UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 12, 2016
DOCUMENT SECURITY SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
| New York | 001-32146 | 16-1229730 | ||
|
(State
or other jurisdiction
of incorporation) |
(Commission
File Number) |
(IRS
Employer
Identification No.) |
||
|
200
Canal View Boulevard
Suite 300 Rochester, NY |
14623 | |||
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (585) 325-3610
| (Former name or former address, if changed since last report.) | |||
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 (see General Instruction A.2. below):
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
As previously reported, on May 24, 2013, Document Security Systems, Inc. (the “Company”) entered into a Promissory Note (the “CNE Note”) with Congregation Noam Elimelech (the “Lender”), in the principal sum of $850,000. The CNE Note was amended on May 2, 2014 and February 23, 2015 to extend its maturity date and restructure its payment schedule.
On April 12, 2016, the Company entered into Promissory Note Amendment No. 3 (“CNE Note Amendment No. 3”) with Lender amending the CNE Note (i) to extend the Maturity Date to May 31, 2017 (the “Extended Maturity Date”) and (ii) to provide for principal payments in the amount of $15,000 per month plus interest through the Extended Maturity Date, and a balloon payment of $430,000 due on the Extended Maturity Date. Except as expressly amended by CNE Note Amendment No. 3, all the other terms and conditions of the CNE Note and previously executed amendments thereto will remain effective and in force through the Extended Maturity Date. The Lender is neither an affiliate of, nor a related party to the Company.
The forgoing description is a summary only, does not purport to set forth the complete terms of CNE Note Amendment No. 3, and is qualified in its entirety by reference to Promissory Note Amendment No. 3 filed as Exhibit 10.1 to this Current Report on Form 8-K.
Also as previously reported, on December 30, 2011, the Company entered into a Convertible Promissory Note (the “Laufer Note”) with Mayer Laufer (“Laufer”), in the principal sum of $575,000. The Laufer Note was amended on May 24, 2013 and February 23, 2015 to extend its maturity date, to restructure its payment schedule, and to eliminate its conversion feature.
On April 12, 2016, the Company entered into Convertible Promissory Note Amendment No. 3 (“Laufer Note Amendment No. 3”) amending the Laufer Note (i) to extend the Maturity Date to May 31, 2017 (the “Extended Note Maturity Date”) and (ii) to provide for principal payments in the amount of $15,000 per month plus interest through the Extended Note Maturity Date, and a balloon payment of $155,000 due on the Extended Note Maturity Date. Except as expressly amended by Laufer Note Amendment No. 3, all other terms and conditions of the Laufer Note and previously executed amendments thereto will remain effective and in force through the Extended Note Maturity Date. Laufer is neither an affiliate of, nor a related party to the Company.
The foregoing description is a summary only, does not purport to set forth the complete terms of Laufer Note Amendment No. 3, and is qualified in its entirety by reference to Convertible Promissory Note Amendment No. 3 filed as Exhibit 10.2 to this Current Report on Form 8-K.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of Registrant.
The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits | |
| 10.1 | Promissory Note Amendment No. 3 between Document Security Systems, Inc. and Congregation Noam Elimelech dated April 12, 2016. | |
| 10.2 | Convertible Promissory Note Amendment No. 3 between Document Security Systems, Inc. and Mayer Laufer dated April 12, 2016. |
SIGNATURE
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.
| DOCUMENT SECURITY SYSTEMS, INC. | |||
| Dated: April 15, 2016 | By: | /s/ Jeffrey Ronaldi | |
| Jeffrey Ronaldi | |||
| Chief Executive Officer | |||
PROMISSORY NOTE AMENDMENT No. 3
This PROMISSORY NOTE AMENDMENT NO. 3 (the “ Amendment ”) is made as of April 12, 2016 (the “ Amendment Date ”) by and between DOCUMENT SECURITY SYSTEMS, INC. (the “ Borrower ”), a corporation formed under the laws of the State of New York, with offices at 200 Canal View Boulevard, Suite 300, Rochester, New York 14623 and CONGREGATION NOAM ELIMELECH (the “ Lender ”).
This Amendment amends the Promissory Note (“ Note ”), dated May 24, 2013, made among Borrower and Lender, as follows. All capitalized terms used herein without definition shall have the meanings ascribed to them in the Note.
