Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 1 of 19 Page ID #:316
`Case 2:17-cv—04263-JVS—JCG Document 29-6 Filed 09/06/17 Page 1 of 19 Page ID #:316
`
`EXHIBIT 6
`
`EXHIBIT 6
`
`
`Case 2:17-cv—04263-JVS—JCG Document 29-6 Filed 09/06/17 Page 1 of 19 Page ID #:316
`
`EXHIBIT 6
`
`EXHIBIT 6
`
`
`
`Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 2 of 19 Page ID #:317
`
`NYSE MKT:DSS
`
`Corporate Overview
`
`April 2017
`
`
`
`Forward-Looking Statements
`
`Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 3 of 19 Page ID #:318
`
`NYSE MKT: DSS
`
`Forward-looking statements that may be contained in this presentation, including, without limitation,
`statements related to the Company’s plans, strategies, objectives, expectations, potential value,
`intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private
`Securities Litigation Reform Act and contain words such as “believes,” “anticipates,” “expects,”
`“plans,” “intends” and similar words and phrases.
`These forward-looking statements are subject to risks and uncertainties that could cause actual
`results to differ materially from the results projected in any forward-looking statement. In addition to
`the factors specifically noted in the forward-looking statements, other important factors, risks and
`uncertainties that could result in those differences include, but are not limited to, those disclosed in
`the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December
`31, 2016, filed with the Securities and Exchange Commission on March 28, 2017. Forward-looking
`statements that may be contained in this presentation are being made as of the date of its release,
`and the Company assumes no obligation to update the forward-looking statements, or to update the
`reasons why actual results could differ from those projected in the forward-looking statements.
`
`2
`
`
`
`Key Stats (NYSE MKT: DSS)
`
`Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 4 of 19 Page ID #:319
`
`Stock Price (4/3/17)
`52 Week Low-High
`
`Avg. Daily Vol. (3 mo.)
`
`Shares Outstanding
`
`$1.16
`
`$0.42-$1.64
`
`Total Revenue (YE 2016)
`Adj. EBITDA (YE 2016)
`
`$19.2M
`
`$1,061,000
`
`146,180
`
`13.7M
`
`EPS (2016)
`P/S (2016)
`Cash (December 31, 2016)
`Total Assets (Dec 31, 2016)
`
`Total Debt (Dec 31, 2016)
`
`$(0.07)
`0.82x
`
`$5.9M
`$18.5M
`
`$6.5M
`
`Market Cap
`
`$15.8M
`
`Date Founded
`
`Employee Count
`
`1984
`
`103
`
`Data sources: Yahoo! Finance, S&P Capital IQ, company estimates
`Figures in USD unless otherwise noted;
`
`NYSE MKT: DSS
`
`Revenue
`
`Tech Sales & Licensing Revenue
`Printed Product Revenue
`$ millions
`$19.2
`$18.3
`$17.5
`1.9
`1.8
`2.0
`
`$17.5
`1.8
`
`15.5
`
`16.5
`
`15.7
`
`17.3
`
`2013
`
`2014
`
`2015
`
`2016
`
`3
`
`
`
`Our Expertise
`
`Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 5 of 19 Page ID #:320
`
`NYSE MKT: DSS
`
`n We have 3 primary areas of focus:
`n Digital Solutions
`n Printed Products
`n Licensing and IP Monetization
`n Our core technologies help prevent documents
`from being copied or scanned.
`n Our technologies lie at the heart of the brand
`protection field- which addresses the $1 trillion
`global brand and product counterfeiting problem.
`n We continuously invest in R&D to remain leaders in
`our market and have a broad IP portfolio.
`n We seek significant returns from IP monetization
`investments
`
`Security
`Mark
`
`Application
`
`Database
`
`Original
`
`Copy
`
`Scan
`
`
`
`Counterfeiting is a Global Epidemic
`
`Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 6 of 19 Page ID #:321
`
`NYSE MKT: DSS
`
`• 10% of Global GNP is
`counterfeit goods1
`
`• $1 trillion losses globally
`($250B in U.S.)2
`
`• $142B anti-counterfeit
`packaging market3
`
`1) U.S. Chamber of Commerce
`2) GCCCP – United Nations World IP Organization
`3) Allied Market Research, March 2014
`4) ICE Newsroom
`5) eBay, LVMH reach settlement over fake goods; CBS news, 7/17/2014
`
`• Leading up to Super Bowl XLIX agents
`seized more than 326,147 items of phony
`sports memorabilia along with other
`counterfeit items worth more than $19.5
`million4
`
`• In 2014, LVMH settled litigation with
`eBay, in which it was disclosed that 90
`percent of the designer goods sold on
`eBay were fakes, and eBay had removed
`more than two million sellers who had
`violated the trademarks of rights holders5
`
`
`
`Scanning/Copying Deterrents
`
`Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 7 of 19 Page ID #:322
`
`NYSE MKT: DSS
`
`DSS core optical deterrent technologies help deter the
`most prevalent source of counterfeiting - desktop
`scanning and color copying by a digital scanner.
