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What changed in NETWORK-1 TECHNOLOGIES, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of NETWORK-1 TECHNOLOGIES, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+135 added−143 removedSource: 10-K (2024-12-31) vs 10-K (2024-03-08)

Top changes in NETWORK-1 TECHNOLOGIES, INC.'s 2024 10-K

135 paragraphs added · 143 removed · 112 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe presently own one hundred (100) U.S. patents, fifty-four (54) of such patents have expired, and fifteen (15) foreign patents relating to (i) our Cox patent portfolio (the “Cox Patent Portfolio”) relating to enabling technology for identifying media content on the Internet and taking further actions to be performed after such identification;(ii) our M2M/IoT patent portfolio (the “M2M/IoT Patent Portfolio”) relating to, -2- 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; (iii) our HFT patent portfolio (the “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 where the difference between success and failure may be measured in nanoseconds; (iv) our Mirror Worlds patent portfolio (the “Mirror Worlds Patent Portfolio”) relating to foundational technologies that enable unified search and indexing, displaying and archiving of documents in a computer system; and (v) our remote power patent (the “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.
Biggest changeWe presently own one hundred and six (106) U.S. patents, fifty-four (54) of such patents have expired, and sixteen (16) foreign patents 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 -2- 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 where the difference between success and failure may be measured in nanoseconds; (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 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 (v) our Mirror Worlds Patent Portfolio relating to foundational technologies that enable unified search and indexing, displaying and archiving of documents in a computer system.
Nix is an entrepreneur and inventor, and founder and Chief Executive Officer of Vobal Technologies, LLC. In 2016, Mr. Nix was recognized as “Creator of the Year” by the Intellectual Property Law Association of Chicago for his intellectual property related to eSIM technology. HFT Patent Portfolio On March 25, 2022, we acquired the HFT Patent Portfolio.
Nix is an entrepreneur and inventor, and founder and Chief Executive Officer of Vobal Technologies, LLC. In 2016, Mr. Nix was recognized as “Creator of the Year” by the Intellectual Property Law Association of Chicago for his intellectual property related to eSIM technology. -4- HFT Patent Portfolio On March 25, 2022, we acquired the HFT Patent Portfolio.
Our current patent acquisition and development strategy is to focus on acquiring high quality patents which management believes have the potential to generate significant licensing opportunities as has been the case with our Remote Power Patent and Mirror Worlds Patent Portfolio. Our Remote Power Patent has generated licensing revenue in excess of $188,000,000 from May 2007 through December 31, 2023.
Our current patent acquisition and development strategy is to focus on acquiring high quality patents which management believes have the potential to generate significant licensing opportunities as has been the case with our Remote Power Patent and Mirror Worlds Patent Portfolio. Our Remote Power Patent has generated licensing revenue in excess of $188,000,000 from May 2007 through December 31, 2024.
In addition, we may also enter into strategic relationships with third parties to develop, commercialize, license or otherwise monetize their intellectual property. We have been dependent upon our Remote Power Patent for a significant portion of our revenue. Our Remote Power Patent has generated revenue in excess of $188,000,000 from May 2007 through December 31, 2023.
In addition, we may also enter into strategic relationships with third parties to develop, commercialize, license or otherwise monetize their intellectual property. We have been dependent upon our Remote Power Patent for a significant portion of our revenue. Our Remote Power Patent has generated revenue in excess of $188,000,000 from May 2007 through December 31, 2024.
Since the acquisition of our Mirror Worlds Patent Portfolio in May 2013, we have received licensing and other revenue of $47,150,000 through December 31, 2023. In addition, we may enter into third party strategic relationships with inventors and patent owners to assist in the development and monetization of their patent technologies.
Since the acquisition of our Mirror Worlds Patent Portfolio in May 2013, we have received licensing and other revenue of $47,150,000 through December 31, 2024. In addition, we may enter into third party strategic relationships with inventors and patent owners to assist in the development and monetization of their patent technologies.
