<SEC-DOCUMENT>0001144204-13-048278.txt : 20130828
<SEC-HEADER>0001144204-13-048278.hdr.sgml : 20130828
<ACCEPTANCE-DATETIME>20130828170248
ACCESSION NUMBER:		0001144204-13-048278
CONFORMED SUBMISSION TYPE:	S-8
PUBLIC DOCUMENT COUNT:		5
FILED AS OF DATE:		20130828
DATE AS OF CHANGE:		20130828
EFFECTIVENESS DATE:		20130828

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:		S-8
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-190870
		FILM NUMBER:		131066583

	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>S-8
<SEQUENCE>1
<FILENAME>v353866_s8.htm
<DESCRIPTION>FORM S-8
<TEXT>


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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; text-align: right"><B>&nbsp;Registration No. 333-__________</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>UNITED STATES</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Washington, D.C. 20549&nbsp;</B></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">FORM S-8</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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<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"><B>REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><IMG SRC="image_003.jpg" ALT=""></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; text-align: center">(Exact name of registrant as specified in
its charter)</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <TD STYLE="width: 47%; border-bottom: black 1pt solid; font-size: 10pt; text-align: center"><font style="color: black"><b>New York</b></font></td>
    <TD STYLE="width: 7%; padding-bottom: 1.1pt; font-size: 10pt; text-align: center">&nbsp;</td>
    <TD STYLE="width: 46%; border-bottom: black 1pt solid; font-size: 10pt; text-align: center"><font style="color: black"><b>16-1229730</b></font></td></tr>
<tr style="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(State or other jurisdiction of</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">incorporation or organization)</P></td>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</td>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(I.R.S. Employer</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Identification No.)</P></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: center"><B>First Federal Plaza, Suite 1525</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>28 East Main Street</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Rochester, NY 14614</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Address of principal executive offices)
(Zip Code)</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Document Security Systems, Inc. 2013</B></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Full title of the plan)</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Jeffrey Ronaldi</B><BR>
<B>Chief Executive Officer</B><BR>
<B>Document Security Systems, Inc.</B><BR>
<B>First Federal Plaza</B><BR>
<B>28 East Main Street, Suite 1525</B><BR>
<B>Rochester, New York 14614</B><BR>
<B>Telephone: (585) 325-3610</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Name, address, including zip code, and
telephone number</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;Including area
code, of agent for service)</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Sichenzia Ross Friedman Ference LLP</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Gregory Sichenzia, Esq.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">61 Broadway, 32<SUP>nd</SUP> Fl.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">New York, NY 10006</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">212-930-9700</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions
of &ldquo;large accelerated filer,&rdquo; &ldquo;accelerated filer&rdquo; and &ldquo;smaller reporting company&rdquo; in Rule 12b-2
of the Exchange Act).</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="background-color: white">
    <TD STYLE="width: 50%; font-size: 10pt"><font style="color: black">Large accelerated filer<font style="font-family: Wingdings"> o</font>&nbsp;</font></td>
    <TD STYLE="width: 50%; font-size: 10pt"><font style="color: black">Accelerated filer<font style="font-family: Wingdings"> o</font></font></td></tr>
<tr style="background-color: white">
    <TD STYLE="font-size: 10pt"><font style="color: black">Non-accelerated filer<font style="font-family: Wingdings"> o</font> (Do not check if smaller reporting company)</font></td>
    <TD STYLE="font-size: 10pt"><font style="color: black">Smaller reporting company<font style="font-family: Wingdings"> &thorn;</font></font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</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; text-align: center"><B>CALCULATION OF REGISTRATION FEE</B></P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <TD STYLE="width: 28%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Title of Securities to Be Registered</b></P></td>
    <TD STYLE="width: 18%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Amount to Be</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Registered</b><font style="font-size: 10pt">(1)</font></P></td>
    <TD STYLE="width: 18%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Proposed Maximum</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Offering Price per</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Share</b><font style="font-size: 10pt">
        </font></P></td>
    <TD STYLE="width: 18%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Proposed Maximum</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Aggregate Offering</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Price</b><font style="font-size: 10pt">
        </font></P></td>
    <TD STYLE="width: 18%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Amount of</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Registration Fee</b></P></td></tr>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; padding-left: 9.9pt; font-size: 10pt; text-align: center; text-indent: -9.9pt"><font style="color: black">Common Stock, $0.02 par value</font></td>
    <TD STYLE="vertical-align: bottom; font-size: 10pt; text-align: center"><font style="color: black">6,000,000<font style="font-size: 10pt">(2)</font></font></td>
    <TD STYLE="vertical-align: bottom; font-size: 10pt; text-align: center"><font style="color: black">$1.445<font style="font-size: 10pt">(3)</font></font></td>
    <TD STYLE="vertical-align: bottom; font-size: 10pt; text-align: center"><font style="color: black">$8,670,000</font></td>
    <TD STYLE="vertical-align: bottom; font-size: 10pt; text-align: center"><FONT STYLE="color: black">$1,182.59</FONT></td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 9.9pt; font-size: 10pt; text-align: center; text-indent: -9.9pt"><font style="color: black"><b>TOTAL</b></font></td>
    <TD STYLE="vertical-align: bottom; font-size: 10pt; text-align: center"><font style="color: black"><b>6,000,000</b></font></td>
    <TD STYLE="vertical-align: bottom; font-size: 10pt; text-align: center"><font style="color: black"><b>--</b></font></td>
    <TD STYLE="vertical-align: bottom; font-size: 10pt; text-align: center"><font style="color: black"><b>$8,670,000</b></font></td>
    <TD STYLE="vertical-align: bottom; font-size: 10pt; text-align: center"><font style="color: black"><b>$1,182.59</b></font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 6%; font-size: 10pt"><font style="color: black">(1)</font></td>
    <td style="width: 94%; font-size: 10pt"><font style="color: black">The provisions of Rule 416 under the Securities Act of 1933, as amended (the &ldquo;Securities Act&rdquo;), shall apply to this Registration Statement and the number of shares registered on this Registration Statement shall increase or decrease as a result of stock splits, stock dividends, or similar transactions. Includes an indeterminate number of additional shares that may be issued to adjust the number of shares issued pursuant to the plans described herein as the result of any future stock split, stock dividend, or similar adjustment of Registrant&rsquo;s outstanding common stock.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 6%; font-size: 10pt"><font style="color: black">(2)</font></td>
    <td style="width: 94%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Represents 6,000,000 shares of Common Stock that are eligible
        for granting under the Document Security Systems, Inc. 2013</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Employee, Director and Consultant Equity Incentive Plan.</P></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 6%; font-size: 10pt"><font style="color: black">(3)</font></td>
    <td style="width: 94%; font-size: 10pt"><font style="color: black">Estimated solely for the purpose of calculating the registration fee. The fee is calculated pursuant to Rules 457(c) and 457(h) under the Securities Act upon the basis of the average of the high and low prices for shares of common stock of the Registrant as reported on NYSE MKT on August 27, 2013. </font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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

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

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

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 90%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P></td>
    <TD STYLE="width: 10%; text-align: center; vertical-align: top"><font style="color: black">Page</font></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center; vertical-align: top">&nbsp;</td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp; PART I - INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS</td>
    <TD STYLE="text-align: center; vertical-align: top">5</td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center; vertical-align: top">&nbsp;</td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp; REOFFER PROSPECTUS</td>
    <TD STYLE="text-align: center; vertical-align: top">6</td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center; vertical-align: top">&nbsp;</td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp; PART II - INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</td>
    <TD STYLE="text-align: center; vertical-align: top">31</td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center; vertical-align: top">&nbsp;</td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 19.8pt">&nbsp; Item 14. Other Expenses of Issuance and Distribution.&nbsp;</td>
    <TD STYLE="text-align: center; vertical-align: top">31</td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: 19.8pt">&nbsp; Item 15: Indemnification of Directors and Officers&nbsp;</td>
    <TD STYLE="text-align: center; vertical-align: top">31</td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 19.8pt">&nbsp; Item 16: Exhibits&nbsp;</td>
    <TD STYLE="text-align: center; vertical-align: top">32</td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: 19.8pt">&nbsp; Item 17: Undertakings&nbsp;</td>
    <TD STYLE="text-align: center; vertical-align: top">33</td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center; vertical-align: top">&nbsp;</td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp; SIGNATURES</td>
    <TD STYLE="text-align: center; vertical-align: top">34</td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center; vertical-align: top">&nbsp;</td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp; INDEX TO EXHIBITS</td>
    <TD STYLE="text-align: center; vertical-align: top">35</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXPLANATORY STATEMENT</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: justify">This registration statement on Form S-8
(the &ldquo;Registration Statement&rdquo;) relates to 6,000,000 shares of the common stock of Document Security Systems, Inc.
(the &ldquo;Registrant,&rdquo; the &ldquo;Company,&rdquo; &ldquo;we,&rdquo; &ldquo;us&rdquo; or &ldquo;our&rdquo;), $0.02 par
value per share (the &ldquo;Common Stock&rdquo;), which are issuable pursuant to, or upon exercise of, options that may be granted
under the Document Security Systems, Inc. 2013 Employee, Director and Consultant Equity Incentive Plan (the &ldquo;Plan&rdquo;).&nbsp;&nbsp;Under
the Plan, a total of 6,000,000 shares of Common Stock have been reserved for issuance upon the grant and exercise of options to
&ldquo;Employees&rdquo; (defined under the Plan as any employee of the Company or of an Affiliate, including, without limitation,
an employee who is also serving as an officer or director of the Company or of an Affiliate, designated by the Administrator to
be eligible under the Plan), and/or to non-&ldquo;Employee&rdquo; Consultants as the administrator of the Plan shall elect.</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 Registration Statement also includes
a reoffer prospectus prepared in accordance with General Instruction C of Form&nbsp;S-8 and in accordance with the requirements
of Part&nbsp;I of Form&nbsp;S-3, which may be utilized for reofferings and resales on a continuous or a delayed basis in the future
related to the following:</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: top">
    <td style="width: 6%; text-align: center"><font style="font-family: Symbol; color: black">&middot;</font></td>
    <td style="width: 94%; text-align: justify"><font style="color: black">2,150,000 shares of common stock (the &ldquo;Shares&rdquo;) which are issuable upon exercise of options that have been granted under the Plan, with respect to which the reoffer prospectus relates are being registered for reoffers and resales by certain stockholders listed (the &ldquo;Selling Stockholders&rdquo;), who are our officers and directors and may be deemed to be our &ldquo;affiliates&rdquo;, as defined in Rule&nbsp;405 of the Securities Act. The Selling Stockholders may acquire the Shares upon exercise of options granted under the Plan.&nbsp;&nbsp;We do not know whether any of such Selling Stockholders will use this reoffer prospectus in connection with the offer or sale of the Shares, or, if this reoffer prospectus is so used, how many shares of Common Stock will be offered or sold.&nbsp;Such Selling Stockholders may resell all, a portion, or none of the shares that they may acquire pursuant to the Plan.&nbsp;</font></td></tr>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The reoffer prospectus does not contain
all of the information included in the Registration Statement, certain items of which are contained in schedules and exhibits to
the Registration Statement, as permitted by the rules and regulations of the Securities and Exchange Commission (the &ldquo;SEC&rdquo;
or the &ldquo;Commission&rdquo;).&nbsp; Statements contained in this reoffer prospectus as to the contents of any agreement, instrument
or other document referred to herein are not necessarily complete.&nbsp; With respect to each such agreement, instrument or other
document filed as an exhibit to the Registration Statement, we refer you to the exhibit for a more complete description of the
matter involved, and each such statement shall be deemed qualified in its entirety by this reference.</P>

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INFORMATION REQUIRED IN THE SECTION 10(a)
PROSPECTUS</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Registrant has sent or given or will
send or give documents containing the information specified by Part I of this Registration Statement to participants in the Plan,
as specified in Rule 428(b)(1)(i) promulgated by the Commission under the Securities Act. The Registrant is not filing such documents
with the Commission, but these documents constitute (along with the documents incorporated by reference into this Registration
Statement pursuant to Item 3 of Part II hereof) a prospectus that meets the requirements of Section 10(a) of the Securities Act.</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; background-color: white">Upon written or
oral request, any of the documents incorporated by reference in Item 3 of Part II of this Registration Statement (which documents
are incorporated by reference in this Section 10(a) Prospectus), and other documents required to be delivered to eligible employees,
non-employee directors and consultants, pursuant to Rule 428(b) are available without charge by contacting:</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">Jeffrey D&rsquo;Angelo,
VP and General Counsel</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">Document Security
Systems, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">First Federal Plaza, Suite 1525</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">28 East Main Street</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Rochester, NY 14614</P>

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><IMG SRC="image_005.jpg" ALT=""></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"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2,150,000&nbsp;shares</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Common Stock</B></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">This Reoffer Prospectus (the &ldquo;Prospectus&rdquo;)
relates to 2,150,000<B> </B>shares of our common stock, $0.02&nbsp;par value per share (the &ldquo;Common Stock&rdquo;) for resale
from time to time by certain stockholders (the &ldquo;Selling Stockholders&rdquo;) of the Company named herein or by prospectus
supplement for their own account and on a continuous or delayed basis, to the public without restriction.&nbsp; Each Selling Stockholder
that sells shares of our Common Stock pursuant to this reoffer prospectus may be deemed to be an &ldquo;underwriter&rdquo; within
the meaning of the Securities Act.&nbsp; Any commissions received by a broker or dealer in connection with resales of shares may
be deemed to be underwriting commissions or discounts under the Securities Act. The Selling Stockholders identified herein will
acquire the shares pursuant to options granted under our Plan and may resell all, a portion, or none of the shares of Common Stock
from time to time.</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">You should carefully read this Prospectus
together with the documents we incorporate by reference before you invest in our Common Stock.</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">Our Common Stock is traded on the NYSE
MKT under the symbol &ldquo;DSS&rdquo;. On&nbsp;August 27, 2013, the closing price of our Common Stock was $1.42.</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"><B>INVESTMENT IN THE COMMON STOCK OFFERED
BY THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK. YOU MAY LOSE YOUR ENTIRE INVESTMENT. CONSIDER CAREFULLY THE &ldquo;RISK FACTORS&rdquo;
DETAILED BEGINNING ON PAGES 5 OF THIS PROSPECTUS BEFORE INVESTING.</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: justify">You should rely only on the information
contained in or incorporated by reference in this Prospectus. We have not, and the Selling Stockholders have not, authorized anyone,
including any salesperson or broker, to give oral or written information about this offering, Document Security Services, Inc.,
or the shares of Common Stock offered hereby that is different from the information included in this Prospectus. If anyone provides
you with different information, you should not rely on it. The Selling Stockholders are not making an offer to sell these securities
in any jurisdiction where the offer or sale is not permitted. You should assume that the information contained in this Prospectus
is accurate only as of the date on the front cover of this Prospectus. Our business, financial condition, results of operations
and prospects may have changed since that date.</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 is not an offer to sell
any securities other than the shares of Common Stock offered hereby. This Prospectus is not an offer to sell securities in any
circumstances in which such an offer is unlawful.</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"><B>NEITHER THE U.S. 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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>The date of this Prospectus is August
28, 2013 </B></P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TABLE OF CONTENTS</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"><I>The following table of contents has been designed to help
you find information contained in this Prospectus.&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>We encourage you read the entire Prospectus.</I></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: top">
    <TD STYLE="width: 90%">

        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></td>
    <TD STYLE="width: 10%; text-align: center"><font style="color: black"><b>Page</b></font></td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD><font style="text-underline-style: none; color: windowtext">Special Note Regarding Forward Looking Statements</font></td>
    <TD STYLE="text-align: center">8</td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><font style="text-underline-style: none; color: windowtext">Summary</font></td>
    <TD STYLE="text-align: center">8</td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>About this Offering</td>
    <TD STYLE="text-align: center">11</td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><font style="text-underline-style: none; color: windowtext">Risk Factors</font></td>
    <TD STYLE="text-align: center">12</td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD><font style="text-underline-style: none; color: windowtext">Tax Considerations</font></td>
    <TD STYLE="text-align: center">24</td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><font style="text-underline-style: none; color: windowtext">Use of Proceeds</font></td>
    <TD STYLE="text-align: center">24</td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD><font style="text-underline-style: none; color: windowtext">Determination of Offering Price</font></td>
    <TD STYLE="text-align: center">24</td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><font style="text-underline-style: none; color: windowtext">Selling Stockholders</font></td>
    <TD STYLE="text-align: center">25</td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD><font style="text-underline-style: none; color: windowtext">Plan of Distribution</font></td>
    <TD STYLE="text-align: center">27</td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>Description of Securities to be Registered</td>
    <TD STYLE="text-align: center">28</td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD><font style="text-underline-style: none; color: windowtext">Legal Representation</font></td>
    <TD STYLE="text-align: center">29</td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><font style="text-underline-style: none; color: windowtext">Experts</font></td>
    <TD STYLE="text-align: center">29</td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD><font style="text-underline-style: none; color: windowtext">Interests of Named Experts and Counsel</font></td>
    <TD STYLE="text-align: center">29</td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><font style="text-underline-style: none; color: windowtext">Disclosure of Commission Position of Indemnification for Securities Act Liabilities</font></td>
    <TD STYLE="text-align: center">29</td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD><font style="text-underline-style: none; color: windowtext">Incorporation of Certain Information by Reference</font></td>
    <TD STYLE="text-align: center">29</td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><font style="text-underline-style: none; color: windowtext">Where You Can find Additional Information</font></td>
    <TD STYLE="text-align: center">31</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>




