Item 1.01 Entry into a Material Definitive Agreement.
On January 19, 2021, Document Security Systems, Inc., a New York corporation
(the "Company"), entered into an underwriting agreement, as amended by Amendment
No. 1 effective as of January 19, 2021 (the "Underwriting Agreement"), with
Aegis Capital Corp. ("Aegis"), as representative of the underwriters, which
provided for the issuance and sale by the Company and the purchase by the
underwriters, in a firm commitment underwritten public offering (the
"Offering"), of 6,666,666 shares of the Company's common stock, $0.02 par value
per share. Subject to the terms and conditions contained in the Underwriting
Agreement, the shares were offered in a public offering at a price of $3.60 per
share, less certain underwriting discounts and commissions. The Company also
granted the underwriters a 45-day option to purchase up to 1,000,000 additional
shares of the Company's common stock on the same terms and conditions for the
purpose of covering any over-allotments in connection with the Offering. The net
offering proceeds to the Company from the Offering are approximately $21.7
million, after deducting estimated underwriting discounts and commissions and
other estimated offering expenses, and assuming no exercise of the
over-allotment option. The Company intends to use the net proceeds from this
offering to fund the development and growth of new business lines, acquisition
opportunities, and general corporate and working capital needs.
The Offering closed on January 22, 2021 and was made pursuant to the Company's
registration statement on Form S-1 (File No. 333- 249857), which was declared
effective by the Securities and Exchange Commission (the "SEC") on January 19,
2021 under the Securities Act of 1933, as amended (the "Securities Act"), and
the Company's Registration Statement on Form S-1MEF (File No. 333- 252239). A
final prospectus describing the terms of the Offering was filed with the SEC on
January 22, 2021 and is available on the SEC's website located at
http://www.sec.gov.
The Underwriting Agreement contains customary representations, warranties and
covenants of the Company, customary conditions to closing, indemnification
obligations of the Company and the Underwriter, including for liabilities under
the Securities Act, and termination and other provisions customary for
transactions of this nature. The Company's executive officers and directors have
also agreed not to sell or transfer any securities of the Company held by them
for a period of 90 days from January 22, 2021, subject to limited exceptions.
This Current Report on Form 8-K contains forward-looking statements that involve
risks and uncertainties, such as statements related to the use of proceeds from
the Offering, as well as other risks detailed from time to time in the Company's
filings with the SEC.
The foregoing summary of the Underwriting Agreement and Amendment No. 1 to the
Underwriting Agreement are qualified in their entirety by reference to the full
text of the Underwriting Agreement and Amendment No. 1 to the Underwriting
Agreement, copies of which are filed herewith as Exhibit 1.1 and 1.2,
respectively, to this Current Report on Form 8-K and incorporated herein by
reference.
Item 8.01 Other Information.
On January 19, 2021, the Company issued a press release announcing the pricing
of the Offering. A copy of this press release is filed as Exhibit 99.1 hereto,
and incorporated herein by reference.
On January 22, 2021, the Company closed its previously announced underwritten
public offering of 6,666,666 shares of its common stock. In connection with the
closing, the Company issued a press release announcing the closing of the
offering. A copy of the press release is included as Exhibit 99.2 to this Form
8-K and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Number Description
1.1 Underwriting Agreement, dated January 19, 2021, by and between Document
Security Systems, Inc. and Aegis Capital Corp.
1.2 Amendment No.1 to Underwriting Agreement, dated January 19, 2021, by
and between Document Security Systems, Inc. and Aegis Capital Corp.
99.1 Press Release issued January 19, 2021
99.2 Press Release issued January 22, 2021
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