This portfolio covers 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 where the difference between success and failure may be measured in nanoseconds. The HFT Patent Portfolio currently includes nine issued U.S. patents and two pending U.S. patents.
This portfolio covers 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 where the difference between success and failure may be measured in nanoseconds. The HFT Patent Portfolio currently includes eleven (11) issued U.S. patents and two pending U.S. patents.
ITEM 1. BUSINESS Overview Our principal business is the development, licensing and protection of our intellectual property assets.
ITEM 1. BUSINESS Our principal business is the development, licensing and protection of our intellectual property assets.
Notwithstanding the expiration of the Remote Power Patent in March 2020, in October and November 2022, we asserted the patent in nine separate actions against ten defendants for damages prior to March 7, 2020 and have reached settlement agreements with eight of the defendants (see “Legal Proceedings” at pages 20 - 21 hereof).
Notwithstanding the expiration of the Remote Power Patent in March 2020, in October and November 2022, we asserted the patent in nine separate actions against ten defendants for damages prior to March 7, 2020 and have reached settlement agreements with nine of the defendants (see “Legal Proceedings” at page 20 hereof).
On December 31, 2023, we owned approximately 6.7% of the outstanding units of ILiAD on a non-fully diluted basis and 5.4% of the outstanding units on a fully diluted basis (after giving effect to the exercise of all outstanding options and warrants). Our current strategy includes continuing our efforts to monetize our intellectual property.
On December 31, 2024, we owned approximately 6.5% of the outstanding units of ILiAD on a non-fully diluted basis and 4.9% of the outstanding units on a fully diluted basis (after giving effect to the exercise of all outstanding options and warrants). Our current strategy includes continuing our efforts to monetize our intellectual property.
On December 31, 2023, we owned approximately 6.7% of the outstanding units of ILiAD on a non-fully diluted basis and 5.4% of the outstanding units on a fully diluted basis (after giving effect to the exercise of all outstanding options, and warrants).
On December 31, 2024, we owned approximately 6.5% of the outstanding units of ILiAD on a non-fully diluted basis and 4.9% of the outstanding units on a fully diluted basis (after giving effect to the exercise of all outstanding options, and warrants).
Since entering into the agreement with Recognition in May 2013, we have paid Recognition an aggregate of $3,127,000 with respect to such net proceeds interest in our Mirror Worlds Patent Portfolio (no such payments were made during the years 2023 and 2022). Remote Power Patent Our Remote Power Patent (U.S.
Since entering into the agreement with Recognition in May 2013, we have paid Recognition an aggregate of $3,127,000 with respect to such net proceeds interest in our Mirror Worlds Patent Portfolio (no such payments were made during the years 2024 and 2023).
Based on our current cash position, we believe that we will have sufficient cash to fund our operations for the foreseeable future. -3- Overview of Our Patents We currently own one hundred (100) U.S. patents and fifteen(15) foreign patents relating to patents within our Cox Patent Portfolio, M2M/IoT Patent Portfolio, HFT Patent Portfolio, Mirror World Patent Portfolio and our Remote Power Patent.
Based on our current cash position, we believe that we will have sufficient cash to fund our operations for the foreseeable future. -3- Overview of Our Patents We currently own one hundred and six (106) U.S. patents and sixteen (16) foreign patents relating to patents within our M2M/IoT Patent Portfolio, HFT Patent Portfolio, Cox Patent Portfolio, Mirror Worlds Patent Portfolio and our Remote Power Patent.
In addition to the purchase price that we paid at closing, we have an obligation to pay the seller an additional cash payment of $500,000 and $375,000 of our common stock contingent upon achieving certain milestones with respect to the HFT Patent Portfolio.