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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SPECIAL NOTE REGARDING FORWARD LOOKING
STATEMENTS</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: justify"><I>This Prospectus contains &ldquo;forward-looking
statements&rdquo; and information relating to our business that are based on our beliefs as well as assumptions made by us or based
upon information currently available to us. When used in this Prospectus, the words &quot;anticipate,&rdquo; &ldquo;believe,&rdquo;
&ldquo;estimate,&rdquo; &ldquo;expect,&rdquo; &ldquo;intend,&rdquo; &ldquo;may,&rdquo; &ldquo;plan,&rdquo; &ldquo;project,&rdquo;
&ldquo;should&rdquo; and similar expressions are intended to identify forward-looking statements. These forward-looking statements
include, but are not limited to, statements relating to our performance in &ldquo;Business&rdquo; and &ldquo;Management's Discussion
and Analysis of Financial Condition and Results of Operations&rdquo; in our latest Annual Report which is incorporated by reference
herein. These statements reflect our current views and assumptions with respect to future events and are subject to risks and uncertainties.
Actual and future results and trends could differ materially from those set forth in such statements due to various factors. Such
factors include, among others: general economic and business conditions; industry capacity; industry trends; competition; changes
in business strategy or development plans; project performance; availability, terms, and deployment of capital; and availability
of qualified personnel. These forward-looking statements speak only as of the date of this Prospectus. Subject at all times to
relevant securities law disclosure requirements, we expressly disclaim any obligation or undertaking to disseminate any update
or revisions to any forward-looking statement contained herein to reflect any change in our expectations with regard thereto or
any changes in events, conditions or circumstances on which any such statement is based. In addition, we cannot assess the impact
of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.</I></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; text-align: center"><B>SUMMARY</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"><B>General</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: justify; text-indent: 0.5in">This summary highlights
selected information about us, but may not contain all information that may be important to you. The following summary is qualified
in its entirety by the more detailed information included in or incorporated by reference into this Prospectus. Before making your
investment decision, you should carefully read this entire Prospectus, any applicable Prospectus supplement, and the documents
referred to in the following sections &ldquo;<I>Incorporation of Certain Information by Reference</I>&rdquo; and &ldquo;<I>Where
You Can Find More Information</I>&rdquo;.</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-indent: 0.5in">As used in this Prospectus, references to
&ldquo;the Company&rdquo;, &ldquo;we&rdquo;, &ldquo;our&rdquo;, &ldquo;ours&rdquo; and &ldquo;us&rdquo; refer to Document Security
Systems, Inc. and consolidated subsidiaries, unless otherwise indicated. References to &ldquo;DSS&rdquo; refer to Document Security
Systems, Inc. In addition, references to our &ldquo;financial statements&rdquo; are to our consolidated financial statements except
as the context otherwise requires.</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-indent: 0.5in">We prepare our financial statements in United
States dollars and in accordance with generally accepted accounting principles as applied in the United States, referred to as
U.S. GAAP. In this Prospectus, references to &ldquo;$&rdquo; and &ldquo;dollars&rdquo; are to United States dollars.</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 3pt"><B>Overview</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">We
were f</FONT>ormed in New York in 1984 and, in 2002, chose to strategically focus on becoming a developer and marketer of secure
technologies. We specialize in fraud and counterfeit protection for all forms of printed documents and digital information. The
Company holds numerous patents for optical deterrent technologies that provide protection of printed information from unauthorized
scanning and copying. We operate three production facilities, a security and commercial printing facility, a packaging facility
and a plastic card facility- where we produce secure and non-secure documents for our customers. We license our anti-counterfeiting
technologies to printers and brand-owners. In addition, we have a digital division which provides cloud computing services for
its customers, including disaster recovery, back-up and data security services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">Prior to 2006, the Company&rsquo;s
primary revenue source in its document security division was derived from the licensing of its technology. In 2006, the Company
began a series of acquisitions designed to expand its ability to produce its products for end-user customers. In 2006, we acquired
Plastic Printing Professionals, Inc. (&ldquo;P3&rdquo;), a privately held plastic cards manufacturer located in the San Francisco,
California area. P3 is also referred to herein as the DSS Plastics Group. In 2008, we acquired substantially all of the assets
of DPI of Rochester, LLC, a privately held commercial printer located in Rochester, New York, referred to herein as &ldquo;Secuprint&rdquo;
or &ldquo;DSS Printing Group&rdquo;. In 2010, the Company acquired Premier Packaging Corporation (&ldquo;Premier Packaging&rdquo;),
a privately held packaging company located in the Rochester New York area. Premier Packaging is also referred to herein as the
DSS Packaging Group. In May 2011, we acquired all of the capital stock of ExtraDev, Inc. (&ldquo;ExtraDev&rdquo;), a privately
held information technology and cloud computing company located in the Rochester, New York area. ExtraDev is also referred to herein
as DSS Digital Group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">In October 2012, the
Company introduced AuthentiGuard&reg;, an iPhone application for authentication, targeted to major pharmaceutical and other companies
worldwide. The application is a cloud-enabled solution that permits efficient and cost effective authentication for packaging,
documents and credentials. The solution embeds customizable, covert AuthentiGuard&reg; Prism technology that resists duplication
on copiers and scanners in a product's packaging. Product verification using the iPhone application creates real-time, accurate
authentication results for brand owners that can be integrated into existing information systems.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 48pt">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 48pt">The Company does business in four operating
segments as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt"><B><I>DSS Printing Group</I></B>&nbsp;&mdash;&nbsp;Provides
secure and commercial printing services for end-user customers along with technical support for the Company&rsquo;s technology
licensees. The division produces a wide array of printed materials such as security paper, vital records, prescription paper, birth
certificates, receipts, manuals, identification materials, entertainment tickets, secure coupons, parts tracking forms, brochures,
direct mailing pieces, catalogs, business cards, etc. The division also provides the basis of research and development for the
Company&rsquo;s security printing technologies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt"><B><I>DSS Plastics Group</I></B>&nbsp;&mdash;&nbsp;Manufactures
laminated and surface printed cards which can include magnetic stripes, bar codes, holograms, signature panels, invisible ink,
micro fine printing, guilloche patterns, Biometric, Radio Frequency Identification (RFID) and watermarks for printed plastic documents
such as ID cards, event badges, and driver&rsquo;s licenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt"><B><I>DSS Packaging
Group</I></B>&nbsp;&mdash;&nbsp;Produces custom paperboard packaging serving clients in the pharmaceutical, beverage, photo packaging,
toy, specialty foods and direct marketing industries, among others. The division incorporates our security technologies into printed
packaging to help companies prevent or deter brand and product counterfeiting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt"><B><I>DSS Digital Group</I></B>&nbsp;&mdash;&nbsp;Provides
data center centric solutions to businesses and governments delivered via the &ldquo;cloud&rdquo;. This division developed the
Company&rsquo;s iPhone based application that integrates some of the Company&rsquo;s traditional optical deterrent technologies
into proprietary digital data security based solutions for brand protection and product diversion prevention.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 48pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 48pt"><B><I>Completion of Merger with DSS Technology
Management, Inc. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">On July 1, 2013 (the
&ldquo;<U>Closing Date</U>&rdquo;), DSSIP, Inc., a Delaware corporation (&ldquo;<U>Merger Sub</U>&rdquo;) and a wholly-owned subsidiary
of <U>DSS</U> merged with and into DSS Technology Management., Inc. (<I>f/k/a</I> Lexington Technology Group, Inc.<B><I>)</I></B>,
a Delaware corporation (&ldquo;<U>DSSTM</U>&rdquo;), pursuant to the terms and conditions of the previously announced Agreement
and Plan of Merger, dated as of October 1, 2012 (as amended, the &ldquo;<U>Merger Agreement</U>&rdquo;), by and among the Company,
DSSTM, Merger Sub and Hudson Bay Master Fund Ltd. (&ldquo;<U>Hudson Bay</U>&rdquo;), as representative of DSSTM&rsquo;s stockholders
(the &ldquo;<U>Merger</U>&rdquo;). Effective on July 1, 2013, as a result of the Merger, DSSTM became a wholly-owned subsidiary
of DSS. In connection with the Merger, the Company issued on the Closing Date, its securities to DSSTM&rsquo;s stockholders in
exchange for the capital stock owned by DSSTM&rsquo;s stockholders, as follows (the &ldquo;<U>Merger Consideration</U>&rdquo;):
(i) an aggregate of 16,558,387 shares of the Company&rsquo;s common stock, par value $0.02 per share (the &ldquo;<U>Common Stock</U>&rdquo;)&nbsp;(which
includes 2,500,000 Additional Shares and 240,559 Exchanged Shares, as such terms are defined in the Merger Agreement); (ii) 7,100,000
shares of the Company&rsquo;s Common Stock to be held in escrow pursuant to an escrow agreement, dated July 1, 2013, entered into
by and among the Company, Hudson Bay and American Stock Transfer &amp; Trust Company, LLC, as escrow agent (the &ldquo;<U>Escrow
Agreement</U>&rdquo;); (iii) warrants to purchase up to an aggregate of 4,859,894 shares of the Company&rsquo;s Common Stock, at
an exercise price of $4.80 per share and expiring on July 1, 2018; and (iv) warrants to purchase up to an aggregate of 3,432,170
shares of the Company&rsquo;s Common Stock, at an exercise price of $0.02 per share and expiring on July 1, 2023 (the &ldquo;<U>$.02
Warrants</U>&rdquo;), to DSSTM&rsquo;s preferred stockholders that would beneficially own more than 9.99% of the shares of the
Company&rsquo;s Common Stock as a result of the Merger (the &ldquo;<U>Beneficial Ownership Condition</U>&rdquo;). In addition,
the Company assumed options to purchase an aggregate of 2,000,000 shares of the Company&rsquo;s Common Stock at an exercise price
of $3.00 per share, in exchange for 3,600,000 outstanding and unexercised stock options to purchase shares of DSSTM&rsquo;s common
stock. In addition, the Company issued an aggregate of 786,678 shares of Common Stock to Palladium Capital Advisors, LLC as compensation
for their services in connection with the transactions contemplated by the Merger Agreement. Of those shares issued to Palladium
Capital Advisors, LLC, 400,000 shall be held in escrow pursuant to the same terms and conditions as those set forth in the Escrow
Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">As a result of the consummation
of the Merger,&nbsp;as of the Closing Date,&nbsp;the former stockholders of DSSTM own approximately 51% of the outstanding common
stock of the combined company and the stockholders of the Company prior to the completion of the Merger own approximately 49% of
the outstanding common stock of the combined company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">Pursuant to the Escrow
Agreement, the shares of the Company&rsquo;s Common Stock deposited in the escrow account will be released to the holders of the
DSSTM common stock (pro rata on a fully-diluted basis as of the effective time of the Merger) if and when the closing price per
share of the Company&rsquo;s Common Stock exceeds $5.00 per share (as adjusted for stock splits, stock dividends and similar events)
for 40 trading days within a continuous 90 trading day period following the closing of the Merger. If within one year following
the closing of the Merger, such threshold is not achieved, the shares of the Company&rsquo;s Common Stock held in escrow shall
be cancelled and returned to the treasury of the Company. DSSTM stockholders will have voting rights with respect to the Company&rsquo;s
shares owned by such stockholders and held in escrow for one year following the closing of the Merger even though such shares may
be cancelled and returned to the treasury of the Company if the condition for release of the shares held in escrow is not met.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">If after one year, the
shares held in escrow are cancelled because the conditions discussed above were not met, the former stockholders of DSSTM are expected
to own approximately 45% of the outstanding common stock of the combined company and the stockholders of the Company prior to the
completion of the Merger are expected to own approximately 55% of the outstanding common stock of the combined company (without
taking into account any shares of the Company&rsquo;s Common Stock held by DSSTM&rsquo;s stockholders prior to the completion of
the Merger, and excluding the exercise of any options and warrants).</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; text-indent: 48pt">The transaction will
be accounted for as a business combination in accordance with the Business Combination Topic of the FASB ASC 805. Under the guidance,
the assets and liabilities of the acquired business, DSSTM, are recorded at their fair value at the date of acquisition. The excess
of the purchase price over the estimated fair values is recorded as goodwill, if any. If the fair value of the assets acquired
exceeds the purchase price and the liabilities assumed, then a gain on acquisition is recorded. As of the date of this Prospectus,
the accounting for the business combination is incomplete.</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; text-indent: 48pt">DSSTM is a private
intellectual property monetization company that recently acquired a patent portfolio of six patents and four pending patent applications
relating to technology invented by Thomas Bascom (the &ldquo;Bascom Portfolio&rdquo;) and invested in VirtualAgility, a developer
of user-friendly programming platforms that facilitate the creation of sophisticated business applications without programming
or coding. DSSTM is focused on the economic benefits of intellectual property assets through acquiring or internally developing
patents or other intellectual property assets (or interests therein) and then monetizing such assets through a variety of value
enhancing initiatives, including, but not limited to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt">&middot;</td>
    <td style="width: 98%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">licensing</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&middot;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">customized technology solutions (such as applications for medical electronic health records),</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&middot;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">strategic partnerships, and</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&middot;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">litigation.</td></tr>
</table>
<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"><B>Our Corporate Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 15pt">We are headquartered in Rochester, New York
and were incorporated in New York in 1984. Our principal offices are located at 28 East Main Street, Suite 1525, Rochester, New
York 14614 and our telephone number is (585) 325-3610. Our principal website is <I>www.dsssecure.com</I>. The information on or
that can be accessed through our website is not part of this Prospectus.</P>

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

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

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

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; width: 50%"><font style="color: black"><i>Shares of Common Stock, $0.02 par value per share, offered by the Selling Stockholders:</i></font></td>
    <TD STYLE="vertical-align: bottom; width: 50%"><font style="color: black">2,150,000&nbsp;shares</font></td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"><font style="color: black"><i>Shares of Common Stock, $0.02 par value per share, outstanding prior to this offering:</i></font></td>
    <TD STYLE="vertical-align: bottom"><font style="color: black">48,678,006 shares as of August 27, 2013</font></td></tr>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top"><font style="color: black"><i>Shares of Common Stock, $0.02 par value per share, outstanding after this offering:</i></font></td>
    <TD STYLE="vertical-align: bottom"><font style="color: black">50,828,006</font> <font style="color: black">shares (1)</font></td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.55in; text-indent: -0.55in"><font style="color: black"><i>Use of proceeds:</i></font></td>
    <TD STYLE="vertical-align: bottom; text-align: justify"><font style="color: black">We will not receive any of the proceeds from the sale of shares of Common Stock by the Selling Stockholders identified in this Prospectus. The Selling Stockholders will receive all net proceeds from the sale of the shares of our Common Stock offered by this Prospectus.&nbsp;&nbsp;However, we may receive proceeds from the exercise of the options granted under the Plan if and to the extent that any such options are exercised by the Selling Stockholders identified herein.&nbsp;</font></td></tr>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; padding-left: 0.55in; text-indent: -0.55in"><font style="color: black"><i>Risk Factors:</i></font></td>
    <TD STYLE="vertical-align: bottom; text-align: justify"><font style="color: black">An investment in our Common Stock is subject to significant risks. You should carefully consider the information set forth in the &ldquo;Risk Factors&rdquo; section beginning on page 12 as well as other information set forth in this Prospectus, including our financial statements and related notes.</font></td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 0.55in; text-indent: -0.55in"><font style="color: black"><i>Dividend policy:</i></font></td>
    <TD STYLE="vertical-align: bottom; text-align: justify"><font style="color: black">We have not paid any cash dividends on our Common Stock during the last three fiscal years, and we do not anticipate the declaration or payment of any dividends at any time in the foreseeable future.</font></td></tr>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; padding-left: 0.55in; text-indent: -0.55in"><font style="color: black"><i>NYSE MKT Symbol</i></font></td>
    <TD STYLE="vertical-align: bottom"><font style="color: black">DSS</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Assumes the exercise of the options and sale of the Shares offered by the Selling Stockholders in this Prospectus.</TD></TR></TABLE>

