Revenue Performance - Network-1 reported no revenue for the three months ended September 30, 2024, and 2023, while revenue for the nine months ended September 30, 2024, was $100,000, down 87% from $820,000 in the same period of 2023[2]. - The company faces uncertainties regarding future revenue from licensing its intellectual property and ongoing litigation outcomes[9]. Net Loss and Financial Improvement - The net loss for the three months ended September 30, 2024, was $316,000 or $0.01 per share, an improvement from a net loss of $810,000 or $0.03 per share for the same period in 2023[3]. - For the nine months ended September 30, 2024, the net loss was $1,894,000 or $0.08 per share, compared to a net loss of $1,909,000 or $0.08 per share for the same period in 2023[4]. - Comprehensive loss for the period was $316,000 compared to $796,000 in the previous period, indicating a 60% improvement[13]. Cash and Assets - As of September 30, 2024, Network-1 had cash and cash equivalents and marketable securities totaling $41,516,000, indicating sufficient cash to fund operations for the next twelve months[5]. - Total current assets decreased to $41,657,000 from $45,673,000, a decline of approximately 9%[13]. - Cash and cash equivalents decreased to $14,315,000 from $16,896,000, a decline of about 13%[13]. - Total stockholders' equity decreased to $45,579,000 from $50,692,000, a decrease of approximately 10%[13]. - Equity investment decreased to $3,636,000 from $5,249,000, a decline of about 31%[13]. Liabilities and Obligations - Total liabilities decreased to $1,006,000 from $1,585,000, representing a reduction of about 37%[13]. - Accounts payable increased to $371,000 from $125,000, a rise of 196%[13]. - Operating lease obligation, current increased to $40,000 from $23,000, a rise of approximately 74%[13]. Shareholder Returns and Dividends - Network-1 continues to pay semi-annual cash dividends of $0.05 per share, with a total annual dividend of $0.10 per share[7]. - Network-1's Board of Directors periodically reviews its dividend policy, which may change based on earnings and financial requirements[7]. Patent Monetization Strategy - The Remote Power Patent has generated licensing revenue exceeding $188 million from May 2007 through September 30, 2024[8]. - Network-1's strategy includes monetizing five patent portfolios, focusing on high-quality patents with significant licensing opportunities[8]. Share Repurchase Activity - During the three months ended September 30, 2024, Network-1 repurchased 119,615 shares at an average price of $1.58, and a total of 577,060 shares at an average price of $1.84 for the nine months ended September 30, 2024[6].

Financial Performance - The company reported no revenue for the three months ended September 30, 2024, and September 30, 2023, due to no litigation outcomes during these periods [82]. - Operating expenses for the nine months ended September 30, 2024, were $2,538,000, a decrease of $466,000 compared to $3,004,000 for the same period in 2023 [86]. - The company recognized a net loss of $1,894,000 or $0.08 per share for the nine months ended September 30, 2024, compared to a net loss of $1,909,000 or $0.08 per share for the same period in 2023 [89]. - The company recorded interest and dividend income of $1,407,000 for the nine months ended September 30, 2024, an increase of $246,000 compared to $1,161,000 for the same period in 2023 [87]. Assets and Capital - As of September 30, 2024, the company had cash and cash equivalents and marketable securities totaling $41,516,000, with working capital of $41,058,000 [72]. - Working capital decreased by $3,792,000 from December 31, 2023, primarily due to dividend payments of $2,366,000 and common stock repurchases of $1,083,000 [91]. Investments and Revenue Potential - The company has invested $7,000,000 in ILiAD, a clinical stage biotechnology company, which involves significant risk and uncertainty [73]. - Licensing revenue from the Remote Power Patent exceeded $188,000,000 from May 2007 through March 7, 2020, after which no further licensing revenue is received [74]. - The company continues to seek opportunities to acquire additional intellectual property assets to enhance its revenue potential [77]. - The company has ongoing litigation involving its patents, including appeals against Google and Meta, with the potential for future revenue generation [76]. Litigation and Legal Matters - Ongoing litigation against Meta regarding Mirror Worlds patents with oral argument on appeal held on October 11, 2024, decision pending [102]. - A putative class action filed against the Company was settled on October 3, 2024, with terms not material to the Company [102]. Internal Controls and Procedures - No material changes in internal control over financial reporting during the fiscal quarter ended September 30, 2024 [100]. - The Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures are effective as of the end of the reporting period [99].

