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`S-1/A 1 forrn-s1_17569.htm FORM S-1 (AMENDMENT #1)
`As filed with the Securities and Exchange Commission on September 30 , 2013
`
`Registration No. 333-190719
`
`
`
`SECURITIES AND EXCHANGE COMMISSION
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`Washington, D.C. 20549
`
`AMENDMENT NO. 1
`
`TO
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`FORM S-1
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`REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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`NETWORK-1 SECURITY SOLUTIONS, INC.
`
`(Exact Name of Registrant as Specified in its Charter)
`
`
` DELAWARE 6794
`(State or other jurisdiction of
`(Primary Standard Industrial
`incorporation or organization)
`Classification Code Number)
`
`
`11-3027591
`(I.R.S. Employer
`Identification No.)
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`445 Park Avenue, Suite 1020
`New York, New York 10022
`(212) 829-5770
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`(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)
`
`Corey M. Horowitz
`Chairman and Chief Executive Officer
`445 Park Avenue, Suite 1020
`New York, New York 10022
`(212) 829-5770
`
`(Address, including zip code, and telephone number, including area code, of registrant’s principal executive officers)
`
`Copies to:
`Sam Schwartz, Esq.
`Eiseman Levine Lehrhaupt & Kakoyiannis, P.C.
`805 Third Avenue
`
`New York, New York 10022
`(212) 752-1000
`
`http://WWW.sec.gov/ArchiVes/edgar/data/1065078/000107261313000390/form-s1__l7569....
`
`10/18/2013
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`form-sl_17569.htm
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`Page 10 of 122
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`agreement for our Remote Power Patent pursuant to which each such defendant agreed to license our Remote Power Patent
`for its full term (which expires in March 2020) and pay a license initiation fee and quarterly royalties based on their sales of
`PoE products. On January 25, 2013, certain defendants filed a motion to stay the litigation pending completion of
`termination of certain Inter Partes Review proceedings pending at the United States Patent and Trademark Office (See
`“Legal Proceedings” at pages 29-31 hereof). On March 5, 2013, the Court granted such defendants’ motion and stayed the
`litigation pending the disposition of the Inter Partes review proceeding.
`
`Settlement of Litigation Against Major Data Networking Equipment Manufacturers including license agreements for
`our Remote Power Patent
`
`In July 2010, we settled our litigation with Adtran, Inc, Cisco Systems, Inc. and Cisco-Linksys, LLC, (collectively,
`“Cisco”), Enterasys Networks, Inc., Extreme Networks, Inc., Foundry Networks, Inc., and 3Com Corporation, Inc. pending
`in the United States District Court for the Eastern District of Texas, Tyler Division. As part of the settlement, Adtran,
`Cisco, Enterasys, Extreme Networks and Foundry Networks each entered into a settlement agreement with us and entered
`into non-exclusive licenses for the Remote Power Patent (the “Licensed Defendants”). Under the terms of the licenses, the
`Licensed Defendants paid us aggregate upfront payments of approximately $32 million and also agreed to license the
`Remote Power Patent for its full term, which expires in March 2020. In accordance with our Settlement and License
`Agreement, dated May 25, 2011, which expanded upon the July 2010 agreement, Cisco is obliged to pay us royalties
`(which began in the first quarter of 2011) based on its sales of PoE products up to maximum royalty payments per year of
`$8 million through 2015 and $9 million per year thereafter for the remaining term of the patent. The royalty payments are
`subject to certain conditions including the continued validity of our Remote Power Patent, and the actual royalty amounts
`received may be less than the caps stated above, as was the case in 2011. Under the terms of the Agreement, if we grant
`other licenses with lower royalty rates to third parties (as defmed in the Agreement), Cisco shall be entitled to the benefit of
`the lower royalty rates provided it agrees to the material terms of such other license. Under the terms of the Agreement, we
`have certain obligations to Cisco and if we materially breach such terms, Cisco will be entitled to stop paying royalties to
`us. This would have a material adverse effect on our business, fmancial condition and results of operations. For more
`details about the July 2010 settlement, please see our Current Reports on Form 8-K filed with the Securities and Exchange
`Commission on July 20, 2010 and June 1, 2011.
`
`Shares Being Ojfered
`
`This Prospectus relates to the resale by the selling stockholders of up to 6,324,661 shares of our common stock,
`consisting of (i) 2,500,000 shares of common stock issuable upon exercise of warrants and 500,000 shares of our common
`stock (issued as a result of exercise of a warrant) issued to four holders in connection with our acquisition of the patent
`portfolio and certain other assets of Looking Glass LLC (formerly Mirror Worlds, LLC) on May 21, 2013, and (ii)
`3,074,661 shares of common stock and 250,000 shares of common stock issuable upon exercise of warrants owned by our
`Chairman and Chief Executive Officer and related parties.
`
`http://www.sec.gov/Archives/edgar/data/1065078/000107261313000390/form-s1_17569....
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`10/18/2013