<SEC-DOCUMENT>0001144204-13-050726.txt : 20130913
<SEC-HEADER>0001144204-13-050726.hdr.sgml : 20130913
<ACCEPTANCE-DATETIME>20130913162415
ACCESSION NUMBER:		0001144204-13-050726
CONFORMED SUBMISSION TYPE:	8-K/A
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20130701
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20130913
DATE AS OF CHANGE:		20130913

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:		8-K/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-32146
		FILM NUMBER:		131096597

	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>8-K/A
<SEQUENCE>1
<FILENAME>v354950_8ka.htm
<DESCRIPTION>FORM 8-K/A
<TEXT>
<HTML>
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<P STYLE="margin: 0">&nbsp;</P>

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

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

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

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

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

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">FORM 8-K/A</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Amendment No. 1)</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">CURRENT 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">Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934</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">Date of report (Date of earliest event reported):
July 1, 2013</P>

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

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Document Security Systems, Inc.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Exact Name of Registrant as Specified in
Charter)</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%">
<TR>
    <TD STYLE="width: 34%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">New York</FONT></TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 30%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">001-32146</FONT></TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 30%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">16-1229730</FONT></TD></TR>
<TR>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(State or Other&nbsp;Jurisdiction</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(Commission File Number)&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(IRS Employer Identification No.) &nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">of Incorporation)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</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%">
<TR>
    <TD STYLE="width: 35%; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">First Federal Plaza, Suite 1525</FONT></TD>
    <TD STYLE="width: 30%">&nbsp;</TD>
    <TD STYLE="width: 35%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">28 E. Main Street</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">14614</FONT></TD></TR>
<TR>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Rochester, NY</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(Address of Principal Executive Offices)&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(Zip Code)</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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Registrant's telephone number, including
area code: (585) 325-3610</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">(Former name or former address, if changed
since last report)</P>

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Fax: (212) 930-9725</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">Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</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%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%"><FONT STYLE="font: 10pt Wingdings">o</FONT></TD>
    <TD STYLE="width: 94%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Wingdings">o</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Wingdings">o</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</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%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%"><FONT STYLE="font: 10pt Wingdings">o</FONT></TD>
    <TD STYLE="width: 94%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c)</FONT></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; 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"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>INTRODUCTORY NOTE</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: 0.25in">On July 1, 2013, DSSIP,
Inc. (&ldquo;Merger-Sub&rdquo;), a wholly-owned subsidiary of Document Security Systems, Inc. (the &ldquo;Company&rdquo; or &ldquo;DSS&rdquo;),
merged with and into Lexington Technology Group, Inc., n/k/a DSS Technology Management, Inc., a Delaware corporation (&ldquo;Lexington&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;Merger Agreement&rdquo;), by and among the Company, Lexington, Merger Sub and Hudson Bay Master Fund Ltd.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">We hereby amend Item
9.01 of our current report on Form 8-K filed on July 1, 2013 to include financial statements of the business acquired and pro forma
financial information in accordance with Items 9.01(a) and (b) within seventy one calendar days after the date on which the initial
report on Form 8-K was required to be filed. Except as set forth in Item 9.01 below, no other changes are being made to our current
report on Form 8-K filed on&nbsp;July 1, 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"><B>Item 9.01 Financial Statements and Exhibits</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>&nbsp;</B></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"></TD><TD STYLE="width: 0.5in">(a)</TD><TD>Financial Statements of Businesses Acquired</TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">DSS Technology Management, Inc.
condensed consolidated interim financial statements as of June 30, 2013 and December 31, 2012 (audited) and for the six
months ended June 30, 2013 and for the period from May 10, 2012 (inception) through June 30, 2012, and for the period from
May 10, 2012 (inception) through June 30, 2013, and related notes thereto.</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; text-indent: 0.5in"></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"></TD><TD STYLE="width: 0.5in">(b)</TD><TD>Pro Forma Financial Information as of and for the six months ended June 30, 2013 and for the year ended December 31, 2012
                                                           reflecting the Merger.</TD></TR></TABLE>



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

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<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>(d)</B></TD><TD STYLE="text-align: justify"><B>Exhibits</B></TD>
</TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">                                                                                                                                          <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Exhibit </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Number&#9;</B></P>

</TD>
    <TD>&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><B>Description</B></TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">99.1</TD>
    <TD STYLE="width: 0.2in">&nbsp;</TD><TD><FONT STYLE="color: black">DSS Technology Management, Inc. condensed consolidated interim financial statements as of
                                        June                                         30, 2013 and December 31, 2012 (audited) and for the six months ended June 30,
                                        2013 and for the period from May 10, 2012                                         (inception) through June 30, 2012, and for
                                        the period from May 10, 2012 (inception) through June 30, 2013, and related notes
                                        thereto.</FONT></TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in">99.2</TD>
    <TD STYLE="width: 0.2in">&nbsp;</TD><TD STYLE="text-align: justify">Summary of unaudited pro forma combined financial statements of Document Security Systems, Inc.
and Lexington Technology Group, Inc. n/k/a DSS Technology Management, Inc.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -1in">&nbsp;&nbsp;</P>

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<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>SIGNATURES</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-indent: 0.5in">Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dated: September 13, 2013&#9;</P>

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

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 53%">&nbsp;</TD>
    <TD STYLE="width: 35%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>DOCUMENT SECURITY SYSTEMS, INC. </B></FONT></TD>
    <TD STYLE="width: 12%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">/s/ Jeffrey Ronaldi</P></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">By: Jeffrey Ronaldi</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Title: Chief Executive Officer</P></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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

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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>v354950_ex99-1.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>


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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center"><B>&nbsp;</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>DSS TECHNOLOGY MANAGEMENT, INC. AND SUBSIDIARY</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>UNAUDITED CONDENSED CONSOLIDATED
INTERIM FINANCIAL STATEMENTS</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>AS
OF JUNE 30, 2013 AND DECEMBER 31, 2012 AND</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>FOR THE SIX MONTHS ENDED JUNE 30, 2013
AND FOR THE PERIOD FROM MAY 10, 2012 (INCEPTION) THROUGH JUNE 30, 2012 AND</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>FOR THE PERIOD FROM
MAY 10, 2012 (INCEPTION) THROUGH JUNE 30, 2013</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>DSS TECHNOLOGY MANAGEMENT, INC. AND SUBSIDIARY</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Index to the Condensed Consolidated
Interim Financial Statements</B></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>AS
OF JUNE 30, 2013 AND DECEMBER 31, 2012 AND</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>FOR THE SIX MONTHS ENDED JUNE 30, 2013
AND FOR THE PERIOD FROM MAY 10, 2012 (INCEPTION) THROUGH JUNE 30, 2012 AND</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>FOR THE PERIOD FROM
MAY 10, 2012 (INCEPTION) THROUGH JUNE 30, 2013</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&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: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right; border-bottom: Black 1pt solid">Page</TD><TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Condensed Consolidated Interim Financial Statements</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="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">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 86%; font-size: 10pt; text-align: left">Condensed Consolidated Interim Balance Sheets</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">3</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">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Condensed Consolidated Interim Statements of Operations</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4</TD><TD STYLE="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">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Condensed Consolidated Interim Statements of Cash Flows</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5</TD><TD STYLE="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">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Notes to the Condensed Consolidated Interim Financial Statements</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6-16</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<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 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9.9pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>DSS TECHNOLOGY MANAGEMENT, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>(A Development Stage
Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>CONDENSED CONSOLIDATED
BALANCE SHEETS </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>($ IN THOUSANDS)</B></P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30, 2013</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, 2012</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold">ASSETS</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">(unaudited)</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left; text-indent: 9.05pt; padding-left: 5.4pt">Current Assets:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 68%; font-size: 10pt; text-align: left; text-indent: 0.375in">Cash and cash equivalents</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">6,559</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">10,031</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; color: black; text-align: left; padding-bottom: 1pt; padding-left: 0.375in">Investments at fair value</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">503</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">423</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 1pt; text-indent: 9.05pt; padding-left: 5.4pt">Total current assets</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">7,062</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">10,454</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.375in">Deposits and non-current assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; padding-left: 0.375in">Investments</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">250</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1pt; padding-left: 0.375in"><P STYLE="margin-top: 0; margin-bottom: 0">Intangible assets, net of accumulated amortization of $424 and $207</P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0">respectively</P></TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,751</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,968</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left; padding-bottom: 1pt; text-indent: 9.05pt; padding-left: 5.4pt">Total non-current assets</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">2,010</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">1,969</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">9,072</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">12,423</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left; padding-left: 5.4pt">LIABILITIES AND STOCKHOLDERS' EQUITY</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; text-indent: 9.05pt; padding-left: 5.4pt">Current Liabilities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; text-align: left; padding-left: 0.375in">Accounts payable and accrued expenses</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">301</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">213</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1pt; padding-left: 0.375in"><P STYLE="margin-top: 0; margin-bottom: 0">Senior notes payable - related parties, net of deferred debt discount of $0</P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0">and $848, respectively</P></TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,590</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">301</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">2,803</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left; text-indent: 9.05pt; padding-left: 5.4pt">Stockholders' Equity:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Series A preferred stock - 27,225,000 shares authorized; par value <BR>$0.00001 per share; 17,913,727 and 17,913,727 shares issued and <BR>outstanding, respectively</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">2</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">2</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Common stock - 100,000,000 shares authorized; par value $0.00001 per <BR>share; 18,150,543 and 13,864,825 shares issued and outstanding, <BR>respectively</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; text-align: left; padding-left: 0.375in">Additional paid-in capital</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">20,561</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">18,623</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Deficit accumulated during the development stage</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(11,793</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(9,006</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">8,771</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">9,620</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Total liabilities and stockholders' equity</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: right">9,072</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: right">12,423</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
</TABLE>