Financial Performance - Network-1 reported revenue of $100,000 for Q2 2024, a decrease of 64.7% from $283,000 in Q2 2023[1] - The net loss for Q2 2024 was $658,000, or $0.03 per share, compared to a net loss of $476,000, or $0.02 per share, in Q2 2023[1][2] - For the six months ended June 30, 2024, the net loss was $1,578,000, or $0.07 per share, compared to a net loss of $1,099,000, or $0.05 per share, in the same period of 2023[2] Cash and Assets - As of June 30, 2024, Network-1 had cash and cash equivalents of $42,599,000, indicating sufficient funds to support operations for the next twelve months[2] - Cash and cash equivalents increased to $19,939,000 from $16,896,000, an increase of about 17.9%[9] - Total current assets decreased to $42,781,000 from $45,673,000, a decline of approximately 6.5%[9] - Total assets decreased to $48,063,000 from $52,277,000, a decline of about 8.1%[9] - Marketable securities at fair value decreased to $22,660,000 from $28,571,000, a drop of approximately 20.7%[9] Shareholder Actions - The company repurchased 373,701 shares at an average price of $1.84 during Q2 2024, with a total cost of $688,410[3] - Network-1 has declared a semi-annual cash dividend of $0.05 per share, consistent with its dividend policy[4] Patent Revenue - The Remote Power Patent has generated over $188 million in licensing revenue since May 2007 through June 30, 2024[5] - The company has achieved licensing and other revenue of $47.15 million from its Mirror Worlds Patent Portfolio as of June 30, 2024[5] - Network-1 continues to focus on monetizing five patent portfolios, including the Remote Power Patent and Mirror Worlds Patent[5] Financial Position - Total liabilities decreased significantly to $890,000 from $1,585,000, a reduction of approximately 43.8%[9] - Total current liabilities decreased to $412,000 from $823,000, a reduction of approximately 50%[9] - Deferred tax liability decreased to $478,000 from $762,000, a decrease of about 37.3%[9] - Total stockholders' equity decreased to $47,173,000 from $50,692,000, a decline of about 7.4%[9] - Accumulated deficit increased to $(20,713,000) from $(16,989,000), reflecting a worsening of approximately 22.5%[9] Risks - The company is subject to various risks, including uncertain revenue from licensing and ongoing litigation outcomes[6]

Revenue Performance - Revenue for the three months ended June 30, 2024, was $100,000, a decrease of 64.7% compared to $283,000 for the same period in 2023, all from litigation settlements involving the Remote Power Patent[87] - Revenue for the six months ended June 30, 2024, was $100,000, a decrease of 87.8% compared to $820,000 for the same period in 2023, all from litigation settlements involving the Remote Power Patent[93] - The Remote Power Patent has generated over $188,000,000 in licensing revenue from May 2007 to June 30, 2024, but no revenue has been received since its expiration on March 7, 2020[79] Operating Expenses - Operating expenses for the three months ended June 30, 2024, were $724,000, down 12.9% from $832,000 for the same period in 2023, primarily due to decreases in costs related to litigation settlements and general administrative expenses[88] - Operating expenses for the six months ended June 30, 2024, were $1,642,000, down 24.5% from $2,145,000 for the same period in 2023, mainly due to decreases in costs related to litigation settlements and general administrative expenses[93] Net Loss - Net loss for the three months ended June 30, 2024, was $658,000, or $0.03 per share, compared to a net loss of $476,000, or $0.02 per share, for the same period in 2023, reflecting a higher loss from equity method investee ILiAD[91] - Net loss for the six months ended June 30, 2024, was $1,578,000, or $0.07 per share, compared to a net loss of $1,099,000, or $0.05 per share, for the same period in 2023, driven by decreased revenue and increased losses from ILiAD[96] Financial Position - As of June 30, 2024, the company had cash and cash equivalents and marketable securities totaling $42,599,000, with working capital of $42,369,000, a decrease from $44,850,000 at December 31, 2023[98] - The company has invested $7,000,000 in ILiAD, a clinical stage biotechnology company, which involves significant risk and uncertainty regarding the outcome[78] Legal Matters - The U.S. District Court dismissed the company's patent infringement claims against Google Inc. and YouTube, LLC, ruling that the asserted claims of two patents are invalid and that another patent is not infringed[109] - The company filed a notice of appeal to the U.S. Court of Appeals for the Federal Circuit regarding the patent infringement case[109] - A class action lawsuit was filed against the company and its CEO, alleging that the company must register as an "investment company" under the Investment Company Act of 1940[109] Strategic Plans - The company plans to continue its licensing efforts and seeks to acquire additional intellectual property assets to enhance monetization opportunities[82] Internal Controls - The company has not experienced any material changes in internal control over financial reporting during the fiscal quarter ended June 30, 2024[107]