The expiration dates within our HFT Patent Portfolio range from October 2039 to February 2040. In addition to the purchase price that we paid at closing, we have an obligation to pay the seller an additional cash payment of $500,000 and $375,000 of our common stock contingent upon achieving certain milestones with respect to the HFT Patent Portfolio.
Cox is currently a Professor at the University of Copenhagen and University College London where he is head of its Information and Decision Systems Group. Dr. Cox was formerly a member of the Technical Staff at AT&T Bell Labs and a Fellow at NEC Research Institute.
Cox is currently a Professor at the University of Copenhagen and University College London where he is head of its Information and Decision Systems Group. He is also Director of the EPSRC Digital Health Hub for AMR (Antimicrobial resistance). Dr. Cox was formerly a member of the Technical Staff at AT&T Bell Labs and a Fellow at NEC Research Institute.
Pertussis is a life-threatening disease caused by the highly contagious respiratory bacterium Bordetella pertussis . ILiAD has the exclusive license to seventy (70) issued patents and has forty-nine (49) pending patent applications.
Pertussis is a life-threatening disease caused by the highly contagious respiratory bacterium Bordetella pertussis . ILiAD has the exclusive license to seventy-four (74) issued patents and has fifty-four (54) pending patent applications.
Patent No. 6,218,930) covers the delivery of power over Ethernet cables for the purpose of remotely powering network devices such as wireless access ports, IP phones and network based cameras. Our Remote Power Patent expired on March 7, 2020.
He is an inventor or co-inventor of over seventy (70) U.S. patents. -5- Remote Power Patent Our Remote Power Patent (U.S. Patent No. 6,218,930) covers the delivery of power over Ethernet cables for the purpose of remotely powering network devices such as wireless access ports, IP phones and network based cameras. Our Remote Power Patent expired on March 7, 2020.
He is an inventor or co-inventor of over seventy (70) U.S. patents. -4- M2M/IoT Patent Portfolio Our M2M/IoT Patent Portfolio, acquired in December 2017 from M2M and IoT Technologies, LLC (“M2M”), relates 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.
M2M/IoT Patent Portfolio Our M2M/IoT Patent Portfolio, acquired in December 2017 from M2M and IoT Technologies, LLC (“M2M”), relates 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.
We have pending litigation against Google Inc. and YouTube, LLC involving assertion of certain patents within our Cox Patent Portfolio (see “Legal Proceedings” at pages 19 - 20 hereof). The patents within our Cox Patent Portfolio are based on a patent application filed in 2000.
We have a pending appeal to the Federal Circuit of a District Court ruling dismissing our case against Google Inc. and YouTube, LLC involving assertion of certain patents within our Cox Patent Portfolio (see “Legal Proceedings” at page 20 hereof). The patents within our Cox Patent Portfolio are based on a patent application filed in 2000.
We believe that our Remote Power Patent covers several of the key technologies covered by both the 802.3af and 802.3at standards. -6- Network-1 Strategy Our strategy is to capitalize on our intellectual property assets by entering into licensing arrangements with third parties that utilize our intellectual property's proprietary technologies as well as any additional proprietary technologies covered by patents which may be acquired by us in the future.
Network-1 Strategy Our strategy is to capitalize on our intellectual property assets by entering into licensing arrangements with third parties that utilize our intellectual property's proprietary technologies as well as any additional proprietary technologies covered by patents which may be acquired by us in the future.
With respect to our one hundred (100) U.S. patents, fifty-four (54) of such patents have expired. However, we can assert expired patents against third parties but only for past damages up to the expiration date.
With respect to our one hundred and six (106) U.S. patents, fifty-four (54) of such patents have expired. However, we can assert expired patents against third parties but only for past damages up to the expiration date. In 2024, our revenue was achieved from claims related to our expired Remote Power Patent and we have appealed to the U.S.
We anticipate further issuances of additional claims for this portfolio. The expiration dates of the thirty-seven (37) issued U.S. patents currently within our M2M/IoT Patent Portfolio range from September 2033 to May 2034.