<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"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral part
of the condensed consolidated financial statements.</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">&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 0pt 9.9pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>DSS
TECHNOLOGY MANAGEMENT, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>(A Development Stage
Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>($ IN THOUSANDS)</B></P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Six Months Ended</P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0">June 30, 2013</P></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Period from May 10, 2012 (inception) through</P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0">June 30, 2012</P></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0; margin-bottom: 0">Period from May 10, 2012 (inception) through</P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0">June 30, 2013</P></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 52%; font-size: 10pt; font-weight: bold; padding-bottom: 1pt; padding-left: 5.4pt">Revenue</TD><TD STYLE="width: 2%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">28</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">28</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 5.4pt">Operating expenses:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; text-align: left; text-indent: 0.25in; padding-left: 5.4pt">Officer's compensation</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">799</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">8</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">1,550</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0.25in; padding-left: 5.4pt">Legal and professional fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">723</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">165</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,374</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; text-align: left; text-indent: 0.25in; padding-left: 5.4pt">General and administrative</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">315</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">476</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt; text-indent: 0.25in; padding-left: 5.4pt">Amortization</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">217</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">424</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; text-align: left; padding-bottom: 1pt; text-indent: 0.5in; padding-left: 5.4pt">Loss from operations</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">2,026</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">173</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">4,796</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left; padding-left: 5.4pt">Other (income) expenses:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0.25in; padding-left: 5.4pt">Interest income</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(7</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(7</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; text-align: left; text-indent: 0.25in; padding-left: 5.4pt">Interest and financing expenses</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">848</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">30</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">1,455</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0.25in; padding-left: 5.4pt">Unrealized (gain) loss on investment</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(80</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">220</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; text-align: left; padding-bottom: 1pt; text-indent: 0.25in; padding-left: 5.4pt">Change in fair value of warrant &nbsp;&nbsp;&nbsp;liability</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">9</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">5,329</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 0.5in; padding-left: 5.4pt">Total other expenses</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">761</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">39</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">6,997</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Net loss</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">(2,787</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">(212</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">(11,793</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<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">The accompanying notes are an integral part
of the condensed consolidated financial statements.</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></B></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>DSS TECHNOLOGY MANAGEMENT, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>(A Development Stage
Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>($ IN THOUSANDS)</B></P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Six Months Ended June 30, 2013</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Period from May 10, 2012 (inception) through June 30, 2012</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Period from May 10, 2012 (inception) through June 30, 2013</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 5.4pt">Cash flow used in operating activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 52%; font-size: 10pt; color: black; font-weight: bold; text-align: left; text-indent: 8.05pt; padding-left: 5.4pt">Net loss</TD><TD STYLE="width: 2%; font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; color: black; text-align: right">(2,787</TD><TD STYLE="width: 1%; font-size: 10pt; color: black; text-align: left">)</TD><TD STYLE="width: 2%; font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; color: black; text-align: right">(212</TD><TD STYLE="width: 1%; font-size: 10pt; color: black; text-align: left">)</TD><TD STYLE="width: 2%; font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; color: black; text-align: right">(11,793</TD><TD STYLE="width: 1%; font-size: 10pt; color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Stock based compensation</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">445</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">650</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Unrealized (gain) loss on investments</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">(80</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">220</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Amortization - intangibles</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">217</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">424</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Accretion of note discount</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">848</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">30</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">1,442</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Change in fair value of warrant liability</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,329</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in"><B>Changes in operating assets
    and liabilities</B></TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Increase in other assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(8</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(9</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: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Increase in accounts payable and accrued expenses</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">88</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">173</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">301</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Net cash used in operating activities</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1,277</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(3,436</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 5.4pt">Cash flow used in investing activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Investments</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">(250</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">(973</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Acquisition of intangible assets</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(2,175</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Net cash used in investing activities</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">(250</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">(3,148</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left; padding-left: 5.4pt">Cash flow used in&nbsp;&nbsp;by financing activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Proceeds from issuance of senior notes and common shares to <BR>related parties</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,627</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,377</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Proceeds from exercise of warrants</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">5,625</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Net proceeds from issuance of shares of common stock</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,086</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Repayment of notes payable</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">(3,438</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">(3,438</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Net proceeds from issuance of shares of common stock in <BR>connection with a rights offering</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,493</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,493</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Net cash (used in) provided by financing activities</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">(1,945</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">3,627</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">13,143</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left; padding-left: 5.4pt">Net (decrease) increase in cash and cash equivalent</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">(3,472</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">3,627</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">6,559</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Cash and cash equivalent at the beginning of the period</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">10,031</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Cash and cash equivalent at the end of the period</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: right">6,559</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: right">3,627</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: right">6,559</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left; padding-left: 5.4pt">Supplemental Disclosure of Cash Flow Information:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Cash paid for income taxes</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Cash paid for interest</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: right">(6</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: right">(6</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 5.4pt">Non-Cash investing and financing activities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Liability - Patents</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: right">45</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: right">45</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Conversion of senior notes into shares of common stock</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">937</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 0.375in">Reclassification of warrant liability upon exercise of warrants</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: right">5,625</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">The accompanying notes are an integral part
of the condensed consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>DSS TECHNOLOGY MANAGEMENT, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>(A Development Stage
Company)</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>Notes to Consolidated
Financial Statements</B></P>



