Document Security Systems, Inc. ("DSS" or the "Company") (NYSE:DSS), a multinational company operating businesses in blockchain security, direct marketing, healthcare, consumer packaging, real estate, renewable energy, and securitized digital assets, today announced Proof Authentication Corporation ("Proof") signed a purchase agreement pursuant to which Proof acquired 100% of the outstanding shares of DSS Digital, Inc., a wholly-owned subsidiary of the Company and a leader in innovative anti-counterfeit, authentication, and brand protection solutions.
"We set out on a mission to revive DSS and the sale of our legacy digital group is another major milestone in our transformation that will enable us to focus on new, higher-return opportunities to grow shareholder value," stated Frank D. Heuszel, CEO of DSS.
Under the terms of the agreement, DSS will retain and sell to certain key customers through a non-exclusive license granted by Proof to DSS, while continuing to use the innovative anti-counterfeiting technology on consumer packaging for authentication and consumer engagement purposes under the Company's Premier Packaging Corp. division. The terms of the deal with Proof include upfront cash and an earn-out provision that provides for potential payments to DSS based on the achievement of certain revenue targets. Riparian Partners, LLC served as financial advisor to Proof, with Orrick serving as its legal counsel. Sichenzia Ross Ference LLP served as legal counsel to DSS.
Jason Grady, COO of DSS, stated, "Proof has the experience and commitment to take our brand protection solutions, such as AuthentiGuard, to a new level, giving the market an even better product than we do today. DSS will benefit from Proof's efforts as we continue to sell key accounts and incorporate technology advancements into Premier's intelligent packaging solutions."
"Having worked in this space for over 15 years from the brand-side of the table, I can confidently say DSS has some of the best technology in the authentication market today. Consumers are more aware now than at any time in our history about the prevalence of counterfeit products in the market. They are clamoring for a way to ensure the products they are buying are real. This acquisition allows us to build on DSS' innovations and further drive increased value to our client brands and their consumers around the globe," added Dan McKinnon, CEO of Proof.
AuthentiGuard is comprised of three key components that work together to secure brands. Developed from patented Prism technology and printed on products during normal printing processes, the AuthentiGuard mark cannot be duplicated or copied, and it contains embedded codes that hold limitless amounts of information. The AuthentiGuard application, customizable in functionality, look and feel, reads the encrypted information to determine authenticity and deliver alerts and information directly to users. Brands also have access to an online portal to manage their program and view real-time data collected from the application reads.
"While our digital group has been a great business for DSS over the years, we have moved in a different direction, investing in new growth opportunities within healthcare, renewable energy, and other emerging technologies that we believe present tremendous potential upside for our shareholders," continued Heuszel. "We are excited for what the future holds for our innovate distribution sharing system business model."