from Security Investment by Equity Method		-			-			-		-		-
Loss from Acquisition		-			-			-		-		-
Total Other Expense		(11,000	)		-			-		-		(11,000	)
Income (loss) before income tax		(1,967,000	)		(125,000	)		-		-		(2,092,000	)

Income tax benefit		-			-			-		-		-

Net Loss	$	(1,967,000	)	$	(125,000	)	$	-	$	-	$	(2,092,000	)

Add: loss attributed to noncontrolling interest		67,000			41,000			-		-		108,000

Net Loss Attributable to Common Stockholders	$	(1,900,000	)	$	(84,000	)	$	-	$	-	$	(1,984,000	)

Note 1:	Elimination of impactbio equity	Investment in subsidiary	126,000
		Accumulated Deficit	1,730,000
		Common Stock		14,000
		Additional Paid in Capital		1,802,000
		Non-Controlling Interests		40,000

Note 2:	Record goodwill	Goodwill	78,441,000
		Investment in subsidiary		49,874,000
		Non-Controlling Interests		28,567,000

Note 3:	Document Security Systems, Inc. has engaged an independent valuation firm to value the assets of Impact BioMedical, Inc. and its subsidiaries. For purposes of this proforma, and until the valuation is complete, the purchase price of $50 million is included in goodwill.

Note 4:	Document Security Systems, Inc. is analyzing the accounting treatment of the perpetual convertible preferred shares offered and for the purposes of this proforma has assumed that the transaction will be recorded as an equity transaction. Also, DSS is evaluating the valuation of those shares and the quoted price of the common shares and face value of the perpetual convertible preferred shares have been assumed to be $50 million.

Ended December 31, 2019
	Pre-Acquisition DSS (Purchaser)			Record Purchase		Post-acquisition DSS (Purchaser)			ImpactBio Medical, Inc. (Target)			Proforma Adjustment (Note 1)			Proforma Adjustment (Note 2)			Consolidated Financials
ASSETS
Current Assets:
Cash	$	1,096,000				$	1,096,000		$	109,000								$	1,205,000
Accounts Receivable		4,212,000					4,212,000			-									4,212,000
Inventory		1,708,000					1,708,000			-									1,708,000
Prepaid Expense and other current assets		460,000					460,000			30,000									490,000
Total Current Assets		7,476,000			-		7,476,000			139,000			-			-			7,615,000
Property plant and equipment, net		5,061,000					5,061,000			-									5,061,000
Investment		2,154,000					2,154,000			-									2,154,000
Investment in Target		-			50,000,000		50,000,000			-			(132,000	)		(49,868,000	)		-
Notes Receivable		793,000					793,000			-									793,000
Other assets		50,000					50,000			-									50,000
Right-of -use assets		1,223,000					1,223,000			-									1,223,000
Goodwill		2,454,000					2,454,000			-						78,435,000			80,889,000
Other intangible assets, net		935,000					935,000			-									935,000
Total Assets	$	20,146,000		$	50,000,000	$	70,146,000		$	139,000		$	(132,000	)	$	28,567,000		$	98,720,000

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts Payable	$	1,492,000				$	1,492,000		$	7,000								$	1,499,000
Accrued expenses and deferred revenue		936,000					936,000												936,000
Other current liabilities		390,000					390,000												390,000
Revolving line of credit		500,000					500,000												500,000
Current portion of lease liabilities		397,000					397,000												397,000
Current portion of long-term debt, net		441,000					441,000												441,000
Total Current Liabilities	$	4,156,000		$	-	$	4,156,000		$	7,000		$	-		$	-		$	4,163,000
Long-term debt, net		2,310,000					2,310,000												2,310,000
Long term lease liability		826,000					826,000												826,000
Other long-term liabilities		507,000					507,000												507,000
Deferred tax liability, net		44,000					44,000												44,000
Total Liabilities	$	7,843,000		$	-	$	7,843,000		$	7,000		$	-		$	-		$	7,850,000
																			-
Stockholders’ Equity																			-
Common Stock	$	24,000		$	10,000	$	34,000		$	-		$	-					$	34,000
Convertible Preferred Stock		-			46,868,000		46,868,000			-									46,868,000
Additional Paid in Capital		115,560,000			3,122,000		118,682,000			1,732,000			(1,732,000	)					118,682,000
Accumulated Deficit		(103,281,000	)				(103,281,000	)		(1,646,000	)		1,646,000						(103,281,000	)
Total Stockholders’ Equity (Deficit)		12,303,000			50,000,000		62,303,000			86,000			(86,000	)		-			62,303,000
Non-Controlling Interests		-								46,000			(46,000	)		28,567,000			28,567,000
Total Stockholders’ Equity (Deficit)	$	12,303,000		$	50,000,000	$	62,303,000		$	132,000		$	(132,000	)	$	28,567,000		$	90,870,000
																			-
Total Liabilities & Stockholders’ Equity	$	20,146,000		$	50,000,000	$	70,146,000		$	139,000		$	(132,000	)	$	28,567,000		$	98,720,000

Name	Number of Shares Beneficially Owned			Percentage of Outstanding Shares Beneficially Owned
Robert Fagenson		1,412,096	(1)		2.72	%
Jeffrey Ronaldi		516,690	(2)		*
Robert B. Bzdick		1,388,325	(3)		2.66	%
Ira A. Greenstein		145,632	(4)		*
Warren Hurwitz		45,000	(5)		*
Joseph Sanders		927,673	(6)		1.79	%
Philip Jones		96,620	(7)		*
All officers and directors as a group (7 persons)		4,532,036			8.59	%
5% Shareholders
None

~~Name~~		~~Age~~
~~Robert B. Fagenson~~		67
~~Jeffrey Ronaldi~~		50
~~Joseph Sanders~~		55
~~Robert B. Bzdick~~		61
~~Warren Hurwitz~~		51
~~Ira A. Greenstein~~		56

Name	Fees Earned or Paid in Cash		Stock Awards		Option Awards^{(1) (2)}		Total
	($)		($)		($)		($)
Robert B. Fagenson		12,000		-		3,213		15,213
Ira A. Greenstein		10,500		-		3,213		13,713
Joseph Sanders		1,000		-		-		1,000
Warren Hurwitz		11,500		3,200		-		16,900
Jonathan Perrelli (3)		1,500		3,200		-		1,500