NETWORK-1 TECHNOLOGIES, INC.
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 6, 2026
NTIP$1.600.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001072613-26-000387
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001072613-26-000626
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 38 previous paragraphs and 46 current paragraphs.
21 unchanged; 16 reworded; 5 added; 1 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
*Operating Expenses.*Operating expenses for the three months ended June 30, 2026 were $1,013,000 as compared to $720,000 for the three months ended June 30, 2025. The increase in operating expenses of $293,000 was primarily due to increased litigation related costs of $337,000 offset by decreased restricted stock compensation expense of $38,000.
Current report
Interest and Dividend Income. Interest and dividend income for the three months ended June 30, 2026 was $350,000 as compared to $445,000 for the three months ended June 30, 2025. The decrease of $95,000 was a result of decreased funds available for investment in marketable securities in 2026, as well as such investments being made in lower yielding fixed income investments as a result of prevailing interest rate market conditions.
Current report
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Current report
Interest and Dividend Income. Interest and dividend income for the six months ended June 30, 2026 was $734,000 as compared to $929,000 for the six months ended June 30, 2025. The decrease of $195,000 was a result of decreased funds available for investment in marketable securities in 2026, as well as such investments being made in lower yielding fixed income investments as a result of prevailing interest rate market conditions.
Current report
Net cash used in operating activities increased by $740,000 to $1,242,000 for the six months ended June 30, 2026 from $502,000 for the six months ended June 30, 2025. The increase in net cash used in operating activities was primarily attributable to an increase in our net loss of $340,000, a non-cash gain on our equity investment of $1,052,000 in 2026, the reduction in the loss on our equity method investment recognized in 2025 of $741,000. These uses of cash were offset by an increase in our unrealized loss on marketable securities of $510,000, increased accounts payable of $402,000 and an increase in the deferred tax expense of $394,000.
Removed paragraphs (1)
Previous report
Net cash used in operating activities increased by $469,000 to $310,000 for the three months ended March 31, 2026 from $159,000 net cash provided by operating activities for the three months ended March 31, 2025. The increase was primarily attributable to components of the net loss of $511,000, such as the $1,052,000 non-cash gain on equity investment in the period ended March 31, 2026, which reduced operating cash flows as it is deducted from net loss of $511,000 in the reconciliation to cash flows from operating activities. These items were offset by working-capital decreases, including an increase of $314,000 in net cash provided by operating activities related to the increase in accounts payable and accrued expenses as of March 31, 2026. Operating cash flows during the three month period ended March 31, 2026 were also increased by a $361,000 unrealized loss on marketable securities, compared to a $149,000 unrealized gain in the same period in 2025. These items were partially offset by higher deferred tax expense of $245,000 in the three months ended March 31, 2026 versus a $111,000 deferred tax benefit in the same period in 2025.
Reworded paragraphs (16)
Previous wording
Our principal business is the development, licensing and protection of our intellectual property assets. We presently own one hundred twenty-one (121) U.S. patents, fifty-four (54) of which have expired, and fifteen (15) foreign patents (unexpired) relating to: (i) our M2M/IoT Patent Portfolio relating to, among other things, enabling technology for authenticating and using eSIM (embedded Subscriber Identification Module) technology in IoT, Machine-to-Machine and other mobile devices, including smartphones, tablets and computers, as well as automobiles; (ii) our HFT Patent Portfolio covering certain advanced technologies relating to high frequency trading, which inventions specifically address technological problems associated with speed and latency and provide critical latency gains in trading systems; (iii) our Cox Patent Portfolio relating to enabling technology for identifying media content on the internet and taking further action to be performed after such identification; (iv) our Smart Home Patent Portfolio relating to, among other things, the enabling technology to support the interoperability of smart home IoT devices; (v) our Remote Power Patent covering the delivery of power over Ethernet (PoE) cables for the purpose of remotely powering network devices, such as wireless access ports, IP phones and network based cameras**;** and (vi) our Mirror Worlds Patent Portfolio relating to foundational technologies that enable unified search and indexing, displaying and archiving of documents in a computer system. The Company is no longer monetizing its Remote Power Patent and Mirror Worlds Patent Portfolio**.**
Current wording
Our principal business is the development, licensing and protection of our intellectual property assets. We presently own one hundred twenty- one (121) U.S. patents, fifty-four (54) of which have expired, and fifteen (15) foreign patents (unexpired) relating to: (i) our M2M/IoT Patent Portfolio relating to, among other things, enabling technology for authenticating and using eSIM (embedded Subscriber Identification Module) technology in IoT, Machine-to-Machine and other mobile devices, including smartphones, tablets and computers, as well as automobiles; (ii) our HFT Patent Portfolio covering certain advanced technologies relating to high frequency trading, which inventions specifically address technological problems associated with speed and latency and provide critical latency gains in trading systems; (iii) our Cox Patent Portfolio relating to enabling technology for identifying media content on the internet and taking further action to be performed after such identification; (iv) our Smart Home Patent Portfolio relating to, among other things, the enabling technology to support the interoperability of smart home IoT devices.
