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
Network-1 Reports Second Quarter Results
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