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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>NOTE 1&nbsp;&mdash;&nbsp;ORGANIZATION AND NATURE
OF BUSINESS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>Organization &amp; Business Activities</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">DSS Technology
Management, Inc. (&ldquo;LTG&rdquo; or &ldquo;the Company&rdquo; or the &ldquo;Parent&rdquo;), was incorporated as a Delaware
corporation on May 10, 2012 under the name Snip Inc. On September 10, 2012, Snip Inc. changed its name to Lexington
Technology Group, Inc. On July 1, 2013, LTG changed its name to DSS Technology Management, Inc. LTG is a holding company that
owns 100% of the membership interests of Bascom Research, LLC (&ldquo;Bascom&rdquo;). Bascom was incorporated in Virginia on
June 6, 2012 under the name of Bascom Linking Intellectual Property, LLC, for the purpose of acquiring and/or
developing patented technologies and intellectual property. On August 29, 2012, Bascom Linking Intellectual Property, LLC
changed its name to Bascom Research, LLC. LTG and its wholly-owned subsidiary Bascom are herein collectively referred to as
the &ldquo;Company&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">LTG is a development stage
company that has minimal revenues to date. LTG&rsquo;s strategic objective is to maximize, for inventors and investors, the economic
benefits of intellectual property assets. LTG&rsquo;s business model is to leverage the extensive background and expertise of its
management and advisors to acquire or internally develop patented technology or intellectual property assets (or interests therein),
and to then monetize these assets for the benefit of its stockholders and the developers of the acquired technology through a variety
of value-enhancing initiatives, including, but not limited to, investment in the development and commercialization of patented
technologies, licensing, strategic partnerships and commercial litigation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="color: black"><I>Completion
of Merger with LTG</I></FONT><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">On July 1, 2013 (the &ldquo;Closing
Date&rdquo;), DSSIP, Inc., a Delaware corporation (&ldquo;Merger Sub&rdquo;) and a wholly-owned subsidiary of Documents Security
Systems, Inc. (&ldquo;DSS&rdquo;) merged with and into LTG, 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;Merger Agreement&rdquo;), by and among DSS, LTG, Merger
Sub and Hudson Bay Master Fund Ltd. (&ldquo;Hudson Bay&rdquo;), as representative of LTG&rsquo;s stockholders (the &ldquo;Merger&rdquo;).
Effective on July 1, 2013, as a result of the Merger, LTG became a wholly-owned subsidiary of DSS. In connection with the Merger,
DSS issued on the Closing Date, its securities to LTG&rsquo;s stockholders in exchange for the capital stock owned by LTG&rsquo;s
stockholders, as follows (the &ldquo;Merger Consideration&rdquo;): (i) an aggregate of 16,558,387 shares of DSS&rsquo;s common
stock, par value $0.02 per share (the &ldquo;Common Stock&rdquo;)&nbsp;; (ii) 7,100,000 shares of DSS&rsquo;s Common Stock to be
held in escrow pursuant to an escrow agreement, dated July 1, 2013, entered into by and among DSS, Hudson Bay and American Stock
Transfer &amp; Trust Company, LLC, as escrow agent (the &ldquo;Escrow Agreement&rdquo;); (iii) warrants to purchase up to an aggregate
of 4,859,894 shares of DSS&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 DSS Common Stock, at an exercise price of $0.02 per share and expiring
on July 1, 2023 (the &ldquo;$.02 Warrants&rdquo;), to LTG&rsquo;s preferred stockholders that would beneficially own more than
9.99% of the shares of DSS&rsquo;s Common Stock as a result of the Merger (the &ldquo;Beneficial Ownership Condition&rdquo;). In
addition, DSS assumed options to purchase an aggregate of 2,000,000 shares of DSS&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 LTG&rsquo;s common stock.
In addition, DSS 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 are currently being 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 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">As a result of the consummation
of the Merger,&nbsp;as of the Closing Date,&nbsp;the former stockholders of LTG own approximately 51% of the outstanding common
stock of the combined company and the stockholders of DSS own approximately 49% of the outstanding common stock of the combined
company.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">Pursuant to the Escrow Agreement,
the shares of DSS&rsquo;s Common Stock deposited in the escrow account will be released to the holders of the LTG 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 DSS 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 DSS&rsquo;s Common Stock held in escrow shall be cancelled and returned to the treasury of DSS.
LTG stockholders will have voting rights with respect to DSS&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 DSS 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 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt"></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>DSS TECHNOLOGY MANAGEMENT, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>(A Development Stage
Company)</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>Notes to Consolidated
Financial Statements</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">If after one year, the shares
held in escrow are cancelled because the conditions discussed above were not met, the former stockholders of LTG are expected to
own approximately 45% of the outstanding common stock of the combined company and the stockholders of DSS are expected to own approximately
55% of the outstanding common stock of the combined company (without taking into account any shares of DSS&rsquo;s Common Stock
held by LTG&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 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">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, LTG, 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify"><I>Six Months Ended 2013 Activity</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 6.6pt; text-align: justify">In February 2013, the Company
repaid the outstanding balance of senior notes and accrued interest, in accordance with their original terms, totaling $3.4 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 6.6pt; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 6.6pt; text-align: justify">In March 2013, LTG made a
strategic investment in VirtualAgility, a developer of programming platforms that facilitate the creation of business applications
without programming or coding. The investment by LTG involves a non-recourse note against the proceeds derived from the patent
portfolio owned by VirtualAgility, plus an equity stake of 1/8 of 7% of the outstanding common stock of VirtualAgility, for $250,000
cash, plus options to make seven additional quarterly investments of $250,000 apiece, for a total investment of up to $2 million
cash. If LTG exercised all of such options, it would have invested an aggregate of $2 million and, based on the current capitalization
of VirtualAgility, would own approximately 7% of the outstanding common stock of VirtualAgility.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 6.6pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>Change in Year End</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">On December 31, 2012, LTG&rsquo;s
Board of Directors approved a change in the Company&rsquo;s fiscal reporting year to a December 31st calendar year end from a June
30th fiscal year end. Accordingly, financial information presented in this report is as of and for the six months ended June 30,
2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>Basis of Presentation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">The accompanying unaudited
condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements for
the year ended December 31, 2012. The year-end balance sheet data was derived from audited consolidated financial statements, but
does not include all disclosures required by accounting principles generally accepted in the United States of America (&ldquo;GAAP&rdquo;).
All normal recurring adjustments which are necessary for the fair presentation of the results for the interim periods are reflected
herein. Operating results for the six month periods ended June 30, 2013 and the period from May 10, 2012 (inception) though June
30, 2012 are not necessarily indicative of results to be expected for a full year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt"></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>DSS TECHNOLOGY MANAGEMENT, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>(A Development Stage
Company)</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>Notes to Consolidated
Financial Statements</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>NOTE 2&nbsp;&mdash;&nbsp;LIQUIDITY
AND MANAGEMENT&rsquo;S BUSINESS PLANS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">The business will require
significant amounts of capital to sustain operations and make the investments it needs to execute its longer term business plan.
The Company has cash of approximately $6.6 million and net working capital of approximately $6.8 million at June 30, 2013. The
Company&rsquo;s cash and working capital amounts were derived from the proceeds of an initial financing transaction in which it
raised aggregate proceeds of approximately $3.6 million through the issuance of senior notes, common stock and common stock purchase
warrants to founding stockholders, proceeds of approximately $5.6 million from the exercise of warrants by the investors and net
proceeds of approximately $5.1 million from the private placement of shares of Company&rsquo;s common stock. The Company&rsquo;s
net losses for the period of May 10, 2012 (inception) through June 30, 2012, for the six months ended June 30, 2013 and for the
period of May 10, 2012 (inception) through June 30, 2013 were approximately $0.2 million, $2.8 million and $11.8 million, respectively,
and the deficit accumulated by the Company since inception amounts to approximately $11.8 million. During the six month period
ended June 30, 2013, the Company used approximately $3.4 million of its available funds to repay the outstanding balance of its
senior notes and accrued interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">In order to monetize the
patent assets LTG acquired from Thomas Bascom, LTG has commenced legal proceedings against five companies, including Facebook,
Inc. and LinkedIn Corporation, pursuant to which LTG alleges that such companies infringe on one or more of LTG&rsquo;s patents.&nbsp;
LTG&rsquo;s viability is dependent on the outcome of this litigation, and there is a risk that LTG may be unable to achieve the
results it desires from such litigation, which failure would significantly harm LTG&rsquo;s business. In addition, the defendants
in this litigation are much larger than LTG and have substantially more resources than LTG does, which could make LTG&rsquo;s litigation
efforts more difficult.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">LTG 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, LTG
may be forced to litigate against others to enforce or defend LTG&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 LTG
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 material adverse effect on the value of the patents and preclude
LTG&rsquo;s ability to derive licensing revenue from the patents, or any revenue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">Therefore, a negative outcome
of any such litigation, or one or more claims contained within any such Litigation, could materially and adversely impact LTG&rsquo;s
business. Additionally, LTG anticipates that its legal fees and other expenses will be material and will negatively impact LTG&rsquo;s
financial condition and results of operations and may result in its inability to continue its business. LTG 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 LTG&rsquo;s patent rights may exceed its recoveries from such enforcement activities. In addition,
the primary law firm being utilized by LTG 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 LTG in connection with its efforts to acquire and
monetize this portfolio of patents. Accordingly, in order for LTG 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. LTG&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 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">LTG will receive between
60 to 65% of the total consideration (including cash payments, equity, assets, or any other form of consideration) received from
any license, settlement, judgment or other award relating to the Bascom Research patents. For all consideration earned outside
of litigation, LTG will receive 65% of the total consideration with the other 35% paid to three other parties (the &ldquo;Monetization
Partners&rdquo;): (i) Kramer Levin Naftalis &amp; Frankel, LLP (&ldquo;Kramer Levin&rdquo;), which firm is national counsel for
Bascom Research; (ii) IP Navigation, LLC (&ldquo;IP Navigation&rdquo;), which is the monetization advisor for Bascom Research;
and (iii) Thomas Bascom, the inventor of the Bascom Research patents. For all consideration earned within litigation but prior
to the empanelment of a Jury, LTG will earn 60% of the total consideration with the other 40% paid to the Monetization Partners.
For all consideration earned within litigation and after the empanelment of a jury, LTG will earn 65% of the total consideration
with the other 35% paid to the Monetization Partners. Of such amounts to be paid to the Monetization Partners, LTG will pay 10%
of the total consideration to Thomas Bascom pursuant to the Patent Purchase Agreement between LTG and Mr. Bascom and the remainder
of such consideration shall be apportioned among Kramer Levin and IP Navigation, the service providers to LTG. LTG is not obligated
to use IP Navigation with respect to any patent portfolio other than the Bascom Portfolio and LTG is free to not use IP Navigation&rsquo;s
services in connection with the Bascom Portfolio, provided, however, that IP Navigation will remain entitled to its share of the
total consideration generated by the Bascom Portfolio unless IP Navigation materially breaches its agreement with LTG.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt"></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>DSS TECHNOLOGY MANAGEMENT, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>(A Development Stage
Company)</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>Notes to Consolidated
Financial Statements</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>NOTE 3&nbsp;&mdash;&nbsp;SUMMARY
OF SIGNIFCANT ACCOUNTING POLICIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>Principles of Consolidation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">The consolidated financial
statements include the accounts of LTG and its wholly-owned subsidiary. All intercompany balances and transactions have been eliminated
