8-K
Network-1 Technologies, Inc. (NTIP)
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 10, 2024
NETWORK-1
TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-15288 | 11-3027591 |
|---|---|---|
| (State or Other Jurisdiction | (Commission | (I.R.S. Employer |
| of Incorporation) | File Number) | Identification No.) |
65Locust Avenue, Third Floor, NewCanaan , Connecticut
06840
(Address of Principal Executive Offices) (Zip Code)
(203)
920-1055
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Securities registered
pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common<br> Stock, par value $0.01 per share | NTIP | NYSE<br> American |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17<br> CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17<br> CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange<br> Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange<br> Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On May 10, 2024, Network-1 Technologies, Inc. issued a press release announcing its financial results for the three months ended March 31, 2024. A copy of the press release is attached hereto as Exhibit 99.1.
| Item 9.01 | Financial Statements and Exhibits. |
|---|
(d) Exhibits
| Exhibit No. | ****<br><br>Description |
|---|---|
| 99.1 | Press<br> Release dated May 10, 2024 |
| 104 | Cover Page Interactive Data<br> File (embedded within the Inline XBRL document). |
| -2- | |
| --- |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| NETWORK-1 TECHNOLOGIES, INC. | ||
|---|---|---|
| Dated:<br> May 14, 2024 | By: | /s/ Corey M.<br> Horowitz |
| Name: Corey<br> M. Horowitz<br><br> <br>Title: Chairman<br> and Chief Executive Officer |
-3-
Exhibit****99.1
FORIMMEDIATE RELEASE
Corey M. Horowitz, Chairman and CEO
Network-1 Technologies, Inc.
203-920-1055
NETWORK-1REPORTS FIRST QUARTER 2024 RESULTS
NewCanaan, Connecticut – May 10, 2024 – Network-1 Technologies, Inc. (NYSE American: NTIP), a company engaged in the acquisition, development, licensing, and monetization of intellectual property assets, today announced financial results for the quarter ended March 31, 2024.
Network-1 had no revenue for the three months ended March 31, 2024, as compared to $537,000 of revenue for the three months ended March 31, 2023. The revenue of $537,000 for the three months ended March 31, 2023 was from the settlement of several patent infringement lawsuits concerning Network-1’s Remote Power Patent.
Network-1 reported a net loss of $920,000 or $0.04 per share basic and diluted for the three months ended March 31, 2024 compared with a net loss of $623,000 or $0.03 per share basic and diluted for the three months ended March 31, 2023. Exclusive of its share of losses of its equity method investee ILiAD Biotechnologies, LLC of $628,000, Network-1 incurred a loss of $292,000 for the three months ended March 31, 2024, compared with income of $51,000 for the three months ended March 31, 2023.
At March 31, 2024, Network-1’s principal sources of liquidity consisted of cash and cash equivalents and marketable securities of $43,394,000 and working capital of $43,067,000. Network-1 believes based on its current cash position that it will have sufficient cash to fund its operations for the foreseeable future.
Since the inception of Network-1’s Share Repurchase Program through March 31, 2024, Network-1 has repurchased an aggregate of 9,724,540 shares of its common stock at an aggregate cost of $18,894,986 (exclusive of commissions) or an average per share price of $1.97. Network-1 repurchased 83,744 shares of its common stock during the three months ended March 31, 2024 at an aggregate cost of $182,070, or an average per share price of $2.17. At March 31, 2024, the dollar value of remaining shares that may be repurchased under the Share Repurchase Program was $4,190,635.
Network-1 continues to pay dividends consistent with its dividend policy which consists of semi-annual cash dividends of $0.05 per share ($0.10 per share annually) which are anticipated to be paid in March and September of each year. On February 23, 2024, Network-1’s Board of Directors declared a semi-annual cash dividend of $0.05 per share which was paid on March 29, 2024 to all shareholders of record as of March 15, 2024. 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 one hundred two (102) U.S. patents and fifteen (15) foreign 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 five patent portfolios (the Cox, M2M/IoT, HFT, Mirror Worlds and Remote Power 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 $188,000,000 from May 2007 through March 31, 2024. Network-1 has achieved licensing and other revenue of $47,150,000 through March 31, 2024 with respect to its Mirror Worlds Patent Portfolio.
Thisrelease contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities LitigationReform Act of 1995. These statements address future events and conditions concerning Network-1's business plans. Such statements aresubject 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 December31, 2023 and its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024 filed with the Securities and Exchange Commissionincluding, among others, Network-1’s uncertain revenue from licensing its intellectual property, uncertainty as to the outcomeof pending litigation involving Network-1’s Remote Power Patent, whether Network-1 in its Cox patent litigation against Googleand YouTube will be successful in its anticipated appeal of the judgment of the U.S. District Court for the Southern District of NewYork dismissing all of Network-1’s claims in the case, whether Network-1 will be successful in its appeal to the Federal Circuitof the District Court judgment of non-infringement dismissing Network-1’s litigation against Facebook (now Meta Platforms, Inc.),the ability of Network-1 to successfully execute its strategy to acquire or make investments in high quality patents with significantlicensing opportunities, Network-1's ability to achieve revenue and profits from its Cox Patent Portfolio, M2M/IoT Patent Portfolio,HFT Patent Portfolio and additional revenue and profit from its Mirror Worlds Patent Portfolio and Remote Power Patent as well as a returnon its investment in ILiAD Biotechnologies, LLC or other intellectual property it may acquire or finance in the future, the ability ofNetwork-1 to enter into additional license agreements, uncertainty as to whether cash dividends will continue be paid, Network-1's abilityto enter into strategic relationships with third parties to license or otherwise monetize their intellectual property, the risk in thefuture of Network-1 being classified as a Personal Holding Company which may result in Network-1 issuing a special cash dividend to itsstockholders, future economic conditions and technology changes and legislative, regulatory and competitive developments. Except as otherwiserequired to be disclosed in periodic reports, Network-1 expressly disclaims any future obligation or undertaking to update or reviseany forward-looking statement contained herein.