Previous wording
At March 31, 2026, our principal sources of liquidity consisted of cash and cash equivalents and marketable securities of $34,589,000 and working capital of $33,674,000**.**Based on our cash position, we review opportunities to acquire additional intellectual property as well as evaluate other strategic opportunities.
Current wording
At June 30, 2026, our principal sources of liquidity consisted of cash and cash equivalents and marketable securities of $33,752,000 and working capital of $33,179,000. Based on our cash position, we review opportunities to acquire additional intellectual property as well as evaluate other strategic opportunities.
Previous wording
We have five pending litigations involving certain patents within our M2M/IoT Patent Portfolio, HFT Patent Portfolio and Cox Patent Portfolio (see “Legal Proceedings” at pages 18 - 19 hereof). We may not achieve successful outcomes of such litigation, or future litigation involving our patent assets.
Current wording
We have four pending litigations involving certain patents within our M2M/IoT Patent Portfolio, HFT Patent Portfolio and Cox Patent Portfolio (see “Legal Proceedings” at pages 19 – 20 hereof). We may not achieve successful outcomes of such litigation, or future litigation involving our patent assets.
Previous wording
To date we have invested $7,000,000 in ILiAD, a clinical stage biotechnology company dedicated to the prevention and treatment of human disease caused byBordetella pertussiswith a focus on validating its proprietary intranasal vaccine, BPZE1, for the prevention of pertussis (see Note K to our consolidated financial statements included herein). On February 5, 2026, ILiAD completed a $115,000,000 preferred stock financing. As part of the financing, ILiAD converted from a limited liability company to a corporation. The financing was led by RA Capital Management with participation from new investors Janus Henderson Investors and BNP Paribas Asset Management Alts, as well as existing investors including a multi-national pharmaceutical company and AI Life Sciences. As a result of the financing, the Company’s percentage ownership of ILiAD was reduced to approximately 2.5% on a fully diluted basis. As a result of the financing, we no longer account for our investment in ILiAD using the equity method of accounting and now we use the cost method of accounting (see Note B[3] and Note K of our unaudited condensed consolidated financial statements included herein).
Current wording
To date we have invested $7,000,000 in ILiAD, a clinical stage biotechnology company dedicated to the prevention and treatment of human disease caused byBordetella pertussiswith a focus on validating its proprietary intranasal vaccine, BPZE1, for the prevention of pertussis(see Note K to our unaudited condensed consolidated financial statements included herein). On February 5, 2026, ILiAD completed a $115,000,000 preferred stock financing. As part of the financing, ILiAD converted from a limited liability company to a corporation. The financing was led by RA Capital Management with participation from new investors Janus Henderson Investors and BNP Paribas Asset Management Alts, as well as existing investors including a multi-national pharmaceutical company and AI Life Sciences. As a result of the financing, the Company’s percentage ownership of ILiAD was reduced to approximately 2.5% on a fully diluted basis. As a result of the financing, we no longer account for our investment in ILiAD using the equity method of accounting and now we use the cost method of accounting (see Note B[3] and Note K of our unaudited condensed consolidated financial statements included herein).