in consolidation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>Cash and Cash Equivalents</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">For purposes of the statement
of cash flows, the Company considers financial instruments with maturities of less than three months when purchased to be cash
equivalents. There are no cash equivalents as of the balance sheet date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>Use of Estimates</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">The preparation of financial
statements in conformity with accounting principles generally accepted in the United States of America (&ldquo;US GAAP&rdquo;)
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates. Key accounting estimates include the
assumptions used to calculate the fair values of securities issued in the financing transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>Development Stage Reporting</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">The Company is a development
stage enterprise as defined in Accounting Standards Codification (&ldquo;ASC&rdquo;) 915 &ldquo;Development Stage Entities&rdquo;
(&ldquo;ASC 915&rdquo;). The Company is currently attempting to raise additional funds it would use to purchase intellectual properties
and implement its operating plan. Accordingly, the Company has not yet commenced its fully planned operations. The Company is subject
to all of the risks and uncertainties that are typical in the life-cycle stage of its business. There is no assurance that the
Company will be successful in its efforts to commence its fully planned operations or that the commencement will actually result
in the realization of its business objectives.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>Intangible Assets</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">The Company accounts for
purchases of intangible assets in accordance with the provisions of ASC 350 &ldquo;Intangibles&rdquo; (&ldquo;ASC 350&rdquo;) and
ASC 360 &ldquo;Fixed Assets&rdquo; (&ldquo;ASC 360&rdquo;). The useful lives of intangible assets are determined at the date of
purchase and are periodically evaluated for reasonableness. The assets will be tested for impairment at least annually, if determined
to have an indefinite life, or whenever events or changes in circumstances indicate that the carrying amount may no longer be recoverable.
Costs to investigate potential purchases of intangible assets will be treated as expense when incurred, until or unless the purchase
of the respective assets will be deemed viable, after which time the costs to further investigate and purchase the assets will
be capitalized. Subsequent to purchase, legal and associated costs incurred in prosecuting alleged infringements of the patents
will be recognized as expense when incurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt"></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>DSS TECHNOLOGY MANAGEMENT, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>(A Development Stage
Company)</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>Notes to Consolidated
Financial Statements</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>Concentrations of Risk</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">Financial instruments that
potentially subject the Company to significant concentrations of credit risk consist of cash. At times, the Company&rsquo;s cash
balances may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation (&ldquo;FDIC&rdquo;) insurance
limits. As of June 30, 2013, the Company had cash and cash equivalent balances of approximately $6.3 million in excess of the federally
insured limit of $250,000. All of the Company's cash in banks at June 30, 2013 was deposited in non-interest bearing checking accounts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>Common Stock Purchase Warrants</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">The Company accounts for
the issuance of common stock purchase warrants issued in connection with capital financing transactions in accordance with the
provisions of ASC 815 &ldquo;Derivatives and Hedging&rdquo; (&ldquo;ASC 815&rdquo;). The Company classifies as equity any contracts
that (i) require physical settlement or net-share settlement, or (ii) gives the Company a choice of net-cash settlement or settlement
in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts
that (i) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event
is outside the control of the Company), or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares
(physical settlement or net-share settlement). The Company also classifies as liabilities, any contracts that contain variable
settlement provisions that cannot be measured as explicit or implicit inputs in a standard option pricing model.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>Fair Value Measurement</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">The Company adopted Financial
Accounting Standards Board (&ldquo;FASB&rdquo;) ASC 820, &ldquo;Fair Value Measurements and Disclosures&rdquo; (&ldquo;ASC 820&rdquo;),
for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value
to be applied to existing US GAAP that requires the use of fair value measurements which establishes a framework for measuring
fair value and expands disclosure about such fair value measurements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">ASC 820 defines fair value
as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs
and minimize the use of unobservable inputs. These inputs are prioritized below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify; text-indent: 16.55pt"><I>Level
1</I>:&nbsp;Observable inputs such as quoted market prices in active markets for identical assets or liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify; text-indent: 16.55pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify; text-indent: 16.55pt"><I>Level
2</I>:&nbsp;Observable market based inputs or unobservable inputs that are corroborated by market data.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify; text-indent: 16.55pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify; text-indent: 16.55pt"><I>Level
3</I>:&nbsp;Unobservable inputs for which there is little or no market data, which require the use of the reporting entity&rsquo;s
own assumptions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify; text-indent: 16.55pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">The carrying amounts reported
in the balance sheet for cash, prepaid expenses, accounts payable, and accrued expenses approximate their estimated fair value
based on the short-term maturity of these instruments. The carrying amount of the notes payable at June 30, 2013, approximate their
respective fair value based on the Company&rsquo;s incremental borrowing rate. As described in Note 5, the Company measured the
fair value of the warrant liability using the Binomial Lattice option pricing model, which requires the use of significant assumptions.
Accordingly, the warrant liability is classified in level 3 of the valuation hierarchy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">In addition, FASB ASC 825-10-25
&ldquo;Fair Value Option&rdquo; was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value measurements
in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt"></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>DSS TECHNOLOGY MANAGEMENT, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>(A Development Stage
Company)</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>Notes to Consolidated
Financial Statements</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">The following table provides
the assets and liabilities at fair value measured as of June 30, 2013 and December 31, 2012 (in thousands):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&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">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD COLSPAN="16" STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">Fair value measured at June 30, 2013</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total carrying value at June 30, 2013</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Quoted prices in active markets (Level 1)</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Significant other observable inputs (Level 2)</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Significant unobservable inputs (Level 3)</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 36%; font-size: 10pt; color: black; text-indent: 8pt; padding-left: 5.4pt">Cash</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">6,559</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; color: black; text-align: right">6,559</TD><TD STYLE="width: 1%; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; color: black; text-align: right">&mdash;</TD><TD STYLE="width: 1%; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; color: black; text-align: right">&mdash;</TD><TD STYLE="width: 1%; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; text-align: left; padding-left: 5.4pt">Investment in Restricted common stk.</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">503</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">503</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">&mdash;</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">&mdash;</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; text-align: left; padding-left: 5.4pt">Investments in Private entity</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">250</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">&mdash;</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">250</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt; color: black"><B>Fair value measured at December 31, 2012</B></FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt; color: black"><B>Total carrying value at December 31, 2012</B></FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt; color: black"><B>Quoted prices in active markets (Level 1)</B></FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom"><P STYLE="margin-top: 0; margin-bottom: 0"></P>
                                                                                                                                                                                                                                              <P STYLE="margin-top: 0; margin-bottom: 0">Significant other observable inputs (Level 2)</P></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt; color: black"><B>Significant unobservable inputs (Level 3)</B></FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; padding-left: 5.4pt">Cash</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">10,031</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">10,031</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">&mdash;</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">&mdash;</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; text-align: left; padding-left: 5.4pt">Investment in Restricted common stk.</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">423</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">423</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The table below provides a reconciliation of the beginning and
ending balances for the liabilities measured using fair value determined with significant unobservable inputs (Level 3).&nbsp;&nbsp;</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; padding-left: 5.4pt">Balance &ndash; May 10, 2012 (inception)</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 86%; font-size: 10pt; color: black; text-align: left; padding-left: 5.4pt">Warrant liability recognized on June 12, 2012</TD><TD STYLE="width: 2%; font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font-size: 10pt; color: black; text-align: right">243</TD><TD STYLE="width: 1%; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Change in fair value of warrant liability on June 30, 2012</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">9</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt; padding-left: 5.4pt">Balance &ndash; June 30, 2012</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">252</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; text-align: left; padding-left: 5.4pt">Warrant liability recognized on July 26, 2012</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">53</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Change in fair value of warrant liability on August 9, 2012</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">5,320</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt; padding-left: 5.4pt">Reclassification of warrant liability on August 9, 2012</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">(5,625</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; padding-bottom: 2.5pt; padding-left: 5.4pt">Balance &ndash; December 31, 2012</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0"><B>Income Taxes</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">Income taxes are accounted
for under the asset and liability method in accordance with ASC 740, Income Taxes (&ldquo;ASC 740&rdquo;). Deferred tax assets
and liabilities are recognized for the future tax consequences attributable to differences between the financial carrying amounts
of existing assets and liabilities and their respective tax bases as well as operating loss and tax credit carry forwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the periods in which those
temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation
allowance to the extent that the recoverability of the asset is unlikely to be recognized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">The Company accounts for
uncertain tax positions in accordance with ASC 740, which prescribes a recognition threshold and measurement process for financial
statement recognition and measurement of a tax position taken or expected to be taken in a return. Management has evaluated and
concluded that there were no material uncertain tax positions requiring recognition in the Company&rsquo;s financial statements
as of June 30, 2013 and December 31, 2012. The Company does not expect any significant changes in the unrecognized tax benefits
within twelve months of the reporting date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">Interest costs and penalties
related to income taxes are classified as interest expense and selling, general and administrative costs, respectively, in the
Company's consolidated financial statements. For the period from May 10, 2012 (inception) to June 30, 2013, the Company did not
recognize any interest or penalties related to income taxes. The Company will file income tax returns in the U.S. federal jurisdiction
and states in which it does business. These tax returns will be subject to examination by tax authorities for three years from
the date the returns are filed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt"></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>DSS TECHNOLOGY MANAGEMENT, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>(A Development Stage
