Click here to close now.




















Welcome!

News Feed Item

Network-1 Reports Third Quarter 2012 Results

NEW YORK, Nov. 14, 2012 /PRNewswire/ -- Network-1 Security Solutions, Inc. (OTC BB: NSSI) today announced financial results for the quarter ended September 30, 2012. 

Network-1 had revenues of $1,418,000 and $7,809,000 for the three and nine months ended September 30, 2012, respectively, as compared with revenue of $1,222,000 and $6,611,000 for the three and nine months ended September 30, 2011, respectively.  

Network-1 reported net income of $194,000 or $0.01 per share (basic) and $0.01 (diluted) for the third quarter ended September 30, 2012 as compared to a net income of $248,000 or $0.01 per share (basic) and $0.01 (diluted) for the third quarter ended September 30, 2011.   

Network-1 reported net income for the nine months ended September 30, 2012 of $2,854,000 or $.0.11 per share (basic) and $0.10 per share (diluted), compared with a net income of $8,580,000 or $0.33 per share (basic) and $0.28 (diluted) for the nine months ended September 30, 2011. 

Included in the net income for the nine month period ended September 30, 2011 were (i) a one-time, non-cash income tax benefit of $7,000,000 (recorded on the balance sheet as a deferred tax asset) and (ii) $1,000,000 of additional patent expense payable to a third party because Network-1 achieved $25 million in net royalties from licensing its Remote Power Patent.  Before consideration of the one-time income tax benefit and patent expense, net income for the nine months ended September 30, 2011 was $1,826,000 or $0.07 per share (basic) and $0.06 per share (diluted). 

At September 30, 2012, Network-1 had net operating loss carryforwards (NOLs) totaling approximately $24,980,000 expiring between 2020 and 2031, with a future tax benefit of approximately $8,470,000.  During the three month period ended September 30, 2012 as a result of income (before taxes) for the period of $346,000, $152,000 was recorded as income tax expense, of which $141,000 was a non-cash expense, and accordingly the deferred tax asset was reduced by $141,000 to $6,194,000.  During the three month period ended September 30, 2011 as a result of income (before taxes) for the period of $421,000, $173,000 was recorded as income tax expense, of which $140,000 was a non-cash expense, and accordingly the deferred tax asset was reduced by $140,000 to $6,860,000.

To the extent Network-1 earns income in the future, it will report income tax expense and such expense attributable to federal income taxes will reduce the recorded income tax asset reflected on the balance sheet.  Management will continue to evaluate the recoverability of the NOL and adjust the deferred tax asset appropriately.

"It was a quarter of continued growth for Network-1", commented Corey M. Horowitz, Chairman and CEO of Network-1.  "Our royalty revenues from our Remote Power Patent for the quarter were higher from most of our royalty paying licensees as compared with the second quarter of 2011.  We now have 14 licensees to this important technology, including some of the largest technology companies in the world", he continued. 

In September 2011, Network-1 initiated patent litigation against 16 data networking equipment manufacturers in the United States District Court for the Eastern District of Texas, Tyler Division, for infringement of its Remote Power Patent.  Named as defendants in the lawsuit, excluding related parties, were Alcatel-Lucent USA, Inc., Allied Telesis, Inc., Avaya Inc., AXIS Communications Inc., Dell, Inc., GarrettCom, Inc., Hewlett-Packard Company, Huawei Technologies USA, Juniper Networks, Inc., Motorola Solutions, Inc., NEC Corporation, Polycom Inc., Samsung Electronics Co., Ltd., ShoreTel, Inc., Sony Electronics, Inc., and Transition Networks, Inc.  Network-1 seeks monetary damages based upon reasonable royalties.  In March 2012, Network-1 reached settlement agreements with defendants Motorola Solutions, Inc. ("Motorola") and Transition Networks, Inc. ("Transition Networks").  In October 2012, Network-1 reached a settlement agreement with defendant GarrettCom, Inc. ("GarrettCom").  As part of the settlements, Motorola, Transition Networks and GarrettCom each entered into a non-exclusive license agreement for Network-1's Remote Power Patent pursuant to which each such defendant agreed to license the Remote Power Patent for its full term (which expires in March 2020) and pay a license initiation fee and quarterly or annual royalties based on their sales of PoE products.

ABOUT NETWORK-1 SECURITY SOLUTIONS, INC.