The unaudited condensed consolidated statements of operations and unaudited condensed consolidated balance sheets are attached.
NETWORK-1TECHNOLOGIES, INC.
CONDENSEDCONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| December 31,<br> <br>2023 | |||||
|---|---|---|---|---|---|
| ASSETS CURRENT<br> ASSETS: | |||||
| Cash<br> and cash equivalents | 18,105,000 | $ | 16,896,000 | ||
| Marketable<br> securities, at fair value | 25,289,000 | 28,571,000 | |||
| Other<br> current assets | 218,000 | 206,000 | |||
| TOTAL<br> CURRENT ASSETS | 43,612,000 | 45,673,000 | |||
| OTHER<br> ASSETS: | |||||
| Patents, net<br> of accumulated amortization | 1,296,000 | 1,326,000 | |||
| Equity<br> investment | 4,621,000 | 5,249,000 | |||
| Operating<br> leases right-of-use asset | 75,000 | 16,000 | |||
| Security<br> deposit | 13,000 | 13,000 | |||
| Total<br> Other Assets | 6,005,000 | 6,604,000 | |||
| TOTAL<br> ASSETS | 49,617,000 | $ | 52,277,000 | ||
| LIABILITIES<br> AND STOCKHOLDERS’ EQUITY: CURRENT<br> LIABILITIES: | |||||
| Accounts<br> payable | 306,000 | $ | 125,000 | ||
| Accrued<br> payroll | — | 378,000 | |||
| Other<br> accrued expenses | 182,000 | 297,000 | |||
| Operating<br> lease obligation, current | 57,000 | 23,000 | |||
| Total<br> Current Liabilities | 545,000 | 823,000 | |||
| LONG<br> TERM LIABILITIES: | |||||
| Deferred<br> tax liability | 615,000 | 762,000 | |||
| Operating<br> lease obligation, non-current | 24,000 | — | |||
| TOTAL<br> LIABILITIES | 1,184,000 | 1,585,000 | |||
| COMMITMENTS<br> AND CONTINGENCIES (Note G) | |||||
| STOCKHOLDERS’<br> EQUITY | |||||
| Preferred stock, 0.01 par value, authorized 10,000,000 shares;<br> none issued and outstanding at March 31, 2024 and December 31, 2023 | — | — | |||
| Common<br> stock, 0.01 par value; authorized 50,000,000 shares; 23,552,561 and 23,553,908 shares issued and outstanding at March 31, 2024 and December 31,<br> 2023, respectively | 235,000 | 235,000 | |||
| Additional<br> paid-in capital | 67,560,000 | 67,446,000 | |||
| Accumulated<br> deficit | (19,362,000 | ) | (16,989,000 | ) | |
| TOTAL<br> STOCKHOLDERS’ EQUITY | 48,433,000 | 50,692,000 | |||
| TOTAL<br> LIABILITIES AND STOCKHOLDERS’ EQUITY | 49,617,000 | $ | 52,277,000 |
All values are in US Dollars.
NETWORK-1 TECHNOLOGIES, INC.
CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three<br> Months Ended<br> March 31, | ||||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | |||||
| REVENUE | $ | — | $ | 537,000 | ||
| OPERATING<br> EXPENSES: | ||||||
| Costs of revenue | — | 151,000 | ||||
| Professional fees and related<br> costs | 219,000 | 298,000 | ||||
| General and administrative | 669,000 | 781,000 | ||||
| Amortization of patents | 30,000 | 83,000 | ||||
| TOTAL<br> OPERATING EXPENSES | 918,000 | 1,313,000 | ||||
| OPERATING<br> LOSS | (918,000 | ) | (776,000 | ) | ||
| OTHER<br> INCOME: | ||||||
| Interest and dividend income,<br> net | 431,000 | 310,000 | ||||
| Net realized and unrealized<br> gain on marketable securities | 48,000 | 364,000 | ||||
| Total other income, net | 479,000 | 674,000 | ||||
| LOSS BEFORE<br> INCOME TAXES AND EQUITY IN NET LOSSES OF EQUITY METHOD INVESTEE | (439,000 | ) | (102,000 | ) | ||
| INCOME<br> TAX PROVISION: | ||||||
| Current | — | — | ||||
| Deferred taxes | (147,000 | ) | (153,000 | ) | ||
| Total income tax benefit | (147,000 | ) | (153,000 | ) | ||
| (LOSS)<br> INCOME BEFORE SHARE OF NET LOSSES OF EQUITY METHOD INVESTEE | (292,000 | ) | 51,000 | |||
| SHARE<br> OF NET LOSSES OF EQUITY METHOD INVESTEE | (628,000 | ) | (674,000 | ) | ||
| NET<br> LOSS | $ | (920,000 | ) | $ | (623,000 | ) |
| Net loss per share: | ||||||
| Basic | $ | (0.04 | ) | $ | (0.03 | ) |
| Diluted | $ | (0.04 | ) | $ | (0.03 | ) |
| Weighted average common shares outstanding: | ||||||
| Basic | 23,540,468 | 23,866,821 | ||||
| Diluted | 23,540,468 | 23,866,821 |