The expiration dates of the forty-one (41) issued U.S. patents currently within our M2M/IoT Patent Portfolio range from September 2033 to May 2034.
In 2009, the IEEE Standards Association approved 802.3at, a new PoE standard which, among other things, increased the available power for delivery over Ethernet networks.
In 2009, the IEEE Standards Association approved 802.3at, a new PoE standard which, among other things, increased the available power for delivery over Ethernet networks. We believe that our Remote Power Patent covers several of the key technologies covered by both the 802.3af and 802.3at standards.
Our principal executive offices are located at 65 Locust Avenue, Third Floor, New Canaan, Connecticut 06840 and our telephone number is (203) 920-1055. Available Information We file or furnish various reports, such as registration statements, quarterly and current reports, proxy statements and other materials with the SEC. Our website address is www.network-1.com .
Available Information We file or furnish various reports, such as registration statements, quarterly and current reports, proxy statements and other materials with the SEC. Our website address is www.network-1.com .
The M2M/IoT Patent Portfolio currently consists of thirty-seven (37) issued U.S. patents, nine (9) pending U.S. patent applications, fourteen (14) registered foreign patents and one (1) additional pending non-U.S. patent applications. Since we acquired the M2M/IoT Patent Portfolio in December 2017, we have been issued twenty-three (23) additional U.S. patents with respect to the portfolio.
The M2M/IoT Patent Portfolio currently consists of forty-one (41) issued U.S. patents, six (6) pending U.S. patent applications, and fifteen (15) registered foreign patents. Since we acquired the M2M/IoT Patent Portfolio in December 2017, we have been issued twenty-nine (29) additional U.S. patents with respect to the portfolio. We anticipate further issuances of additional claims for this portfolio.
In addition, we review opportunities to acquire or license additional intellectual property as well as other strategic alternatives. We have invested $7,000,000 in ILiAD Biotechnologies, LLC (“ILiAD”), a clinical stage biotechnology company with an exclusive license to seventy (70) patents.
We have invested $7,000,000 in ILiAD Biotechnologies, LLC (“ILiAD”), a clinical stage biotechnology company with an exclusive license to seventy-four (74) patents.
We have previously successfully asserted litigation with respect to our Remote Power Patent and our Mirror Worlds Patent Portfolio and have also been successful in defending proceedings at the USPTO challenging the validity of our Remote Power Patent and certain patents within our Cox Patent Portfolio. -7- Revenue Concentration Revenue from our Remote Power Patent as a result of litigation settlements constituted 100% of our revenue for the year ended December 31, 2023, of which four defendants constituted 90% of our revenue for such year.
We have previously successfully asserted litigation with respect to our Remote Power Patent and our Mirror Worlds Patent Portfolio. -7- Revenue Concentration Revenue from our Remote Power Patent as a result of a litigation settlement with a defendant constituted 100% of our revenue for the year ended December 31, 2024.
Our 227 Patent was previously asserted in litigations against Apple Inc. and Microsoft Corporation which were settled resulting in aggregate payments to us of $29,650,000. The inventions relating to document stream operating systems covered by our Mirror Worlds Patent Portfolio resulted from the work done by Yale University computer scientist, Professor David Gelernter, and his then graduate student, Dr.
The inventions relating to document stream operating systems covered by our Mirror Worlds Patent Portfolio resulted from the work done by Yale University computer scientist, Professor David Gelernter, and his then graduate student, Dr. Eric Freeman, in the mid-1990s.
As part of our acquisition of the Mirror Worlds Patent Portfolio in 2013, we also entered into an agreement with Recognition Interface, LLC (“Recognition”), an entity that financed the commercialization of the Mirror Worlds patent portfolio prior to its sale to Mirror Worlds, LLC and also retained an interest in the licensing proceeds of the Mirror Worlds patent portfolio.