Previous wording
The significant components of expenses, when revenue is recorded, that may impact our net income (loss) relate to contingent legal fees and expenses related to our patent litigation as well as contingent payments related to patent acquisitions (see Note H[1] and Note H[2] hereof) to our unaudited condensed consolidated financial statements included herein) and incentive compensation payable to our Chairman and Chief Executive Officer pursuant to his employment agreement (see Note I[1] to our unaudited condensed consolidated financial statements included herein). Both such components of expenses are based on a percentage of the revenue received by us as a result of litigation or otherwise.
Current wording
The significant components of expenses, when revenue is recorded, that may impact our net income (loss) relate to contingent legal fees and expenses related to our patent litigation contingent payments related to patent acquisitions (see Note H[1] and Note H[2] hereof) to our unaudited condensed consolidated financial statements included herein) and incentive compensation payable to our Chairman and Chief Executive Officer pursuant to the surviving provisions of his prior employment agreement (see Note I[1] to our unaudited condensed consolidated financial statements included herein). All such components of expenses are based on a percentage of the revenue received by us as a result of litigation or otherwise.
Previous wording
Revenue. We had no revenue for the three months ended March 31, 2026 and revenue of $150,000 for the three months ended March 31, 2025. We currently have five pending patent infringement litigations involving certain patents within our HFT Patent Portfolio, M2M/IoT Patent Portfolio and Cox Patent Portfolio (see Note J to our unaudited condensed consolidated financial statements included herein).
Current wording
Revenue. We had no revenue for the six months ended June 30, 2026 and $150,000 in revenue for the six months ended June 30, 2025. We currently have four pending patent infringement litigations involving certain patents within our HFT Patent Portfolio, M2M/IoT Patent Portfolio and Cox Patent Portfolio (see Note J to our unaudited condensed consolidated financial statements included herein).
Previous wording
*Operating Expenses.*Operating expenses for the three months ended March 31, 2026 were $1,415,000 as compared to $795,000 for the three months ended March 31, 2025. The increase in operating expenses of $620,000 was primarily due to increased professional fees and related costs of $654,000, as a result of increased litigation related costs of $625,000, offset by reduced costs of revenue of $42,000 due to no revenue in the period ended March 31, 2026.
Current wording
Operating Expenses. Operating expenses for the six months ended June 30, 2026 were $2,428,000 as compared to $1,515,000 for the six months ended June 30, 2025. The increase in operating expenses of $913,000 was primarily as a result of increased professional fees and related costs of $971,000, as a result of increased litigation related costs of $962,000, offset by reduced costs of revenue of $42,000 due to no revenue in the period ended June 30, 2026.
Previous wording
Gain on Equity Investment. For the three months ended March 31, 2026, as a result of ILiAD’s private financing completed in February 2026 and the resulting change in our accounting for the investment from the equity method to the cost method, we recorded a gain on our equity investment in ILiAD of $1,052,000 (see Note K and Note B[3] to our unaudited condensed consolidated financial statements included herein).
Current wording
Gain on Equity Investment. For the six months ended June 30, 2026, as a result of ILiAD’s private financing completed in February 2026 and the resulting change in our accounting for the investment from the equity method to the cost method, we recorded a gain on our equity investment in ILiAD of $1,052,000 (see Note K and Note B[3] to our unaudited condensed consolidated financial statements included herein).
Previous wording
Realized and Unrealized Gain on Marketable Securities. For the three months ended March 31, 2026, we recorded realized and unrealized losses on marketable securities of $287,000, as compared to realized and unrealized gains on marketable securities of $149,000 for the three months ended March 31, 2025. The decrease of $436,000 was primarily due to unrealized losses of $103,000 as of March 31, 2026 on our marketable securities, compared to unrealized gains of $257,000 at December 31, 2025. The decrease reflects a decline in the market value of U.S. government securities and fixed income mutual funds held by us. During the period ended March 31, 2026, short-term Treasury yields increased, which resulted in lower market prices for our fixed-income securities.