Network-1 Security Solutions, Inc. is engaged in the acquisition, development, licensing and protection of its intellectual property and proprietary technologies. It currently owns six patents covering various telecommunications and data networking technologies and is currently focusing its licensing efforts on its Remote Power Patent (U.S. Patent No. 6,218,930) covering the remote delivery of power over Ethernet networks.  The Remote Power Patent was granted by the U.S. Office of Patents and Trademarks on April 21, 2001 and expires on March 11, 2020.  Network-1 has entered into fourteen (14) license agreements with respect to its Remote Power Patent which include, among others, license agreements with Cisco Systems, Inc. and Cisco-Linksys, Microsemi Corporation, Motorola Solutions, Inc., Extreme Networks, Inc., Netgear, Inc. and several other major data networking equipment manufacturers.

This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements address future events and conditions concerning Network-1's business plans. Such statements are subject to a number of risk factors and uncertainties as disclosed in the Network-1's Annual Report on Form 10-K for the year ended December 31, 2011 and its Quarterly Report on 10-Q for the quarter ended September 30, 2012 including, among others, the ability of Network-1 to enter into additional license agreements with third parties for its intellectual property or the intellectual property of its strategic partners, the ability of Network-1 to receive significant royalties from its existing license agreements, the uncertainty of patent litigation, Network-1's ability to achieve revenues and profits from its intellectual property or the intellectual property of its strategic partners, Network-1's ability to execute its strategy to acquire additional patents or enter into strategic relationships with third parties to license or otherwise monetize their intellectual property, risks associated with the pending reexamination of the Remote Power Patent by the United States Patent and Trademark Office, the continued viability of the PoE market, future economic conditions and technology changes and legislative, regulatory and competitive developments. Except as otherwise required to be disclosed in periodic reports, Network-1 expressly disclaims any future obligation or undertaking to update or revise any forward-looking statement contained herein.

The condensed statements of operations and condensed balance sheets are attached.



Three Months Ended

September 30,

Nine Months Ended

September 30,


2012

2011

2012

2011






ROYALTY REVENUE

$     1,418,000

$  1,222,000

$   7,809,000

$    6,611,000

COST OF REVENUE

393,000

341,000

2,341,000

1,883,000

    GROSS PROFIT

1,025,000

881,000

5,468,000

4,728,000

OPERATING EXPENSES:





   General and Administrative

624,000

411,000

1,660,000

1,693,000

   Additional Patent Expense

1,000,000

   Non-Cash compensation

58,000

59,000

223,000

268,000






                TOTAL OPERATING EXPENSES

682,000

470,000

1,883,000

2,961,000






OPERATING INCOME

343,000

411,000

3,585,000

1,767,000
















OTHER INCOME (EXPENSES):





   Interest income, net

3,000

10,000

22,000

42,000
















INCOME BEFORE INCOME TAXES

346,000

421,000

3,607,000

1,809,000











INCOME TAXES (BENEFIT)





   Current

11,000

33,000

44,000

89,000

   Deferred

141,000

140,000

709,000

(6,860,000 )

   Total Income Taxes (Benefit)

152,000

173,000

753,000

(6,771,000)

NET INCOME

$       194,000

$   248,000

$    2,854,000

$    8,580,000











Net Income per share -  Basic

$           0.01

$          0.01

$            0.11

$             0.33

                                -  Diluted

$           0.01

$          0.01

$            0.10

$             0.28











Weighted average number of common shares outstanding:










                                -     Basic

25,963,093

26,014,578

25,659,085

25,979,596

                                -     Diluted

28,516,642

30,991,041

28,544,972

30,956,059






NET INCOME

$       194,000

$  248,000

$    2,854,000

$ 8,580,000






OTHER COMPREHENSIVE INCOME NET OF TAX:     Unrealized gain (loss) arising during period

(6,000)

(4,000)






COMPREHENSIVE INCOME

 

$       188,000

$         248,000

$    2,850,000

$   8,560,000

 

Condensed Balance Sheet as of September 30, 2012



Cash and cash equivalents

$  22,213,000



   Total current assets

$  24,320,000



   Total assets

$ 30,600,000



   Total current liabilities

$    668,000



   Total long term liabilities

$  -0-



   Total stockholders' equity

$29,932,000



 

Corey M. Horowitz, Chairman and CEO


Network-1 Security Solutions, Inc.


