UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 14, 2020
DOCUMENT SECURITY SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
| New York | | 001-32146 | | 16-1229730 |
(State or other jurisdiction of incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
200 Canal View Boulevard Suite 104 Rochester, NY | | 14623 |
| (Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (585) 325-3610
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | | Ticker symbol(s) | | Name of each exchange on which registered |
| Common Stock, $0.02 par value per share | | DSS | | The NYSE American LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 8.01 Other Events
As previously reported on a Form 8-K filed on May 22, 2020, management of Document Security Systems, Inc. (the “Company”) announced that it had committed to a restructuring plan to further reduce its operating expenses in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its potential permanent impact on the Company’s plastics business. As part of this restructuring, the management of the Company had decided to exit its plastic printing business line, which it operates under Plastic Printing Professionals, Inc. (“DSS Plastics”), a wholly-owned subsidiary of the Company, and to fully impair its goodwill related to DSS Plastics. Thereafter, the Company entered into negotiations with a third party to purchase substantially all of the assets of DSS Plastics. On August 14, 2020, the Company, DSS Plastics and this third party entered into an asset sale agreement for the sale of substantially all of the assets of DSS Plastics for $683,000 in cash, In addition, the Company is entitled to a potential additional earn-out payment of an aggregate amount of up to $517,000 based on future quarterly gross revenue of the business to be conducted by the buyer with the sold assets. The Company also licensed to the buyer on a royalty-free basis certain technology that support the sold assets.
In connection with the closing of this business line, and as previously reported in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, the impact to the Company’s first quarter earnings of the goodwill impairment was approximately $685,000.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
| | DOCUMENT SECURITY SYSTEMS, INC. |
| | | |
| Dated: August 19, 2020 | By: | /s/ Frank D. Heuszel |
| | Name: | Frank D. Heuszel |
| | Title: | Chief Executive Officer and Interim Chief Financial Officer |
