Network-1 Reports Second Quarter Results

  NEW YORK, Nov. 17 /PRNewswire-FirstCall/ -- Network-1 Security Solutions,
Inc. (NSSI.PK) today announced financial results for the second quarter ended
June 30, 2003. 
The Company announced revenues for the second quarter ended June 30, 2003
of $164,000 compared with revenues of $243,000 for the second quarter ended
June 30, 2002.  Revenues during this quarter were related to the (i) the
recognition of deferred revenue from Falconstor Software, Inc. that was
recognized when the Company sold its CyberwallPLUS software and related
intellectual property to an unaffiliated third party during the quarter, and
(ii) amortization of deferred maintenance revenues from customers who elected
to purchase maintenance and support contracts in earlier periods.  There were
no new product revenues during the second quarter ended June 30, 2003 as
compared to product revenues of $191,000 for the second quarter ended June 30,
2002.  The decrease was due to the Company's decision to discontinue its
software product line and related operations in December 2002. 
For the six months ended June 30, 2003 revenues were $206,000 as compared
with $361,000 for the same period in 2002.  Revenues for the six months ended
June 30, 2003 were related to the recognition of deferred revenue and did not
include new product revenues. 
Network-1 reported net income from operations  for the second quarter
ended June 30, 2003 of $280,000, or $0.03 per share, compared with a loss of
$(2,034,000), or $(0.26) per share, for the quarter ended June 30, 2002.  The
net income includes a gain of $415,000 on the sale of its CyberwallPLUS
software and related intellectual property to an unaffiliated third party. 
Network-1 reported net income from continuing operations for the first six
months of 2003 of $4,000, or $0.00 per diluted share, compared with a net loss
of $(3,558,000), or $(0.48) per diluted share, for the first six months of
2002. 
Cash and cash equivalents were $1,550,000 at June 30, 2003.  Cash and cash
equivalents were $1,266,000 at October 31, 2003. 
  About Network-1 Security Solutions, Inc. 
Until December 2002, Network-1 Security Solutions, Inc. (the "Company")
developed, marketed and licensed security software products designed to
prevent unauthorized access to information residing on an enterprise's
computers.  In December 2002, the Company discontinued offering its security
software product line as it was unable to achieve sufficient product revenue
to support the expenses of such operations.  Management is focusing its
efforts on seeking a merger candidate or other strategic transaction for the
Company.  In May 2003, the Company completed the sale of its CyberwallPlus
technology and related intellectual property to an unaffiliated third party
for $415,000. 
The condensed statements of operations and condensed balance sheets are
attached. 


       Corey M. Horowitz, Chairman
     Network-1 Security Solutions, Inc.
     212-829-5770
         Network-1 Security Solutions, Inc.
     Condensed Statements of Operations (unaudited)
                                Three Months Ended           Six Months Ended
                                 June 30,                    June 30,
                            2003          2002          2003          2002
      Revenue:
     Licenses             $130,000      $191,000    $ 130,000      $259,000
     Services               34,000        52,000       76,000       102,000
        Total revenue        164,000       243,000      206,000       361,000
      Cost of revenue:
     Amortization of
      software development
      costs                              125,000                    195,000
     Cost of licenses                      7,000                     10,000
     Cost of services       17,000        42,000       34,000        84,000
      Total cost of revenue 17,000       174,000       34,000       289,000
      Gross Profit           147,000        69,000      172,000        72,000
      Operating expenses:
     Product development
      costs                              397,000                    836,000
     Selling and marketing               730,000                  1,349,000
     General and
      administrative       285,000       995,000      590,000     1,490,000
       Total operating
        expenses           285,000     2,122,000      590,000     3,675,000
      Loss before other
     income              (138,000)   (2,053,000)    (418,000)   (3,603,000)
    Interest income - net    3,000        19,000        7,000        45,000
    Gain on sale of assets 415,000                    415,000
      Net income (loss)     $280,000  $(2,034,000)       $4,000 $ (3,558,000)
      Earnings (loss) per common share:
     Basic                   $0.03       $(0.26)        $0.00       $(0.48)
     Diluted                 $0.03       $(0.26)        $0.00       $(0.48)
      Weighted average shares:
     Basic               8,314,458     7,683,900    8,314,458     7,398,221
     Diluted             8,314,458     7,683,900    8,314,458     7,398,221
        Condensed  Balance Sheet as of  06/30/03
        Cash and cash equivalents                     $1,550,000
       Total current assets                         $1,589,000
       Total assets                                 $1,589,000
       Total current liabilities                      $486,000
       Liability to be settled with Equity
      Instrument                                      $9,000


   Total stockholders' equity                   $1,094,000
  

SOURCE  Network-1 Security Solutions, Inc. 
-0-                             11/17/2003 
/CONTACT:  Corey M. Horowitz, Chairman of Network-1 Security Solutions,
Inc., +1-212-829-5770/ 
/Web site:  http://www.network-1.com/ 
(NSSI.PK) 
CO:  Network-1 Security Solutions, Inc.
ST:  New York
IN:  STW HTS
SU:  ERN 
-0- Nov/17/2003 21:30 GMT