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

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    <!-- Field: /Page -->

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RISK FACTORS</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: justify"><I>You should carefully consider the risks
described below before buying Common Stock offered in this offering. The risks and uncertainties described below are not the only
risks we face. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may impair our
business operations. If any of the adverse events described in this risk factors section actually occur, our business, results
of operations and financial condition could be materially adversely affected, the trading price of our Common Stock could decline
and you might lose all or part of your investment. We have had operating losses from time to time and cannot assure that we will
be profitable in the foreseeable future. We make various statements in this section which constitute &ldquo;forward-looking&rdquo;
statements under Section 27A of the Securities Act.</I></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; text-indent: 24pt">We have identified the
following additional risks and uncertainties that may have a material adverse effect on our business, financial condition or results
of operations in the future.&nbsp; &nbsp; References to the &ldquo;combined company&rdquo; made in this registration statement
relate to the recent business combination of DSS and DSSTM, whereby DSSTM became a wholly-owned subsidiary of DSS effective on
July 1, 2013. Our business faces significant risks, and the risks described below may not be the only risks we face.&nbsp; Additional
risks not presently known to us or that we currently believe are immaterial may also significantly impair our business operations.&nbsp;
If any of these risks occur, our business, results of operations or financial condition could suffer, the market price of our common
stock could decline and you could lose all or part of your investment in our common stock.</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; text-indent: 24pt"><B><I>The failure to
integrate successfully the businesses of DSS and DSSTM in the expected timeframe could adversely affect the combined company&rsquo;s
future results.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">The success of the recently
closed Merger will depend, in large part, on the ability of the combined company to realize the anticipated benefits from combining
the businesses of DSS and DSSTM.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">The failure to integrate
successfully and to manage successfully the challenges presented by the integration process may result in the combined company&rsquo;s
failure to achieve some or all of the anticipated benefits of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">Potential difficulties
that may be encountered in the integration process include the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 94%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">using the combined company&rsquo;s cash and other assets efficiently to develop the business of the combined company;</font></td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">appropriately managing the liabilities of the combined company;</font></td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">potential unknown or currently unquantifiable liabilities associated with the Merger and the operations of the combined company;</font></td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">potential unknown and unforeseen expenses, delays or regulatory conditions associated with the Merger; and</font></td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">performance shortfalls resulting from &nbsp;diversion of management&rsquo;s attention to the task of&nbsp;&nbsp;efficiently integrating the companies&rsquo; operations.</font></td></tr>
</table>
<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: justify"><B><I>DSS may not realize the potential
value and benefits created by the Merger.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">The success of the Merger
will depend, in part, on DSS&rsquo;s ability to realize the expected potential value and benefits created from integrating DSS&rsquo;s
existing business with DSSTM&rsquo;s business, which includes the maximization of the economic benefits of the combined company&rsquo;s
intellectual property portfolio. The integration process may be complex, costly, and time-consuming. The difficulties of integrating
the operations of DSSTM&rsquo;s business could include, among others:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 94%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">failure to effectively implement the &nbsp;business plan for the combined business;</font></td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">unanticipated issues in integrating the business of both companies;</font></td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">potential lost sales and customers if any customer of DSS decides not to do business with DSS after the Merger;</font></td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">loss of key employees with knowledge of DSS&rsquo;s historical business and operations;</font></td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">unanticipated changes in applicable laws and regulations; and</font></td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">other unanticipated issues, expenses, or liabilities that could impact, among other things, DSS&rsquo;s ability to realize any expected benefits on a timely basis, or at all.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSS may not accomplish
the integration of DSSTM&rsquo;s business smoothly, successfully, or within the anticipated costs or time frame. The diversion
of the attention of management from DSS&rsquo;s current operations to the integration effort and any difficulties encountered in
combining businesses could prevent DSS from realizing the full expected potential value and benefits to result from the Merger
and could adversely affect its business. In addition, the integration efforts could divert the focus and resources of the management
of DSS and DSSTM from other strategic opportunities and operational matters during the integration process.</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"><B><I>If the Merger does not qualify as
a &ldquo;reorganization&rdquo; under Section 368(a) of the Internal Revenue Code (the &ldquo;Code&rdquo;), the stockholders of
DSSTM may be required to pay substantial United States federal income taxes as a result of the Merger.</I></B></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: justify; text-indent: 48pt">DSS and DSSTM intend
that the Merger will qualify as a &ldquo;reorganization&rdquo; under Section 368(a) of the Code. DSS and DSSTM currently anticipate
that the United States holders of shares of DSSTM capital stock generally should not recognize taxable gain or loss as a result
of the Merger. However, neither DSS nor DSSTM has requested, or intends to request, a ruling from the IRS with respect to the tax
consequences of the Merger, and there can be no assurance that the companies&rsquo; position would be sustained if challenged by
the IRS. Accordingly, if there is a final determination that the Merger does not qualify as a &ldquo;reorganization&rdquo; under
Section 368(a) of the Code and is taxable for United States federal income tax purposes, DSSTM stockholders generally would recognize
taxable gain or loss on their receipt of equity securities of DSS in connection with the Merger equal to the difference between
such stockholder&rsquo;s adjusted tax basis in their shares of DSSTM capital stock and the fair market value of the equity securities
of DSS.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>The combined company will be dependent
on certain key personnel, and the loss of these key personnel could have a material adverse effect on the combined company&rsquo;s
business, financial conditions and results of operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">The success and future
prospects of the combined company largely depend on the skills, experience and efforts of its key personnel, including Jeffrey
Ronaldi, Peter Hardigan and Robert Bzdick. The loss of Messrs. Ronaldi, Hardigan and/or Bzdick, or other executives and managers
of the combined company, or the combined company&rsquo;s failure to retain other key personnel, could jeopardize the combined company&rsquo;s
ability to execute its strategic plan and materially harm its business.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>The Merger resulted in changes to
the DSS board of directors and the combined company may pursue different strategies than either DSS or DSSTM may have pursued independently.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">The board of directors
of DSS following the Merger consists of eight (8) directors, four designated by DSSTM and four designated by DSS. Currently, it
is anticipated that the combined company will maximize the economic benefits of its intellectual property portfolio, add significant
talent in technological innovation and potentially enhance its opportunities for revenue generation through the monetization of
the combined company&rsquo;s assets. However, because the composition of the board of directors of the combined company will consist
of directors from both DSS and DSSTM, the combined company may determine to pursue certain business strategies that neither DSS
nor DSSTM would have pursued independently.</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><I>The success of the combined company
will depend in part on relationships with third parties, which relationships may be affected by third-party preferences or public
attitudes about the Merger. Any adverse changes in these relationships could adversely affect the combined company&rsquo;s business,
financial condition, or results of operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">The combined company&rsquo;s
success will be dependent on its ability to maintain and renew the business relationships of both DSS and DSSTM and to establish
new business relationships. There can be no assurance that the management of the combined company will be able to maintain such
business relationships, or enter into or maintain new business contracts and other business relationships, on acceptable terms,
if at all. The failure to maintain important business relationships could have a material adverse effect on the business, financial
condition, or results of operations of the combined company.</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><I>Future results of the combined company
may differ materially from the unaudited pro forma financial statements presented in the Company&rsquo;s proxy statement/prospectus
and the financial forecasts prepared by DSS and DSSTM in connection with discussions concerning the Merger.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">The future results of
the combined company may be materially different from those shown in the unaudited pro forma combined financial statements presented
in the proxy statement/prospectus filed by the Company with the SEC, which show only a combination of the historical results of
DSS and DSSTM, prepared by DSS and DSSTM in connection with the Merger. DSS expects to incur significant costs associated with
combining the operations of the two companies. The exact magnitude of these costs are not yet known, but are estimated to be approximately
$1,000,000. Furthermore, these costs may decrease the capital that the combined company could use for continued development of
the combined company&rsquo;s business in the future or may cause the combined company to seek to raise new capital sooner than
expected.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>The combined company may require
additional capital to support its present business plan and its anticipated business growth, and such capital may not be available
on acceptable terms, or at all, which would adversely affect the combined company&rsquo;s ability to operate.</I></B></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: justify; text-indent: 48pt">DSS believes that the
Bascom intellectual property will significantly augment the scope and value of DSS&rsquo;s litigation and licensing business without
impacting its current operations or resource allocation plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">The Bascom Portfolio
will expand upon DSS&rsquo;s licensing potential and ability to compete within its current areas of commercial focus. DSS&rsquo;s
primary commercial focus is to develop integrated security solutions for authentication and brand protection that incorporate DSS&rsquo;s
proprietary print and digital technologies such as its suite of AuthentiGuard patents, the DSS Digital Group&rsquo;s cloud computing
platform and intellectual property, and customized software that delivers digital security solutions via standard handheld devices
(such as the apple iPhone) and the cloud. DSS anticipates that this commercial focus will benefit from the integration of technical
&ldquo;know-how&rdquo; from Thomas Bascom, the President and Chief Technology Officer of Bascom Research, as well as from the ability
to use the current Bascom Portfolio and any potential new derivative technologies that may be co-developed and licensed. DSS initially
will be the only competitor in the marketplace that is a licensee of the Bascom Portfolio, which may lead to additional licensing
opportunities for DSS with customers or competitors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">The Bascom Research
intellectual property licensing program provides a significant new potential income stream for DSS&rsquo;s litigation and licensing
business that will be funded by DSSTM, and as such, will not alter the current resource allocation for DSS&rsquo;s existing litigation
and licensing business. DSSTM has delivered approximately $6.5 million in capital (net of transaction fees) in connection with
the Merger, which will be used in part to fund the Bascom Research licensing effort. We do not expect that DSS capital resources
will initially be used for Bascom Research, and the Bascom Research effort will not initially divert other DSS resources aside
from requiring some oversight by the current DSS General Counsel, who will be involved in all ongoing litigation and licensing
matters for the combined company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">The combined company
may require additional funds to further develop its business plan. Based on current operating plans of DSS and DSSTM, the current
resources of the combined company are expected to be sufficient to fund its planned operations into the fourth quarter of 2014.
Since it is impossible to predict the timing and amount of any recovery, if any, resulting from the DSSTM litigation, we anticipate
that we will need to raise additional funds through equity offerings in order to meet our liquidity requirements in the fourth
quarter of 2014. However, if revenues of DSS do not meet expectations or if operating expenses exceed expectations, or a combination
of both, then the combined company may require additional resources prior to the fourth quarter of 2014. Any such financing that
DSS undertakes will likely be dilutive to DSS&rsquo;s current stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">The combined company
intends to continue to make investments to support its business growth, including patent or other intellectual property asset creation.
In addition, the combined company may also need additional funds to respond to business opportunities and challenges, including
its ongoing operating expenses, protecting its assets, satisfying debt payment obligations, developing new lines of business and
enhancing its operating infrastructure. While the combined company may need to seek additional funding for such purposes, it may
not be able to obtain financing on acceptable terms, or at all. In addition, the terms of the combined company&rsquo;s financings
may be dilutive to, or otherwise adversely affect, holders of its common stock. The combined company may also seek additional funds
through arrangements with collaborators or other third parties. The combined company may not be able to negotiate any such arrangements
on acceptable terms, if at all. If the combined company is unable to obtain additional funding on a timely basis, it may be required
to curtail or terminate some or all of its business plans.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Risks Related to DSS&rsquo;s Business</I></B></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: justify; text-indent: 20pt">DSS is currently subject
to the additional risks described below.</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><I>DSS has a history of losses.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSS has a history of
losses. In first six months of 2013 and for the fiscal years of 2012, 2011, and 2010, DSS incurred losses of approximately $3.1
million, $4.3 million, $3.2 million, and $3.5 million, respectively. DSS&rsquo;s results of operations in the future will depend
on many factors, but largely on DSS&rsquo;s ability to successfully market DSS&rsquo;s anti-counterfeiting products, technologies
and services. DSS&rsquo;s failure to achieve profitability in the future could adversely affect the trading price of its common
stock and its ability to raise additional capital and, accordingly, its ability to continue to grow its business. There can be
no assurance that DSS will succeed in addressing any or all of these risks, and the failure to do so could have a material adverse
effect on DSS&rsquo;s business, financial condition and operating results.</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><I>DSS has a significant amount of indebtedness,
some of which is secured by its assets, and may be unable to satisfy its obligations to pay interest and principal thereon when
due.</I></B></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; text-indent: 48pt">As of June 30, 2013,
DSS has the following significant amounts of outstanding indebtedness:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 5%; padding-right: 0; padding-left: 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">(i)</font></td>
    <TD STYLE="width: 95%; padding-right: 0; padding-left: 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">$648,000 convertible promissory note bearing interest at 10% per annum due in full on December 29, 2015, or convertible into up to 260,180 shares of DSS Common Stock, secured by the assets of DSS&rsquo;s wholly-owned subsidiary, Secuprint. Interest is due quarterly.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 5%; padding-right: 0; padding-left: 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">(ii)</font></td>
    <TD STYLE="width: 95%; padding-right: 0; padding-left: 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">$500,000 due under a term loan with Citizens Bank which matures February 1, 2015 and is payable in monthly payments of $25,000 plus interest. Interest accrues at 1 Month LIBOR plus 3.75%. DSS subsequently entered into an interest rate swap agreement to lock into a 5.7% effective interest rate over the life of the term loan.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 5%; padding-right: 0; padding-left: 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">(iii)</font></td>
    <TD STYLE="width: 95%; padding-right: 0; padding-left: 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Up to $1,000,000 in a revolving line of credit with Citizens Bank available for use by Premier Packaging, subject to certain limitations, payable in monthly installments of interest only. Interest accrues at 1 Month LIBOR plus 3.75%. As of June 30, 2013, there was approximately $70,000, net of the sweep account, outstanding on the line.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 5%; padding-right: 0; padding-left: 0"><font style="font-family: Times New Roman, Times, Serif">(iv)</font></td>
    <TD STYLE="width: 95%; padding-right: 0; padding-left: 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">$1,159,000 due under a promissory note with Citizens Bank used to purchase DSS&rsquo;s packaging division facility. DSS is required to pay monthly installments of $7,658 plus interest until August 2021 at which time a balloon payment of the remaining principal balance of $919,677 is due. DSS subsequently entered into an interest rate swap agreement to lock into a 5.865% effective interest rate over the life of the term loan. The promissory note is secured by a first mortgage.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 5%; padding-right: 0; padding-left: 0"><font style="font-family: Times New Roman, Times, Serif">(v)</font></td>
    <TD STYLE="width: 95%; padding-right: 0; padding-left: 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">$850,000 promissory note bearing interest at 9% per annum due in full on May 24, 2014 secured by certain equipment and the assets of DSS&rsquo;s wholly-owned subsidiary, Secuprint. Interest is due quarterly.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">All of the Citizens
Bank credit facilities are subject to various covenants including a fixed charge coverage ratio, tangible net worth and current
ratio. The Citizens Bank obligations are secured by all of the assets of Premier Packaging and are also secured through cross guarantees
by DSS and its other wholly-owned subsidiaries, P3 and Secuprint.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">If DSS were to default
on any of the above indebtedness, and the creditors were to foreclose on secured assets, this could have a material adverse effect
on DSS&rsquo;s business, financial condition and operating results.</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><I>If DSS is unable to adequately protect
its intellectual property, its competitive advantage may disappear.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">The success of DSS will
be determined in part by its ability to obtain United States and foreign patent protection for its technology and to preserve its
trade secrets. Because of the substantial length of time and expense associated with developing new document security technology,
DSS places considerable importance on patent and trade secret protection. DSS intends to continue to rely primarily on a combination
of patent protection, trade secrets, technical measures, copyright protection and nondisclosure agreements with its employees and
customers to establish and protect the ideas, concepts and documentation of software and trade secrets developed by DSS. DSS&rsquo;s
ability to compete and the ability of its business to grow could suffer if these intellectual property rights are not adequately
protected. There can be no assurance that DSS&rsquo;s patent applications will result in patents being issued or that current or
additional patents will afford protection against competitors. Failure of DSS&rsquo;s patents, copyrights, trademarks and trade
secret protection, non-disclosure agreements and other measures to provide protection of its technology and its intellectual property
rights could enable DSS&rsquo;s competitors to more effectively compete with it and have an adverse effect on DSS&rsquo;s business,
financial condition and results of operations. In addition, DSS&rsquo;s trade secrets and proprietary know-how may otherwise become
known or be independently discovered by others. No guarantee can be given that others will not independently develop substantially
equivalent proprietary information or techniques, or otherwise gain access to DSS&rsquo;s proprietary technology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">In addition, DSS may
be required to litigate in the future to enforce its intellectual property rights, to protect its trade secrets, to determine the
validity and scope of the proprietary rights of others, or to defend against claims of infringement or invalidity. Any such litigation
could result in substantial costs and diversion of resources and could have a material adverse effect on DSS&rsquo;s business,
financial condition or results of operations, and there can be no assurances of the success of any such litigation.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>DSS may face intellectual property
infringement or other claims against it, its customers or its intellectual property that could be costly to defend and result in
its loss of significant rights.</I></B></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; text-indent: 48pt">Although DSS has received
patents with respect to certain of its technologies, there can be no assurance that these patents will afford DSS any meaningful
protection. Although DSS believes that its use of the technology and products it has developed and other trade secrets used in
its operations do not infringe upon the rights of others, DSS&rsquo;s use of the technology and trade secrets it developed may
infringe upon the patents or intellectual property rights of others. In the event of infringement, DSS could, under certain circumstances,
be required to obtain a license or modify aspects of the technology and trade secrets it developed or refrain from using the same.
DSS may not have the necessary financial resources to defend an infringement claim made against it or be able to successfully terminate
any infringement in a timely manner, upon acceptable terms and conditions or at all. Failure to do any of the foregoing could have
a material adverse effect on DSS and its financial condition. Moreover, if the patents, technology or trade secrets DSS developed
or uses in its business are deemed to infringe upon the rights of others, DSS could, under certain circumstances, become liable
