<SEC-DOCUMENT>0001144204-12-023470.txt : 20120424
<SEC-HEADER>0001144204-12-023470.hdr.sgml : 20120424
<ACCEPTANCE-DATETIME>20120424163843
ACCESSION NUMBER:		0001144204-12-023470
CONFORMED SUBMISSION TYPE:	424B3
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20120424
DATE AS OF CHANGE:		20120424

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DOCUMENT SECURITY SYSTEMS INC
		CENTRAL INDEX KEY:			0000771999
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
		IRS NUMBER:				161229730
		STATE OF INCORPORATION:			NY
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-180353
		FILM NUMBER:		12776424

	BUSINESS ADDRESS:	
		STREET 1:		36 WEST MAIN ST
		STREET 2:		SUITE 710
		CITY:			ROCHESTER
		STATE:			NY
		ZIP:			14614
		BUSINESS PHONE:		585 232 1500

	MAIL ADDRESS:	
		STREET 1:		36 W MAIN ST
		STREET 2:		SUITE 710
		CITY:			ROCHESTER
		STATE:			NY
		ZIP:			14614

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NEW SKY COMMUNICATIONS INC
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	THOROUGHBREDS USA INC
		DATE OF NAME CHANGE:	19861118
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>v310402_424b3.htm
<DESCRIPTION>PROSPECTUS FILED PURSUANT TO RULE 424(B)(3)
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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>FILED PURSUANT TO RULE 424(b)(3) </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>REGISTRATION&nbsp; NO. 333-180353</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>PROSPECTUS SUPPLEMENT NO. 1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>(TO PROSPECTUS, DATED APRIL 23,2012)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DOCUMENT SECURITY SYSTEMS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">1,509,674 Shares of Common Stock, par value
$0.02</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This prospectus supplement, dated April
24, 2012, supplements the prospectus, dated April 23, 2012, of Document Security Systems, Inc. relating to the sale by the selling
security holders of up to 1,509,674 shares of our common stock, par value $0.02, consisting of 967,740 shares which are issued
and outstanding and 541,934 shares of common stock issuable upon the exercise of outstanding warrants. You should read this prospectus
supplement in conjunction with the prospectus, and this prospectus supplement is qualified by reference to the prospectus, except
to the extent that the information contained in this prospectus supplement supersedes the information contained in the prospectus.
This prospectus supplement is not complete without, and may not be delivered or utilized except in connection with, the prospectus,
including any amendments or additional supplements thereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Investing in our securities involves
significant risks. You should read this entire prospectus carefully, including the &ldquo;Risk Factors&rdquo; beginning on page</B>
5 <B>of the prospectus.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NEITHER THE SECURITIES AND EXCHANGE
COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SELLING SECURITY HOLDERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The information in the table appearing
under the caption &quot;Selling Security Holders&quot; commencing on page 14 of the prospectus is amended to correct an error.
The Selling Security Holder table incorrectly listed GRQ Consultants, Inc. as the selling security holder of 483,870 shares of
our common stock, when in fact, GRQ Consultants, Inc. 401k is the selling security holder of said shares. The Selling Security
Holder table is amended to reflect the correction and is accurate as of April 23, 2012, the date of the prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All the other information in the Selling
Security Holder section and table remains the same.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1pt solid; padding-right: 0.8pt; text-align: center">Name&nbsp;of&nbsp;Selling&nbsp;Security&nbsp;Holders</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 1.8pt; text-align: center">Common&nbsp;Stock<BR>
Beneficially&nbsp;Owned<BR>
prior&nbsp;to&nbsp;the&nbsp;Offering</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 1.8pt; text-align: center">Number&nbsp;of&nbsp;Shares<BR>
Offered&nbsp;by&nbsp;Selling<BR>
Security&nbsp;Holder</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: black 1pt solid; padding-right: 5.8pt; text-align: center">Number&nbsp;of&nbsp;Shares&nbsp;and&nbsp;Percent<BR>
Beneficially&nbsp;Owned&nbsp;After&nbsp;the&nbsp;Offering</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 1.8pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 1.8pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 1.8pt; text-align: center"># of Shares</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding-right: 1.8pt; text-align: center">% of Class</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 32%; padding-right: 0.8pt">Frost Gamma Investments Trust(1)</TD>
    <TD STYLE="width: 1%; padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="width: 6%; padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="width: 10%; padding-right: 0.8pt; text-align: right">241,935</TD>