Certain aspects of the technologies developed by David Gelernter were commercialized in their company's product offering called “Scopeware.” Technologies embodied in Scopeware are now common in various computer and web-based operating systems. -6- As part of our acquisition of the Mirror Worlds Patent Portfolio in 2013, we also entered into an agreement with Recognition Interface, LLC (“Recognition”), an entity that financed the commercialization of the Mirror Worlds patent portfolio prior to its sale to Mirror Worlds, LLC and also retained an interest in the licensing proceeds of the Mirror Worlds patent portfolio.
We also have an obligation to pay the seller 15% of the first $50 million of net proceeds (after deduction of expenses) generated from the patent portfolio and 17.5% of net proceeds greater than $50 million. -5- Mirror Worlds Patent Portfolio Our Mirror Worlds Patent Portfolio, acquired in May 2013, consists of ten (10) U.S. patents and covers foundational technologies that enable unified search and indexing, displaying and archiving of documents in a computer system.
Mirror Worlds Patent Portfolio Our Mirror Worlds Patent Portfolio, acquired in May 2013, consists of ten (10) U.S. patents and covers foundational technologies that enable unified search and indexing, displaying and archiving of documents in a computer system. All of our patents within our Mirror Worlds Patent Portfolio have expired.
We have pending litigation involving our assertion of infringement claims concerning certain patents within our Cox Patent Portfolio and our Remote Power Patent. In addition, we have a pending appeal to the U.S. Court of Appeals for the Federal Circuit of the District Court judgment of non-infringement dismissing our case against Meta Platforms, Inc.
We have pending litigations involving our assertion of infringement claims concerning certain patents within our HFT Patent Portfolio. In addition, we have a pending appeal to the U.S.
We are currently involved in several litigations to protect our patents including certain patents within our Cox Patent Portfolio, Mirror Worlds Patent Portfolio and Remote Power Patent (see “Legal Proceedings” at pages 19 - 21 hereof).
We are currently involved in several litigations to protect our patents including certain patents within our HFT Patent Portfolio and an appeal to the Federal Circuit of a District Court dismissal involving certain patents within our Cox Patent Portfolio (see “Legal Proceedings” at page 20 (hereof).
We no longer receive revenue for our Remote Power Patent for any period subsequent to March 7, 2020 (the expiration date of the patent).
We no longer receive revenue for our Remote Power Patent for any infringement period subsequent to March 7, 2020 (the expiration date of the patent). During the year ended December 31, 2024 and 2023, our Remote Power Patent generated all of our revenue. Our future revenue is largely dependent on our ability to monetize our other patent assets.
(formerly Facebook, Inc.) involving certain patents within our Mirror Worlds Patent Portfolio (see “Legal Proceedings” at pages 19 - 21 of this Annual Report). At December 31, 2023, we had cash and cash equivalents and marketable securities of $45,467,000 and working capital of $44,850,000.
Court of Appeals for the Federal Circuit of the District Court judgment of non-infringement dismissing our case against Google and YouTube involving certain patents within our Cox Patent Portfolio (see “Legal Proceedings” at page 20 of this Annual Report). At December 31, 2024, we had cash and cash equivalents and marketable securities of $40,600,000 and working capital of $40,066,000.
Removed
During the year ended December 31, 2023, our Remote Power Patent generated all of our revenue of $2,601,000 as a result of litigation settlements relating to periods prior to March 7, 2020 (see “Legal Proceedings at pages 20 - 21. Our future revenue is largely dependent on our ability to monetize our other patent assets.
Added
Court of Appeals for the Federal Circuit the District Court order dismissing our claims involving certain expired patents within our Cox Patent Portfolio (see “Legal Proceedings” at page 20 hereof).
Removed
We currently have pending litigation involving expired patents including our Remote Power Patent, and certain patents within Our Cox and Mirror Worlds Patent Portfolios (see “Legal Proceedings” at pages 19 - 21 hereof). Cox Patent Portfolio Our Cox Patent Portfolio, acquired from Dr.