for damages, which could have a material adverse effect on DSS and its financial condition. As DSS continues to market its products,
DSS could encounter patent barriers that are not known today. A patent search may not disclose all related applications that are
currently pending in the United States Patent Office, and there may be one or more such pending applications that would take precedence
over any or all of DSS&rsquo;s applications.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">Furthermore, third parties
may assert that DSS&rsquo;s intellectual property rights are invalid, which could result in significant expenditures by DSS to
refute such assertions. If DSS becomes involved in litigation, DSS could lose its proprietary rights, be subject to damages and
incur substantial unexpected operating expenses. Intellectual property litigation is expensive and time-consuming, even if the
claims are subsequently proven unfounded, and could divert management&rsquo;s attention from DSS&rsquo;s business. If there is
a successful claim of infringement, DSS may not be able to develop non-infringing technology or enter into royalty or license agreements
on acceptable terms, if at all. If DSS is unsuccessful in defending claims that its intellectual property rights are invalid, DSS
may not be able to enter into royalty or license agreements on acceptable terms, if at all. This could prohibit DSS from providing
its products and services to customers, which could have a material adverse effect on DSS and its financial condition.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>The value of DSS&rsquo;s intangible
assets may not be equal to their carrying values.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">As of June 30, 2013,
DSS had approximately $5.1 million of net intangible assets, including goodwill. DSS is required to evaluate the carrying value
of such intangibles. Whenever events or changes in circumstances indicate that the carrying value of an intangible asset, including
goodwill, may not be recoverable, DSS will have to determine whether there has been impairment by comparing the anticipated undiscounted
cash flows (discounted cash flows for goodwill) from the operation and eventual disposition of the product line with its carrying
value. If any of DSS&rsquo;s intangible assets are deemed to be impaired then it will result in a significant reduction of the
operating results in such period. No impairments were recognized during the six months ended June 30, 2013 and the year ended December
31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Certain of DSS&rsquo;s recently developed
products are not yet commercially accepted and there can be no assurance that those products will be accepted, which would adversely
affect DSS&rsquo;s financial results.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">Over the past several
years, DSS has spent significant funds and time to create new products by applying its technologies onto media other than paper,
including plastic and cardboard packaging, and delivery of DSS&rsquo;s technologies digitally. DSS has had limited success to date
in selling its products that are on cardboard packaging and those that are delivered digitally. DSS&rsquo;s business plan for the
remainder of 2013 and beyond includes plans to incur significant marketing, intellectual property development and sales costs for
these newer products, particularly the digitally delivered products. If DSS is not able to sell these new products, its financial
results will be adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>The results of DSS&rsquo;s research
and development efforts are uncertain and there can be no assurance of the commercial success of its products.</I></B></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; text-indent: 48pt">DSS believes that it
will need to continue to incur research and development expenditures to remain competitive. The products DSS is currently developing
or may develop in the future may not be technologically successful. In addition, the length of DSS&rsquo;s product development
cycle may be greater than it originally expected and DSS may experience delays in future product development. If DSS&rsquo;s resulting
products are not technologically successful, they may not achieve market acceptance or compete effectively with DSS&rsquo;s competitors&rsquo;
products.</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><I>Changes in document security technology
and standards could render DSS&rsquo;s applications and services obsolete.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">The market for document
security products, applications, and services is fast moving and evolving. Identification and authentication technology is constantly
changing as DSS and its competitors introduce new products, applications, and services, and retire old ones as customer requirements
quickly develop and change. In addition, the standards for document security are continuing to evolve. If any segments of DSS&rsquo;s
market adopt technologies or standards that are inconsistent with DSS&rsquo;s applications and technology, sales to those market
segments could decline, which could have a material adverse effect on DSS and its financial condition.</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><I>The market in which DSS operates
is highly competitive, and DSS may not be able to compete effectively, especially against established industry competitors with
greater market presence and financial resources.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSS&rsquo;s market is
highly competitive and characterized by rapid technological change and product innovations. DSS competitors may have advantages
over DSS because of their longer operating histories, more established products, greater name recognition, larger customer bases,
and greater financial, technical and marketing resources. As a result, they may be able to adapt more quickly to new or emerging
technologies and changes in customer requirements, and devote greater resources to the promotion and sale of their products. Competition
may also force DSS to decrease the price of DSS&rsquo;s products and services. DSS cannot assure you that it will be successful
in developing and introducing new technology on a timely basis, new products with enhanced features, or that these products, if
introduced, will enable DSS to establish selling prices and gross margins at profitable levels.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>DSS&rsquo;s growth strategy depends,
in part, on DSS acquiring complementary businesses and assets and expanding DSS&rsquo;s existing operations to include manufacturing
capabilities, which DSS may be unable to do.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSS&rsquo;s growth strategy
is based, in part, on its ability to acquire businesses and assets that are complementary to its existing operations and expanding
DSS&rsquo;s operations to include manufacturing capabilities. DSS may also seek to acquire other businesses. The success of this
acquisition strategy will depend, in part, on DSS&rsquo;s ability to accomplish the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 98%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">identify suitable businesses or assets to buy;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 98%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">complete the purchase of those businesses on terms acceptable to DSS;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 98%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">complete the acquisition in the time frame DSS expects; and</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 98%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">improve the results of operations of the businesses that DSS buys and successfully integrate their operations into DSS&rsquo;s.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">Although DSS has been
able to make acquisitions in the past, there can be no assurance that DSS will be successful in pursuing any or all of these steps
on future transactions. DSS&rsquo;s failure to implement its acquisition strategy could have an adverse effect on other aspects
of DSS&rsquo;s business strategy and its business in general. DSS may not be able to find appropriate acquisition candidates, acquire
those candidates that DSS finds or integrate acquired businesses effectively or profitably.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSS has in the past
used, and may continue to use, its common stock as payment for all or a portion of the purchase price for acquisitions. If DSS
issues significant amounts of its common stock for such acquisitions, this could result in substantial dilution of the equity interests
of DSS stockholders.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If DSS fails to retain certain of
its key personnel and attract and retain additional qualified personnel, DSS might not be able to pursue its growth strategy.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSS&rsquo;s future success
depends upon the continued service of certain of its executive officers and other key sales and research personnel who possess
longstanding industry relationships and technical knowledge of DSS products and operations. Although DSS believes that its relationship
with these individuals is positive, there can be no assurance that the services of these individuals will continue to be available
to DSS in the future. There can be no assurance that these persons will agree to continue to be employed by DSS after the expiration
dates of their current contracts.</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><I>If DSS does not successfully expand
its sales force, it may be unable to increase its revenues.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSS must expand the
size of its marketing activities and sales force to increase revenues. DSS continues to evaluate various methods of expanding its
marketing activities, including the use of outside marketing consultants and representatives and expanding its in-house marketing
capabilities. If DSS is unable to hire or retain qualified sales personnel or if newly hired personnel fail to develop the necessary
skills to be productive, or if they reach productivity more slowly than anticipated, DSS&rsquo;s ability to increase its revenues
and grow could be compromised. The challenge of attracting, training and retaining qualified candidates may make it difficult to
meet DSS&rsquo;s sales growth targets. Further, DSS may not generate sufficient sales to offset the increased expense resulting
from expanding DSS&rsquo;s sales force or DSS may be unable to manage a larger sales force.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Future growth in DSS&rsquo;s business
could make it difficult to manage DSS&rsquo;s resources.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSS&rsquo;s anticipated
business expansion could place a significant strain on its management, administrative and financial resources. Significant growth
in DSS&rsquo;s business may require it to implement additional operating, product development and financial controls, improve coordination
among marketing, product development and finance functions, increase capital expenditures and hire additional personnel. There
can be no assurance that DSS will be able to successfully manage any substantial expansion of its business, including attracting
and retaining qualified personnel. Any failure to properly manage its future growth could negatively impact its business and operating
results.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>DSS cannot predict its future capital
needs and DSS may not be able to secure additional financing.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSS may need to raise
additional funds in the future to fund its working capital needs, to fund more aggressive expansion of its business, to complete
development, testing and marketing of its products and technologies, or to make strategic acquisitions or investments. DSS may
require additional equity or debt financings, collaborative arrangements with corporate partners or funds from other sources for
these purposes. No assurance can be given that necessary funds will be available for DSS to finance its development on acceptable
terms, if at all. Furthermore, such additional financings may involve substantial dilution of DSS stockholders or may require that
DSS relinquish rights to certain of its technologies or products. In addition, DSS may experience operational difficulties and
delays due to working capital restrictions. If adequate funds are not available from operations or additional sources of financing,
DSS may have to delay or scale back its growth plans.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If DSS is unable to respond to regulatory
or industry standards effectively, its growth and development could be delayed or limited.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSS&rsquo;s future success
will depend in part on its ability to enhance and improve the functionality and features of its products and services in accordance
with regulatory or industry standards. DSS&rsquo;s ability to compete effectively will depend in part on its ability to influence
and respond to emerging industry governmental standards in a timely and cost-effective manner. If DSS is unable to influence these
or other standards or respond to these or other standards effectively, its growth and development of various products and services
could be delayed or limited.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Changes in the laws and regulations
to which DSS are subject may increase DSS&rsquo;s costs.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSS is subject to numerous
laws and regulations, including, but not limited to, environmental and health and welfare benefit regulations, as well as those
associated with being a public company. These rules and regulations may be changed by local, state, provincial, national or foreign
governments or agencies. Such changes may result in significant increases in DSS&rsquo;s compliance costs. Compliance with changes
in rules and regulations could require increases to DSS&rsquo;s workforce, and could result in increased costs for services, compensation
and benefits, and investment in new or upgraded equipment.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Declines in general economic conditions
or acts of war and terrorism may adversely impact DSS&rsquo;s business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">Demand for printing
services is typically correlated with general economic conditions. The recent declines in United States economic conditions have
adversely impacted DSS&rsquo;s business and results of operations, and may continue to do so for the foreseeable future. The overall
business climate of DSS&rsquo;s industry may also be impacted by domestic and foreign wars or acts of terrorism, which events may
have sudden and unpredictable adverse impacts on demand for DSS&rsquo;s products and services.</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><I>DSS has a large number of authorized
but unissued shares of common stock, which DSS&rsquo;s management may issue without further stockholder approval, thereby causing
dilution of your holdings of DSS common stock.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">As of July 1, 2013,
after the Company&rsquo;s merger with DSSTM, there were approximately 154 million authorized but unissued shares of DSS common
stock. DSS management continues to have broad discretion to issue shares of its common stock in a range of transactions, including
capital-raising transactions, mergers, acquisitions, for anti-takeover purposes, and in other transactions, without obtaining stockholder
approval, unless stockholder approval is required for a particular transaction under the rules of the NYSE MKT, state and federal
law, or other applicable laws. If DSS&rsquo;s board of directors determines to issue additional shares of DSS common stock from
the large pool of authorized but unissued shares for any purpose in the future without obtaining stockholder approval, your ownership
position would be diluted without your further ability to vote on such transaction.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>The exercise of DSS&rsquo;s outstanding
options and warrants, vesting of restricted stock awards and conversion of debt securities may depress DSS&rsquo;s stock price.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">As of June 30, 2013
and 2012, there were up to 4,286,534 and 4,225,691, respectively, of shares potentially issuable under convertible debt agreements,
options, warrants, restricted stock agreements and employment agreements that could potentially dilute basic earnings per share
in the future. These shares were excluded from the calculation of diluted earnings per share because their inclusion would have
been anti-dilutive to the Company&rsquo;s losses in the respective periods. On July 1, 2013, in connection with the Merger, the
Company issued the following: (i) 16,558,387 shares of the Company&rsquo;s common stock, (ii) 7,100,000 shares of the Company&rsquo;s
Common Stock to be held in escrow pursuant to an escrow agreement, dated July 1, 2013, (iii) warrants to purchase up to an aggregate
of 4,859,894 shares of the Company&rsquo;s Common Stock, at an exercise price of $4.80 per share and expiring on July 1, 2018,
and (iv) warrants to purchase up to an aggregate of 3,432,170 shares of the Company&rsquo;s Common Stock, at an exercise price
of $0.02 per share and expiring on July 1, 2023. In addition, the Company assumed options to purchase an aggregate of 2,000,000
shares of the Company&rsquo;s Common Stock at an exercise price of $3.00 per share, in exchange for 3,600,000 outstanding and unexercised
stock options to purchase shares of DSSTM&rsquo;s common stock. In addition, the Company issued an aggregate of 786,678 shares
of Common Stock to Palladium Capital Advisors, LLC as compensation for their services in connection with the transactions contemplated
by the Merger Agreement. Of those shares issued to Palladium Capital Advisors, LLC, 400,000 shall be held in escrow pursuant to
the same terms and conditions as those set forth in the Escrow Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">Sales of these securities
in the public market, or the perception that future sales of these securities could occur, could have the effect of lowering the
market price of DSS common stock below current levels and make it more difficult for DSS and DSS&rsquo;s stockholders to sell DSS&rsquo;s
equity securities in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">Sale or the availability
for sale of shares of common stock by stockholders could cause the market price of DSS common stock to decline and could impair
DSS&rsquo;s ability to raise capital through an offering of additional equity securities.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>DSS does not intend to pay cash dividends.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSS does not intend
to declare or pay cash dividends on its common stock in the foreseeable future. DSS anticipates that it will retain any earnings
and other cash resources for investment in its business. The payment of dividends on DSS&rsquo;s common stock is subject to the
discretion of its board of directors and will depend on DSS&rsquo;s operations, financial position, financial requirements, general
business conditions, restrictions imposed by financing arrangements, if any, legal restrictions on the payment of dividends and
other factors that its board of directors deems relevant.</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><I>DSS has material weaknesses in its
internal control over financial reporting structure, which, until remedied, may cause errors in its financial statements that could
require restatements of its financial statements and investors may lose confidence in DSS&rsquo;s reported financial information,
which could lead to a decline in DSS&rsquo;s stock price.</I></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; text-indent: 48pt">Section 404 of the Sarbanes-Oxley
Act of 2002 requires DSS to evaluate the effectiveness of its internal control over financial reporting as of the end of each year,
and to include a management report assessing the effectiveness of DSS&rsquo;s internal control over financial reporting in each
Annual Report on Form 10-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSS has identified two
material weaknesses in its internal control over financial reporting in its annual assessment of internal controls over financial
reporting that management performed for the year ended December 31, 2012. Those identified material weaknesses remain as of the
date of this registration statement. Management has concluded that (i) DSS did not maintain a sufficient complement of qualified
accounting personnel and controls associated with segregation of duties; and (ii) DSS lacks sufficient resources within the accounting
department to have effective controls associated with identifying and accounting for complex and non-routine transactions in accordance
with United States generally accepted accounting principles, and that the foregoing represented material weaknesses in its internal
control over financial reporting. DSS is uncertain at this time of the costs to remediate all of the above listed material weaknesses,
however, DSS anticipates the cost to be in the range of $200,000 to $400,000 (including the cost of hiring additional qualified
accounting personnel to eliminate segregation of duties issues and using the services of accounting consultants for complex and
non-routine transactions if and when they arise). DSS cannot guarantee that the actual costs to remediate these deficiencies will
not exceed this amount. If DSS&rsquo;s internal control over financial reporting or disclosure controls and procedures are not
effective, there may be errors in DSS&rsquo;s financial statements and in DSS&rsquo;s disclosure that could require restatements.
Investors may lose confidence in DSS&rsquo;s reported financial information and in DSS&rsquo;s disclosure, which could lead to
a decline in DSS&rsquo;s stock price.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSS&rsquo;s management,
including its Chief Executive Officer and Chief Financial Officer, does not expect that DSS&rsquo;s internal control over financial
reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance that the control system&rsquo;s objectives will be met. Further, the design of a control system must reflect
the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Controls
can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the
controls. Over time, controls may become inadequate because changes in conditions or deterioration in the degree of compliance
with policies or procedures may occur. Because of the inherent limitations in a cost-effective control system, misstatements due
to error or fraud may occur and not be detected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">As a result, DSS cannot
assure you that significant deficiencies or material weaknesses in its internal control over financial reporting will not be identified
in the future. Any failure to maintain or implement required new or improved controls, or any difficulties DSS encounters in their
implementation, could result in significant deficiencies or material weaknesses, cause DSS to fail to timely meet DSS&rsquo;s periodic
reporting obligations, or result in material misstatements in DSS&rsquo;s financial statements. Any such failure could also materially
adversely affect the results of periodic management evaluations regarding disclosure controls and procedures and the effectiveness
of DSS&rsquo;s internal control over financial reporting required under Section 404 of the Sarbanes-Oxley Act of 2002 and the rules
promulgated thereunder.</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><I>Post-Merger Risks Related to DSSTM&rsquo;s
Business, which, effective on July 1, 2013, operates as a wholly-owned subsidiary of DSS.</I></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><I>DSSTM&rsquo;s limited operating history
makes it difficult to evaluate its current business and future prospects.</I></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; text-indent: 20pt">DSSTM is a newly formed
development stage company and has generated minimal revenue to date and has incurred expenses which exceed its revenues. DSSTM
was incorporated in May 2012 and acquired a portfolio of patents from <B>T</B>homas Bascom in July 2012, and also invested in VirtualAgility
in March 2013 and again in August 2013. Therefore, DSSTM not only has a very limited operating history, but also a very limited
track record in executing its business model which includes, among other things, creating, prosecuting, licensing, litigating or
otherwise monetizing its patent assets. DSSTM&rsquo;s limited operating history makes it difficult to evaluate its current business
model and future prospects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">In light of the costs,
uncertainties, delays and difficulties frequently encountered by companies in the early stages of development with limited operating
history, there is a significant risk that DSSTM will not be able to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 98%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">implement or execute its current business plan, or show that its business plan is sound; and/or</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<!-- Field: Page; Sequence: 19 -->
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    <!-- Field: /Page -->

