Network-1 (NSSI) records remarkable quarterly results

Posted on: Monday, November 15th, 2010
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Network-1 Security Solutions, Inc. (OTCBB: NSSI) enjoyed heavy volume Monday after announcing favorable financial results and operating highlights for the quarter ended September 30, 2010. Heavily influencing these positive quarterly results was the settlement agreement reached by Network-1 in its patent infringement litigation against Adtran, Inc, Cisco Systems, Inc. and Cisco-Linksys, LLC, (collectively, “Cisco”), Enterasys Networks, Inc., Extreme Networks, Inc., Foundry Networks, Inc., and 3Com Corporation, Inc.

Based on the settlement reached, the companies listed above will pay Network-1 aggregate upfront payments of approximately $32 million and have also agreed to license Network-1’s Remote Power Patent for its full term, which expires in March 2020. Additionally, Cisco agreed to pay royalties, beginning in 2011, based on its sales of Power over Ethernet (“PoE”) products up to maximum royalty payments per year of $8 million through 2015 and $9 million per year through 2020.

Commenting on the impact of the litigation settlement and financial reports, Chairman and CEO of Network-1, Corey M. Horowitz said, “It was a very notable quarter for Network-1. We successfully resolved our second litigation over our Remote Power Patent and now have 11 licensees to this important technology, including some of the largest technology companies in the world. There are over two hundred companies selling PoE equipment and we look forward to successfully licensing them as we have demonstrated the quality of our intellectual property as well as our perseverance in defending it.’

Network-1 reported revenues of $32,560,000 for the three months ended September 30, 2010, a figure that includes $32,320,000 received from the settlement of patent litigation in July 2010. Network-1 reported net income of $21,805,000 or $0.89 per share for the three months ended September 30, 2010 as compared to a net loss of ($457,000) or $(0.07) for the same period in 2009.

“We continue to be presented with exciting opportunities in the IP commercialization and monetization space,” continued Mr. Horowitz. “Our knowledge, discipline and experience combined with our resources opens many doors in this fast growing business. Increasingly, companies are seeking to monetize their intellectual property portfolios, resulting in some large and well-publicized transactions, and Network-1 believes that it can be an effective participant in such endeavors.”

Share prices have grown immensely in the past six months, skyrocketing 117.5 percent from a low of .80 in May to the current price of 1.74.

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Category: OTCBB, Technology Stocks
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