Slide 1: Document Security Systems
Document Security Systems (NYSE MKT: DSS) April 2013 2 % Lexington % www.lex-tg.com www.dsssecure.com
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding ‘Statements in this presentation regarding the proposed transaction between Document Security Systems, nc. ("DSS") and Lexington Technology Group, Inc. ("Lexington Technology Group" the expected timetable for completing the transaction; the potential value created by the pr
Slide 3: Important Additional Information
Important Additional Information Will Be Filed with the SEC ‘This communication does not constitute an offer to sell or the sallcltation of an offer to buy any securities of DSS or Lexington Technology Group or the solicltation of any vote or approval. In connection with the proposed transaction, DS
Slide 4: DSS Investment Highlights
DSS Investment Highlights DSS/LTG offers an integrated approach to creating value from innovation: Grow operating business Monetize IP portfolios LTG brings a strong and proven intellectual property management team LTG is focused on monetizing a growing portfolio of IP investments: Bascom Research V
Slide 5: DSS and Lexington overview
¥YDSS NYSE MKT: DSS Lexington Private company Market Cap: $46.7M Leader in anti-counterfeit, authentication, and mass— serialization technologies Provides turnkey security solutions to corporations, governments, and financial institutions IP portfolio consists of 9 patents and 12 applications () Sou
Slide 6: The DSS/LTG Merger
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, VirtualAgility investment, pipeline, assembled management \<tTGrecei - AN ¢ pss ) warrants at $4.80 and 7.1 MM escrow
Slide 7: Management Profiles
Management Profiles Jeff Ronaldi - Chief Executive Officer ‘Over 25 years of experience in company formation FO Head of investment Management at IPNav and management, Inuding roles at UUNET, Led 2 private placements with institutional investors Concentric Networks, SPX and newsleters.com Tecate bs a
Slide 8: DSS and LTG strengths and synergies
DSS has a strong history of technology development but has had limited success in licensing and enforcement of technologies LTG brings an experienced IP management team with a results-oriented focus DSS’ R&D and technical expertise will aid LTG in assessing additional investment opportunities —— Dss
Slide 9: Model
Model Advantages For Patent Ow Our Value-Added Investment Approach Makes Us A Better Partner Vs. Existing Alternatives = Real, results-oriented patent monetization skill set = NPE: often involving assignment of assets, minimal upfront capital, no injunctive relief = Highly experienced managers with
Slide 10: Industry Backdrop — IP Monetization
Industry Backdrop — IP Mo $180.08 Microsoft | AOL» $1.18 Google / © $12.5B ockstar * | N@RTEL §4-5B CS] gp 8 Landmark (ated /Qnvww, $458 Licensing $27.0B Deals: Vimerx / Bi Microsoft $200M NTP / 44 $613M “ | () Source: World intellectual Property Organization,
Slide 11: Competitive landscape of IP monetization
ACACIA 4 = w ASae) | ORPX) Rambus vimex @ DSS WARLAUNT sees Quatcomm| VRINGO Lexington |___Commercialization “Carrot” Licensing “stick” Licensing Enforcement Buying Group Technology E: Generalist Specialist (No Tech R&D) (Active Tech R&D)
Slide 12: Current State of LTG and DSS Litigation
Current State of LTG and DSS Dispute ‘# Patents) Portfolio Applications Technology Litigation Milestones Current Defendants Bascom Research 64 Data structure used to build = Cases filed: 10/4/2012 Social networks and use ‘Markman: 10/02/2013, Novell mee Trial: 2014-2015¢ Unkeal} Virtuatagitity sts -
Slide 13: Bascom Research, LLC
Bascom Research, LLC Investment Overview ?LinkSpace Bascom Research is a wholly owned subsidiary of LTG, Tom Bascom is the founder of Linkspace, based Virginia, led by Tom Bascom, President & CTO a pioneering software company established in 2001 in McLean, VA The patented technology covers the abili
Slide 14: Bascom Research, LLC Case Study: Facebook
Bascom Research, LLC Case Study: Facebook Establishing a relationship between two or more objects (eg, user profiles, documents, articles, data entries, etc.) open Graph With the ability to describe / customize Tae = |____and display the characteristics ofthe relationship developer acebok.conWocstet
Slide 15: Bascom case timeline
ComplaintFiled Scheduling Order Markman Hearing & Ruling 10/4/2012 3/19/2013 October 2013
Slide 16: VirtualAgility, Inc.
VirtualAgility, Inc. Investment Overview LTG has a minority equity interest in VirtualAgtlity (“VA”) and has options to acquire additional equity interests VA owns 5 US patents and a number of pending applications that cover a user-configurable platform that allows persons create sophisticated, inte
Slide 17: VirtualAgility Case Study: Salesforce.com
VirtualAgility, Inc. Case Study: Salesforce.com * Systems for supporting management of collaborative activity by non IT specialists + “Salesforce.com offers products and services that are designed to enable users of those products and services to autonomously access, assemble, share, and modify stra
Slide 18: DSS Intellectual Property Management
DSS Intellectual Property Management DSS IP Portfolios Core Document Security portfolio = 9 patent families; 12 pending applications Digital and cloud portfolio: 5 patent applications; additional concepts in development Current Licensing Relationships R.R. Donnelly* Other security printers Current I
Slide 19: Monetization Growth Driver: Acquisition Pipeline
netization 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 expertise of o
Slide 20: Our Operating Business
Our Operating Business A Leading Developer in ant?-counterfelting and authentication technology with customers world-wide Works closely with clients, including Fortune 500 companies, to. vos design proprietary technology solutions; protecting government 7 ‘Scanner documents, identity cards, academic
Slide 21: Integrated Security Solution with AuthentiGuard
Integrated Security Solution with AuthentiGuard® Launched 10/2012; Currently in Beta Testing Brand owner digitally ADX Cloud Service Packaging or secure Packaging or secure creates art files for incorporates security documents incorporating documents can be scanned packaging or Identification Featur
Slide 22: DSS Historical Financials
DSS Historical Financials $in thousands i ] 2012 vs 2011 Revenue Packaging 5,753 5,940 9,428 59% Plastic IDs and Cards 2,291 2,769 2,966 7% Licensing of Digital Solutions 641 1,447 1,826 26% Printing 4,697 3,227 2,895 (10%) Total Revenue 13,382 13,383 17,115, 28% Operating Expense 7,581 7,646 9,502
Slide 23: Bring traditional DSS to near breakeven
Bring traditional DSS to near breakeven Lexington Bascom Research: Continue revenue growth Markman hearing October 2", 2013 Continue cost control, possible Initial revenues from consolidation licensingjsettlement Convert beta testing of DSS VirtualAgility Investment: ‘AuthentiGuard to revenues Case