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

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 98%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">obtain sufficient funding, long-term, &nbsp;to effectuate its business plan.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">If DSSTM cannot execute
any one of the foregoing or similar matters relating to its operations, its business may fail.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>DSSTM is presently reliant primarily
on the patent assets it recently acquired. If DSSTM is unable to license or otherwise monetize such assets and generate revenue
and profit through those assets or by other means, there is a significant risk that DSSTM&rsquo;s business would fail.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">In July 2012, DSSTM
acquired a portfolio of patent assets from Thomas Bascom that DSSTM plans to license or otherwise monetize. If DSSTM&rsquo;s efforts
to generate revenue from such assets fail, DSSTM will have incurred significant losses and may be unable to acquire additional
assets. If this occurs, DSSTM&rsquo;s business would likely fail.</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><I>DSSTM has commenced legal proceedings
against five companies, including Facebook, Inc. and LinkedIn Corporation, and DSSTM expects such litigation to be time-consuming
and costly, which may adversely affect DSSTM&rsquo;s financial condition and its ability to operate its business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">To license or otherwise
monetize the patent assets DSSTM acquired from Thomas Bascom, DSSTM commenced legal proceedings against five companies, including
Facebook, Inc. and LinkedIn Corporation, pursuant to which DSSTM alleges that such companies infringe on one or more of DSSTM&rsquo;s
patents. DSSTM&rsquo;s viability is highly dependent on the outcome of this litigation, and there is a risk that DSSTM may be unable
to achieve the results it desires from such litigation, which failure would harm DSSTM&rsquo;s business to a great degree. In addition,
the defendants in this litigation are much larger than DSSTM and have substantially more resources than DSSTM does, which could
make DSSTM&rsquo;s litigation efforts more difficult.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSSTM anticipates that
these legal proceedings may continue for several years and may require significant expenditures for legal fees and other expenses.
Disputes regarding the assertion of patents and other intellectual property rights are highly complex and technical. Once initiated,
DSSTM may be forced to litigate against others to enforce or defend DSSTM&rsquo;s intellectual property rights or to determine
the validity and scope of other parties&rsquo; proprietary rights. The defendants or other third parties involved in the lawsuits
in which DSSTM is involved may allege defenses and/or file counterclaims in an effort to avoid or limit liability and damages for
patent infringement. If such defenses or counterclaims are successful, they may have a great impact on the value of the patents
and preclude DSSTM&rsquo;s ability to derive licensing revenue from the patents, or any revenue. Therefore, a negative outcome
of any such litigation, or one or more claims contained within any such Litigation, could materially and adversely impact DSSTM&rsquo;s
business. Additionally, DSSTM anticipates that its legal fees and other expenses will be material and will negatively impact DSSTM&rsquo;s
financial condition and results of operations and may result in its inability to continue its business. DSSTM estimates that its
legal fees over the next twelve months will be approximately $2,000,000. Expenses thereafter are dependent on the outcome of the
litigation; in the event the case is appealed, legal fees over the course of the subsequent twelve months would be approximately
$2,000,000. The costs of enforcing DSSTM&rsquo;s patent rights may exceed its recoveries from such enforcement activities. In addition,
the primary law firm being utilized by DSSTM for such litigation would be entitled to a certain percentage of any recoveries from
the litigation or licensing of the patents. The inventor of the patents is likewise entitled to a percentage of such recoveries,
as is IP Navigation Group, the intellectual property consulting firm engaged by DSSTM in connection with its efforts to acquire
and monetize this portfolio of patents. Accordingly, in order for DSSTM to generate a profit from its patent enforcement and monetization
activities, the revenues from such enforcement and monetization activities must be high enough to offset both the cash outlays
and the contingent fees payable from such revenues. DSSTM&rsquo;s failure to monetize its patent assets would significantly harm
its business.</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><I>While DSSTM believes that the patents
acquired from Thomas Bascom are infringed by the defendants in the Litigation, there is a risk that a court will find the patents
invalid, not infringed or unenforceable and/or that the US Patent and Trademark Office (USPTO) will either invalidate the patents
or materially narrow the scope of their claims during the course of a re-examination. In addition, even with a positive trial court
verdict, the patent may be invalidated, found not infringed or rendered unenforceable on appeal. This risk may occur either presently
in DSSTM&rsquo;s initial litigation or from time to time in connection with future litigations DSSTM may bring. If this were to
occur, it would have a material adverse effect on the viability of its company and its operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSSTM believes that
certain social and business networking and other companies infringe on at least four of its patents, but recognizes that obtaining
and collecting a judgment against such infringers may be difficult or impossible. Patent litigation is inherently risky and the
outcome is uncertain. Some of the parties DSSTM believes infringe on DSSTM&rsquo;s patents are large and well-financed companies
with substantially greater resources than DSSTM. DSSTM believes that these parties will devote a substantial amount of resources
in an attempt to avoid or limit a finding that they are liable for infringing DSSTM&rsquo;s patents or, in the event liability
is found, to avoid or limit the amount of associated damages. In addition, there is a risk that these parties may file re-examinations
or other proceedings with the USPTO or other government agencies in an attempt to invalidate, narrow the scope or render unenforceable
the patents DSSTM acquired from Thomas Bascom. As of the date of this registration statement, DSSTM has settled with two defendants,
and is legally precluded from disclosing other developments in the cases.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">At this time, DSSTM
cannot predict the outcome of such potential litigation or administrative action, and if DSSTM is unsuccessful in its litigation
efforts for any reason, the value of the patents acquired from Thomas Bascom, which are DSSTM&rsquo;s most significant assets,
would be significantly reduced and DSSTM&rsquo;s business, financial condition and results of operations would be significantly
harmed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">Moreover, in connection
with any of DSSTM&rsquo;s present or future patent enforcement actions, it is possible that a defendant may request and/or a court
may rule that DSSTM has violated statutory authority, regulatory authority, federal rules, local court rules, or governing standards
relating to the substantive or procedural aspects of such enforcement actions. In such event, a court may issue monetary sanctions
against DSSTM or its operating subsidiaries or award attorneys&rsquo; fees and/or expenses to one or more defendants, which could
be material, and if DSSTM or its subsidiaries are required to pay such monetary sanctions, attorneys&rsquo; fees and/or expenses,
such payment could materially harm DSSTM&rsquo;s operating results and its financial position.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">In addition, it is difficult
in general to predict the outcome of patent enforcement litigation at the trial level. There is a higher rate of appeals in patent
enforcement litigation than more standard business litigation. Such appeals are expensive and time-consuming, and the outcomes
of such appeals are sometimes unpredictable, resulting in increased costs and reduced or delayed revenue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">Finally, DSSTM believes
that the more prevalent patent enforcement actions become, the more difficult it will be for DSSTM to license its patents without
engaging in litigation. As a result, DSSTM may need to increase the number of its patent enforcement actions to cause infringing
companies to license the patent or pay damages for lost royalties. This will adversely affect DSSTM&rsquo;s operating results due
to the high costs of litigation and the uncertainty of the results.</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><I>If DSSTM is unsuccessful in its pending
litigation or is unable to adequately protect its patent rights, the value of such patents would be significantly reduced and DSSTM&rsquo;s
business would be negatively impacted.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSSTM believes its patents
are valid, enforceable and valuable. Notwithstanding this belief, third parties may make claims of infringement or invalidity claims
with respect to DSSTM&rsquo;s patents and such claims could give rise to material costs for defense or settlement or both, jeopardize
or substantially delay a successful outcome of litigation DSSTM is or may become involved in, or otherwise materially and adversely
affect its business. At this time, DSSTM cannot predict the outcome of its current pending patent infringement litigation. If DSSTM
is unsuccessful in its litigation efforts for any reason or is otherwise unable to protect its patent rights, the value of the
patents acquired from Thomas Bascom, which are DSSTM&rsquo;s most significant assets, would be significantly reduced and DSSTM&rsquo;s
business, financial condition and results of operations would be significantly harmed.</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><I>DSSTM may be unable to retain key
advisors and legal counsel to represent DSSTM in the current patent infringement Litigation and in future legal proceedings.</I></B></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: justify; text-indent: 48pt">The success of DSSTM&rsquo;s
pending legal proceedings and future legal proceedings depends in part upon DSSTM&rsquo;s ability to retain key advisors and legal
counsel to represent DSSTM in such litigation. The retention of such key advisors and legal counsel is likely to be expensive and
DSSTM may not be able to retain such key advisors and legal counsel on favorable economic terms. Therefore, DSSTM may be unable
to retain key advisors and legal counsel to represent DSSTM in its litigation, which could have a material adverse effect on DSSTM&rsquo;s
business.</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><I>The patent infringement cases initiated
by DSSTM will likely take longer and be more expensive in the United States District Court in the Northern District of California
than if the cases were litigated in the United States District Court for the Eastern District of Virginia.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSSTM&rsquo;s wholly-owned
subsidiary, Bascom Research LLC, initiated its patent infringement litigation in the United States District Court for the Eastern
District of Virginia. It is difficult to predict the length of time it will take to complete such litigation. In December, 2012,
the lawsuits were transferred to the United States District Court in the Northern District of California. As of the date of this
Registration Statement, DSSTM has settled with two defendants, and is legally precluded from disclosing certain other developments
in the cases. As of August 27, 2013, Bascom Research has reached settlements with two defendants in connection with its ongoing
litigation in the Northern District of California and the case against Salesforce.com was dismissed. Bascom Research is precluded
from releasing the specific terms of its settlements as a result of confidentiality provisions contained in the various settlement
agreements. The litigation is still pending against the other defendants (including Facebook, Inc. and LinkedIn Corporation). DSSTM
believes that as a result of the transfer to California, the patent infringement litigation may take significantly longer, become
more expensive, and possibly adversely impact the financial position of DSSTM moving forward.</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><I>DSSTM may seek to internally develop
additional new inventions and intellectual property, which would take time and would be costly. Moreover, the failure to obtain
or maintain intellectual property rights for such inventions would lead to the loss of DSSTM&rsquo;s investments in such activities.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">Members of DSSTM&rsquo;s
management team have significant experience as inventors. As such, part of DSSTM&rsquo;s business may include the internal development
of new inventions and intellectual property that DSSTM will seek to monetize. However, this aspect of DSSTM&rsquo;s business would
likely require significant capital and would take time to achieve. Such activities could also distract DSSTM&rsquo;s management
team from its present business initiatives, which could have a material and adverse effect on DSSTM&rsquo;s business. There is
also the risk that DSSTM&rsquo;s initiatives in this regard would not yield any viable new inventions or technology, which would
lead to a loss of DSSTM&rsquo;s investments in time and resources in such activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">In addition, even if
DSSTM is able to internally develop new inventions, in order for those inventions to be viable and to compete effectively, DSSTM
would need to develop and maintain, and it would heavily rely on, a proprietary position with respect to such inventions and intellectual
property. However, there are significant risks associated with any such intellectual property DSSTM may develop principally including
the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 94%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">patent applications DSSTM may file may not result in issued patents or may take longer than DSSTM expects to result in issued patents;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 94%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">DSSTM may be subject to interference proceedings;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 94%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">DSSTM may be subject to opposition proceedings in the U.S. or foreign countries;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 94%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">any patents that are issued to DSSTM may not provide meaningful protection;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 94%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">DSSTM may not be able to develop additional proprietary technologies that are patentable;</font></td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">other companies may challenge patents issued to DSSTM;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 94%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">other companies may design around technologies DSSTM has developed; and</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 94%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">enforcement of DSSTM&rsquo;s patents would be complex, uncertain and very expensive.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSSTM cannot be certain
that patents will be issued as a result of any future applications, or that any of DSSTM&rsquo;s patents, once issued, will provide
DSSTM with adequate protection from competing products. For example, issued patents may be circumvented or challenged, declared
invalid or unenforceable, or narrowed in scope. In addition, since publication of discoveries in scientific or patent literature
often lags behind actual discoveries, DSSTM cannot be certain that it will be the first to make its additional new inventions or
to file patent applications covering those inventions. It is also possible that others may have or may obtain issued patents that
could prevent DSSTM from commercializing DSSTM&rsquo;s products or require DSSTM to obtain licenses requiring the payment of significant
fees or royalties in order to enable DSSTM to conduct its business. As to those patents that DSSTM may license or otherwise monetize,
DSSTM&rsquo;s rights will depend on maintaining its obligations to the licensor under the applicable license agreement, and DSSTM
may be unable to do so. DSSTM&rsquo;s failure to obtain or maintain intellectual property rights for DSSTM&rsquo;s inventions would
lead to the loss of DSSTM&rsquo;s investments in such activities, which would have a material and adverse effect on DSSTM&rsquo;s
company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">Moreover, patent application
delays could cause delays in recognizing revenue from DSSTM&rsquo;s internally generated patents and could cause DSSTM to miss
opportunities to license patents before other competing technologies are developed or introduced into the market.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>New legislation, regulations or court
rulings related to enforcing patents could harm DSSTM&rsquo;s business and operating results.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">If Congress, the United
States Patent and Trademark Office or courts implement new legislation, regulations or rulings that impact the patent enforcement
process or the rights of patent holders, these changes could negatively affect DSSTM&rsquo;s business model. For example, limitations
on the ability to bring patent enforcement claims, limitations on potential liability for patent infringement, lower evidentiary
standards for invalidating patents, increases in the cost to resolve patent disputes and other similar developments could negatively
affect DSSTM&rsquo;s ability to assert its patent or other intellectual property rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">In addition, on September
16, 2011, the Leahy-Smith America Invents Act (or the Leahy-Smith Act), was signed into law. The Leahy-Smith Act includes a number
of significant changes to United States patent law. These changes include provisions that affect the way patent applications will
be prosecuted and may also affect patent litigation. The U.S. Patent and Trademark Office is currently developing regulations and
procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the
Leahy-Smith Act will not become effective until one year or 18 months after its enactment. Accordingly, it is too early to tell
what, if any, impact the Leahy-Smith Act will have on the operation of DSSTM&rsquo;s business. However, the Leahy-Smith Act and
its implementation could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement
or defense of DSSTM&rsquo;s issued patents, all of which could have a material adverse effect on DSSTM&rsquo;s business and financial
condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">Further, and in general,
it is impossible to determine the extent of the impact of any new laws, regulations or initiatives that may be proposed, or whether
any of the proposals will become enacted as laws. Compliance with any new or existing laws or regulations could be difficult and
expensive, affect the manner in which DSSTM conducts its business and negatively impact DSSTM&rsquo;s business, prospects, financial
condition and results of operations.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>DSSTM&rsquo;s acquisitions of patent
assets may be time consuming, complex and costly, which could adversely affect DSSTM&rsquo;s operating results.</I></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; text-indent: 48pt">Acquisitions of patent
or other intellectual property assets, which are and will be critical to DSSTM&rsquo;s business plan, are often time consuming,
complex and costly to consummate. DSSTM may utilize many different transaction structures in its acquisitions and the terms of
such acquisition agreements tend to be heavily negotiated. As a result, DSSTM expects to incur significant operating expenses and
will likely be required to raise capital during the negotiations even if the acquisition is ultimately not consummated. Even if
DSSTM is able to acquire particular patent assets, there is no guarantee that DSSTM will generate sufficient revenue related to
those patent assets to offset the acquisition costs. While DSSTM will seek to conduct confirmatory due diligence on the patent
assets DSSTM is considering for acquisition, DSSTM may acquire patent assets from a seller who does not have proper title to those
assets. In those cases, DSSTM may be required to spend significant resources to defend DSSTM&rsquo;s interest in the patent assets
and, if DSSTM is not successful, its acquisition may be invalid, in which case DSSTM could lose part or all of its investment in
the assets.</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; text-indent: 48pt">DSSTM may also identify
patent or other intellectual property assets that cost more than DSSTM is prepared to spend with its own capital resources. DSSTM
may incur significant costs to organize and negotiate a structured acquisition that does not ultimately result in an acquisition
of any patent assets or, if consummated, proves to be unprofitable for DSSTM. These higher costs could adversely affect DSSTM&rsquo;s
operating results, and if DSSTM incurs losses, the value of its securities will decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">In addition, DSSTM may
acquire patents and technologies that are in the early stages of adoption in the commercial, industrial and consumer markets. Demand
for some of these technologies will likely be untested and may be subject to fluctuation based upon the rate at which DSSTM&rsquo;s
licensees will adopt its patents and technologies in their products and services. As a result, there can be no assurance as to
