424(B)(3) SUPPLEMENT
REGISTRATION NO. 333-116317
SUPPLEMENT NO.2 DATED APRIL 28, 2005
TO
PROSPECTUS DATED AUGUST 12, 2004
of
DOCUMENT SECURITY SYSTEMS, INC.
SELLING SHAREHOLDERS
This prospectus supplement relates to the resale of an aggregate
3,000,000 shares of our common stock by certain of our shareholders. The selling
shareholders own 1,565,000 shares of our common stock and warrants to purchase
an additional 1,435,000 shares of common stock issuable to the Selling Security
Holders upon exercise of warrants. You should read this prospectus supplement in
conjunction with the prospectus dated August 12, 2004, which is to be delivered
with this prospectus supplement. This prospectus supplement is qualified by
reference to the prospectus except to the extent that the information herein
contained supersedes the information contained in the prospectus. Capitalized
terms used in this prospectus supplement and not otherwise defined herein have
the meanings specified in the prospectus.
Specifically, this Supplement No.2 relates to the transfer by Fordham
Financial Management Inc. a selling shareholder, of an aggregate of warrants to
purchase 359,150 shares of Common Stock, to the individuals listed below.
The information in the following table is presented as of April 26,
2005 and supplements the information in the table appearing under the heading
"Selling Security Holders" beginning on page 15 of the prospectus dated August
12, 2004, including any amendments or supplements thereto, and was provided by
or on behalf of the selling security holders. The following table sets forth as
to the Selling Security Holder listed below:
The following list (or footnotes) provides:
o the names of the selling shareholders.
o the affiliation or material relationship we have, if any, with
each selling shareholder.
o the amount of shares beneficially owned by each selling
shareholder before this offering.
o the number of outstanding shares and shares underlying warrants
being offered for each selling shareholder's account.
Beneficial ownership includes shares owned and shares that the
shareholder has the right to acquire within 60 days. Except as may be notes in a
footnote below, all of the shares listed as underlying warrants are immediately
acquirable and thus are beneficially owned by the selling shareholder holding
the respective warrants. However, we have no control over when, if ever, a
selling shareholder may exercise the option to exercise warrants held by such
selling shareholder.
SHARES CURRENTLY WARRANT
SHARES BENEFICIALLY OUTSTANDING AND SHARES BEING TOTAL SHARES BEING
OWNED BEFORE BEING REGISTERED IN REGISTERED IN REGISTERED IN
NAME OF SELLING SHAREHOLDER OFFERING(1) OFFERING OFFERING OFFERING(4)
- --------------------------- ----------- -------- -------- -----------
Fordham Financial Management, Inc. (2) 0 0 3,350 3,350
Karen Farrell (3) 0 0 3,350 3,350
David Goren (3) 0 0 3,350 3,350
Joseph Ingarra (3) 0 0 26,100 26,100
Bruce Inglis (3) 0 0 1,675 1,675
Mio Lum (3) 0 0 1,675 1,675
Mac Lutz (3) 0 0 3,350 3,350
Umberto Marcucci (3) 0 0 3,350 3,350
Peter Mazzone (3) 0 0 3,350 3,350
Fred Meyers (3) 0 0 6,700 6,700
Robert Sagarino (3) 0 0 26,800 26,800
John Stewart (3) 0 0 3,350 3,350
Vace Partners (3) 0 0 26,800 26,800
Eustace Conway (3) 0 0 3,350 3,350
John Young (3) 0 0 3,350 3,350
Janzig Demirkan (3) 0 0 3,350 3,350
Jay Belding (3) 0 0 3,350 3,350
William Baquet (3) 0 0 169,685 169,685
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SHARES CURRENTLY WARRANT
SHARES BENEFICIALLY OUTSTANDING AND SHARES BEING TOTAL SHARES BEING
OWNED BEFORE BEING REGISTERED IN REGISTERED IN REGISTERED IN
NAME OF SELLING SHAREHOLDER OFFERING(1) OFFERING OFFERING OFFERING(4)
- --------------------------- ----------- -------- -------- -----------
Charles Giordano (3) 0 0 25,425 25,425
Dean Kajouras (3) 0 0 14,400 14,400
Rich Adams (3) 0 0 4,000 4,000
Jodi Mandarino (3) 0 0 200 200
Maria Luppino (3) 0 0 200 200
Jesus Ramos (3) 0 0 200 200
Joseph Priincipe (3) 0 0 500 500
Jason Barter (3) 0 0 200 200
Harvey Latzen (3) 0 0 3,000 3,000
Patricia DiDomenico (3) 0 0 200 200
Margaret Grennes (3) 0 0 300 300
Charles Giordano, Jr. (3) 0 0 2,000 2,000
Michael Natapov (3) 0 0 125 125
Matthew Cody (3) 0 0 250 250
John Lowry (3) 0 0 3,405 3,405
Josh Conroy (3) 0 0 1,125 1,125
Andrew Sidebotham (3) 0 0 375 375
Stephen Liotta (3) 0 0 1,250 1,250
Chiaki Yamamoto (3) 0 0 500 500
George Carris (3) 0 0 4,405 4,405
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SHARES CURRENTLY WARRANT
SHARES BENEFICIALLY OUTSTANDING AND SHARES BEING TOTAL SHARES BEING
OWNED BEFORE BEING REGISTERED IN REGISTERED IN REGISTERED IN
NAME OF SELLING SHAREHOLDER OFFERING(1) OFFERING OFFERING OFFERING(4)
- --------------------------- ----------- -------- -------- -----------
Adam Bush (3) 0 0 125 125
John Gino (3) 0 0 135 135
William Barbour (3) 0 0 1,375 1,375
Preston Kassem (3) 0 0 2,530 2,530
Total 0 0 362,500 362,500
- -------------------
(1) Figures include the shares of Common Stock and shares underlying warrants
being registered in the registration statement of which this prospectus forms a
part.
(2) Fordham Financial Management Inc. served as placement agent in connection
with the private placement offering recently completed by the Company in which
the Company raised $5,800,000 in gross proceeds. The private offering was
completed in December 2003. Fordham Financial is an NASD member brokerage firm.
Fordham Financial received 362,500 warrants as compensation for its services as
placement agent. The warrants have an exercise price of $4.80 per share. The
warrants expire on November 29, 2008. Fordham Financial is a registered broker
dealer and is controlled by William Baquette, who has the control and power to
vote and/or sell the securities
(3) The named selling shareholder may be deemed an associated person of a
registered broker dealer firm under the rules of the SEC and NASD. Further,
based upon information provided to us by the selling shareholder, we have been
advised that at the time of purchase, there were no agreements or
understandings, directly or indirectly, with any person to distribute the
securities held by the selling shareholder. Document Security Systems has no
arrangements or understandings with any persons, including any broker dealer
firm, to distribute the securities. The named selling shareholder is an employee
of Fordham Financial Management, an NASD member firm.
(4) The number of shares which may be resold by the selling shareholder assumes
the sale of all shares of common stock and shares underlying warrants. The
registration statement of which this Prospectus forms a part includes additional
shares pursuant to SEC Rule 416 which may be required to be issued pursuant to
the anti-dilution provisions of the warrants for stock splits, stock dividends
and similar corporate transaction.
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