(212) 829-5770

SOURCE Network-1 Security Solutions, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
The Internet of Things is in the early stages of mainstream deployment but it promises to unlock value and rapidly transform how organizations manage, operationalize, and monetize their assets. IoT is a complex structure of hardware, sensors, applications, analytics and devices that need to be able to communicate geographically and across all functions. Once the data is collected from numerous endpoints, the challenge then becomes converting it into actionable insight.
eCube Systems has released NXTmonitor, a full featured application orchestration solution. NXTmonitor, which inherited the code base of NXTminder, has been extended to support multi-discipline processes and will act as a DevOps utility in a heterogeneous enterprise environment. Previously, NXTminder was packaged with NXTera middleware to configure and manage Entera and NXTera RPC servers. “Since we are widening the focus of this solution to DevOps, we felt the need to change the name to NXTmon...
Contrary to mainstream media attention, the multiple possibilities of how consumer IoT will transform our everyday lives aren’t the only angle of this headline-gaining trend. There’s a huge opportunity for “industrial IoT” and “Smart Cities” to impact the world in the same capacity – especially during critical situations. For example, a community water dam that needs to release water can leverage embedded critical communications logic to alert the appropriate individuals, on the right device, as...
As more and more data is generated from a variety of connected devices, the need to get insights from this data and predict future behavior and trends is increasingly essential for businesses. Real-time stream processing is needed in a variety of different industries such as Manufacturing, Oil and Gas, Automobile, Finance, Online Retail, Smart Grids, and Healthcare. Azure Stream Analytics is a fully managed distributed stream computation service that provides low latency, scalable processing of ...
The 5th International DevOps Summit, co-located with 17th International Cloud Expo – being held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the ...
Mobile, social, Big Data, and cloud have fundamentally changed the way we live. “Anytime, anywhere” access to data and information is no longer a luxury; it’s a requirement, in both our personal and professional lives. For IT organizations, this means pressure has never been greater to deliver meaningful services to the business and customers.
Akana has announced the availability of the new Akana Healthcare Solution. The API-driven solution helps healthcare organizations accelerate their transition to being secure, digitally interoperable businesses. It leverages the Health Level Seven International Fast Healthcare Interoperability Resources (HL7 FHIR) standard to enable broader business use of medical data. Akana developed the Healthcare Solution in response to healthcare businesses that want to increase electronic, multi-device acce...
SYS-CON Events announced today that the "Second Containers & Microservices Expo" will take place November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities.
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies leverage disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advance...
Red Hat is investing in Tesora, the number one contributor to OpenStack Trove Database as a Service (DBaaS) also ranked among the top 20 companies contributing to OpenStack overall. Tesora, the company bringing OpenStack Trove Database as a Service (DBaaS) to the enterprise, has announced that Red Hat and others have invested in the company as a part of Tesora's latest funding round. The funding agreement expands on the ongoing collaboration between Tesora and Red Hat, which dates back to Febr...
Puppet Labs has announced the next major update to its flagship product: Puppet Enterprise 2015.2. This release includes new features providing DevOps teams with clarity, simplicity and additional management capabilities, including an all-new user interface, an interactive graph for visualizing infrastructure code, a new unified agent and broader infrastructure support.
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
Any Ops team trying to support a company in today’s cloud-connected world knows that a new way of thinking is required – one just as dramatic than the shift from Ops to DevOps. The diversity of modern operations requires teams to focus their impact on breadth vs. depth. In his session at DevOps Summit, Adam Serediuk, Director of Operations at xMatters, Inc., will discuss the strategic requirements of evolving from Ops to DevOps, and why modern Operations has begun leveraging the “NoOps” approa...
SYS-CON Events announced today that G2G3 will exhibit at SYS-CON's @DevOpsSummit Silicon Valley, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Based on a collective appreciation for user experience, design, and technology, G2G3 is uniquely qualified and motivated to redefine how organizations and people engage in an increasingly digital world.
SYS-CON Events announced today that DataClear Inc. will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. The DataClear ‘BlackBox’ is the only solution that moves your PC, browsing and data out of the United States and away from prying (and spying) eyes. Its solution automatically builds you a clean, on-demand, virus free, new virtual cloud based PC outside of the United States, and wipes it clean...