whether technologies DSSTM acquires or develops will have value that it can monetize.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>In certain acquisitions of patent
assets, DSSTM may seek to defer payment or finance a portion of the acquisition price. This approach may put DSSTM at a competitive
disadvantage and could result in harm to DSSTM&rsquo;s business.</I></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; text-indent: 48pt">DSSTM has limited capital
and may seek to negotiate acquisitions of patent or other intellectual property assets where DSSTM can defer payments or finance
a portion of the acquisition price. These types of debt financing or deferred payment arrangements may not be as attractive to
sellers of patent assets as receiving the full purchase price for those assets in cash at the closing of the acquisition. As a
result, DSSTM might not compete effectively against other companies in the market for acquiring patent assets, many of whom have
greater cash resources than DSSTM has. In addition, any failure to satisfy DSSTM&rsquo;s debt repayment obligations may result
in adverse consequences to its operating results.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Any failure to maintain or protect
DSSTM&rsquo;s patent assets or other intellectual property rights could significantly impair its return on investment from such
assets and harm DSSTM&rsquo;s brand, its business and its operating results.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">DSSTM&rsquo;s ability
to operate its business and compete in the intellectual property market largely depends on the superiority, uniqueness and value
of DSSTM&rsquo;s acquired patent assets and other intellectual property. To protect DSSTM&rsquo;s proprietary rights, DSSTM relies
on and will rely on a combination of patent, trademark, copyright and trade secret laws, confidentiality agreements with its employees
and third parties, and protective contractual provisions. No assurances can be given that any of the measures DSSTM undertakes
to protect and maintain its assets will have any measure of success.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">Following the acquisition
of patent assets, DSSTM will likely be required to spend significant time and resources to maintain the effectiveness of those
assets by paying maintenance fees and making filings with the United States Patent and Trademark Office. DSSTM may acquire patent
assets, including patent applications, which require DSSTM to spend resources to prosecute the applications with the United States
Patent and Trademark Office. Further, there is a material risk that patent related claims (such as, for example, infringement claims
(and/or claims for indemnification resulting therefrom), unenforceability claims, or invalidity claims) will be asserted or prosecuted
against DSSTM, and such assertions or prosecutions could materially and adversely affect DSSTM&rsquo;s business. Regardless of
whether any such claims are valid or can be successfully asserted, defending such claims could cause DSSTM to incur significant
costs and could divert resources away from DSSTM&rsquo;s other activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">Despite DSSTM&rsquo;s
efforts to protect its intellectual property rights, any of the following or similar occurrences may reduce the value of DSSTM&rsquo;s
intellectual property:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 94%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">DSSTM&rsquo;s applications for patents, trademarks and copyrights may not be granted and, if granted, may be challenged or invalidated;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 94%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">issued trademarks, copyrights, or patents may not provide DSSTM with any competitive advantages versus potentially infringing parties;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 94%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">DSSTM&rsquo;s efforts to protect its intellectual property rights may not be effective in preventing misappropriation of DSSTM&rsquo;s technology; or</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 94%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">DSSTM&rsquo;s efforts may not prevent the development and design by others of products or technologies similar to or competitive with, or superior to those DSSTM acquires and/or prosecutes.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">Moreover, DSSTM may
not be able to effectively protect its intellectual property rights in certain foreign countries where DSSTM may do business in
the future or from which competitors may operate. If DSSTM fails to maintain, defend or prosecute its patent assets properly, the
value of those assets would be reduced or eliminated, and DSSTM&rsquo;s business would be harmed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 20pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>DSSTM may not be able to capitalize
on potential market opportunities related to its licensing strategy or patent portfolio.</I></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; text-indent: 48pt">In order to capitalize
on its patent portfolio, DSSTM intends to enter into licensing relationships. However, there can be no assurance that DSSTM will
be able to capitalize on its patent portfolio or any potential market opportunity in the foreseeable future. DSSTM&rsquo;s inability
to generate licensing revenues associated with potential market opportunities could result from a number of factors, including,
but not limited to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48pt">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 94%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">DSSTM may not be successful in entering into licensing relationships on commercially acceptable terms; and</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
    <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">&bull;</font></td>
    <td style="width: 94%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">challenges from third parties as to the
        validity of DSSTM&rsquo;s patents underlying DSSTM&rsquo;s licensing opportunities.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;Weak global
economic conditions may cause infringing parties to delay entering into licensing agreements, which could prolong DSSTM&rsquo;s
litigation and adversely affect its financial condition and operating results<FONT STYLE="color: #E72625">.</FONT></I></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 4pt 0pt 0; text-indent: 0.5in">DSSTM&rsquo;s business plan depends
significantly on worldwide economic conditions, and the United States and world economies have recently experienced weak economic
conditions. Uncertainty about global economic conditions poses a risk as businesses may postpone spending in response to tighter
credit, negative financial news and declines in income or asset values. This response could have a material negative effect on
the willingness of parties infringing on DSSTM&rsquo;s assets to enter into licensing or other revenue generating agreements voluntarily.
Entering into such agreements is critical to DSSTM&rsquo;s business plan, and DSSTM&rsquo;s failure to do so could cause material
harm to its business.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TAX CONSIDERATIONS</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: justify">We are not providing any tax advice as
to the acquisition, holding or disposition of the securities offered herein. In making an investment decision, investors are strongly
encouraged to consult their own tax advisor to determine the U.S.&nbsp;federal, state and any applicable foreign tax consequences
relating to their investment in our securities.</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"><B>USE OF PROCEEDS</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: justify">The Selling Stockholders will receive all
proceeds from the sale of the shares of our Common Stock offered by the Selling Stockholders in this Prospectus. We will not receive
any of the proceeds from the sale of shares of our Common Stock by the Selling Stockholders. We will pay all expenses (other than
transfer taxes) of the Selling Stockholders in connection with the sale of the Shares offered by the Selling Stockholders in this
Prospectus.</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">We will receive proceeds from the exercise
of the stock options granted under the Plan if and to the extent that any such options are exercised by the Selling Stockholders.&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"><B>DETERMINATION OF OFFERING PRICE</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: justify">Our Common Stock is traded on the NYSE
MKT under the symbol &ldquo;DSS&rdquo;. On&nbsp;August 27, 2013, the closing price of our Common Stock was $1.42.</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">The Selling Stockholders may offer to sell
the shares of Common Stock being offered in this Prospectus at fixed prices, at prevailing market prices at the time of sale, at
varying prices or at negotiated prices.</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">The Selling Stockholders may, from time
to time, sell all or a portion of the shares of Common Stock on any market where our Common Stock may be listed or quoted (currently
the NYSE MKT), in privately negotiated transactions or otherwise. Such sales may be at fixed prices prevailing at the time of sale,
at prices related to the market prices or at negotiated prices.&nbsp;&nbsp;Consequently, there is no offering price being established
for the shares.&nbsp;&nbsp;See &ldquo;Plan of Distribution&rdquo; below for additional information.</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></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: center"><B>SELLING STOCKHOLDERS</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: justify">Under our Plan, a total of 6,000,000 shares
of Common Stock were reserved for issuance upon the grant and exercise of options to &ldquo;Employees&rdquo; (defined under the
Plan as any employee of the Company or of an Affiliate, including, without limitation, an employee who is also serving as an officer
or director of the Company or of an Affiliate, designated by the Administrator to be eligible under the Plan), directors and/or
to non-&ldquo;Employee&rdquo; consultants as the Administrator of the Plan shall elect.</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"><FONT STYLE="color: black">2,150,000 of
the shares of Common Stock,</FONT> <FONT STYLE="color: black">which are issuable upon exercise of stock options that have been
granted under the Plan, to which this reoffer prospectus relates are being registered for reoffers and resales by the Selling Stockholders
who are our officers, directors, significant stockholders and may be deemed to be our &ldquo;affiliates,&rdquo; as defined in Rule&nbsp;405
of the Securities Act, who may acquire such shares upon exercise of options granted under the Plan. We do not know whether any
of such individuals will be granted additional options under the Plan, whether any of such Selling Stockholders will use this prospectus
in connection with the offer or sale of any shares of Common Stock, or, if this prospectus is so used, how many shares of Common
Stock will be offered or sold.&nbsp; The selling stockholders may resell all, a portion, or none of the shares that they may acquire
pursuant to the Plan.&nbsp; </FONT></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">The number of shares presented as owned
in this table assumes that all options are fully vested and exercised, and that all shares offered are sold.</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">All expenses incurred with respect to the
registration of the Common Stock will be bared by us, but we will not be obligated to pay any underwriting fees, discounts, commissions
or other expenses incurred by the Selling Stockholders in connection with the sale of such shares.</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">The following table sets forth information
with respect to the maximum number of shares of Common Stock beneficially owned by the Selling Stockholders named below and as
adjusted to give effect to the sale of the shares offered hereby. The shares beneficially owned have been determined in accordance
with rules promulgated by the Securities and Exchange Commission, and the information is not necessarily indicative of beneficial
ownership for any other purpose. The information in the table below is current as of the date of this Prospectus. All information
contained in the table below is based upon information provided to us by the Selling Stockholders and we have not independently
verified this information. The Selling Stockholders are not making any representation that any shares covered by this Prospectus
will be offered for sale. The Selling Stockholders may from time to time offer and sell pursuant to this Prospectus any or all
of the Common Stock being registered.</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">Except as indicated below in the notes
to the tables below, none of the Selling Stockholders held any position or office with us, nor are any of the Selling Stockholders
associates or affiliates of any of our officers or directors. Except as indicated below, no selling stockholder is the beneficial
owner of any additional shares of Common Stock or other equity securities issued by us or any securities convertible into, or exercisable
or exchangeable for, our equity securities. Except as indicated below, no Selling Stockholder is a registered broker-dealer or
an affiliate of a broker-dealer.</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">For purposes of this table, beneficial
ownership is determined in accordance with the Securities and Exchange Commission rules, and includes investment power with respect
to shares and shares owned pursuant to warrants or options exercisable within 60 days. The number of shares presented as owned
in the tables assumes that all warrants and options are fully exercised, and the &quot;Number of Shares Beneficially Owned after
the Offering&rdquo; columns assume the sale of all shares offered.</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">The percentages of shares beneficially owned are based on&nbsp;48,678,006
shares of our Common Stock issued and outstanding as of August 27, 2013, and is&nbsp;calculated by dividing the number of shares
that person beneficially owns by the sum of (a) the total number of shares outstanding on August 27, 2013, plus (b) the number
of shares such person has the right to&nbsp;acquire within 60 days of August 27, 2013.</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">We may require the Selling Stockholders&nbsp;to
suspend the sales of the securities offered by this Prospectus upon the occurrence of any event that makes any statement in this
Prospectus or the related Registration Statement untrue in any material respect or that requires the changing of statements in
these documents in order to make statements in those documents not misleading. The address of each Selling Stockholders listed
below is c/o Document Security Systems, Inc., First Federal Plaza, 28 East Main Street, Suite 1525, Rochester, New York 14614,
USA.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&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">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Name of Selling</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Stockholder</b></P></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="color: black"><b>Number of <BR>
Shares <BR>
Beneficially <BR>
Owned Prior to <BR>
the Offering</b></font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td colspan="2" style="border-bottom: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Number of <BR>
Shares</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Being Offered</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Hereby</b></P></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="color: black"><b>Number of <BR>
Shares to be <BR>
Beneficially <BR>
Owned Upon <BR>
Completion of &nbsp;<BR>
the Offering (21)</b></font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="color: black"><b>Percentage of <BR>
Shares to be <BR>
Beneficially <BR>
Owned Upon <BR>
Completion of &nbsp;<BR>
the Offering (21) </b></font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Jeffrey Ronaldi (1)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">296,443(2)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">1,000,000(15)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">88,110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>*</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td style="width: 36%"><font style="color: black">Peter Hardigan (3)</font></td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 3%">&nbsp;</td>
    <td style="width: 12%; text-align: right"><font style="color: black">331,135(4)</font></td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 12%; text-align: right"><font style="color: black">1,000,000(16)</font></td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 5%">&nbsp;</td>
    <td style="width: 8%; text-align: right"><font style="color: black">122,802</font></td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 5%; text-align: center">&nbsp;</td>
    <td style="width: 8%"><font style="color: black">*</font></td>
    <td style="width: 1%"><font style="color: black">&nbsp;</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <td><font style="color: black">Philip Jones (5)</font></td>
    <td>&nbsp;</td>
    <td style="text-align: right">&nbsp;</td>
    <td style="text-align: right"><font style="color: black">203,333(6)</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="color: black">0</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="color: black">203,333</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font style="color: black">*</font></td>
    <td><font style="color: black">&nbsp;</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td style="padding-bottom: 1.1pt"><font style="color: black">Robert B. Bzdick (7)</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="color: black">698,770(8)</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="color: black">0</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="color: black">698,770</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td><font style="color: black">1.4%</font></td>
    <td style="padding-bottom: 1.1pt"><font style="color: black">&nbsp;</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <td style="padding-bottom: 1.1pt"><font style="color: black">David Klein (9)</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="color: black">28,333(10)</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="color: black">30,000</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="color: black">18,333</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td><font style="color: black">*</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td style="padding-bottom: 1.1pt"><font style="color: black">Ira A. Greenstein (11)</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="color: black">63,333(12)</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="color: black">30,000</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="color: black">53,333</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td><font style="color: black">*</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <td style="padding-bottom: 1.1pt"><font style="color: black">Robert B. Fagenson (13)</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="color: black">1,059,500(14)</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="color: black">30,000</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="color: black">1,049,500</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td><font style="color: black">2.2%</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td style="padding-bottom: 1.1pt"><font style="color: black">Jonathon Perrelli (17)</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="color: black">10,000(18)</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="color: black">30,000</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right"><font style="color: black">0</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td>&nbsp;</td>
    <td><font style="color: black">*</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <td style="padding-bottom: 1.1pt"><font style="color: black">Warren Hurwitz (19)</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="border-bottom: black 1pt solid">&nbsp;</td>
    <td style="border-bottom: black 1pt solid; text-align: right"><font style="color: black">10,000(20)</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="border-bottom: black 1pt solid">&nbsp;</td>
    <td style="border-bottom: black 1pt solid; text-align: right"><font style="color: black">30,000</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="border-bottom: black 1pt solid">&nbsp;</td>
    <td style="border-bottom: black 1pt solid; text-align: right"><font style="color: black">0</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td>
    <td style="border-bottom: black 1pt solid">&nbsp;</td>
    <td style="border-bottom: black 1pt solid"><font style="color: black">*</font></td>
    <td style="padding-bottom: 1.1pt">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="padding-bottom: 1.1pt"><B><I>All executive officers and directors
as a group (9 persons)</I></B></TD>
    <TD STYLE="padding-bottom: 1.1pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">2,700,847</TD>
    <TD STYLE="padding-bottom: 1.1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.1pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">2,150,000</TD>
    <TD STYLE="padding-bottom: 1.1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.1pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">2,234,181</TD>
    <TD STYLE="padding-bottom: 1.1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.1pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>4.5%</TD>
    <TD STYLE="padding-bottom: 1.1pt">&nbsp;</TD></TR>
</table>
<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"></P>

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

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

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



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

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>* less than one percent of common
stock outstanding</I></P>

