DSS (DSS) 8-K/A Material Modifications to Rights of Security Holders

Exhibit 99.2

DOCUMENT SECURITY SYSTEMS. INC.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

June 30, 2020

Balance Sheet

Ended June 30, 2020

	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	$	7,176,000				$	7,176,000		$	76,000								$	7,252,000
Accounts Receivable		2,445,000					2,445,000			-									2,445,000
Inventory		1,774,000					1,774,000			-									1,774,000
Current assets held for sale - discontinued operations		236,000					236,000			-									236,000
Prepaid Expense and other current assets		510,000					510,000			23,000									533,000
Total Current Assets		12,141,000			-		12,141,000			99,000			-			-			12,240,000
Property plant and equipment, net		4,257,000					4,257,000			-									4,257,000
Investment		3,445,000					3,445,000			-									3,445,000
Marketable Securities		1,976,000					1,976,000			-									1,976,000
Investment in Target		-			38,319,000		38,319,000			-			(90,000	)		(38,229,000	)		-
Notes Receivable		522,000					522,000			-									522,000
Non-current assets held for sale - discontinued operations		1,608,000					1,608,000
Other assets		311,000					311,000			-									311,000
Right-of -use assets		37,000					37,000			-									37,000
Goodwill		1,769,000					1,769,000			-									1,769,000
Other intangible assets, net		1,347,000					1,347,000			-						38,319,000			39,666,000
Total Assets	$	27,413,000		$	38,319,000	$	65,732,000		$	99,000		$	(90,000	)	$	90,000		$	65,831,000
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts Payable	$	690,000				$	690,000		$	9,000								$	699,000
Accrued expenses and deferred revenue		883,000					883,000												883,000
Other current liabilities		522,000					522,000												522,000
Current liabilities held for sale - discontinued operations		274,000					274,000												274,000
Revolving line of credit		-					-												-
Current portion of lease liabilities		35,000					35,000												35,000
Current portion of long-term debt, net		426,000					426,000												426,000
Total Current Liabilities	$	2,830,000		$	-	$	2,830,000		$	9,000		$	-		$	-		$	2,839,000
Long-term debt, net		3,388,000					3,388,000												3,388,000
Long term lease liability		3,000					3,000												3,000
Non-current liabilities held for sale - discontinued operations		677,000
Other long-term liabilities		507,000					507,000												507,000
Deferred tax liability, net		44,000					44,000												44,000
Total Liabilities	$	7,449,000		$	-	$	7,449,000		$	9,000		$	-		$	-		$	7,458,000
																			-
Stockholders’ Equity																			-
Common Stock	$	60,000		$	-	$	60,000		$	125,000		$	(125,000	)				$	60,000
Convertible Preferred Stock		-			1,000		1,000			-									1,000
Additional Paid in Capital		126,058,000			38,318,000		164,376,000			1,818,000			(1,818,000	)					164,376,000
Accumulated Deficit		(105,973,000	)				(105,973,000	)		(1,889,000	)		1,889,000						(105,973,000	)
Total Stockholders’ Equity (Deficit)		20,145,000			38,319,000		58,464,000			54,000			(54,000	)		-			58,464,000
Non-Controlling Interests		(181,000	)				(181,000	)		36,000			(36,000	)		90,000			(91,000	)
Total Stockholders’ Equity (Deficit)	$	19,964,000		$	38,319,000	$	58,283,000		$	90,000		$	(90,000	)	$	90,000		$	58,373,000
Total Liabilities & Stockholders’ Equity	$	27,413,000		$	38,319,000	$	65,732,000		$	99,000		$	(90,000	)	$	90,000		$	65,831,000

Consolidated Statement of Operations

For the six months Ended June 30, 2020

	DSS   (Purchaser)			Impact BioMedical (Target)			Proforma Adjustment (Note 1)		Proforma Adjustment (Note 2)		Consolidated Proforma
Revenue:
Printed products	$	5,434,000		$	-		$	-	$	-	$	5,434,000
Technology sales, services and licensing		836,000			-			-		-		836,000
Direct selling		1,078,000			-			-		-		1,078,000
Total revenue	$	7,348,000		$	-		$	-	$	-	$	7,348,000
Costs and expense
Costs of revenue, exclusive of deprecation and amortization	$	4,439,000		$	-		$	-	$	-	$	4,439,000
Selling, general and administrative (including stock based compensation)		4,487,000			361,000			-		-		4,848,000
Deprecation and amortization		578,000			-			-		-		578,000
Impairment of Goodwill		-			-			-		-		-
Total Operating Expense		9,504,000			361,000			-		-		9,865,000
Operating Loss		(2,156,000	)		(361,000	)		-		-		(2,517,000	)
Other Income (expense)
Interest Income		51,000			-			-		-		51,000
Interest Expense		(73,000	)		-			-		-		(73,000	)
Unrealized gain on Marketable Securities		584,000			-			-		-		584,000
Amortization of deferred financing costs a debt discount		(1,000	)		-			-		-		(1,000	)
Total Other Expense		561,000			-			-		-		561,000
Income (loss) before income tax		(1,595,000	)		(361,000	)		-		-		(1,956,000	)
Income tax benefit		-			-			-		-		-
Loss from continuing operations	$	(1,595,000	)	$	(361,000	)	$	-	$	-	$	(1,956,000	)
Loss from discontinued operations		(1,278,000	)		-			-		-		(1,278,000	)
Net loss		(2,873,000	)		(361,000	)		-		-		(3,234,000	)
Add: loss attributed to noncontrolling interest		181,000			119,000			-		-		300,000
Net Loss from continuing operations attributable to common stockholders	$	(1,414,000	)	$	(242,000	)	$	-	$	-	$	(1,656,000	)
Other comprehensive income (loss)
Interest rate swap loss		-			-			-		-		-
Settlement of Interest rate swap		-			-			-		-		-
Comprehensive income (loss)	$	(2,873,000	)	$	(361,000	)	$	-	$	-	$	(3,234,000	)

Note 1:	Elimination of ImpactBio equity	Investment in subsidiary	90,000
		Accumulated Deficit	1,889,000
		Common Stock		125,000
		Additional Paid in Capital		1,818,000
		Non-Controlling Interests		36,000
Note 2:	Record assets acquired	Other intangible assets, net	38,319,000
		Investment in subsidiary		38,229,000
		Non-Controlling Interests		90,000
Note 3:	Document Security Systems, Inc. has determined that the accounting treatment of the perpetual convertible preferred shares offered should be treated as permanent equity and will be classified as such on the Company’s balance sheet. It was determined that due to several factors, including a discount for liquidation, the value of the Series A Preferred Stock was discounted from $46,868,000 to $35,187,000, thus reducing the total consideration given to approximately $38,319,000 from the initial purchase price of $50,000,000.
Note 4:	Document Security Systems, Inc. is performing a valuation of the assets as well as the non-controlling interest portion of Impact BioMedical, Inc. and its subsidiaries. For purposes of this pro forma, and until the valuation is complete, the purchase price of $38,318,000 is included in Other intangible assets, net and no amortization recorded.