Company)</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>Notes to Consolidated
Financial Statements</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>Stock-Based Compensation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">The Company measures its
compensation cost for all stock-based awards at fair value on the date of grant, taking into account any post vesting selling restrictions,
and recognizes the compensation expense over the requisite service period pursuant to the provisions of ASC Topic 718, Compensation&nbsp;&mdash;&nbsp;Stock
Compensation. Expenses associated with such grants are generally recognized on a straight-line basis over the requisite service
period, net of estimated forfeitures. Deferred stock based compensation costs with respect to shares of restricted stock and stock
options granted are presented as part of additional paid in capital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>Recently Issued Accounting
Pronouncements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">Management does not believe
that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a significant effect to the accompanying
consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>Subsequent Events</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">Management has evaluated
subsequent events to determine if events or transactions occurring through the date these consolidated financial statements were
issued, require potential adjustment to or disclosure in the consolidated financial statements and has concluded that no subsequent
events have occurred that would require recognition in the consolidated financial statements or disclosure in the notes to the
consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0"><B>NOTE 4 &ndash; INTANGIBLE ASSETS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0">Intangible assets consisted of the following (in
thousands):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 75%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 5.4pt">Intangible Assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right"><FONT STYLE="color: black">&nbsp;June 30, 2013 </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right"><FONT STYLE="color: black">December 31, 2012</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 56%; font-size: 10pt; padding-left: 10pt">Patents</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; font-size: 10pt; text-align: right">2,175</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; font-size: 10pt; text-align: right">2,175</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; color: black; text-align: left; padding-bottom: 1pt; padding-left: 10pt">Accumulated amortization</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(424</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(207</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: right">1,751</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; text-align: right">1,968</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify">Amortization expense for the
six months ended June 30, 2013, June 30, 2012 and for the period of May 10, 2012 (inception) through June 30, 2013 was approximately
$0.2 million, $0 and $0.4 million, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt"></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>DSS TECHNOLOGY MANAGEMENT, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>(A Development Stage
Company)</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>Notes to Consolidated
Financial Statements</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>NOTE 5&nbsp;&mdash;&nbsp;DEBT
REPAYMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><B>Note Debt Discount and Interest</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">During June 2012 and July
2012, the Company received $4,375,000 in Senior Notes (&ldquo;Notes&rdquo;). In September 2012, the Company converted $937,188
of the Notes into 625,136 shares of common stock at $1.50 per share. The contractual interest expense on the remaining balance
of the Notes was immaterial for the period of May 10, 2012 (inception) through June 30, 2013. Accretion recorded as a component
of interest expense amounted to approximately $1.4 million for the period of May 10, 2012 (inception) through June 30, 2013 and
approximately $0.6 million for the year ended December 31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">In February 2013, the Company
repaid the outstanding balance of Notes, in accordance with their original terms, of $3,431,000 and accrued interest of $6,153
for an aggregate of approximately $3,438,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0; text-align: justify"><B>NOTE 6&nbsp;&mdash;&nbsp;COMMON
STOCK</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0; text-align: justify">&nbsp;<I>&nbsp;</I></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">The authorized common stock
of the Company consists of 100,000,000 shares of common stock with par value of $0.0001.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">The voting, dividend and
liquidation rights of the holders of the common stock are subject to and qualified by the rights of the holders of the preferred
stock of any series. The holders of common stock are entitled to one vote for each share held at all the meetings of stockholders.
Upon the dissolution or liquidation of the Company, holders of common stock will be entitled to receive ratably all the assets
of the Company available for distribution, subject to any preferential rights of any then outstanding preferred stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">On August 9, 2012 all 7,500,000
outstanding Note Warrants were exercised at a price of $0.75 each for a total of $5,625,000. The Company issued 4,114,287 shares
of Series A Preferred Stock and 3,385,713 shares of common stock upon the exercise of warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">On August 16, 2012, the
Company sold 3,651,316 shares of common stock in a private placement to certain investors for $1.50 per share for gross proceeds
of approximately $5,477,000 before selling commissions of approximately $391,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt"></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>DSS TECHNOLOGY MANAGEMENT, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>(A Development Stage
Company)</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>Notes to Consolidated
Financial Statements</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Preferred Stock</I></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 0.05in 0pt 6.5pt; text-align: justify">On July 13, 2012 the Company
filed a Certificate of Designation with the Secretary of State of Delaware to authorize the issuance of up to 29,000,000 shares
(27,225,000 authorized for Series A) of preferred stock, par value $0.0001 which have been designated as Series A Preferred Stock
with such rights and preferences designated in the Company&rsquo;s Certificate of Designation (the &ldquo;Series A Preferred Stock&rdquo;).
In the event of any liquidation, dissolution, or winding up of the Corporation, whether voluntary or involuntary, or in the event
of its insolvency, and after provision for payment of all debts and liabilities of the Company in accordance with the Delaware
General Corporation Law, any remaining assets of the Company shall be distributed pro rata to the holders of common stock and the
holders of Series A Preferred Stock as if the Series A Preferred Stock had been converted into shares of common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">On July 16, 2012, the Company
entered into an exchange agreement whereby the Company offered to all of its stockholders a right to exchange up to 99% of their
shares of common stock for the same number of shares of Series A Preferred Stock, $0.0001 par value and gave the holders of its
warrants the right to elect to exchange the common stock underlying such warrants for Series A Preferred Stock. On the same date
common stock holders exchanged 13,799,440 shares of $0.0001 par value common stock into 13,799,440 shares of Series A Preferred
Stock with a par value of $0.0001 per share. The exchange did not have any impact on the Company&rsquo;s consolidated financial
statements as the benefit of exchanging the common for the preferred is nominal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">The holders of Series A
Preferred Stock will be entitled to vote together with the holders of the common stock and as a single class on all matters submitted
for a vote of holders of common stock. When voting together with the holders of common stock, each share of Series A Preferred
Stock shall entitle the holder thereof to such number of votes per share on each such action as will equal the number of shares
of common stock into which each share of such Series A Preferred Stock is then convertible. In the event of any liquidation, dissolution,
or winding up of the Company and after provision for payment of all debts and liabilities of the Company, any remaining assets
of the Company shall be distributed pro rata to the holders of common stock and the holders of Series A Preferred Stock as if the
Series A Preferred Stock had been converted into shares of common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Rights Offering </I></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 0.05in 0pt 6.5pt; text-align: justify">On February 1, 2013, LTG
completed the sale of 4,285,718 shares of its common stock at a purchase price of $0.35 per share to certain of its existing stockholders,
who elected to participate in an offering, conducted by LTG to its entire existing stockholders, for aggregate gross proceeds
of approximately $1.5 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0; text-align: justify"><B>NOTE 7&nbsp;&mdash;&nbsp;INVESTMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">Concurrently with the execution
of the Merger Agreement, on October 1, 2012, DSS entered into subscription agreements with certain accredited investors, pursuant
to which DSS agreed to issue and sell to such investors in a private placement an aggregate of 833,651 shares of its common stock,
at a purchase price of $3.30 per share, for an aggregate purchase price of $2,751,048 (the &ldquo;Private Placement&rdquo;). The
Private Placement was completed on October 1, 2012. LTG participated in the private placement and purchased an aggregate of 218,675
shares of DSS common stock, at a purchase price of $3.30 per share, for an aggregate purchase price of approximately $0.7 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">LTG adopted the fair value
option because the investment in DSS is a recognized financial asset. LTG recorded this investment at fair value with the change
in fair value recorded through earnings. LTG measured its investment in DSS at fair value, taking into account any selling restrictions.
From October 1, 2012 through June 30, 2013, the Company recorded a $0.2 million unrealized loss. For the six months ended June
30, 2013, the Company recorded a $0.1 million unrealized gain. As of June 30, 2013 and December 31, 2012, the fair value of its
investment in DSS amounted to $0.5 million and $0.4 million, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">In March 2013, LTG
made a strategic investment in VirtualAgility, a developer of programming platforms that facilitate the creation of business applications
without programming or coding. The investment by LTG involves a non-recourse note against the proceeds derived from the patent
portfolio owned by VirtualAgility, plus an equity stake of 1/8 of 7% of the outstanding common stock of VirtualAgility, for $250,000
cash, plus options to make seven additional quarterly investments of $250,000 apiece, for a total investment of up to $2 million
in cash. If LTG exercises all of such options, it will have invested an aggregate of $2 million and, based on the current capitalization
of virtual Agility, would own approximately 7% of the outstanding common stock of VirtualAgility. LTG recorded its investment in
VirtualAgility at fair value which approximates its cost basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt"></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>DSS TECHNOLOGY MANAGEMENT, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>(A Development Stage
Company)</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>Notes to Consolidated
Financial Statements</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0"><B>NOTE 8&nbsp;&mdash;&nbsp;STOCK BASED COMPENSATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt">On November 20, 2012 LTG granted 200,000 shares
of restricted common stock, of which 100,000 shares vested immediately and 100,000 shares vest in February 2013. LTG also granted
on November 20, 2012 non-statutory options to purchase up to 3,600,000 shares of its common stock, at an exercise price of $1.67
per share and a contractual term of ten years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt">The Company recorded stock-based compensation
of $0.4 million for the six months ended June 30, 2013. The unamortized deferred stock-based compensation balance as of June 30,
2013 was $1.8 million and will be fully amortized through 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt">The Company estimates the fair value of stock
option grants using a Black-Scholes option pricing model. In applying this model, the Company uses the following assumptions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP ROWSPAN="2" STYLE="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: black">&bull;</FONT></TD>
    <TD ROWSPAN="2" STYLE="width: 89%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="color: black"><I>Risk-Free Interest Rate:</I>&nbsp;&nbsp;The Company determined the risk-free interest rate equivalent to the expected term based on the U.S. Treasury constant maturity rate.</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD NOWRAP ROWSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: black">&bull;</FONT></TD>
    <TD ROWSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="color: black"><I>Expected Volatility:</I>&nbsp;&nbsp;The Company determined its future stock price volatility based on the average historical stock price volatility of comparable peer companies.</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: black">&bull;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="color: black"><I>Expected Term:</I>&nbsp;&nbsp;Due to the limited exercise history of the Company&rsquo;s stock options, the Company determined the expected term based on the stratification of employee groups and the expected effect of events that have indications on future exercise activity. Expected life for options granted to employees uses the Simplified Method, while option granted to non-employees uses an expected term equal to the life of the contract.</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD NOWRAP ROWSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: black">&bull;</FONT></TD>
