Network-1 Reports 2023 Year-End Financial Results | NTIP Stock News

    Date:

    Rhea-AI Impact

    Rhea-AI Sentiment

    Rhea-AI Summary

    Network-1 Technologies, Inc. (NTIP) reported revenue of $2.6 million in 2023 from settlements related to its Remote Power Patent, compared to no revenue in 2022. The company incurred operating expenses of $933,000 in 2023, primarily due to legal fees and incentive bonuses. Interest and dividend income increased to $1.87 million in 2023, with gains on marketable securities reaching $525,000. Despite a net loss of $1.46 million in 2023, Network-1 maintains strong liquidity with $45.47 million in cash and marketable securities. The company’s Share Repurchase Program was extended to repurchase up to $5 million of common stock, with 428,132 shares repurchased in 2023. Network-1’s dividend policy includes semi-annual cash dividends of $0.05 per share.

    The reported financial results for Network-1 Technologies indicate a significant shift in the company’s revenue stream, with a year-over-year increase from no revenue to $2.6 million. This is a noteworthy development for investors as it reflects the company’s ability to monetize its intellectual property through litigation settlements. However, the net loss of $1.457 million, despite the increase in revenue, suggests that the company’s cost structure and contingent legal fees might be areas of concern.

    Furthermore, the increase in interest and dividend income aligns with the broader market trend of higher interest rates in 2023. The positive turnaround in gains from marketable securities also demonstrates a more favorable investment environment, which could be indicative of prudent financial management. Yet, these financial gains were not sufficient to offset the operational losses.

    The liquidity position, with over $45 million in cash and marketable securities, suggests a strong balance sheet. This is further supported by the company’s confidence in its liquidity to fund future operations. The share repurchase program and consistent dividend policy are signals of management’s commitment to returning value to shareholders. Nonetheless, the share repurchase strategy should be evaluated in the context of the company’s long-term growth strategy and potential investment opportunities that could drive future revenue growth.

    From a market perspective, Network-1 Technologies’ transition from a lack of revenue to generating income through litigation settlements is a strategic pivot that may influence investor perception. The ability to enforce and monetize patents is crucial in the intellectual property sector and successful litigation can serve as a deterrent against future infringements, potentially opening up new licensing opportunities.

    However, the dependence on litigation settlements for revenue may raise questions about the sustainability and predictability of future earnings. Investors typically prefer stable and recurring revenue streams and the reliance on one-off settlements could introduce volatility into the stock’s performance. It is also important to consider the competitive landscape and the potential for Network-1 to secure additional licensing agreements without resorting to litigation.

    The share repurchase program, while underscoring confidence in the intrinsic value of the company’s stock, may also reflect a lack of attractive investment opportunities to fuel organic growth. The continuation of dividend payments signals stability, but the Board’s statement that the dividend policy is subject to periodic review could introduce uncertainty regarding future payouts.

    In the realm of intellectual property, Network-1 Technologies’ focus on litigation to enforce patent rights is a critical aspect of their business strategy. The company’s success in securing settlements highlights the strength and enforceability of its patent portfolio. However, the legal landscape is ever-changing and the potential for legislative or judicial shifts could impact the company’s ability to leverage its intellectual property in the future.

    The increased legal expenses are indicative of the costs associated with litigation, which can be substantial. While the company has successfully monetized its Remote Power Patent, there is an inherent risk in relying heavily on litigation outcomes, which are unpredictable and can be influenced by various external factors.

    It is also essential to consider the broader implications of the company’s litigation strategy on its reputation and relationships within the industry. Aggressive enforcement actions could potentially lead to strained relationships with other companies and may affect future collaboration or licensing agreements.

    NEW CANAAN, CT / ACCESSWIRE / March 8, 2024 / Network-1 Technologies, Inc. (NYSE American:NTIP) (“Network-1”), a company engaged in acquiring, developing, licensing, and monetizing intellectual property, today announced financial results for the year ended December 31, 2023.

    Network-1 had revenue of $2,601,000 for the year ended December 31, 2023 as compared to no revenue in the year ended December 31, 2022. Revenue realized in 2023 was from settlement agreements in litigations related to Network-1’s Remote Power Patent. Network-1incurred increases in operating expenses of $933,000 in 2023 compared to 2022, primarily due to increases in costs of revenue of $874,000 related to contingent legal fees and incentive bonus compensation in connection with the litigation settlements.