`
`According to the U.S. Secret Service 2010 Annual Report:
`
`“The widespread use of personal computers and advancements in
`digital printing technology have provided more individuals the
`opportunity to manufacture a passable counterfeit note with
`relative ease. Approximately 63 percent of the counterfeit currency
`passed domestically in FY 2010 was produced using digital printing
`means, compared with less than one percent in FY 1995.”
`
`1%
`
`1995
`
`63%
`
`2010
`
`
`
`Our Revenue Channels
`
`Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 8 of 19 Page ID #:323
`
`NYSE MKT: DSS
`
`Digital Solutions
`
`Printed Products
`
`IP Licensing & Monetization
`
`Develop applications for
`authentication & security
`
`•
`
`• Next–generation brand
`protection solution
`Integrates print security, data
`security, and GPS tracking
`technologies
`• SaaS licensing model
`
`Manufacture
`secure printed products
`• Deliver custom security
`printing, packaging and ID
`card products to end-user
`customers
`• Supports licensing business
`
`Develop, acquire
`& license technology
`• Expand market reach of
`technologies
`• Creates partners to enhance
`capabilities for customers
`• Enter new markets
`
`
`
`DSS Digital Solutions
`
`Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 9 of 19 Page ID #:324
`
`NYSE MKT: DSS
`
`❸ IP Licensing and Monetization
`
`The Mark
`
`The App
`
`The Database
`
`❶ Digital Solutions
`
`❷ Printed
`Products
`n AuthentiGuard®: Authenticates
`packaging and printed material
`through a mobile application
`n Target market: Brand Protection for
`consumer products, industrial
`components & pharmaceuticals
`
`n AuthentiSite: Verifies authenticity
`of websites
`n Target markets: Online retail &
`wholesalers
`
`The Mark
`
`The App
`
`The Portal
`
`For more information: www.authentiguard.com
`
`8
`
`
`
`DSS Digital Solutions
`
`Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 10 of 19 Page ID
` #:325
`
`❸ IP Licensing and Monetization
`
`NYSE MKT: DSS
`
`❶ Digital Solutions
`
`❷ Printed
`Products
`AuthentiGuard™
`
`n Product development since October 2012
`n $2 million R&D budget (patent protected)
`n Targets the global brand protection
`market estimated to hit $3.8 billion in
`2018.1
`
`The Application
`
`The Mark
`
`The Database
`
`• Fills a significant void in the current brand
`protection market- a covert tracking system
`that uses existing production means and
`authentication tools and is resistant to
`copying and scanning.
`
`• Customer targets include large multi-
`nationals seeking brand protection solution.
`• We are now often dealing with new “brand
`protection” departments.
`Longer sales cycles touching marketing,
`production and security groups.
`Sales contracts expected to be $300,000 -$3
`million per customer.
`
`•
`
`•
`
`For more information: www.authentiguard.com
`1- Smithers Pira The Future of Anticounterfeiting, Brand Protection and Security Packaging VII
`
`9
`
`• Profitability with first enterprise customer,
`scales quickly.
`
`
`
`Printed Products
`
`Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 11 of 19 Page ID
` #:326
`
`NYSE MKT: DSS
`
`❶ Digital Solutions
`
`❷ Printed
`Products
`
`❸ IP Licensing and
`Monetization
`
`n Core competency: Delivery of
`patented “optical deterrence”
`security technologies across multiple
`products.
`n Supports continuous R&D efforts to
`stay ahead of new counterfeiting
`risks.
`n Profitable division with strong
`customer base.
`
`Products
`n Secure and commercial
`packaging solutions
`n Intelligent cards that
`authenticate identity &
`resist counterfeiting
`
`n Printing services that
`leverage DSS’ fraud
`protection technology
`
`10
`
`
`
`Printed Products
`
`Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 12 of 19 Page ID
` #:327
`
`NYSE MKT: DSS
`
`❶ Digital Solutions
`
`❷ Printed
`Products
`
`2016 Printed Products
`Revenue Mix
`
`7%
`
`25%
`
`68%
`
`Packaging
`
`ID Cards
`
`Printing
`
`❸ IP Licensing and
`Monetization
`n Packaging:
`n Multi-year agreements with largest
`customers provides stable,
`predictable revenue
`n Platform for integration with
`Authentiguard™ roll-out
`n ID Cards:
`n RFID focus offers significant upsell
`to core customer group
`n Strong presence in event badges
`(Super Bowl, World Series, etc.)