    <TD ROWSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="color: black"><I>Expected Dividend Rate:</I>&nbsp;&nbsp;The Company has not paid and does not anticipate paying any cash dividends in the near future.</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 6.6pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 6.6pt">The fair value of each option award was estimated
on the grant date using the Black Scholes option-pricing model and expensed under the straight line method. The following assumptions
were used:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 6.6pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 81%; font-size: 10pt; color: black; text-indent: 9pt; padding-left: 5.4pt">Exercise price</TD><TD STYLE="width: 2%; font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="width: 15%; font-size: 10pt; color: black; text-align: right">1.67</TD><TD STYLE="width: 1%; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; text-align: left; text-indent: 9pt; padding-left: 5.4pt">Expected stock price volatility</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">77</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; text-align: left; text-indent: 9pt; padding-left: 5.4pt">Risk free rate of interest</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">0.05</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; text-align: left; text-indent: 9pt; padding-left: 5.4pt">Expected life of options</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right"><FONT STYLE="font-size: 10pt; color: black">6.5 years</FONT></TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0">A summary of stock options outstanding as of June
30, 2013 is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; border-bottom: Black 1pt solid">Stock Options</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of Options</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted Average Exercise Price</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted Average Grant Date Fair Value</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted Average Remaining Contractual Life</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Aggregate Intrinsic Value</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; text-align: left; text-indent: 8pt; padding-left: 5.4pt"><B>Outstanding
    at June 30, 2012</B></TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left"><B>$</B></TD><TD STYLE="font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left"><B>$</B></TD><TD STYLE="font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; text-align: left"><B>$</B></TD><TD STYLE="font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 33%; font-size: 10pt; color: black; text-align: left; padding-bottom: 1pt; text-indent: 8pt; padding-left: 5.4pt">Issuance of stock options</TD><TD STYLE="width: 1%; font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">3,600,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">1.67</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">0.64</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right"><FONT STYLE="font-size: 10pt; color: black">9.9 years</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt; text-indent: 8.05pt; padding-left: 5.4pt">Outstanding at December 31, 2012</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: right">3,600,000</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: right">1.67</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: right">0.64</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: right"><FONT STYLE="font-size: 10pt; color: black"><B>9.9 years</B></FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: black; text-align: left; padding-bottom: 1pt; text-indent: 8pt; padding-left: 5.4pt">Issuance of stock options</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt; text-indent: 8.05pt; padding-left: 5.4pt">Outstanding at June 30, 2013</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: right">3,600,000</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: right">1.67</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: right">0.64</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: right"><FONT STYLE="font-size: 10pt; color: black"><B>9.4 years</B></FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0">As of June 30, 2013, 600,000 stock options were unvested
and 3,000,000 were vested.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0">As of December 31, 2012, 300,000 stock options were
unvested and 3,300,000 were vested.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt"></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>DSS TECHNOLOGY MANAGEMENT, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>(A Development Stage
Company)</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>Notes to Consolidated
Financial Statements</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0">The following tables detail the activity of restricted
stock:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0">&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0"><B><I>Restricted Stock</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0">&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">
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: left; vertical-align: bottom">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Shares</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted Average Grant Date Fair Value per Share</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left; vertical-align: bottom">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt; color: black"><B>Future Service Required</B></FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt; color: black"><B>No Future Service Required</B></FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt; color: black"><B>Future Service Required</B></FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 10pt; color: black"><B>No Future Service Required</B></FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt; color: black"><B>Balance at June 30, 2012</B></FONT></TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 35%; padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt; color: black">Granted</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">200,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">1.08</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt; color: black"><B>Balance at December 31, 2012</B></FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: right">200,000</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: right">1.08</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt; color: black">Granted</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: black; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 10pt; color: black"><B>Balance at June 30, 2013</B></FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: right">200,000</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: black; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: black; font-weight: bold; text-align: right">1.08</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: black; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 6.6pt; text-indent: 16.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 6.6pt; text-indent: 16.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0"><B>NOTE 9&nbsp;&mdash;&nbsp;COMMITMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>Peter Hardigan Employment Agreement</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 6.6pt; text-align: justify">On November 20, 2012, LTG
entered into an amended employment agreement with Peter Hardigan (the &ldquo;<B>Amended Hardigan Agreement</B>&rdquo;). The Amended
Hardigan Agreement expressly supersedes the terms of the previous employment agreement, dated August 7, 2012, between LTG and Mr.
Hardigan. The Amended Hardigan Agreement has an initial term of one year, commencing on August 1, 2012, and is automatically renewable
for additional consecutive one year terms, unless at least ninety days written notice is given by either LTG or Mr. Hardigan prior
to the commencement of the next renewal term. The Amended Hardigan Agreement provides for an annual base salary of $250,000, effective
August 1, 2012 and an annual discretionary bonus based upon Mr. Hardigan&rsquo;s and LTG&rsquo;s achievement of annual performance
objectives, as determined by the board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 6.6pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">Upon commencement of the Amended Hardigan Agreement,
LTG will grant to Mr. Hardigan 100,000 shares of its common stock, vesting immediately. LTG will also grant to Mr. Hardigan a non-statutory
option to purchase up to 1,800,000 shares of its common stock, at an exercise price of $1.67 per share. One half of the option
shall vest in 12 equal quarterly tranches, with the first tranche having vested as of November 15, 2012, and the remaining tranches
vesting on each of February 15, May 15, August 15, and November 15 thereafter through August 15, 2015. Vesting of the remaining
one half of the option shall not commence unless and until the Merger is completed. Following the completion of the Merger, the
remaining one half of the options shall vest in 12 equal tranches, with a tranche to vest on the last day of each calendar quarter
commencing on the last day of the calendar quarter in which the Merger is completed. The Amended Hardigan Agreement also provides
for Mr. Hardigan&rsquo;s participation in all benefit programs LTG establishes and makes available to its executive employees,
and for reimbursement to Mr. Hardigan for reasonable travel, entertainment, mileage and other business expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">The Amended Hardigan Agreement is terminable
by LTG for cause or upon thirty days prior written notice without cause, and terminable at Mr. Hardigan&rsquo;s election upon thirty
days prior written notice. If LTG terminates Mr. Hardigan without cause, then LTG will pay Mr. Hardigan: (i) a lump sum amount
equal to his base salary for the balance of the then-remaining term of the Amended Hardigan Agreement, but no less than six months&rsquo;
base salary, (ii) LTG&rsquo;s share of the cost of health insurance coverage pursuant to COBRA for the then-remaining term of the
Amended Hardigan Agreement and (iii) reimbursement of business expenses incurred by Mr. Hardigan prior to termination. The Amended
Hardigan Agreement also includes certain confidentiality, non-compete and non-solicitation provisions effective for a period of
twelve months following the termination of Mr. Hardigan&rsquo;s employment with LTG.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt; text-align: justify"></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>DSS TECHNOLOGY MANAGEMENT, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>(A Development Stage
Company)</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: center"><B>Notes to Consolidated
Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 8.8pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">On November 20, 2012, LTG entered into an employment
agreement with Jeffrey Ronaldi, LTG&rsquo;s Chief Executive Officer (the &ldquo;<B>Ronaldi Agreement</B>&rdquo;). The Ronaldi Agreement
has an initial term of three years, commencing on November 9, 2012, and is automatically renewable for additional consecutive one
year terms, unless at least ninety days written notice is given by either LTG or Mr. Ronaldi prior to the commencement of the next
renewal term. The Ronaldi Agreement provides for an annual base salary of $350,000, effective November 9, 2012 and an annual discretionary
bonus based upon Mr. Ronaldi&rsquo;s and LTG&rsquo;s achievement of annual performance objectives, as determined by the board of
directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">Upon commencement of the Ronaldi Agreement, LTG
will grant to Mr. Ronaldi 100,000 shares of its common stock, vesting immediately. LTG will also grant to Mr. Ronaldi a non-statutory
option to purchase up to 1,800,000 shares of its common stock, at an exercise price of $1.67 per share. One half of the option
shall vest in 12 equal quarterly tranches, beginning February 15, 2013 and on each May 15, August 15, November 15 and February
15 thereafter through November 15, 2015. Vesting of the remaining one half of the option shall not commence unless and until the
Merger is completed. Following the completion of the Merger, the remaining one half of the options shall vest in 12 equal tranches,
with a tranche to vest on the last day of each calendar quarter commencing on the last day of the calendar quarter in which the
Merger is completed. The Ronaldi Agreement also provides for Mr. Ronaldi&rsquo;s participation in all benefit programs LTG establishes
and makes available to its executive employees, and for reimbursement to Mr. Ronaldi for reasonable travel, entertainment, mileage
and other business expenses. The Ronaldi Agreement is terminable by LTG for cause or upon thirty days prior written notice without
cause, and terminable at Mr. Ronaldi&rsquo;s election upon thirty days prior written notice. If LTG terminates Mr. Ronaldi without
cause, then LTG will pay Mr. Ronaldi: (i) a lump sum amount equal to his base salary for the balance of the then-remaining term
of the Ronaldi Agreement, but no less than six months&rsquo; base salary (ii) LTG&rsquo;s share of the cost of health insurance
coverage pursuant to COBRA for the then-remaining term of the Ronaldi Agreement and (iii) reimbursement of business expenses incurred
by Mr. Ronaldi prior to termination. The Ronaldi Agreement also includes certain confidentiality, non-compete and non-solicitation
provisions effective for a period of twelve months following the termination of Mr. Ronaldi&rsquo;s employment with LTG.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0; text-align: justify"><B>NOTE 10&nbsp;&mdash;&nbsp;SUBSEQUENT
EVENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.3pt 0pt 0; text-align: justify"><B>Completion of Merger with
LTG</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 0.05in 0pt 6.5pt; text-align: justify">On July 1, 2013 (the &ldquo;Closing Date&rdquo;),
DSSIP, Inc., a Delaware corporation (&ldquo;Merger Sub&rdquo;) and a wholly-owned subsidiary of Documents Security Systems, Inc.
(&ldquo;DSS&rdquo;) merged with and into LTG, 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;Merger Agreement&rdquo;), by and among DSS, LTG, Merger Sub and
Hudson Bay Master Fund Ltd. (&ldquo;Hudson Bay&rdquo;), as representative of LTG&rsquo;s stockholders (the &ldquo;Merger&rdquo;).
Effective on July 1, 2013, as a result of the Merger, LTG became a wholly-owned subsidiary of DSS. In connection with the Merger,
DSS issued on the Closing Date, its securities to LTG&rsquo;s stockholders in exchange for the capital stock owned by LTG&rsquo;s
stockholders. (See Note 1)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 6.5pt; text-align: justify">As a result of the consummation of the Merger,&nbsp;as
of the Closing Date,&nbsp;the former stockholders of LTG own approximately 51% of the outstanding common stock of the combined
company and the stockholders of DSS own approximately 49% of the outstanding common stock of the combined company.&nbsp;</P>