    Interest and dividend income for 2023 was $1,868,000 as compared to interest and dividend income of $1,020,000 for 2022. The increase in interest and dividend income of $848,000 for 2023 was primarily due to higher yielding fixed income investments due to generally higher interest rates during 2023. In addition, for 2023, Network-1 recorded realized and unrealized gains on marketable securities of $525,000 as compared to realized and unrealized losses on marketable securities of $1,351,000 in 2022. The improvement in unrealized and realized gains in 2023 was primarily due to the more favorable interest rate environment for fixed income securities in 2023 as compared to 2022.

    Network-1 reported a net loss of $1,457,000 or $0.06 per share basic and diluted for the year ended December 31, 2023 compared to a net loss of $2,326,000 or $0.10 per share on a basic and diluted basis for the year ended December 31, 2022.

    At December 31, 2023, Network-1’s principal sources of liquidity consisted of cash and cash equivalents and marketable securities of $45,467,000 and working capital of $44,850,000. Management believes that based on Network-1’s current cash, cash equivalents and marketable securities positions, Network-1 will have sufficient liquidity to fund its operations for the foreseeable future.

    On June 14, 2023, Network‑1’s Board of Directors authorized an extension and increase of Network‑1’s Share Repurchase Program to repurchase up to $5,000,000 of shares of its common stock over the subsequent 24-month period. During the year ended December 31, 2023, Network‑1 repurchased an aggregate of 428,132 shares of its common stock pursuant to its Share Repurchase Program at a cost of approximately $955,000 or an average price per share of $2.23. Since inception of its Share Repurchase Program (August 2011) to December 31, 2023, Network‑1 repurchased an aggregate of 9,532,982 shares of its common stock at a cost of approximately $18,713,000 (exclusive of commissions) or an average per share price of $1.94.

    Network-1’s dividend policy consists of semi-annual cash dividends of $0.05 per share ($0.10 per share annually) which have been paid in March and September of each year. In 2023 and March 2024, Network‑1 continued to declare and pay dividends consistent with its dividend policy. Network‑1’s dividend policy undergoes a periodic review by its 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 (100) U.S. patents covering various telecommunications and data networking technologies as well as technologies relating to document stream operating systems, the identification of media content and high frequency trading. Network-1’s current strategy includes continuing to pursue licensing opportunities for its intellectual property. 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 December 31, 2023. Network-1 has achieved licensing and other revenue of $47,150,000 through December 31, 2023 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, 2023 filed with the Securities and Exchange Commission on March 8, 2024 including, among others, Network-1’s uncertain revenue from licensing its intellectual property, uncertainty as to the outcome of pending litigation involving Network-1’s Cox Patent Portfolio and Remote Power Patent, whether Network-1 will be successful in its appeal to the Federal Circuit of the District Court judgment of non-infringement dismissing Network-1’s litigation against Meta Platforms, Inc.( formerly Facebook), 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, M2M/IoT Patent Portfolio, HFT Patent Portfolio and additional revenue and profit from its Remote Power Patent and Mirror Worlds Patent Portfolio as well as a successful outcome 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 increasing development of artificial intelligence could materially impact Network-1’s business, 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.

    Network-1’s statements of operations and comprehensive loss and balance sheet are attached.

    For additional details regarding the above referenced highlights, please see Network-1’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 8, 2024.

    NETWORK-1 TECHNOLOGIES, INC.
    CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

    Years Ended
    December 31,
    2023 2022

    REVENUE

    $ 2,601,000 $

    OPERATING EXPENSES:

    Costs of revenue

    874,000

    Professional fees and related costs

    807,000 809,000

    General and administrative

    2,889,000 2,778,000

    Amortization of patents

    266,000 316,000

    TOTAL OPERATING EXPENSES

    4,836,000 3,903,000

    OPERATING LOSS

    (2,235,000 ) (3,903,000 )

    OTHER INCOME

    Interest and dividend income, net

    1,868,000 1,020,000

    Gain on conversion of note

    271,000

    Gain on equity method investment

    3,883,000

    Net realized and unrealized gain (loss) on marketable securities

    525,000 (1,351,000 )

    Total other income, net

    2,393,000 3,823,000

    INCOME (LOSS) BEFORE INCOME TAXES AND SHARE OF

    NET LOSSES OF EQUITY METHOD INVESTEE

    158,000 (80,000 )

    INCOME TAXES PROVISION:

    Current

    11,000

    Deferred taxes, net

    (399,000 ) 607,000

    Total income taxes (benefit) expense

    (388,000 ) 607,000

    INCOME (LOSS) BEFORE SHARE OF NET LOSSES OF

    EQUITY METHOD INVESTEE:

    546,000 (687,000 )

