Dss, Inc. · AMEX:DSS
Dss — Document Security Systems — Merger or Acquisition (May 2013)
22 slides from Dss's merger presentation, May 20, 2013
Slide 1: Document Security Systems, Inc. May 2013
www.dsssecure.com Document Security Systems, Inc. (NYSE MKT: DSS) May 2013 www.lex - tg.com
Slide 2: Cautionary Note Regarding Forward-Looking Statements
1 Cautionary Note Regarding Forward - Looking Statements Statements in this presentation regarding the proposed transaction between Document Security Systems, Inc . ("DSS") and Lexington Technology Group, Inc . ("Lexington Technology Group") ; the expected timetable for completing the transaction ;
Slide 3: Important Additional Information Filed with the SEC
2 Important Additional Information Filed with the SEC This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities of DSS or Lexington Technology Group or the solicitation of any vote or approval . In connection with the proposed transaction, DSS file
Slide 4: The DSS/LTG Merger Overview
3 The DSS/LTG Merger Overview ▪ NYSE MKT: DSS ▪ Market Cap: ~$58M (1) ▪ Leader in anti - counterfeit and authentication technologies ▪ Provides turnkey security solutions to corporations, governments, and financial institutions ▪ IP portfolio consists of 9 patents and 12 applications ▪ Private compa
Slide 5: The DSS/LTG Merger Key Terms
4 The DSS/LTG Merger Key Terms ▪ LTG to receive merger shares in exchange for $7.25MM in cash DSS shares purchased by LTG in a private placement in October, 2012 Existing assets: Bascom Research, VirtualAgility investment, pipeline, assembled management ▪ LTG receives approximately 20MM merger
Slide 6: Post Merger Management Profiles
5 Post Merger Management Profiles 1 Will Rosellini, Chief Executive Officer Jeff Ronaldi - Chief Executive Officer ▪ Over 25 years of experience in company formation and management, including roles at UUNET, Concentric Networks, SPX and newsletters.com ▪ Managed Juridica’s investment in patent portf
Slide 7: IP & Technology Assets
6 IP & Technology Assets ▪ LTG brings IP assets believed to be widely practiced by technology and Fortune 500 companies ▪ DSS Integrated security technology presents a significant licensing opportunity ▪ DSS has existing litigation and other potential opportunities to assert IP as its core business
Slide 8: DSS/LTG Business Model Advantages For Patent Owners
7 ▪ Real, results - oriented patent m onetization skill s et ▪ Highly experienced managers with monetization track records and corporate operating experience ▪ Capital and willingness to fund operations ▪ Access to incubators and network of technical experts ▪ Willingness to work with company to see
Slide 9: Industry Backdrop – IP Monetization
8 Global IP Licensing Market (1) IP Industry Evolution Industry Backdrop – IP Monetization / $12.5B $1.1B / $1.1B / $1.5B / $200M / NTP $613M / $4.5B / (1) Source: World Intellectual Property Organization. Landmark M&A Deals: Landmark Licensing Deals:
Slide 10: Industry Landscape – IP Monetization
9 Technology Expertise Enforcement Generalist (No Tech R&D) Specialist (Active Tech R&D) “Stick” Licensing Commercialization Buying Group “Carrot” Licensing Industry Landscape – IP Monetization
Slide 11: Current State of LTG and DSS Disputes
10 Current State of LTG and DSS Disputes Portfolio # Patents/ Applications Technology Litigation Milestones Current Defendants Bascom Research 6 /4 Data structure used to build social networks and use thereof Cases filed: 10/4/2012 2 Settlements to date at 5% effective royalty rate Markman H
Slide 12: Bascom Research, LLC Investment Overview
11 Bascom Research, LLC Investment Overview ▪ Bascom Research is a wholly - owned subsidiary of LTG, based in Virginia, led by Tom Bascom, President & CTO ▪ The patented technology covers the ability to link, search, and provide selective access to information in social networks and in modern enterp
Slide 13: Bascom Research Case Study: Facebook
12 Bascom Research Patents Disclose “Relationships with Attributes” ▪ Establishing a relationship between two or more objects (e.g., user profiles, documents, articles, data entries, etc.) ▪ With the ability to describe / customize and display the characteristics of the relationship Exemplary Use of
Slide 14: Bascom Research, LLC Case and Potential Timeline
13 Bascom Research, LLC Case and Potential Timeline • Case was transferred to Northern California on 12/11/2012 • Scheduling order took place on 3/15/2013 • Bascom Research reached settlements with two defendants on 4/23/13 and 5/14/13 for 4% and 5% effective royalty rate, respectively • Markman hea
Slide 15: VirtualAgility, Inc. Investment Overview
14 VirtualAgility, Inc. Investment Overview VirtualAgility Investment ▪ LTG has a minority equity interest in VirtualAgility (“VA”) and has options to acquire additional equity interests ▪ VA owns five US patents and a number of pending applications that cover a user - configurable platform that all
Slide 16: VirtualAgility Case Study: Salesforce.com
15 VirtualAgility Patent 8,095,413 discloses 1 • Systems for supporting management of collaborative activity by non IT specialists • Methods and devices for supporting collaboration by non - IT specialists 1. Paraphrase of certain independent claims from US Patent number 8,095,413; No formal infring
Slide 17: DSS Intellectual Property Management
16 ▪ DSS IP Portfolios Core Document Security portfolio = nine patent families; 12 pending applications Digital and cloud portfolio: five patent applications; additional concepts in development ▪ C urrent Licensing Relationships International security p rinters Other security product supplie
Slide 18: IP Monetization Growth Driver: Our Acquisition Pipeline
17 IP Monetization Growth Driver Our Acquisition Pipeline ▪ Acquire additional portfolios and make investments that build value in our existing businesses Patented technologies or IP portfolios that support the competitive advantage of DSS, Bascom, VirtualAgility or future investments Technical
Slide 19: Our Operating Business
18 Our Operating Business ▪ $1 Trillion global losses 2 ($250 billion in US) 1 ▪ Security expected to grow to $79 billion in 2014 2 ▪ Key Markets: – Pharmaceuticals – Cosmetics – Apparel – High value consumer goods Counterfeiting Marketplace 1. GCCCP – United Nations World Intellectual Property Orga
Slide 20: Integrated Security Solution with AuthentiGuard
19 Integrated Security Solution with AuthentiGuard® Launched 10/2012; Currently in Beta Testing Authentication marker, using covert Prism technology, that once read unlocks encrypted information to the app user and resists copying and scanning Manage marks, users, access to the system with complete
Slide 21: DSS Historical Financials
20 DSS Historical Financials * Adjusted EBITDA is a non - GAAP financial performance measurement. Adjusted EBITDA is calculated by adding back to net income (l oss) interest expense, income taxes, depreciation and amortization expense as further adjusted to add back stock - based compensation expens
Slide 22: 2013 Strategic Goals
21 2013 Strategic Goals 1. Bring traditional DSS to near breakeven Continue revenue growth Continue cost control, possible consolidation 2. Convert beta testing of DSS AuthentiGuard to revenues Pharmaceuticals Luxury goods Consumer products 3. Additional monetization of the DSS IP portfoli
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