Current wording
Realized and Unrealized Gain (Loss) on Marketable Securities. For the six months ended June 30, 2026, we recorded realized and unrealized losses on marketable securities of $279,000, as compared to realized and unrealized gains of $171,000 for the six months ended June 30, 2025. The decrease of $450,000 was primarily due to unrealized losses of $84,000 as of June 30, 2026 on our marketable securities, compared to unrealized gains of $257,000 at December 31, 2025. The decrease reflects a decline in the market value of U.S. government securities, fixed income mutual funds and corporate bonds and notes held by us. During the period ended June 30, 2026, short-term Treasury yields increased, which resulted in lower market prices for our fixed-income securities.
Previous wording
Income Taxes. For the three months ended March 31, 2026 and 2025, we had a deferred tax expense of $245,000 as compared to a deferred tax benefit of $111,000, respectively. The net increase of $356,000 in our deferred income taxes was the result of deferred income tax expense of $245,000 for the three months ended March 31, 2026 recorded in connection with the gain on our equity investment and no deferred income tax benefit was recorded in the same period as a result of no longer recognizing our share of the losses of our equity method investee (ILiAD) in 2026, as compared to $111,000 of deferred income tax benefit for the three months ended March 31, 2025.
Current wording
Income Taxes. For the six months ended June 30, 2026, we had no current income tax expense as compared to a $31,000 current tax benefit related to a federal income tax refund for the same period in 2025. We had a deferred tax expense of $245,000 for the six months ended June 30, 2026 compared to a deferred tax benefit of $149,000 for the six months ended June 30, 2025. The increase of $394,000 in our deferred income taxes was primarily the result of deferred income tax expense of $245,000 recorded in 2026 in connection with the gain on our equity investment (ILiAD) and no deferred income tax benefit as a result of no longer recognizing our share of the losses of our equity method investee, as compared to $149,000 of deferred tax benefit as a result of our recognized net losses of our equity method investee (ILiAD) for the six months ended June 30, 2025.
Previous wording
Share of Net Losses of Equity Method Investee. As a result of the conversion to the fair value method of accounting for our equity investment, we recognized no net losses during the three months period ended March 31, 2026 as compared to $462,000 of net losses during the three month period ended March 31, 2025 as a result of application of the equity method of accounting.
Current wording
Share of Net Losses of Equity Method Investee. As a result of the conversion to the fair value method of accounting for our equity investment, we recognized no net losses during the six months period ended June 30, 2026 as compared to $741,000 of net losses during the six month period ended June 30, 2025 as a result of application of the equity method of accounting.
Previous wording
Net Loss. As a result of the foregoing, we realized a net loss of $511,000 or $0.02 per share basic and diluted for the three months ended March 31, 2026, compared with a net loss of $363,000 or $0.02 per share basic and diluted for the three months ended March 31, 2025. The increase in our net loss of $148,000 for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily the result of the gain on equity investment of $1,052,000 and the benefit of no recognized share of net losses of equity method investee, which loss was $462,000 for the three months ended March 31, 2025. These items were offset by lower revenue of $150,000, increases in litigation related costs of $625,000, realized and unrealized losses on marketable securities of $436,000, deferred income taxes of $356,000 and a decrease in earned interest and dividend income of $100,000 during the three months ended March 31, 2026.
Current wording
Net Loss. As a result of the foregoing, we realized a net loss of $1,166,000 or $0.05 per share basic and diluted for the six months ended June 30, 2026, compared with a net loss of $826,000 or $0.04 per share basic and diluted for the six months ended June 30, 2025. The increase in net loss of $340,000 for the six months ended June 30, 2026, as compared to 2025, was primarily the result of decreased revenue of $150,000, increased operating expenses of $913,000, decreased interest and dividend income of $195,000, increased realized and unrealized loss on marketable securities of $450,000 and increased income taxes of $425,000, offset by increased gain on equity investment of $1,052,000 and decreased recognized losses of our equity method investee of $741,000.
Previous wording
We have financed our operations primarily from revenue from licensing our patents. At March 31, 2026, our principal sources of liquidity consisted of cash and cash equivalents and marketable securities of $34,589,000 and working capital of $33,674,000. Based on our current working capital position, we believe that we will have sufficient liquidity to fund our operations for the next twelve months and the foreseeable future. Our pending patent infringement litigation or realization of our investment in ILiAD may result in a material increase in our liquidity and capital resources.