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

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

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<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>v354950_ex99-2.htm
<DESCRIPTION>EXHIBIT 99.2
<TEXT>
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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right; text-indent: 0.5in">Exhibit 99.2</P>

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

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SUMMARY OF UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS</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: 0.5in">The following summary unaudited pro
forma combined financial data is intended to show how the Merger of Document Security Systems, Inc. (&ldquo;DSS&rdquo;, the &ldquo;Company&rdquo;)
and Lexington Technology Group, Inc. n/k/a DSS Technology Management, Inc. (&ldquo;Lexington&rdquo;) (the &ldquo;Merger&rdquo;)
might have affected historical financial statements if the Merger had been completed on January 1, 2012, for the purposes of the
statements of operations, and June 30, 2013, for the purposes of the balance sheet, and was prepared based on the historical financial
statements and results of operations reported by DSS and Lexington.</P>

<P STYLE="font: bold 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: 27.5pt"><B><I>Background of
Merger between Document Security Systems, Inc. and Lexington Technology Group</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-indent: 0.5in">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 DSS
merged with and into Lexington, 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;). Effective on July 1, 2013, as a
result of the Merger, Lexington became a wholly-owned subsidiary of DSS. In connection with the Merger, the Company issued on
the Closing Date, its securities to Lexington&rsquo;s stockholders in exchange for the capital stock owned by
Lexington&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;), which includes
240,559 shares of the Company&rsquo;s common stock owned by Lexington prior to the merger that were exchanged for shares
issuable to Lexington stockholders pursuant to the merger (the &ldquo;Exchange Shares&rdquo;); (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. 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 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. The holders
of the escrow shares will have voting rights with respect to the shares until such shares are released or retired after one
year (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 Lexington&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 Lexington&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 are currently being 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: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Accounting Treatment of the Merger</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: 0.5in">U.S. Generally Accepted Accounting Principles
(hereafter&nbsp;&mdash;&nbsp;GAAP), require that for each business combination, one of the combining entities shall be identified
as the acquirer, and the existence of a controlling financial interest shall be used to identify the acquirer in a business combination.
In a business combination effected primarily by exchanging equity interests, the acquirer usually is the entity that issues its
equity interests. However, it is sometimes not clear which party is the acquirer.</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: 0.5in">In accordance with FASB Topic ASC 805 &ldquo;Business
Combinations&rdquo;, if a business combination has occurred, but it is not clear which of the combining entities is the acquirer,
GAAP requires considering additional factors in making that determination. These factors include the relative voting rights of
the combined entity after the business combination, the existence of a large minority voting interest in the combined entity, the
composition of the governing body of the combined entity, the composition of senior management in the combined entity and the relative
size of the combining entities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 15pt">&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">Based on the aforementioned, and after taking
in consideration all relevant facts and circumstances, management came to the conclusion that DSS, as the legal acquirer was also
the accounting acquirer in the transaction. The conclusion was based on the determination that although, the former stockholders
of Lexington had 51% of the voting interest in the combined company as of the closing date of the merger, the former stockholders
of Lexington did not have clear indications of control when analyzed in the context of the other factors listed by FASB Topic ASC
805, such as the existence of a large minority voting interest, the composition of the governing body of the combined entity, the
composition of senior management in the combined entity and the relative size of the combining entities. In addition, the ownership
of the combined company by the former stockholders of Lexington could reduce to approximately 42% of the outstanding common stock
of the combined company if, after one year, the shares held in escrow are cancelled because the conditions of the escrow agreement
were not met. At the time of the Merger, management determined the likelihood of meeting the conditions in the escrow agreement
to be remote.</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: 0.5in">As a result, the merger 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, Lexington, 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.</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: 0.5in">The summary unaudited pro forma combined
balance sheet as of June 30, 2013 combines the historical balance sheets of DSS and Lexington as of June 30, 2013 and gives pro
forma effect to the Merger as if it had been completed on June 30, 2013.</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: 0.5in">The summary unaudited pro forma statements
of operations for the year ended December 31, 2012 and for the six months ended June 30, 2013 gives pro forma effect to the Merger
as if it had been completed on January 1, 2012.</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: 0.5in">The historical financial data has been adjusted
to give pro forma effect to events that are (i) directly attributable to the Merger, (ii) factually supportable, and (iii) with
respect to the statements of operations, expected to have a continuing impact on the combined results. The pro forma adjustments
are preliminary and based on management&rsquo;s estimates of the fair value and useful lives of the assets acquired and liabilities
assumed and have been prepared to illustrate the estimated effect of the acquisition and certain other adjustments.</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: 0.5in">The unaudited pro forma combined financial
statements are presented for illustrative purposes only, and are not necessarily indicative of the financial condition or results
of operations of future periods or the financial condition or results of operations that actually would have been realized had
the entities been combined during the periods presented. In addition, the unaudited pro forma adjustments are based on management&rsquo;s
preliminary estimates of the fair value of the identifiable assets acquired and liabilities assumed. As a result, the actual adjustments
may differ materially from those presented in the unaudited pro forma statements.<B>&nbsp;</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>Purchase Price Allocation </B></P>