Revenue and Loss - Network-1 reported no revenue for Q1 2024, a decrease from $537,000 in Q1 2023, which was generated from patent infringement lawsuit settlements[3] - The net loss for Q1 2024 was $920,000, or $0.04 per share, compared to a net loss of $623,000, or $0.03 per share, in Q1 2023[4] - The company incurred a loss of $292,000 excluding its share of losses from equity method investee ILiAD Biotechnologies, LLC, compared to an income of $51,000 in Q1 2023[4] Liquidity and Assets - As of March 31, 2024, Network-1 had cash and cash equivalents of $18,105,000 and marketable securities valued at $25,289,000, totaling $43,394,000 in liquidity[5] - Network-1's total assets decreased to $49,617,000 as of March 31, 2024, down from $52,277,000 at the end of 2023[12] Share Repurchase and Dividends - The company repurchased 83,744 shares at an average price of $2.17 during Q1 2024, with a total repurchase cost of $182,070[6] - Network-1 continues to pay semi-annual dividends of $0.05 per share, with the latest payment made on March 29, 2024[7] Operating Expenses and Revenue Generation - Total operating expenses for Q1 2024 were $918,000, down from $1,313,000 in Q1 2023[14] - The Remote Power Patent has generated over $188,000,000 in licensing revenue since May 2007, while the Mirror Worlds Patent Portfolio has achieved $47,150,000 in revenue through March 31, 2024[8] Shares Outstanding - The company reported a weighted average of 23,540,468 common shares outstanding for Q1 2024[14]

Revenue Performance - The company reported no revenue for the three months ended March 31, 2024, compared to $537,000 for the same period in 2023, primarily from litigation settlements involving the Remote Power Patent[104]. - Licensing revenue from the Remote Power Patent exceeded $188,000,000 from May 2007 to March 31, 2024, but no revenue has been generated since the patent's expiration on March 7, 2020[96]. Operating Expenses - Operating expenses decreased to $918,000 for the three months ended March 31, 2024, down from $1,313,000 in the same period of 2023, reflecting a reduction in costs associated with litigation settlements and professional fees[105]. Net Loss - The company recognized a net loss of $920,000 or $0.04 per share for the three months ended March 31, 2024, compared to a net loss of $623,000 or $0.03 per share for the same period in 2023, attributed to the absence of revenue[111]. Cash and Investments - Cash and cash equivalents, along with marketable securities, totaled $43,394,000 as of March 31, 2024, with working capital decreasing to $43,067,000 from $44,850,000 at December 31, 2023[94][114]. - The company has invested $7,000,000 in ILiAD, a clinical stage biotechnology company, which holds an exclusive license to 70 patents, with ongoing risks associated with this investment[95]. Interest and Gains - Interest and dividend income increased to $431,000 for the three months ended March 31, 2024, compared to $310,000 for the same period in 2023, due to higher interest rates[107]. - The company recorded realized and unrealized gains on marketable securities of $48,000 for the three months ended March 31, 2024, down from $364,000 for the same period in 2023[108]. Future Plans - The company plans to continue its licensing efforts and seeks to acquire additional intellectual property assets to enhance monetization opportunities[98].

Revenue and Income - Network-1 reported revenue of $2,601,000 for the year ended December 31, 2023, compared to no revenue in 2022[3] - Interest and dividend income rose to $1,868,000 in 2023, up from $1,020,000 in 2022, reflecting higher yielding fixed income investments[4] - The Remote Power Patent has generated over $188,000,000 in licensing revenue since May 2007, while the Mirror Worlds Patent Portfolio has achieved $47,150,000 in revenue[9] Expenses and Losses - Operating expenses increased by $933,000 in 2023, primarily due to contingent legal fees and incentive bonuses related to litigation settlements[3] - The net loss for 2023 was $1,457,000, or $0.06 per share, an improvement from a net loss of $2,326,000, or $0.10 per share, in 2022[5] - The company’s accumulated deficit increased to $16,989,000 in 2023, compared to $12,055,000 in 2022[14] Cash and Liquidity - As of December 31, 2023, Network-1 had cash and cash equivalents and marketable securities totaling $45,467,000, indicating sufficient liquidity for operations[6] - The company repurchased 428,132 shares at a cost of approximately $955,000 during 2023, with a total of 9,532,982 shares repurchased since the program's inception[7] - Network-1 declared and paid semi-annual cash dividends of $0.05 per share in 2023, consistent with its dividend policy[8] Assets - Total assets decreased to $52,277,000 as of December 31, 2023, down from $57,969,000 in 2022[14]

