NEW YORK, NY / ACCESSWIRE / March 20, 2020 / 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 year ended December 31, 2019.
Network-1 had revenue of $3,037,000 for the year ended December 31, 2019 as compared to revenue of $22,106,000 for the year ended December 31, 2018. The decrease in revenue of $19,069,000 for 2019 was primarily due to revenue from Network-1's fully-paid License with Juniper Networks, Inc. of $12,700,000 related to a litigation settlement and $6,320,000 of revenue from sale of Network-1's Avaya unsecured claim in 2018. Excluding revenue from fully-paid licenses, revenue from royalty bearing licenses decreased by $49,000 from $3,086,000 for 2018 to $3,037,000 for 2019.
Network-1 reported a net loss of $(1,792,000) or $(0.07) per share (basic) and (diluted) for 2019 compared with net income of $7,706,000 or $0.32 per share (basic) and $0.30 per share (diluted) for 2018. Included in the results for 2019 and 2018 are non-cash stock-based compensation expenses of $567,000 and $687,000 and non-cash amortization expense of $285,000 and $290,000, respectively. The decrease in net income of $9,498,000 for 2019 was primarily due to income in 2018 associated with Network-1's fully-paid license with Juniper of $12,700,000 and from the sale of the Avaya claim of $6,320,000, less related costs.
At December 31, 2019, Network-1's principal sources of liquidity consisted of cash and cash equivalents and marketable securities of 48,317,000 and working capital of $47,189,000. Based on its cash position, Network-1 continually reviews opportunities to acquire additional intellectual property for development and licensing as well as evaluates other strategic alternatives.
The following are financial and strategic highlights for 2019:
Network-1 owned approximately 10.3% of the outstanding units of ILiAD (on a non-fully diluted basis) at December 31, 2019. In connection with this investment, Corey M. Horowitz, Network-1's Chairman and Chief Executive Officer, became a member of ILiAD's Board of Managers.
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 (80) 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 continuing to pursue licensing opportunities for its Remote Power Patent and its 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 $147,000,000 from May 2007 through December 31, 2019. Network-1 has achieved licensing and other revenue of $47,150,000 through December 31, 2019 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, 2019 filed with the Securities and Exchange Commission, including, among others, Network-1's uncertain revenue stream, the risk that Network-1 will not receive significant licensing revenue from Cisco and other licensees if the District Court order confirming the HP jury verdict finding of non-infringement is not reversed by the Federal Circuit Court of Appeals, 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, the uncertainty of patent litigation and proceedings at the United States Patent and Trademark Office, the difficulty in Network-1 verifying royalty amounts owed to it by its licensees, 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, 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.
Network-1's condensed statements of income and comprehensive income and condensed balance sheet are attached.
Years Ended December 31, | ||||||||
2019 | 2018 | |||||||
REVENUE | $ | 3,037,000 | $ | 22,106,000 | ||||
OPERATING EXPENSES: | ||||||||
Costs of revenue | 882,000 | 8,072,000 | ||||||
Professional fees and related costs | 1,490,000 | 1,635,000 | ||||||
General and administrative | 2,167,000 | 2,255,000 | ||||||
Amortization of patents | 285,000 | 290,000 | ||||||
Stock-based compensation | 567,000 | 687,000 | ||||||
TOTAL OPERATING EXPENSES | 5,391,000 | 12,939,000 | ||||||
OPERATING INCOME (LOSS) | (2,354,000 | ) | 9,167,000 | |||||
OTHER INCOME (LOSS): | ||||||||
Interest and dividend income, net | 1,150,000 | 876,000 | ||||||
Net realized and unrealized gain (loss) on marketable securities | 37,000 | (29,000 | ) | |||||
Total other income, net | 1,187,000 | 847,000 | ||||||
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET LOSSES OF EQUITY METHOD INVESTEE | (1,167,000 | ) | 10,014,000 | |||||
INCOME TAXES PROVISION: | ||||||||
Current | (147,000 | ) | 2,308,000 | |||||
Deferred taxes, net | 168,000 | - | ||||||
Total income taxes provision | 21,000 | 2,308,000 | ||||||
INCOME (LOSS) BEFORE SHARE OF NET LOSSES OF EQUITY METHOD INVESTEE: | (1,188,000 | ) | $ | 7,706,000 | ||||
SHARE OF NET (LOSSES) OF EQUITY METHOD INVESTEE | $ | (604,000 | ) | $ | - | |||
NET INCOME (LOSS) | $ | (1,792,000 | ) | $ | 7,706,000 | |||
Net Income (Loss) Per Share: | ||||||||
Basic | $ | (0.07 | ) | $ | 0.32 | |||
Diluted | $ | (0.07 | ) | $ | 0.30 | |||
Weighted average common shares outstanding: | ||||||||
Basic | 23,978,774 | 23,763,785 | ||||||
Diluted | 23,978,774 | 25,354,978 | ||||||
Cash dividends declared per share | $ | 0.10 | $ | 0.10 | ||||
NET INCOME (LOSS) | $ | (1,792,000 | ) | $ | 7,706,000 | |||
OTHER COMPREHENSIVE INCOME (LOSS): | ||||||||
Net unrealized holding gain (loss) on corporate bonds and notes arising during the year, net of tax | 160,000 | (39,000 | ) | |||||
COMPREHENSIVE INCOME (LOSS) | $ | (1,632,000 | ) | $ | 7,667,000 |
Condensed Consolidated Balance Sheet as of December 31, 2019
Cash and cash equivalents | $ | 22,587,000 | ||
Marketable securities | $ | 25,730,000 | ||
Total current assets | $ | 48,758,000 | ||
Total assets | $ | 55,076,000 | ||
Total current liabilities | $ | 1,569,000 | ||
Total long term liabilities | $ | -0- | ||
Total stockholders' equity | $ | 53,507,000 |
Contacts:
Network-1 Technologies, Inc.
Corey M. Horowitz, Chairman and CEO
212-829-5770 (o)
917-692-0000 (m)
SOURCE: Network-1 Technologies, Inc.