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

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 1%; text-align: justify">&nbsp;</td>
    <td style="width: 4%; text-align: justify">(1)</td>
    <td style="width: 95%; text-align: justify">Mr. Ronaldi is currently the Company&rsquo;s Chief Executive Officer and serves as a director of the Company.&nbsp;&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">(2)</td>
    <td style="text-align: justify">Includes 74,708 shares of the Company&rsquo;s common stock, 208,333 shares of the Company&rsquo;s common stock issuable upon exercise of stock options within 60 days of August 27, 2013, and 13,402 shares of the Company&rsquo;s common stock issuable upon exercise of warrants with an exercise price of $4.80. Does not include 791,667 options that will not vest within 60 days of August 27, 2013, which options are discussed below in footnote number 15. </td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 1%; text-align: justify">&nbsp;</td>
    <td style="width: 4%; text-align: justify">(3)</td>
    <td style="width: 95%; text-align: justify">Mr. Hardigan is currently the Company&rsquo;s Chief Operating Officer and serves as a director of the Company</td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">(4)</td>
    <td style="text-align: justify">Includes 104,123 shares of the Company&rsquo;s common stock, 208,333 shares of the Company&rsquo;s common stock issuable upon exercise of stock options within 60 days of August 27, 2013, and 18,679 shares of the Company&rsquo;s common stock issuable upon exercise of warrants with an exercise price of $4.80. Does not include 791,667 options that will not vest within 60 days of August 27, 2013, which options are discussed below in footnote number 16.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 1%; text-align: justify">&nbsp;</td>
    <td style="width: 4%; text-align: justify">(5)</td>
    <td style="width: 95%; text-align: justify">Mr. Jones is currently the Company&rsquo;s Chief Financial Officer.&nbsp;&nbsp;&nbsp;&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">(6)</td>
    <td style="text-align: justify">Includes 203,333 shares of the Company&rsquo;s common stock issuable upon the exercise of options within 60 days of August 27, 2013.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 1%; text-align: justify">&nbsp;</td>
    <td style="width: 4%; text-align: justify">(7)</td>
    <td style="width: 95%; text-align: justify">Mr. Bzdick is currently the Company&rsquo;s President and serves as a director of the Company.</td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">(8)</td>
    <td style="text-align: justify">Includes 515,437 shares of the Company&rsquo;s common stock, and 183,333 shares of the Company&rsquo;s common stock issuable upon the exercise of stock options within 60 days of August 27, 2013.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 1%; text-align: justify">&nbsp;</td>
    <td style="width: 4%; text-align: justify">(9)</td>
    <td style="width: 95%; text-align: justify">Mr. Klein currently serves as a director of the Company. </td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">(10)</td>
    <td style="text-align: justify">Includes 18,333 shares of the Company&rsquo;s common stock issuable upon the exercise of stock options within 60 days of August 27, 2013.&nbsp;&nbsp;Also includes 10,000 of the 30,000 shares of the Company common stock issuable upon exercise of stock options which shall be granted simultaneously with the filing of this registration statement which shall vest 1/3 on the date of grant, 1/3 twelve-months following the date of grant, and 1/3 twenty-four months following the date of grant.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 1%; text-align: justify">&nbsp;</td>
    <td style="width: 4%; text-align: justify">(11)</td>
    <td style="width: 95%; text-align: justify">Mr. Greenstein currently serves as a director of the Company.&nbsp;&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify">(12)</td>
    <td style="text-align: justify">Includes 53,333 shares of the Company&rsquo;s common stock issuable upon exercise of stock options exercisable within 60 days of August 27, 2013.&nbsp;&nbsp;Also includes 10,000 of the 30,000 shares of the Company common stock issuable upon exercise of stock options which shall be granted simultaneously with the filing of this registration statement which shall vest 1/3 on the date of grant, 1/3 twelve-months following the date of grant, and 1/3 twenty-four months following the date of grant.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 1%; text-align: justify">&nbsp;</td>
    <TD STYLE="width: 4%; text-align: justify">(13)</td>
    <TD STYLE="width: 95%; text-align: justify">Mr. Fagenson currently serves as the Chairman of the Board of Directors of the Company.&nbsp;&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">(14)</td>
    <TD STYLE="text-align: justify">Includes 809,500 shares of the Company&rsquo;s common stock, 40,000 shares of the Company&rsquo;s common stock issuable upon the exercise of currently exercisable stock options, 100,000 shares of the Company&rsquo;s common stock held by Mr. Fagenson&rsquo;s wife, and an aggregate of 100,000 shares of the Company&rsquo;s common stock held in trusts for Mr. Fagenson&rsquo;s two adult children, of which Mr. Fagenson is trustee. Mr. Fagenson disclaims beneficial ownership of the 100,000 shares of the Company&rsquo;s common stock held by his wife and the 100,000 shares of the Company&rsquo;s common stock held in trusts for Mr. Fagenson&rsquo;s two adult children.&nbsp;&nbsp;Also includes 10,000 of the 30,000 shares of the Company common stock issuable upon exercise of stock options which shall be granted simultaneously with the filing of this registration statement which shall vest 1/3 on the date of grant, 1/3 twelve-months following the date of grant, and 1/3 twenty-four months following the date of grant.</td></tr>
</TABLE>

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

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<P STYLE="margin: 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify; width: 1%">&nbsp;</td>
    <TD STYLE="text-align: justify; width: 4%">&nbsp;</td>
    <TD STYLE="text-align: justify; width: 95%">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">(15)</td>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="background-color: white">One
        half of these options shall vest in 12 equal quarterly tranches, with the first tranches having vested as of November 15, 2012,
        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.</font></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">(16)</td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; background-color: white">One half of these options shall vest in 12 equal quarterly tranches, with the first tranches having vested as of November 15, 2012, 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.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">(17)</td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; background-color: white">Mr. Perrelli currently serves as a director of the Company.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">(18)</td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; background-color: white">Includes </font>10,000 of the <font style="font-family: Times New Roman, Times, Serif; background-color: white">30,000 shares of the Company common stock issuable upon exercise of stock options which shall be granted simultaneously with the filing of this registration statement which shall vest 1/3 on the date of grant, 1/3 twelve-months following the date of grant, and 1/3 twenty-four months following the date of grant.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">(19)</td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; background-color: white">Mr. Hurwitz currently serves as a director of the Company.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">(20)</td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; background-color: white">Includes </font>10,000 of the <font style="font-family: Times New Roman, Times, Serif; background-color: white">30,000 shares of the Company common stock issuable upon exercise of stock options which shall be granted simultaneously with the filing of this registration statement which shall vest 1/3 on the date of grant, 1/3 twelve-months following the date of grant, and 1/3 twenty-four months following the date of grant.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</td>
    <TD STYLE="text-align: justify">(21)</td>
    <TD STYLE="text-align: justify">Assumes the exercise of all options and sale of all shares registered pursuant to this reoffer prospectus.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PLAN OF DISTRIBUTION</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: justify">The Selling Stockholders may, from time
to time, sell all or a portion of the shares of Common Stock on any market where our Common Stock may be listed or quoted (currently
the NYSE MKT), in privately negotiated transactions or otherwise. Such sales may be at fixed prices prevailing at the time of sale,
at prices related to the market prices or at negotiated prices. The shares of Common Stock being offered for resale by this Prospectus
may be sold by the Selling Stockholders by one or more of the following methods:</P>

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

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%">&nbsp;</td>
    <td style="width: 3%; padding-right: 0.8pt"><font style="font-family: Symbol">&middot;</font></td>
    <td style="width: 94%; padding-right: -34.2pt; text-align: justify">ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%">&nbsp;</td>
    <td style="width: 3%; padding-right: 0.8pt"><font style="font-family: Symbol">&middot;</font></td>
    <td style="width: 94%; padding-right: -34.2pt; text-align: justify">block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%">&nbsp;</td>
    <td style="width: 3%; padding-right: 0.8pt"><font style="font-family: Symbol">&middot;</font></td>
    <td style="width: 94%; padding-right: -34.2pt; text-align: justify">purchases by a broker-dealer as principal and resale by the broker-dealer for its account;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%">&nbsp;</td>
    <td style="width: 3%; padding-right: 0.8pt"><font style="font-family: Symbol">&middot;</font></td>
    <td style="width: 94%; padding-right: -34.2pt; text-align: justify">an exchange distribution in accordance with the rules of the applicable exchange;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%">&nbsp;</td>
    <td style="width: 3%; padding-right: 0.8pt"><font style="font-family: Symbol">&middot;</font></td>
    <td style="width: 94%; padding-right: -34.2pt; text-align: justify">privately negotiated transactions;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 3%">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt; width: 3%"><font style="font-family: Symbol">&middot;</font></td>
    <TD STYLE="padding-right: -34.2pt; text-align: justify; width: 94%">broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per
share;</td></tr>
</TABLE>

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

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%">&nbsp;</td>
    <td style="width: 3%; padding-right: 0.8pt"><font style="font-family: Symbol">&middot;</font></td>
    <td style="width: 94%; padding-right: -34.2pt; text-align: justify">through the writing of options on the shares;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%">&nbsp;</td>
    <td style="width: 3%; padding-right: 0.8pt"><font style="font-family: Symbol">&middot;</font></td>
    <td style="width: 94%; padding-right: -34.2pt; text-align: justify">a combination of any such methods of sale; and</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%">&nbsp;</td>
    <td style="width: 3%; padding-right: 0.8pt"><font style="font-family: Symbol">&middot;</font></td>
    <td style="width: 94%; padding-right: -34.2pt; text-align: justify">any other method permitted pursuant to applicable law.</td></tr>
</table>
<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">The Selling Stockholders or their respective pledgees, donees,
transferees or other successors in interest, may also sell the shares directly to market makers acting as principals and/or broker-dealers
acting as agents for themselves or their customers. Such broker-dealers may receive compensation in the form of discounts, concessions
or commissions from the Selling Stockholders and/or the purchasers of shares for whom such broker-dealers may act as agents or
to whom they sell as principal or both, which compensation as to a particular broker-dealer might be in excess of customary commissions.
Market makers and block purchasers purchasing the shares will do so for their own account and at their own risk. It is possible
that a Selling Stockholder will attempt to sell shares of Common Stock in block transactions to market makers or other purchasers
at a price per share which may be below the then market price. The Selling Stockholders cannot assure that all or any of the shares
offered in this prospectus will be issued to, or sold by, the Selling Stockholders. In addition, the Selling Stockholders and any
brokers, dealers or agents, upon effecting the sale of any of the shares offered in this prospectus are underwriters&rdquo; as
that term is defined under the Securities Act or the Exchange Act, or the rules and regulations under such acts. In such event,
any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed
to be underwriting commissions or discounts under the Securities Act.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Discounts, concessions, commissions and similar selling expenses,
if any, attributable to the sale of shares will be borne by a Selling Stockholder. The Selling Stockholders may agree to indemnify
any agent, dealer or broker-dealer that participates in transactions involving sales of the shares if liabilities are imposed on
that person under the Securities Act.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Selling Stockholders may from time to time pledge or grant
a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time under this
prospectus after we have filed an amendment to this prospectus under Rule 424(b)(3) or any other applicable provision of the Securities
Act amending the list of Selling Stockholders to include the pledgee, transferee or other successors in interest as a Selling Stockholder
under this prospectus.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Selling Stockholders also may transfer the shares of common
stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial
owners for purposes of this prospectus and may sell the shares of common stock from time to time under this prospectus after we
have filed an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the
list of Selling Stockholders to include the pledgee, transferee or other successors in interest as a Selling Stockholder under
this prospectus.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are required to pay all fees and expenses incident to the
registration of the shares of common stock. Otherwise, all discounts, commissions or fees incurred in connection with the sale
of our common stock offered hereby will be paid by the Selling Stockholders.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Selling Stockholders have advised us that they have not
entered into any agreements, understandings or arrangements with any underwriters or broker-dealers regarding the sale of their
shares of common stock, nor is there an underwriter or coordinating broker acting in connection with a proposed sale of shares
of common stock by any Selling Stockholder. We will file a supplement to this prospectus if a Selling Stockholder enters into a
material arrangement with a broker-dealer for sale of common stock being registered. If the Selling Stockholders use this prospectus
for any sale of the shares of common stock, they will be subject to the prospectus delivery requirements of the Securities Act.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We will pay all expenses incident to the registration, offering
and sale of the shares of our common stock to the public hereunder other than commissions, fees and discounts of underwriters,
brokers, dealers and agents. If any of these other expenses exists, we expect the Selling Stockholders to pay these expenses. We
have agreed to indemnify the Selling Stockholders against certain liabilities, including liabilities under the Securities Act.
We will not receive any proceeds from the resale of any of the shares of our common stock by the Selling Stockholders.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The anti-manipulation rules of Regulation M under the Exchange
Act, may apply to sales of our common stock and activities of the Selling Stockholders. The Selling Stockholders will act independently
of us in making decisions with respect to the timing, manner and size of each sale.</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"><B>DESCRIPTION OF SECURITIES TO BE REGISTERED</B></P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our authorized capital stock consists
of 200,000,000 shares of common stock, par value $0.02, (48,678,006 of which are issued and outstanding as of August 27, 2013).
Our common stock may be issued from time to time without prior approval by our stockholders. Our common stock may be issued for
such consideration as may be fixed from time to time by our board of directors. Our board of directors may issue such shares of
our preferred stock and/or common stock in one or more series, with such voting powers, designations, preferences and rights or
qualifications, limitations or restrictions thereof as shall be stated in the resolution or resolutions.</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>Common Stock</B></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">The Company, a New York corporation, is
authorized to issue 200,000,000 shares of common stock, $0.02 par value. The holders of common stock: (i) have equal rights to
dividends from funds legally available therefore, ratably when as and if declared by the Company&rsquo;s Board of Directors; (ii)
are entitled to share ratably in all assets of the Company available for distribution to holders of common stock upon liquidation,
dissolution, or winding up of the affairs of the Company; (iii) do not have preemptive, subscription or conversion rights and there
are no redemption or sinking fund provisions applicable thereto; (iv) are entitled to one non-cumulative vote per share of common
stock, on all matters which stockholders may vote on at all meetings of stockholders; and (v) the holders of common stock have
no conversion, preemptive or other subscription rights.&nbsp;&nbsp;There is no cumulative voting for the election of directors.&nbsp;&nbsp;As
of August 27, 2013, there were 48,678,006 shares of common stock outstanding.&nbsp;&nbsp;Each holder of our common stock is entitled
to one vote for each share of our common stock held on all matters submitted to a vote of stockholders.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEGAL REPRESENTATION</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: justify">The validity of the issuance of the Common
Stock offered hereby will be passed upon for us by Sichenzia Ross Friedman Ference LLP, at 61 Broadway, 32<SUP>nd</SUP> Fl., New
York, New York 10006.</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"><B>EXPERTS</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: justify">The consolidated financial statements of
Document Security Services, Inc. as of and for the years ended December 31, 2012 and 2011, have been incorporated by reference
in this prospectus and elsewhere in the Registration Statement in reliance upon the report of FREED MAXICK CPAs, P.C., independent
registered public accountants, upon the authority of said firm as experts in accounting and auditing in giving said report.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INTERESTS OF NAMES EXPERTS AND COUNSEL</B></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">No expert or counsel named in this prospectus
as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being
registered or upon other legal matters in connection with the registration or offering of the Common Stock was employed on a contingency
basis or had, or is to receive, in connection with the offering, a substantial interest, directly or indirectly, in the Company,
nor was any such person connected with the Company as a promoter, managing or principal underwriter, voting trustee, director,
officer or employee.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;<B>DISCLOSURE
OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT LIABILITIES</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: justify">Insofar as indemnification for liabilities
arising under the Securities Act of 1933 (the &ldquo;Act&rdquo;) may be permitted to directors,&nbsp;officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the Company has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable.&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"><B>INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE</B></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">The following documents are incorporated by reference into this
document:</P>