`n Printing:
`n Security printing relationships with
`Fortune 500 consumer brands.
`
`Note: Figures unaudited
`
`11
`
`
`
`IP Licensing and Monetization
`
`Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 13 of 19 Page ID
` #:328
`
`NYSE MKT: DSS
`
`❷ Printed
`Products
`
`❶ Digital Solutions
`Licensing
`n Long-standing licenses with top
`security printers in the U.S.
`n RR Donnelly
`n Banknote Corp. of America
`n Our licensees use DSS technology for
`wide–range of secure documents:
`n Checks, government documents,
`coupons, vital records, etc.
`n Licensing provides high-margin
`returns and expanded production
`network
`n $800,000 annual run rate
`
`❸ IP Licensing and Monetization
`IP Monetization
`n Follow the “technology roadmap” of our
`business lines to create new solutions and
`identify IP with significant commercial &
`licensing potential
`n Opportunistic IP acquisition - highly
`selective
`n License IP/patents to commercial partners
`n Enforce IP where commercialization is
`blocked by competitors
`n Utilize co-investor and contingent legal to
`support IP enforcement efforts
`
`12
`
`
`
`Active IP Litigation
`
`Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 14 of 19 Page ID
` #:329
`
`NYSE MKT: DSS
`
`❶ Digital Solutions
`
`❷ Printed
`Products
`
`❸ IP Licensing and Monetization
`
`Technology
`
`Status
`
`Current Defendants
`
`Use of wireless peripheral
`devices in “Personal Data
`Network”
`
`§ Case pending in the Northern District of
`California
`§ IPR decision in favor of defendant
`§ DSS evaluating IPR appeal
`§ Case stayed pending IPR outcome
`
`Semiconductor
`Fabrication
`
`§ Cases pending in the Eastern District of Texas
`§ IPRs pending
`§ Cases stayed pending IPR outcomes
`
`13
`
`
`
`Income Statement Highlights
`
`Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 15 of 19 Page ID
` #:330
`
`NYSE MKT: DSS
`
`Revenue
`
`$ millions
`
`Tech Sales & Licensing Revenue
`Printed Product Revenue
`$19.2
`$18.3
`$17.5
`$17.5
`$1.9
`$1.8
`$1.8
`$2.0
`
`$15.5
`
`$16.5
`
`$15.7
`
`$17.3
`
`SG&A Expenses
`(Excluding stock based compensation and IP
`Amortization and Impairments)
`$ millions
`
`$9.9
`
`$9.5
`
`$8.0
`
`$7.0
`
`2013
`
`2014
`
`2015
`
`2016
`
`2013
`
`2014
`
`2015
`
`2016
`
`14
`
`
`
`Income Statement Highlights
`
`Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 16 of 19 Page ID
` #:331
`
`NYSE MKT: DSS
`
`Adjusted EBITDA
`(earnings before interest, taxes, depreciation and amortization,
`stock based compensation and other non-recurring items)
`$ millions
`
`1
`
`2013
`
`2014
`
`2015
`
`2016
`$1.1
`
`1Q_16
`
`2Q_16
`
`3Q_16
`
`4Q_16
`
`$0.7
`
`$0.4
`
`$0.1
`
`($0.1)
`
`($1.3)
`
`Strong Adjusted EBITDA trends as Company
`achieves positive Adjusted EBITDA for 2016.
`
`($2.0)
`
`($2.8)
`
`1- Figures unaudited
`
`15
`
`
`
`Balance Sheet Summary
`
`Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 17 of 19 Page ID
` #:332
`
`NYSE MKT: DSS
`
`Select Balance Sheet Items
`
`$Millions
`
`Cash & restricted cash
`Net working capital
`Total assets
`
`Total debt
`Total liabilities
`
`Total stockholders’ equity
`
`December 31,
`2016
`
`$5.9
`$1.8
`$18.5
`
`$6.5
`$15.2
`
`$3.3
`
`16
`
`
`
`Value Propositions
`
`Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 18 of 19 Page ID
` #:333
`
`NYSE MKT: DSS
`
`n Differentiated business model — focused on high growth
`commercialization and licensing opportunities
`
`n Valuable near-term growth opportunities with AuthentiGuard™ & other
`technology products
`
`n Significant upside potential with IP licensing
`
`n Catalysts include potential product successes and litigation milestones
`
`17
`
`
`
`Contact Us
`
`Case 2:17-cv-04263-JVS-JCG Document 29-6 Filed 09/06/17 Page 19 of 19 Page ID
` #:334
`
`NYSE MKT: DSS
`
`DSS Investor Relations
`Tel (585) 325-3610
`IR@dsssecure.com
`
`Document Security Systems, Inc.
`200 Canal View Blvd, Suite 300
`Rochester, NY 14623
`www.dsssecure.com
`
`18
`
`
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