Added
We also have an obligation to pay the seller 15% of the first $50 million of net proceeds (after deduction of expenses) generated from the patent portfolio and 17.5% of net proceeds greater than $50 million. Cox Patent Portfolio Our Cox Patent Portfolio, acquired from Dr.
Removed
All of our patents within our Mirror Worlds Patent Portfolio have expired. The Mirror Worlds Patent Portfolio includes U.S. Patent No. 6,006,227 (the “227 Patent”), U.S. Patent No. 7,865,538 and U.S. Patent No. 8,255,439 which are currently being asserted in our litigation against Meta Platforms, Inc. (formerly Facebook, Inc.) (see “Legal Proceedings” at page 20 hereof).
Added
Our 227 Patent, within this portfolio, was previously asserted in litigations against Apple Inc. and Microsoft Corporation which were settled resulting in aggregate payments to us of $29,650,000. In December 2024, the U.S.
Removed
Eric Freeman, in the mid-1990s. Certain aspects of the technologies developed by David Gelernter were commercialized in their company's product offering called “Scopeware.” Technologies embodied in Scopeware are now common in various computer and web-based operating systems.
Added
Circuit Court of Appeals for the Federal Circuit affirmed the judgment of the District Court granting Meta Platform’s Inc.’s (formerly Facebook) motion for summary judgment of non- infringement dismissing Network-1 claims against Meta involving certain patents within our Mirror Worlds Patent Portfolio.
Removed
On August 24, 2022, ILiAD consummated a private financing of $42,800,000 of its Class D units, of which a multi-national pharmaceutical company invested $30,000,000.
Added
On August 24, 2022, ILiAD consummated a private equity financing of $42,800,000, of which a multi-national pharmaceutical company invested $30,000,000. -9- Corporate Information We were incorporated under the laws of the State of Delaware in July 1990. Our principal executive offices are located at 65 Locust Avenue, Third Floor, New Canaan, Connecticut 06840 and our telephone number is (203) 920-1055.
Removed
As a result of the financing, we recognized a gain in 2022 of $3,883,000 on our equity investment and a gain of $271,000 with respect to the conversion of our convertible note in the principal amount of $1,000,000 plus interest into equity of ILiAD. -9- Corporate Information We were incorporated under the laws of the State of Delaware in July 1990.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe market price of our common stock may be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including, but not limited to, the following: • the outcome of our litigation against Google and YouTube involving certain patents within our Cox Patent Portfolio; • our ability to further develop, license and monetize our M2M/IoT Patent Portfolio; • our ability to further develop, license and monetize our HFT Patent Portfolio; • our ability to achieve a successful outcome of our investment in ILiAD; • our ability to acquire additional intellectual property; • our ability to enter into strategic relationships with third parties to license or otherwise monetize their intellectual property; • variations in our quarterly and annual operating results; • our ability to continue to pay cash dividends; • our ability to raise capital if needed; • sales of our common stock; • technology changes; • legislative, regulatory and competitive developments; and • economic and other external factors.
Biggest changeThe market price of our common stock may be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including, but not limited to, the following: • the outcome of our litigations against Citadel Securities, LLC and Jump Trading, LLC involving certain patents within our HFT Patent Portfolio; • our ability to monetize our M2M/IoT Patent Portfolio; • the outcome of our appeal to the Federal Circuit of the District Court dismissal of our litigation against Google and YouTube involving certain patents within our Cox Patent Portfolio; • our ability to achieve a successful outcome of our investment in ILiAD; • our ability to acquire additional intellectual property; • our ability to enter into strategic relationships with third parties to license or otherwise monetize their intellectual property; • variations in our quarterly and annual operating results; • our ability to continue to pay cash dividends; • our ability to raise capital if needed; • sales of our common stock; • technology changes; • the increasing development of artificial intelligence could impact our business; • legislative, regulatory and competitive developments; and • economic and other external factors.
