FOR IMMEDIATE RELEASE
|Corey M. Horowitz, Chairman and CEO|
|Network-1 Technologies, Inc.|
NETWORK-1 REPORTS THIRD QUARTER RESULTS
New York, New York November 12, 2021 - Network-1 Technologies, Inc. (NYSE AMERICAN: NTIP), a company specializing in the development, licensing, and protection of its intellectual property assets, today announced financial results for the quarter ended September 30, 2021.
Network-1 had revenue of $17,000,000 and $35,692,000 for the three and nine months ended September 30, 2021, respectively, as compared to revenue of $4,150,000 and $4,366,000 for the three and nine months ended September 30, 2020, respectively. The increase in revenue of $12,850,000 for the three months ended September 30, 2021 was due to revenue of $17,000,000 from a litigation settlement with Hewlett Packard (HP). Similarly, the increase in revenue of $31,326,000 for the nine months ended September 30, 2021 was due primarily to the HP settlement and revenue of $18,692,000 from the resolution of a contractual dispute with Cisco Systems, Inc. concerning the licensing of Network-1’s Remote Power Patent.
Network-1 realized net income of $6,589,000 or $0.28 per share basic and $0.27 per share diluted for the three months ended September 30, 2021 compared with a net income of $1,687,000 or $0.07 per share basic and diluted for the three months ended September 30, 2020. The increased net income of $4,902,000 for the three months ended September 30, 2021 was primarily due to revenue of $17,000,000 from the HP settlement.
Network-1 realized net income of $15,257,000 or $0.63 per share basic and $0.62 diluted for the nine months ended September 30, 2021 compared with a net loss of $(234,000) or $(0.01) per share basic and diluted for the nine months ended September 30, 2020. The increase in net income of $15,491,000 for the nine months ended September 30, 2021 was primarily due to increased revenue of $31,326,000 from the HP settlement and resolution of the contractual dispute with Cisco.
At September 30, 2021, Network-1 had cash and cash equivalents and marketable securities of $60,840,000 and working capital of $57,251,000. Based on its current cash position, Network-1 believes that it will have sufficient cash to fund its operations for the foreseeable future.
On June 9, 2021, the Board of Directors of Network-1 approved the continuation of Network-1’s dividend policy which consists of semi-annual cash dividends of $0.05 per share ($0.10 per share annually) which dividends are anticipated to be paid in March and September of each year. On September 10, 2021, the Company’s Board of Directors declared a semi-annual cash dividend of $0.05 per share with a payment date of September 30, 2021 to common stockholders of record as of September 21, 2021. On February 23, 2021, Network-1’s Board of Directors declared a semi-annual cash dividend of $0.05 per share with a payment date of March 31, 2021 to all shareholders of record as of March 16, 2021. Network-1’s dividend policy undergoes a periodic review by the Board of Directors and is subject to change at any time depending upon Network-1’s earnings, financial requirements and other factors existing at the time.
ABOUT NETWORK-1 TECHNOLOGIES, INC.
Network-1 Technologies, Inc. is engaged in the development, licensing and protection of its intellectual property and proprietary technologies. Network-1 works with inventors and patent owners to assist in the development and monetization of their patented technologies. Network-1 currently owns eighty-eight (88) patents covering various telecommunications and data networking technologies as well as technologies relating to document stream operating systems and the identification of media content. Network-1’s current strategy includes efforts to monetize three patent portfolios (the Cox, Mirror Worlds and M2M/IoT Patent Portfolios). Network-1’s strategy is to focus on acquiring and investing in high quality patents which management believes have the potential to generate significant licensing opportunities as Network-1 has achieved with respect to its Remote Power Patent and Mirror Worlds Patent Portfolio. Network-1’s Remote Power Patent has generated licensing revenue in excess of $187,000,000 from May 2007 through September 30, 2021. Network-1 has achieved licensing and other revenue of $47,150,000 through September 30, 2021 with respect to its Mirror Worlds Patent Portfolio.
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, 2020 and its Quarterly Reports on 10-Q for the three months ended March 31, 2021, June 30, 2021 and September 30, 2021 filed with the Securities and Exchange Commission including, among others, Network-1’s uncertain revenue stream, uncertainty as to the outcome of pending litigations involving Network-1’s Remote Power Patent, Mirror Worlds patent portfolio and Cox patent portfolio, the ability of Network-1 to successfully execute its strategy to acquire or make investments in high quality patents with significant licensing opportunities, Network-1's ability to achieve revenue and profits from its Cox Patent Portfolio, its M2M/IoT Patent Portfolio and additional revenue and profit from its Mirror Worlds Patent Portfolio as well as a return on its investment in IliAD Biotechnologies, LLC or other intellectual property it may acquire or finance in the future, the ability of Network-1 to enter into additional license agreements, uncertainty as to whether cash dividends will continue be paid, Network-1's ability to enter into strategic relationships with third parties to license or otherwise monetize their intellectual property, the risk in the future of Network-1 being classified as a Personal Holding Company which may result in Network-1 issuing a special cash dividend to its stockholders, 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 consolidated statements of operations and comprehensive income (loss) and condensed consolidated balance sheet are attached.
NETWORK-1 TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
|Three Months Ended|
|Nine Months Ended|
|Costs of revenue||6,610,000||1,593,000||12,030,000||1,645,000|
|Professional fees and related costs||721,000||267,000||1,384,000||790,000|
|General and administrative||493,000||473,000||1,467,000||1,418,000|
|Amortization of patents||74,000||72,000||221,000||216,000|
|TOTAL OPERATING EXPENSES||7,963,000||2,490,000||15,285,000||4,311,000|
|Interest and dividend income, net||67,000||105,000||185,000||403,000|
|Net realized and unrealized gain (loss) on |
|Total other income, net||27,000||173,000||153,000||355,000|
|INCOME BEFORE INCOME TAXES AND EQUITY|
IN NET LOSSES OF EQUITY METHOD INVESTEE
|INCOME TAXES PROVISION:|
|Deferred taxes, net||(37,000||)||(355,000||)||1,635,000||79,000|
|Total income taxes provision||2,289,000||—||4,671,000||—|
|INCOME BEFORE SHARE OF NET LOSSES OF EQUITY METHOD INVESTEE:||$||6,775,000||$||1,833,000||$||15,889,000||$||410,000|
|SHARE OF NET LOSSES OF EQUITY METHOD INVESTEE||$||(186,000||)||$||(146,000||)||$||(632,000||)||$||(644,000||)|
|NET INCOME (LOSS)||$||6,589,000||$||1,687,000||$||15,257,000||$||(234,000||)|
|Net Income (loss) per share|
|Weighted average common shares outstanding:|
|Cash dividends declared per share||$||0.05||$||0.05||$||0.10||$||0.10|
|NET INCOME (LOSS)||$||6,589,000||$||1,687,000||$||15,257,000||$||(234,000||)|
OTHER COMPREHENSIVE INCOME (LOSS)
Net unrealized holding gain (loss) on corporate bonds and notes
|COMPREHENSIVE INCOME (LOSS)||$||6,585,000||$||1,620,000||$||15,261,000||$||(309,000||)|
Network-1 Technologies, Inc.
Condensed Consolidated Balance Sheets as of September 30, 2021
|Cash and cash equivalents and marketable securities||$||60,840,000|
|Total current assets||$||60,866,000|
|Total current liabilities||$||3,615,000|
|Total long-term liabilities||$||680,000|
|Total stockholders' equity||$||62,046,000|