    SHARE OF NET LOSSES OF EQUITY METHOD INVESTEE

    (2,003,000 ) (1,639,000 )

    NET LOSS

    $ (1,457,000 ) $ (2,326,000 )

    Net Loss Per Share:

    Basic

    $ (0.06 ) $ (0.10 )

    Diluted

    $ (0.06 ) $ (0.10 )

    Weighted average common shares outstanding:

    Basic

    23,791,287 23,825,917

    Diluted

    23,791,287 23,825,917

    Cash dividends declared per share

    $ 0.10 $ 0.10

    NET LOSS

    $ (1,457,000 ) $ (2,326,000 )

    OTHER COMPREHENSIVE INCOME (LOSS}

    Net unrealized holding gain (loss) on corporate bonds and notes
    arising during the year, net of tax

    14,000 (2,000 )

    COMPREHENSIVE LOSS

    $ (1,443,000 ) $ (2,328,000 )

    NETWORK-1 TECHNOLOGIES, INC.
    CONSOLIDATED BALANCE SHEETS

    December 31,
    2023 2022

    ASSETS:

    CURRENT ASSETS:

    Cash and cash equivalents

    $ 16,896,000 $ 13,448,000

    Marketable securities, at fair value

    28,571,000 34,991,000

    Prepaid taxes

    177,000

    Other current assets

    206,000 348,000

    Total Current Assets

    45,673,000 48,964,000

    OTHER ASSETS:

    Patents, net of accumulated amortization

    1,326,000 1,592,000

    Equity investment

    5,249,000 7,252,000

    Operating leases right of use asset

    16,000 161,000

    Security deposits

    13,000

    Total Other Assets

    6,604,000 9,005,000

    TOTAL ASSETS

    $ 52,277,000 $ 57,969,000

    LIABILITIES AND STOCKHOLDERS’ EQUITY:

    CURRENT LIABILITIES:

    Accounts payable

    $ 125,000 $ 507,000

    Income taxes payable

    115,000

    Accrued payroll

    378,000 317,000

    Other accrued expenses

    297,000 587,000

    Operating lease obligations, current

    23,000 79,000

    Total Current Liabilities

    823,000 1,605,000

    LONG TERM LIABILITIES:

    Deferred tax liability

    762,000 1,161,000

    Operating lease obligation, non-current

    94,000

    TOTAL LIABILITIES

    $ 1,585,000 $ 2,860,000

    COMMITMENTS AND CONTINGENCIES (See Note I)

    STOCKHOLDERS’ EQUITY

    Preferred stock, $0.01 par value; authorized 10,000,000 shares;

    none issued and outstanding at December 31, 2023 and December 31, 2022

    $ $

    Common stock, $0.01 par value; authorized 50,000,000 shares;

    23,553,908 and 23,863,639 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively

    235,000 239,000

    Additional paid-in capital

    67,446,000 66,939,000

    Accumulated deficit

    (16,989,000 ) (12,055,000 )

    Accumulated other comprehensive loss

    (14,000 )

    TOTAL STOCKHOLDERS’ EQUITY

    50,692,000 55,109,000

    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

    $ 52,277,000 $ 57,969,000

    Contacts:

    Network-1 Technologies, Inc.
    Corey M. Horowitz, Chairman and CEO
    (917) 692-0000

    SOURCE: Network-1 Technologies, Inc.

    View the original press release on accesswire.com

    Network-1 reported revenue of $2,601,000 in 2023.

    Network-1 incurred operating expenses of $933,000 in 2023, primarily due to legal fees and incentive bonuses.

    Network-1 earned $1,868,000 in interest and dividend income in 2023.

    Network-1 reported a net loss of $1,457,000 in 2023.

    As of December 31, 2023, Network-1 had cash and marketable securities of $45,467,000 and working capital of $44,850,000.

    Network-1 repurchased 428,132 shares of its common stock in 2023.

    Network-1’s dividend policy includes semi-annual cash dividends of $0.05 per share.

    Go Source

    Chart

    Sign up for Breaking Alerts

    Share post:

    Popular

    More like this
    Related

    Trading 0DTE Options with the IBKR Native API

    The article “Trading 0DTE Options with the IBKR Native...

    Highlights from the IBKR Quant Blog – March 2024

    Be sure not to miss the latest articles on...

    Bullish Market Outlook As Inflation And AI Sector Energize Stocks

    What’s going on here? After dodging a few economic curveballs,...

    How Can I Find Really Bad Seasonal Patterns?

    As an investor, you may well naturally prefer to...