The parties agree as follows:
1. Section 1 of the Note shall be, and hereby is, amended to read in its entirety as follows:
| “1. | Maturity . The aggregate outstanding Principal Amount, together with all accrued interest thereon and expenses incurred by the Lender in connection herewith (cumulatively, the “Outstanding Amount”), shall be due and payable in full on the earliest to occur of (the earliest of such events being the “Maturity Date”): (i) May 31, 2017 (the “Scheduled Maturity Date”) and (ii) the acceleration of this Note upon the occurrence of an Event of Default.” |
2. Section 2 of the Note shall be, and hereby is, amended to read in its entirety as follows:
| “2. | Principal and Interest . Borrower shall continue to make principal payments in the amount of $15,000 per month until the Maturity Date, at which time a balloon payment of $430,000 of principal will become due and payable. In addition to the monthly principal payments, Borrower shall make monthly interest payments which shall accrue on the then outstanding balance of the Principal Amount at a fixed interest rate equal to 9% per annum. Accrued interest shall be payable in cash in arrears on the last day of each calendar month until the Principal Amount is paid in full. If at any time the outstanding Principal Amount shall be paid in full, then all accrued interest shall be payable at the time of such principal payment.” |
3. Note Ratified. Except as expressly amended hereby, the Note and previously executed amendments thereto are in all respects ratified and confirmed, and all of the terms, provisions and conditions thereof shall be and remain in full force and effect, and this Amendment and all of its terms, provisions and conditions shall be deemed to be a part of the Note.
4. No Events of Default. The Borrower confirms that, as of the date hereof, there exists no condition or event that constitutes (or that would after expiration of applicable grace or cure periods constitute) an Event of Default.
5. Costs and Expenses. Borrower agrees to pay any and all reasonable costs incurred in connection with preparation for closing, the closing, and post-closing items relating to this Amendment.
6. Governing Law. This Amendment, together with all of the rights and obligations of the parties hereto, shall be construed and interpreted in accordance with the laws of the State of New York, excluding the laws applicable to conflicts or choice of law.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their duly authorized representatives by their signatures below.
| CONGREGATION NOAM ELIMELECH (Lender) | ||
| /s/ Mayer Laufer | ||
| By: Mayer Laufer | ||
| Title: President | ||
| DOCUMENT SECURITY SYSTEMS, INC. (Borrower) | ||
| /s/ Philip Jones | ||
| By: Philip Jones | ||
| Title: Chief Financial Officer | ||
| 2 |
CONVERTIBLE PROMISSORY NOTE AMENDMENT No. 3
This CONVERTIBLE PROMISSORY NOTE AMENDMENT NO. 3 (the “ Amendment ”) is made as of April 12, 2016 (the “ Amendment Date ”) by and between DOCUMENT SECURITY SYSTEMS, INC. (“ Borrower ”), a corporation formed under the laws of the State of New York, with offices at 200 Canal View Boulevard, Suite 300, Rochester, New York 14623 and MAYER LAUFER (“ Lender ”).
This Amendment amends the Convertible Promissory Note (“ Note ”), dated December 30, 2011, made among Borrower and Lender, as follows. All capitalized terms used herein without definition shall have the meanings ascribed to them in the Note.
The parties agree as follows:
1. Section 1 of the Note shall be, and hereby is, amended to read in its entirety as follows:
| “1. | Maturity . The aggregate outstanding Principal Amount, together with all accrued interest thereon and expenses incurred by the Lender in connection herewith (cumulatively, the “Outstanding Amount”), shall be due and payable in full on the earliest to occur of (the earliest of such events being the “Maturity Date”): (i) May 31, 2017 (the “Scheduled Maturity Date”) and (ii) the acceleration of this Note upon the occurrence of an Event of Default.” |
2. Section 2 of the Note shall be, and hereby is, amended to read in its entirety as follows:
| “2. | Principal and Interest . Borrower shall continue to make principal payments in the amount of $15,000 per month until the Maturity Date, at which time a balloon payment of $155,000 of principal will become due and payable. In addition to the monthly principal payments, Borrower shall make monthly interest payments which shall accrue on the then outstanding balance of the Principal Amount at a fixed interest rate equal to 10% per annum. Accrued interest shall be payable in cash in arrears on the last day of each calendar month until the Principal Amount is paid in full. If at any time the outstanding Principal Amount shall be paid in full, then all accrued interest shall be payable at the time of such principal payment.” |
3. Note Ratified. Except as expressly amended hereby, the Note and previously executed amendments thereto are in all respects ratified and confirmed, and all of the terms, provisions and conditions thereof shall be and remain in full force and effect, and this Amendment and all of its terms, provisions and conditions shall be deemed to be a part of the Note.
4. No Events of Default. The Borrower confirms that, as of the date hereof, there exists no condition or event that constitutes (or that would after expiration of applicable grace or cure periods constitute) an Event of Default.
5. Costs and Expenses. Borrower agrees to pay any and all reasonable costs incurred in connection with preparation for closing, the closing, and post-closing items relating to this Amendment.
6 . Governing Law. This Amendment, together with all of the rights and obligations of the parties hereto, shall be construed and interpreted in accordance with the laws of the State of New York, excluding the laws applicable to conflicts or choice of law.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their duly authorized representatives by their signatures below.
| LENDER | |||
| /s/ Mayer Laufer | |||
| Mayer Laufer | |||
| DOCUMENT SECURITY SYSTEMS, INC. (Borrower) | |||
| By: | /s/ Philip Jones | ||
| Name: | Philip Jones | ||
| Title: | Chief Financial Officer |
| 2 |