Financial Performance - Revenue for 2023 was $2,601,000, with a net loss of $1,457,000, compared to no revenue and a net loss of $2,326,000 in 2022[70] - The company faced a net income of $14,281,000 in 2021, with revenue of $36,029,000, indicating significant fluctuations in financial performance[70] - The company may be classified as a Personal Holding Company in the future, which could result in a 20% tax on undistributed income[71] - The ability to continue paying cash dividends and raise capital if needed is essential for maintaining investor confidence[97] Revenue Generation - The Remote Power Patent generated over $188,000,000 in revenue from May 2007 to December 31, 2023, constituting 100% of revenue for 2023[64] - The patent monetization cycle is long and costly, with significant time lags before recognizing revenue from acquired patents[68] - The company aims to further develop, license, and monetize its M2M/IoT and HFT Patent Portfolios, which are critical for future revenue[97] Investments and Assets - The company invested $7,000,000 in ILiAD, a clinical stage biotechnology company, with uncertain future returns[63] - The company has 100 U.S. patents and 15 foreign patents, focusing on acquiring high-quality patent assets for significant licensing opportunities[67] Competition and Market Position - The company faces intense competition in acquiring intellectual property and entering strategic relationships, with competitors having greater resources[80] - The company faces risks from technology changes, legislative, regulatory, and competitive developments that could affect its market position[97] Stock and Shareholder Matters - The common stock is traded on the NYSE American exchange under the symbol "NTIP" and may face delisting if continued listing standards are not met[89] - The company has authorized the issuance of up to 10,000,000 shares of preferred stock, which could adversely affect common stockholders if issued[91] - The company has a dividend policy of $0.05 per share, paid semi-annually, but future payments are subject to review and may change[73] Corporate Governance - The company has been dependent on its CEO, Corey M. Horowitz, for its success, with no key-man insurance in place[72] - The company is subject to "anti-takeover" provisions that could prevent business combinations with stockholders owning 15% or more for three years unless approvals are obtained[92] - Provisions in the corporate charter and by-laws may deter unsolicited takeovers and limit stockholders' ability to influence management changes[94] Legal Matters - The company is involved in litigation against Google and YouTube regarding patents, which could impact its financial performance[97] Financial Reporting - The preparation of financial statements involves estimates and assumptions that could materially affect the company's financial condition and operating results[90] Stock Price Volatility - The stock price may be highly volatile, influenced by factors beyond the company's control, including market fluctuations unrelated to operating performance[96]

Financial Position - As of September 30, 2023, the company had cash and cash equivalents of $44,568,000 and working capital of $44,267,000[93] - As of September 30, 2023, the company's cash and cash equivalents and marketable securities totaled $44,568,000, with working capital at $44,267,000[128] - Working capital decreased by $3,092,000 from $47,359,000 at December 31, 2022, primarily due to dividend payments of $2,371,000 and increased operating expenses of $326,000[129] - The company has no off-balance sheet arrangements or long-term debt obligations[134][135] - The company maintains its cash in low-risk investments, minimizing exposure to interest rate risk[133] Revenue and Income - The company generated licensing revenue exceeding $187,000,000 from the Remote Power Patent from May 2007 to September 30, 2023, but no revenue has been received since the patent's expiration on March 7, 2020[95] - For the nine months ended September 30, 2023, the company reported revenue of $820,000 from litigation settlements, compared to no revenue for the same period in 2022[116] - Interest and dividend income for the nine months ended September 30, 2023 was $1,161,000, an increase of $629,000 from $532,000 in the same period of 2022[120] Expenses and Losses - Operating expenses for the nine months ended September 30, 2023 were $3,004,000, an increase of $435,000 from $2,569,000 in the same period of 2022[117] - The company recognized a net loss of $1,909,000 or $0.08 per share for the nine months ended September 30, 2023, compared to a net loss of $618,000 or $0.03 per share for the same period in 2022[127] - The company recognized $532,000 of net losses related to its equity share of ILiAD for the three months ended September 30, 2023, compared to $285,000 for the same period in 2022[113] Investments - The company has invested $7,000,000 in ILiAD, a clinical stage biotechnology company, which has significant risks and uncertain outcomes[94] - The company recorded realized and unrealized gains on marketable securities of $420,000 for the nine months ended September 30, 2023, compared to losses of $1,358,000 in the same period of 2022[124] Cash Flow - Net cash used in operating activities for the nine months ended September 30, 2023 was $753,000, a decrease of $4,427,000 from $5,180,000 for the same period in 2022[130] - Net cash provided by investing activities increased by $26,588,000 to $11,350,000 compared to $(15,238,000) for the nine months ended September 30, 2022[131] - Net cash used in financing activities was $3,159,000 for the nine months ended September 30, 2023, compared to $2,915,000 for the same period in 2022, reflecting an increase in treasury share repurchases[133] Corporate Governance - The Chief Executive Officer and Chief Financial Officer confirmed the effectiveness of the company's disclosure controls and procedures as of the end of the reporting period[139] - There were no changes in internal controls over financial reporting that materially affected the company during the fiscal quarter ended September 30, 2023[140] Future Plans - The company plans to continue its licensing efforts and seeks to acquire additional intellectual property assets to monetize[98] Accounting Estimates - The company’s critical accounting estimates include revenue recognition and the valuation of equity method investments, which could materially affect reported results[137][138]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________ FORM 10-Q _________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 203-920-1055 NETWORK-1 TECHNOLOGIES, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 11-3027591 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 ...