<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-indent: 0.5in">In accordance with the accounting treatment
of the Merger 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, Lexington, are recorded at their fair values 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. The purchase price is based on the
fair value of the DSS common stock, DSS common stock to be held in escrow and issued if certain contingencies are met, warrants
to purchase DSS common stock issued by DSS to Lexington stockholders, and replacement options awards related to pre-combination
services granted to certain Lexington employees pursuant to the Merger agreement. The Company measured the identifiable assets
acquired and liabilities assumed based on the acquisition date fair value. The fair value of the equity instruments issued to former
stockholders of Lexington is based on a $1.87 share price of DSS common stock which was the closing share price of DSS&rsquo;s
stock on July 1, 2013 on the date of the Merger. For warrants and employee options to purchase DSS common stock issued or assumed
as consideration in the Merger, the Company used the Black Scholes Merton option pricing model to determine fair values, with terms
set at the remaining life of the option or warrant, a volatility of approximately 59%, and a risk free rate of return of approximately
0.9% with zero forfeitures expected. For the DSS common stock to be held in escrow, the Company used a Monte Carlo simulation model
to determine an average expected fair value. While DSS uses its best estimates and assumptions as part of the purchase price allocation
process to value the assets acquired and liabilities assumed, the purchase price allocation is preliminary and could change during
the measurement period (not to exceed one year) if new information is obtained about the facts and circumstances that existed as
of the Merger date that, if known, would have resulted in the recognition of additional or changes to the value of the assets and
liabilities presented in this pro forma purchase price allocation.</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; text-indent: 0.5in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($ -in thousands)</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 86%; font-size: 10pt; text-align: left">Current assets, net of current liabilities</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">6,761</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">Deposits and non-current assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">Goodwill</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">12,138</TD><TD STYLE="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">Other intangible assets- patent and patent rights</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">33,653</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">52,561</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Deferred tax liability</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">12,138</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Total estimated purchase price</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">40,423</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-decoration: underline; text-align: left">Consideration issued:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="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">Fair value of 16,317,828 shares of DSS common stock issued to Lexington shareholders</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">30,514</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Fair value of 7,100,000 shares of DSS common stock issued to Lexington shareholders to be held in escrow for up to one year</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">901</TD><TD STYLE="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">Fair value of options to purchase 2,000,000 shares DSS common stock for $3.00 per share exchanged for options to purchase Lexington's common stock that were granted to Lexington's employees which relate to precombination services</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">203</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Fair value of warrants to purchase up to 4,859,894 shares of DSS common stock for $4.80 per share issued to Lexington shareholders</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,455</TD><TD STYLE="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; padding-bottom: 1pt">Fair value of warrants to purchase 3,432,170 shares of DSS common stock for $0.02 per share issued to certain Lexington shareholders</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">6,350</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Total estimated purchase price</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">40,423</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</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"><B>Unaudited Pro Forma Consolidated Balance Sheet as of June
30, 2013 ($- in thousands)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&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">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Historical</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Lexington<BR> Technology <BR>
Group, Inc.</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Document <BR>
Security<BR> Systems, Inc.</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Pro Forma<BR> Adjustments</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Notes</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Pro Forma<BR> Consolidated</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">ASSETS</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 35%; font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Total current assets</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">7,062</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">3,817</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">10,879</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Property, plant and equipment, net</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">4,217</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">4,217</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Other assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">259</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">223</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(250</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: right">6</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">232</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Goodwill</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3,323</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">12,138</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: right">1</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">15,461</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 10pt">Other intangible assets, net</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,751</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,737</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">31,902</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: right">1</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">35,390</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; text-indent: -10pt; padding-left: 10pt">Total assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">9,072</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">13,317</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">43,790</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">66,179</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">LIABILITIES AND STOCKHOLDERS' EQUITY</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Total current liabilities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">301</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">4,052</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">4,353</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Long-term debt, net</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,013</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,013</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Other long-term liabilities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">189</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">189</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Stockholders' equity</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 20pt">Preferred stock, $.02 par value</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 20pt">Common stock, $.02 par value</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">435</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">483</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: right">3</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">918</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Additional paid-in capital</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">20,564</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">57,192</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">19,427</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: right">4,6</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">97,183</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Accumulated other<BR> comprehensive loss</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(52</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(52</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 20pt">Accumulated deficit</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(11,793</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(50,512</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">23,880</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: right">4,7</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(38,425</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 20pt">Total stockholders' equity</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">8,771</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">7,063</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">43,790</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">59,624</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; text-indent: -10pt; padding-left: 10pt">Total liabilities and stockholders' equity</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">9,072</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">13,317</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">43,790</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">66,179</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Unaudited Pro Forma Consolidated Statement of Operations,
for the six months ended June 30, 2013 ($- in thousands, except per share and per share data)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&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">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Historical</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Lexington<BR> Technology <BR>
Group, Inc.</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Document <BR>
Security <BR>
Systems, Inc.</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Pro Forma<BR> Adjustments</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Notes</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Pro Forma<BR> consolidated</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 35%; font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Revenue</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">28</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">8,050</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">8,078</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Cost of revenue</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">4,968</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">4,968</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Gross profit</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">28</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3,082</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3,110</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Operating expenses:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Selling, general and administrative</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,837</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">5,693</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(1,508</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: right">2</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">6,022</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Research and development</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">121</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">121</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-indent: -10pt; padding-left: 20pt">Amortization of intangibles</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">217</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">168</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">2,127</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: right">5</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">2,512</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 30pt">Operating expenses</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">2,054</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">5,982</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">619</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">8,655</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Operating loss</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(2,026</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(2,900</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(619</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(5,545</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Other income (expense), net</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(761</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(148</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(909</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Loss before income taxes</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(2,787</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(3,048</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(619</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(6,454</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Income tax expense</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">9</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">9</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; text-indent: -10pt; padding-left: 10pt">Net loss</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(2,787</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(3,057</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(619</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(6,463</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; text-indent: -10pt; padding-left: 10pt">Net loss per share&nbsp;&ndash;&nbsp;basic and diluted:</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(0.14</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: right">4</TD><TD STYLE="padding-bottom: 2.5pt; font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(0.15</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; text-indent: -10pt; padding-left: 10pt">Weighted average common shares outstanding, basic and diluted</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">21,711,503</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">20,136,678</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: right">4</TD><TD STYLE="padding-bottom: 2.5pt; font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">41,848,181</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<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"><B>Unaudited Pro Forma Consolidated Statement of Operations,
for the year ended December 31, 2012 ($- in thousands, except per share and per share data)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&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">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Historical</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Lexington<BR> Technology <BR>
Group, Inc.</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Document <BR>
Security <BR>
Systems, Inc.</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Pro Forma<BR> Adjustments</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Notes</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Pro Forma<BR> consolidated</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 35%; font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Revenue</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">17,115</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">17,115</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Cost of revenue</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">11,387</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">11,387</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Gross profit</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">5,728</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">5,728</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Operating expenses:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Selling, general and administrative</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,563</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">8,707</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(1,868</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: right">2</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">9,402</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Research and development</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">491</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">491</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-indent: -10pt; padding-left: 20pt">Amortization of intangibles</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">207</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">304</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">4,254</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: right">5</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">4,765</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 30pt">Operating expenses</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">2,770</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">9,502</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">2,386</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">14,658</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Operating loss</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(2,770</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(3,774</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(2,386</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(8,930</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Other income (expense), net</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(6,236</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(488</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(6,724</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Loss before income taxes</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(9,006</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(4,262</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(2,386</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(15,654</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Income tax expense</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">19</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">19</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; text-indent: -10pt; padding-left: 10pt">Net loss</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(9,006</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(4,281</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(2,386</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(15,673</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; text-indent: -10pt; padding-left: 10pt">Net loss per share&nbsp;&ndash;&nbsp;basic and diluted:</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(0.21</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: right">4</TD><TD STYLE="padding-bottom: 2.5pt; font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(0.38</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; text-indent: -10pt; padding-left: 10pt">Weighted average common shares outstanding, basic and diluted</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">20,828,149</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">20,136,678</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: right">4</TD><TD STYLE="padding-bottom: 2.5pt; font: bold 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">40,964,827</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<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"><B>Notes to Unaudited Pro Forma Consolidated Balance Sheet
and Statements of Operations:</B></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: 21px; padding: 0; text-indent: 0">&nbsp;</td>
    <TD STYLE="width: 20px; padding: 0; text-indent: 0"><font style="font: 10pt Times New Roman, Times, Serif">1.</font></td>
    <TD STYLE="padding: 0; text-indent: 0"><font style="font: 10pt Times New Roman, Times, Serif">This pro forma adjustment represents the estimated fair value of goodwill and other intangible assets acquired as a result of the Merger. Since DSS is determined to be the accounting acquirer the consideration transferred is measured based on the expected fair value of the DSS common stock, common stock held in escrow, warrants issued by DSS to &nbsp;stockholders and replacement option awards to certain&nbsp;&nbsp;employees. <font style="color: black">See the preliminary purchase price allocation table above.</font></font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;&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: 21px; padding: 0; text-indent: 0">&nbsp;</td>
    <TD STYLE="width: 20px; padding: 0; text-indent: 0"><font style="font: 10pt Times New Roman, Times, Serif">2.</font></td>
    <TD STYLE="padding: 0; text-indent: 0"><font style="font: 10pt Times New Roman, Times, Serif">This pro forma adjustment eliminates direct, incremental costs of the Merger that were incurred by DSS ($768,000 during the year ended December 31, 2012, and $1,310,000 during the six months ended June 30, 2013) and&nbsp;&nbsp;($1,100,000 during the year ended December 31, 2012 and $198,000 during the six months ended June 30, 2013) that are considered non-recurring in nature.</font></td></tr>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</td>
    <TD STYLE="padding: 0; text-indent: 0"><font style="font: 10pt Times New Roman, Times, Serif">3.</font></td>
    <TD STYLE="padding: 0; text-indent: 0"><font style="font: 10pt Times New Roman, Times, Serif">This pro forma adjustment represents the par value of the 23,417,830 shares of common stock issued by DSS to acquire &nbsp;and the par value of 786,678 shares issued to Palladium Capital as advisor on the date of the merger.&nbsp;&nbsp;</font></td></tr>
</table>
<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">&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">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">As of June 30, <BR>
2013</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 86%; font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Document Security Systems</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">21,705,969</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Document
    Security Systems shares of common stock issued to former  Lexington stockholders, net of Exchange Shares</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">23,417,830</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Document Security Systems shares of common stock issued to Palladium Capital in conjunction with the Merger</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">786,678</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Total common stock outstanding, pursuant to the Merger</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">45,910,477</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Par value per share of common stock</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.02</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Common stock, at par</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">918,210</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;&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: 21px; padding: 0; text-indent: 0">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></td>
    <TD STYLE="width: 20px; padding: 0; text-indent: 0">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">4.</P></td>
    <TD STYLE="padding: 0; text-indent: 0">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This pro forma adjustment presents the effect
of business combination accounting on additional paid-in capital, and accumulated deficit of the combined company that reflect
DSS as the accounting acquirer and as the accounting acquiree in the Merger. As a result, in the post-combination consolidated
financial statements, additional paid-in capital will reflect DSS&rsquo;s paid-in capital amounts immediately prior to the Merger,
plus the fair value of the DSS common stock, net of par value, DSS common stock held in escrow, DSS common stock warrants issued
to and replacement option awards granted to certain employees as consideration, plus the fair value of common stock issued to
Palladium Capital held in escrow. Accumulated deficit will reflect the balance of DSS prior to the Merger along with pro forma
adjustments representing direct and incremental costs of the Merger. The accumulated deficit of will be cancelled in conjunction
with the Merger.</P></td></tr>
</table>
<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">&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">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">For the year ended<BR>
December 31, 2012</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 86%; font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Net loss &ndash;($ -in thousands)</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(15,673</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Weighted average of Document Security Systems shares of common stock outstanding for the year:</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">20,828,149</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Weighted average of Document Security Systems shares of common stock expected to be issued to former Lexington stockholders and Palladium Capital, excluding Exchange Shares and contingently issuable shares for which the contingency was not met at the time of the merger, as of January 1, 2012</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">16,704,508</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Warrants to purchase Document Security Systems common stock for $0.02 per share issued to certain Lexington shareholders considered contingently issuable shares for which the contingency was met at the time of the merger</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,432,170</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">40,964,827</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Basic and diluted net loss per share</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(0.38</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="margin: 0">&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">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">For the six months ended June 30, 2013</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif">Net loss &ndash;($ -in thousands)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">$(6,463)</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 86%; font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Weighted average of Document Security Systems shares of common stock outstanding for the period:</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">21,711,503</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Weighted average of Document Security Systems shares of common stock expected to be issued to former Lexington stockholders and Palladium Capital, excluding Exchange Shares and contingently issuable shares for which the contingency was not met at the time of the merger, as of January 1, 2013</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">16,704,508</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Warrants to purchase Document Security Systems common stock for $0.02 per share issued to certain Lexington shareholders considered contingently issuable shares for which the contingency was met at the time of the merger</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,432,170</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">41,848,181</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Basic and diluted net loss per share</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(0.15</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
</TABLE>

<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">&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: 21px; padding: 0; text-indent: 0">&nbsp;</td>
    <TD STYLE="width: 20px; padding: 0; text-indent: 0">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">5.</P></td>
    <TD STYLE="padding: 0; text-indent: 0">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This pro forma adjustment represents the additional
amortization expense that will result from the intangible assets acquired from Lexington, which include patent assets. <FONT STYLE="color: black">Management
is responsible for determining the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed
as of the Acquisition Date. Management considered a number of factors, including reference to an analysis under FASB ASC 805 solely
for the purpose of allocating the purchase price to the assets acquired and liabilities assumed. The analysis included a discounted
cash flow which estimated future net cash flows resulting from the licensing and enforcement of the patent portfolio based on
information as of the date of acquisition, considering assumptions and estimates related to potential infringers of the patents,
applicable industries, usage of the underlying patented technologies, estimated license fee revenues, contingent legal fee arrangements,
other estimated costs, tax implications and other factors. A discount rate consistent with the risks associated with achieving
the estimated net cash flows was used to estimate the present value of estimated net cash flows. Amounts attributable to the patents
acquired are being amortized using the straight-line method over an estimated weighted average economic useful life of the underlying
patents, which is estimated to be approximately&nbsp;7.5 years.</FONT></P></td></tr>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">6.</TD>
    <TD STYLE="padding: 0; text-indent: 0">This pro forma adjustment represents the amount of investment in DSS held by Lexington that were exchanged by Lexington for
shares of DSS common stock and distributed to the former stockholders of Lexington at the time of the Merger.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">7.</TD>
    <TD STYLE="padding: 0; text-indent: 0">Estimated deferred tax benefit which resulted directly from the transaction is a result of the release of the deferred tax
asset valuation allowance and not included in pro forma consolidated statement of operations. The deferred tax liability resulting
from the increase in basis of the Lexington tangible and intangible assets, excluding goodwill, for book purposes but not
for tax purposes was calculated using a 38% effective tax rate. Under the acquisition method of accounting, the impact on
the acquiring company's deferred tax assets is recorded outside of acquisition accounting. Accordingly, the valuation allowance
on the Company&rsquo;s deferred tax assets will be released to offset the increase in deferred tax liability and result in
an estimated financial statement income tax benefit of approximately $12.1 million which will be recorded in the statement
of operations for the three and nine month period ending September 30, 2013.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">The unaudited pro forma combined statements of operations for the periods presented herein have been adjusted to give effect
to pro forma events that are expected to have a continuing impact on the combined results. As such, the estimated income tax
benefit related to the estimated release of valuation allowance expected to be reflected in the statement of operations for
the third quarter of 2013 is not reflected in the accompanying unaudited pro forma combined statements of operations for the
six months ended June 30, 2013 and the year ended December 31, 2012.</TD></TR>
</table>
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