Current wording
We have financed our operations primarily from revenue from licensing our patents. At June 30, 2026, our principal sources of liquidity consisted of cash and cash equivalents and marketable securities of $33,752,000 and working capital of $33,179,000. Based on our current working capital position, we believe that we will have sufficient liquidity to fund our operations for the next twelve months and the foreseeable future. Our pending patent infringement litigations or realization of our investment in ILiAD may result in a material increase in our liquidity and capital resources.
Previous wording
Working capital decreased by $2,662,000 at March 31, 2026 to $33,674,000 as compared to working capital of $36,336,000 at December 31, 2025. The decrease was primarily attributed to dividend payments of $1,140,000, certain aspects of the net cash used in operating activities of $310,000 and lower accrued payroll of $289,000 during the three month period ended March 31, 2026. These decreases in working capital were partially offset by increased current liabilities of $340,000.
Current wording
Working capital decreased by $3,157,000 at June 30, 2026 to $33,179,000 as compared to working capital of $36,336,000 at December 31, 2025. The decrease during the six month period ended June 30, 2026 was primarily attributed to the net cash used in operating activities of $1,242,000, dividend payments of $1,140,000, the acquisition of patents of $250,000 and repurchases of common stock of $136,000.
Previous wording
Net cash used in investing activities during the three months ended March 31, 2026 increased by $3,533,000 to $3,248,000 as compared to net cash provided by investing activities of $285,000 for the three months ended March 31, 2025, primarily as a result of increased purchases of marketable securities of $2,802,000 and sales of marketable securities of $770,000 as our investments shifted to longer duration maturities of greater than three months.
Current wording
Net cash used in investing activities during the six months ended June 30, 2026 increased by $3,590,000 to $1,440,000 used in investing activities as compared to $2,150,000 provided by investing activities for the six months ended June 30, 2025. The increase in the net cash used in investing activities is primarily as a result of reduced sales of marketable securities of $2,444,000 and increased purchases of marketable securities of $1,310,000, offset by reduced acquisitions of patents of $164,000.
Previous wording
Net cash used in financing activities for the three months ended March 31, 2026 and 2025 was $1,234,000 and $1,301,000, respectively. The decrease of $67,000 for the three months ended March 31, 2025 primarily resulted from reduced stock repurchases of $65,000.
Current wording
Net cash used in financing activities for the six months ended June 30, 2026 and 2025 was $1,285,000 and $1,369,000, respectively. The decrease in net cash used in financing activities of $84,000 primarily resulted from the decrease in stock repurchases of $71,000.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
*Revenue.*We had no revenue for the three months ended June 30, 2026 and June 30, 2025. We currently have four pending patent infringement litigations involving certain patents within our HFT Patent Portfolio, M2M/IoT Patent Portfolio and Cox Patent Portfolio (see Note J to our unaudited condensed consolidated financial statements included herein).
Current report — wording carried from elsewhere
*Income Taxes.*For the three months ended June 30, 2026, we had no current income tax expense as compared to a $31,000 current tax benefit related to a federal income tax refund for the same period in 2025. For the three months ended June 30, 2026, we had no deferred income taxes as compared to a deferred tax benefit of $38,000 for the three months ended June 30, 2025. The decrease in our deferred income tax benefit was the result of no longer recognizing our share of the net losses of our equity method investee (ILiAD) in 2026.
Current report — wording carried from elsewhere
*Share of Net Losses of Equity Method Investee.*As a result of the conversion to the fair value method of accounting for our equity investment, we recognized no net losses during the three month period ended June 30, 2026 as compared to $279,000 of net losses under the equity method of accounting during the three month period ended June 30, 2025.
Current report — wording carried from elsewhere
Net Loss. As a result of the foregoing, we realized a net loss of $655,000 or $0.03 per share basic and diluted for the three months ended June 30, 2026, compared with a net loss of $463,000 or $0.02 per share basic and diluted for the three months ended June 30, 2025. The increase in our net loss of $192,000 for the three months ended June 30, 2026, as compared to the same period in 2025, was the result of increased operating expenses of $293,000, decreased other income of $109,000 and decreased income tax benefits of $69,000, offset somewhat by the decrease in our share of net loss of equity method investee of $279,000.