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

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr>
    <td style="width: 5%">&nbsp;</td>
    <td style="vertical-align: top; width: 7%"><font style="color: black">&bull;</font></td>
    <td style="vertical-align: top; width: 2%">&nbsp;</td>
    <td style="vertical-align: top; width: 86%"><font style="color: black">Our Annual Report on Form 10-K for the fiscal year ended December&nbsp;31, 2012 filed with the SEC on March 6, 2013;</font></td></tr>
<tr>
    <td>&nbsp;</td>
    <td style="vertical-align: top"><font style="color: black">&bull;</font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top"><font style="color: black">Our Annual Report on Form 10-K/A for the fiscal year ended December&nbsp;31, 2012 filed with the SEC on April 26, 2013;</font></td></tr>
</table>
<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>
    <td style="width: 5%">&nbsp;</td>
    <td style="vertical-align: top; width: 7%"><font style="color: black">&bull;</font></td>
    <td style="vertical-align: top; width: 2%">&nbsp;</td>
    <td style="vertical-align: top; width: 86%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our Current Reports on Form 8-K or 8-K/A, filed with the SEC
        on:</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><font style="font-family: Symbol">&middot;&#9;</font>January
        22, 2013;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><font style="font-family: Symbol">&middot;&#9;</font>March
        6, 2013;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><font style="font-family: Symbol">&middot;&#9;</font>March
        15, 2013;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><font style="font-family: Symbol">&middot;&#9;</font>April
        16, 2013;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><font style="font-family: Symbol">&middot;&#9;</font>April
        30, 2013;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><font style="font-family: Symbol">&middot;&#9;</font>May
        1, 2013;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><font style="font-family: Symbol">&middot;&#9;</font>May
        15, 2013;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><font style="font-family: Symbol">&middot;&#9;</font>May
        28, 2013;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><font style="font-family: Symbol">&middot;&#9;</font>June
        21, 2013;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><font style="font-family: Symbol">&middot;&#9;</font>July
        1, 2013;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><font style="font-family: Symbol">&middot;&#9;</font>July
        25, 2013; and</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><font style="font-family: Symbol">&middot;&#9;</font>August
        13, 2013</P></td></tr>
<tr>
    <td>&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top">&nbsp;</td></tr>
<tr>
    <td>
        <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></td>
    <td style="vertical-align: top"><font style="color: black">&bull;</font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top"><font style="color: black">Our Quarterly Report on Form 10-Q for the period ended March 31, 2013, filed with the SEC on May 15, 2013;</font></td></tr>
<tr>
    <td>&nbsp;</td>
    <td style="vertical-align: top"><font style="color: black">&bull;</font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our Quarterly Report on Form 10-Q for the period ended June
        30, 2013, filed with the SEC on August 13, 2013;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></td></tr>
<tr>
    <td>&nbsp;</td>
    <td style="vertical-align: top"><font style="color: black">&bull;</font></td>
    <td style="vertical-align: top">&nbsp;</td>
    <td style="vertical-align: top"><font style="color: black">The description of our Common Stock, which is registered under Section&nbsp;12 of the Exchange Act, in our registration statement on Form 8-A, filed with the SEC on April 19, 2004, including any amendments or reports filed for the purpose of updating such description.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We will provide to each person, including
any beneficial owner, to whom a prospectus is delivered, without charge upon written or oral request, a copy of any or all of the
documents that are incorporated by reference into this prospectus. Requests should be directed to our General Counsel.</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">Any statement contained in a document incorporated,
or deemed to be incorporated, by reference in this Registration Statement shall be deemed to be modified or superseded for purposes
of this Registration Statement to the extent that a statement contained in this Registration Statement or incorporated by reference,
or in any other subsequently filed document that also is or is deemed to be incorporated by reference, modifies or supersedes the
statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part
of this Registration Statement.</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">In addition, all documents we subsequently
file pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the &ldquo;Exchange Act&rdquo;)
prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be
a part hereof from the date of filing of such documents.</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">You may request a copy of these filings at no cost, by writing
or telephoning us at the following address or telephone number:</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; background-color: white">Jeffrey D&rsquo;Angelo,
VP and General Counsel</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">Document Security
Systems, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">First Federal Plaza, Suite 1525</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">28 East Main Street</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Rochester, NY 14614</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"></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"><B>WHERE YOU CAN FIND ADDITIONAL INFORMATION</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have filed with the Securities and Exchange
Commission under the Securities Act of 1933 a Registration Statement on Form S-8, of which this Prospectus forms a part, with respect
to the shares being offered in this offering. This Prospectus does not contain all of the information set forth in the Registration
Statement, certain items of which are omitted in accordance with the rules and regulations of the Securities and Exchange Commission.
The omitted information may be inspected and copied at the Public Reference Room maintained by the Securities and Exchange Commission
at 100 F. Street, N.E., Washington, D.C.&nbsp;20549. You can obtain information about operation of the Public Reference Room by
calling the Securities and Exchange Commission at 1-800-SEC-0330.</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">In addition, we are a reporting company
and file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings (CIK No.&nbsp;0000771999)
are available to the public over the Internet at the SEC&rsquo;s web site at www.sec.gov, at our web site at http://www.dsssecure.com/.
You may also read and copy any document we file at the SEC&rsquo;s Public Reference Room.&nbsp;&nbsp;Copies of such material can
be obtained from the Public Reference Room at prescribed rates.</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">Statements contained in this Prospectus
as to the contents of any contract or other document filed as an exhibit to the Registration Statement are not necessarily complete
and in each instance reference is made to the copy of the document filed as an exhibit to the Registration Statement, each statement
made in this Prospectus relating to such documents being qualified in all respect by such reference. For further information with
respect to us and the securities being offered hereby, reference is hereby made to the Registration Statement, including the exhibits
thereto.</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"><B>PART II</B></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: center"><B>INFORMATION REQUIRED IN THE REGISTRATION
STATEMENT</B></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: center; text-indent: 0"><FONT STYLE="color: black">&nbsp;</FONT><B>OTHER
EXPENSES OF ISSUANCE AND DISTRIBUTION</B></P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 86%; font-size: 10pt; text-align: left">Securities and Exchange Commission Registration Fee</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">1,182.59</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Transfer Agent and Miscellaneous Fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">500.00</TD><TD STYLE="font-size: 10pt; text-align: left">*</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Accounting fees and expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">2,500</TD><TD STYLE="font-size: 10pt; text-align: left">*</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Legal fees and expense</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">4,500</TD><TD STYLE="font-size: 10pt; text-align: left">*</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold">Total</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">8,682.59</TD><TD STYLE="font-size: 10pt; text-align: left">*</TD></TR>
</TABLE>

<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">* Estimate</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 amounts are estimates other than the
Commission&rsquo;s registration fee. We are paying all expenses of the offering listed above. No portion of these expenses will
be borne by the Selling Stockholders. The Selling Stockholders, however, will pay any other expenses incurred in selling their
common stock, including any brokerage commissions or costs of sale.</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: center"><B>INDEMNIFICATION OF DIRECTORS AND OFFICERS</B></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"><B>Articles of Incorporation and Bylaws</B></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; background-color: white">Under the provisions of the certificate
of incorporation and by-laws of the registrant, as amended, as of the date of this Registration Statement, each person who is or
was a director, officer or employee of registrant shall be indemnified by the registrant to the full extent permitted or authorized
by the Business Corporation Law of the State of New York, provided that no such indemnification shall be made if a judgment or
other final adjudication adverse to such person establishes that his or her acts were committed in bad faith or were the result
of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he or she personally gained
in fact a financial profit or other advantage to which he or she was not legally entitled, and provided further that no such indemnification
shall be required with respect to any settlement or other non-adjudicated disposition of any threatened or pending action or proceeding
unless the Corporation has given its prior consent to such settlement or other disposition.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">Under such law, to the extent that
such person is successful on the merits of defense of a suit or proceeding brought against such person by reason of the fact that
such person is a director or officer of the registrant, such person shall be indemnified against expenses (including attorneys&rsquo;
fees) reasonably incurred in connection with such action. If unsuccessful in defense of a third-party civil suit or a criminal
suit is settled, such a person shall be indemnified under such law against both (a) expenses (including attorneys&rsquo; fees)
and (b) judgments, fines and amounts paid in settlement if such person acted in good faith and in a manner such person reasonably
believed to be in, or not opposed to, the best interests of the registrant, and with respect to any criminal action, had no reasonable
cause to believe such person&rsquo;s conduct was unlawful. If unsuccessful in defense of a suit brought by or in the right of the
registrant, or if such suit is settled, such a person shall be indemnified under such law only against expenses (including attorney&rsquo;s
fees) incurred in the defense or settlement of such suit if such person acted in good faith and in a manner such person reasonably
believed to be in, or not opposed to, the best interests of the registrant.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&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="width: 20%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Exhibit Number</b></P></td>
    <TD STYLE="width: 80%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Exhibit</b></P></td></tr>
<tr style="vertical-align: top">
    <TD>4.1<font style="font-size: 10pt">*</font></td>
    <TD>Document Security Systems, Inc. 2013 Employee, Director and Consultant Equity Incentive Plan.</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify">5.1**</td>
    <TD STYLE="text-align: justify"><font style="color: black">Opinion of Sichenzia Ross Friedman Ference LLP.</font></td></tr>
<tr style="vertical-align: top">
    <TD>23.1**</td>
    <TD><font style="color: black">Consent of FREED MAXICK CPAs, P.C., Independent Registered Public Accounting Firm.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify"><font style="color: black">23.2**</font></td>
    <TD STYLE="text-align: justify"><font style="color: black">Consent of Sichenzia Ross Friedman Ference LLP (incorporated by reference to Exhibit&nbsp;5.1).</font></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"><I>*Previously included in the Registrant&rsquo;s Registration
Statement on Form S-4/A filed with the SEC on May 7, 2013.</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>**Filed herewith.</I></P>

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(A) The undersigned Registrant hereby undertakes:</P>

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

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="padding-right: 0.8pt">(1)</td>
    <td colspan="2" style="padding-right: 1.8pt; text-align: justify">To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to:&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 0.8pt">&nbsp;</td>
    <td colspan="2" style="padding-right: 1.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 0.8pt">&nbsp;</td>
    <td style="width: 5%; padding-right: 0.8pt">(i)</td>
    <td style="width: 92%; padding-right: 0.8pt; text-align: justify">To include any prospectus required by Section 10(a)(3) of the Securities Act;&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 0.8pt">&nbsp;</td>
    <td style="padding-right: 0.8pt">&nbsp;</td>
    <td style="padding-right: 0.8pt; text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 0.8pt">&nbsp;</td>
    <td style="padding-right: 0.8pt">(ii)</td>
    <td style="padding-right: 0.8pt; text-align: justify">Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the &ldquo;Calculation of Registration Fee&rdquo; table in the effective registration statement; and&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 0.8pt">&nbsp;</td>
    <td style="padding-right: 0.8pt">&nbsp;</td>
    <td style="padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 0.8pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 0.8pt; text-align: justify">(iii)</td>
    <td style="padding-right: 0.8pt; text-align: justify">Include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 0.8pt; text-align: justify">(2)</td>
    <td style="width: 97%; padding-right: 0.8pt; text-align: justify">That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 0.8pt; text-align: justify">&nbsp;</td>
    <td style="padding-right: 0.8pt; text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 0.8pt">(3)</td>
    <td style="padding-right: 0.8pt; text-align: justify">To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 0.8pt">&nbsp;</td>
    <td style="padding-right: 0.8pt; text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 0.8pt">(4)</td>
    <td style="padding-right: 0.8pt; text-align: justify">Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(B) The issuer is subject to Rule 430C
(ss. 230. 430C of this chapter): Each prospectus filed pursuant to Rule 424(b)(ss. 230. 424(b) of this chapter) as part of a registration
statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in
reliance on Rule 430A (ss. 230. 430A of this chapter), shall be deemed to be part of and included in the registration statement
as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus
that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior
to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of
the registration statement or made in any such document immediately prior to such date of first use</P>




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

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<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>SIGNATURES</B></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">Pursuant to the requirements of the Securities
Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, on August
28, 2013.</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <td colspan="3" style="padding-right: 2.8pt; text-align: justify"><b>DOCUMENT SECURITY SYSTEMS, INC.</b></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="width: 50%; padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="width: 3%; padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="width: 35%; padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="width: 12%; padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">By:</td>
    <TD STYLE="border-bottom: black 1pt solid; padding-right: 0.8pt; text-align: justify"><i>/s/ Jeffrey Ronaldi</i></td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">Name: Jeffrey Ronaldi</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 0.8pt">&nbsp;&#9;</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">Title: Chief Executive Officer</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Principal Executive Officer)</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <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">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">By:</td>
    <TD STYLE="border-bottom: black 1pt solid; padding-right: 0.8pt; text-align: justify"><i>/s/ Philip Jones</i></td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">Name: Philip Jones</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">Title: Chief Financial Officer</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Principal Financial Officer)</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Principal Accounting Officer)</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>PURSUANT TO THE REQUIREMENTS OF THE
SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY OR ON BEHALF OF THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED:</B></P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 30%; padding-right: 0.8pt; text-align: justify"><b>Signature</b></td>
    <TD STYLE="width: 5%; padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="width: 40%; padding-right: 0.8pt; text-align: justify"><b>Title</b></td>
    <TD STYLE="width: 5%; padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="width: 20%; padding-right: 0.8pt; text-align: justify"><b>Date</b></td></tr>
<tr style="vertical-align: top">
    <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">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-bottom: black 1pt solid; padding-right: 0.8pt; text-align: justify"><i>/s/ Jeffrey Ronaldi</i></td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">Chief Executive Officer, Principal Executive</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">August 28, 2013</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 0.8pt; text-align: justify">Jeffrey Ronaldi</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">Officer and Director</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <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">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-bottom: black 1pt solid; padding-right: 0.8pt; text-align: justify"><i>/s/ Peter Hardigan</i></td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">Chief Operating Officer and Director</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">August 28, 2013</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 0.8pt; text-align: justify">Peter Hardigan</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">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <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">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-bottom: black 1pt solid; padding-right: 0.8pt; text-align: justify"><i>/s/ Philip Jones</i></td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">Chief Financial Officer, Principal Financial</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">August 28, 2013</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 0.8pt; text-align: justify">Philip Jones</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">Officer and Principal Accounting Officer</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <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">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-bottom: black 1pt solid; padding-right: 0.8pt; text-align: justify"><i>/s/ Robert B. Bzdick</i></td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">President and Director</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt; text-align: justify">August 28, 2013</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 0.8pt; text-align: justify">Robert B. Bzdick</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">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <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">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-bottom: black 1pt solid; padding-right: 0.8pt"><i>/s/ Warren Hurwitz</i></td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">Director</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">August 28, 2013</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 0.8pt">Warren Hurwitz</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">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <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">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-bottom: black 1pt solid; padding-right: 0.8pt"><i>/s/ David Klein</i></td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">Director</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">August 28, 2013</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 0.8pt">David Klein</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">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <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">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-bottom: black 1pt solid; padding-right: 0.8pt"><i>/s/ Ira A. Greenstein</i></td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">Director</td>
    <TD STYLE="padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="padding-right: 0.8pt">August 28, 2013</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 0.8pt">Ira A. Greenstein</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">&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&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="width: 20%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Exhibit Number</b></P></td>
    <TD STYLE="width: 80%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Exhibit</b></P></td></tr>
<tr style="vertical-align: top">
    <TD>4.1*</td>
    <TD>Document Security Systems, Inc. 2013 Employee, Director and Consultant Equity Incentive Plan.</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify">5.1**</td>
    <TD STYLE="text-align: justify"><font style="color: black">Opinion of Sichenzia Ross Friedman Ference LLP.</font></td></tr>
<tr style="vertical-align: top">
    <TD>23.1**</td>
    <TD><font style="color: black">Consent of FREED MAXICK CPAs, P.C., Independent Registered Public Accounting Firm.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify"><font style="color: black">23.2**</font></td>
    <TD STYLE="text-align: justify"><font style="color: black">Consent of Sichenzia Ross Friedman Ference LLP (incorporated by reference to Exhibit&nbsp;5.1).</font></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"><I>*Previously included in the Registrant&rsquo;s Registration
Statement on Form S-4/A filed with the SEC on May 7, 2013.</I></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>** Filed herewith.</I></P>

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

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

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

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<TYPE>EX-5.1
<SEQUENCE>2
<FILENAME>v353866_ex5-1.htm
<DESCRIPTION>EXHIBIT 5.1
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>Exhibit 5.1</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"><B>SICHENZIA ROSS FRIEDMAN FERENCE LLP</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">61 Broadway, 32<FONT STYLE="font-size: 10pt">nd</FONT>
Floor</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">New York, N.Y. 10006</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Telephone: (212) 930-9700</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Facsimile: (212) 930-9725</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">August 28, 2013</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">Securities and Exchange Commission</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">450 Fifth Street, N.W.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Washington, DC 20549</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%">Re:</TD>
    <TD STYLE="width: 95%">Document Security Systems, Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><U>Form S-8 Registration Statement</U></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">Ladies and Gentlemen:</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-indent: 0.5in">We refer to the above-captioned registration
statement on Form S-8 (the &ldquo;Registration Statement&rdquo;) under the Securities Act of 1933, as amended (the &ldquo;Act&rdquo;),
being filed by Security Systems, Inc., a New York corporation (the &ldquo;Company&rdquo;), with the Securities and Exchange Commission.</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-indent: 0.5in">We have examined the originals, photocopies,
certified copies or other evidence of such records of the Company, certificates of officers of the Company and public officials,
and other documents as we have deemed relevant and necessary as a basis for the opinion hereinafter expressed. In such examination,
we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as certified copies or photocopies
and the authenticity of the originals of such latter documents.</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-indent: 0.5in">Based on our examination mentioned above,
we are of the opinion that the shares of common stock being issued pursuant to the Registration Statement, will be, when so issued,
duly authorized, legally and validly issued, fully paid and non-assessable.</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-indent: 0.5in">We hereby consent to the filing of this
opinion as Exhibit 5.1 to the Registration Statement. In giving the foregoing consent, we do not hereby admit that we are in the
category of persons whose consent is required under Section 7 of the Act, or the rules and regulations of the Securities and Exchange
Commission.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">/s/<FONT STYLE="font-size: 10pt"> </FONT>Sichenzia Ross Friedman
Ference LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Sichenzia Ross Friedman Ference LLP</P>

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<TYPE>EX-23.1
<SEQUENCE>3
<FILENAME>v353866_ex23-1.htm
<DESCRIPTION>EXHIBIT 23.1
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<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5in; text-align: right"><B>Exhibit 23.1</B></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: justify"><B>&nbsp;</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</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">We consent to the incorporation by reference
in this Registration Statement (No. 333-______) on Form S-8 of our report dated March 6, 2013, relating to our audits of the consolidated
financial statements of Document Security Systems, Inc. as of and for the years ended December 31, 2012 and 2011, which appears
in the Company&rsquo;s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 6, 2013.</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">We also consent to the reference to our
firm under the captions &quot;Experts&quot;.</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">/s/ FREED MAXICK CPAs, P.C.</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">Buffalo, New York</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">August 28, 2013</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="margin: 0"></P>

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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