    <TD STYLE="width: 4%; padding-right: 0.8pt">(2)</TD>
    <TD STYLE="width: 1%; padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="width: 4%; padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="width: 9%; padding-right: 0.8pt; text-align: right">241,935</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt">(2)</TD>
    <TD STYLE="width: 1%; padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="width: 8%; padding-right: 0.8pt; text-align: right">0</TD>
    <TD STYLE="width: 5%; padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="width: 6%; padding-right: 0.8pt; text-align: right">0</TD>
    <TD STYLE="width: 1%; padding-right: 0.8pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 0.8pt">GRQ Consultants, Inc. 401K(3)</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: right">659,580</TD>
    <TD STYLE="padding-right: 0.8pt">(4)(5)</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: right">483,870</TD>
    <TD STYLE="padding-right: 0.8pt">(4)</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: right">175,710</TD>
    <TD STYLE="padding-right: 0.8pt">(5)</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: right">Less than 1%</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.8pt">Hudson Bay Master Fund, Ltd. (6)</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: right">725,805</TD>
    <TD STYLE="padding-right: 0.8pt">(7)</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: right">725,805</TD>
    <TD STYLE="padding-right: 0.8pt">(7)</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: right">0</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: right">0</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 0.8pt">Palladium Capital Advisors, LLC(8)</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: right">5,806</TD>
    <TD STYLE="padding-right: 0.8pt">(9)</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: right">5,806</TD>
    <TD STYLE="padding-right: 0.8pt">(9)</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: right">0</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: right">0</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.8pt">Moishe Hartstein (8)</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: right">52,258</TD>
    <TD STYLE="padding-right: 0.8pt">(10)</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: right">52,258</TD>
    <TD STYLE="padding-right: 0.8pt">(10)</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: right">0</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; text-align: right">0</TD>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(1) Dr. Phillip Frost, the Trustee of Frost
Gamma Investments Trust, has sole voting and dispositive power as to the shares beneficially owned by the Frost Gamma Investments
Trust.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(2) Includes currently exercisable warrants
to purchase 80,645 shares of common stock at $3.10 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(3) Barry Honig has sole voting and dispositive
power as to the shares beneficially owned by GRQ Consultants, Inc. 401K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(4) Includes currently exercisable warrants
to purchase 161,290 shares of common stock at $3.10 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(5) Barry Honig, the control person of
GRQ Consultants Inc. 401K, owns 175,710 shares of common stock as a result of the conversion of a convertible debt Mr. Honig held
with the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(6) Hudson Bay Capital Management LP, the
investment manager of Hudson Bay Master Fund, Ltd. has voting, investment and dispositive power as to the shares beneficially owned
by Hudson Bay Master Fund, Ltd. Sander Gerber, as the managing member of Hudson Bay Capital GP LLC, which is general partner of
Hudson Bay Capital Management LP, has sole voting and dispositive power as to the shares beneficially owned by Hudson Bay Master
Fund, Ltd. Sander Gerber disclaims beneficial ownership over these shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(7) Includes currently exercisable warrants
to purchase 241,935 shares of common stock at $3.10 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(8) Joel Padowitz, the Chief Executive
Officer of Palladium Capital Advisors, LLC, has sole voting and dispositive power as to the shares beneficially owned by Palladium
Capital Advisors, LLC. Moishe Hartstein is an affiliate of Palladium Advisors, a registered broker-dealer, and serves as Director
of Banking of Palladium Capital Advisors, LLC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(9) Represents currently exercisable warrants
to purchase 5,806 shares of common stock at $3.10 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(10) Represents currently exercisable warrants
to purchase 52,258 shares of common stock at $3.10 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The date of this prospectus supplement is
April 24, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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