Many of these competitors have greater financial resources and human resources than us. -15- Our markets are subject to rapid technological change and our technologies face potential technology obsolescence. The markets covered by our intellectual property are characterized by rapid technological changes, changing customer requirements, frequent new product introductions and enhancements, and evolving industry standards.
Many of these competitors also have greater financial resources and human resources than us. -15- Our markets are subject to rapid technological change and our technologies face potential technology obsolescence. The markets covered by our intellectual property are characterized by rapid technological changes, changing customer requirements, frequent new product introductions and enhancements, and evolving industry standards.
The America Invents Act and its implementation also increased the uncertainties and costs surrounding the enforcement of patent rights, which have made it more difficult to successfully prosecute our patents. The increasing development of artificial intelligence could materially impact our business.
The America Invents Act and its implementation also increased the uncertainties and costs surrounding the enforcement of patent rights, which have made it more difficult to successfully prosecute our patents. The increasing development of artificial intelligence could impact our business.
In general, it addressed issues surrounding the enforceability of patents and the increase in patent litigation by, among other things, established new procedures for patent litigation and new administrative post-grant review procedures to challenge the patentability of issued patents outside of litigation, including Inter Partes Review (IPR) proceedings, which provide third parties a timely, cost effective alternative to district court litigation to challenge the validity of an issued patent.
In general, it addressed issues surrounding the enforceability of patents and the increase in patent litigation by, among other things, establishing new procedures for patent litigation and new administrative post-grant review procedures to challenge the patentability of issued patents outside of litigation, including Inter Partes Review (IPR) proceedings, which provide third parties a timely, cost effective alternative to district court litigation to challenge the validity of an issued patent.
If we were determined to be a PHC in 2024 or any future year, we would be subject to an additional 20% tax on our UPHCI. In such event, we may issue a special cash dividend to our shareholders in an amount equal to the UPHCI rather than incur the 20% tax. We are dependent upon our CEO and Chairman.
If we were determined to be a PHC in 2025 or any future year, we would be subject to an additional 20% tax on our UPHCI. In such event, we may issue a special cash dividend to our shareholders in an amount equal to the UPHCI rather than incur the 20% tax. We are dependent upon our CEO and Chairman.
Our patents are central to our business strategy of licensing our intellectual property rights or enforcing such rights against those that we believe are infringing. However, rapid advancements in the field of artificial intelligence (AI) and machine learning (ML) have the potential to disrupt our current business model in various ways.
Our patents are central to our business strategy of licensing our intellectual property rights or enforcing such rights against those that we believe are infringing. However, rapid advancements in the field of artificial intelligence (AI) and machine learning (ML) have the potential to impact our current business model in various ways.
During the second half of 2023, based on available information concerning our shareholder ownership, we did not satisfy the Ownership Test. In addition, we did not satisfy the Income Test for 2023. Thus, we were not a PHC for 2023. However, we may be determined to be a PHC in the future.
During the second half of 2024, based on available information concerning our shareholder ownership, we did not satisfy the Ownership Test. In addition, we did not satisfy the Income Test for 2024. Thus, we were not a PHC for 2024. However, we may be determined to be a PHC in the future.
Accordingly, our revenue, net income and results of operations may widely fluctuate as a result of a variety of factors that are outside our control including the timing and our ability to achieve successful outcomes from current and future patent litigation, our ability and timing in consummating future license agreements for our intellectual property assets, the timing and extent of payments received by us from licensees, whether we will achieve a successful outcome of our investment in ILiAD, and the timing and our ability to achieve revenue from future strategic relationships.
Our revenue, net income and results of operations may widely fluctuate, including years where we may have no revenue, as a result of a variety of factors that are outside our control, including the timing and our ability to achieve successful outcomes from current and future patent litigation, our ability and timing in consummating future license agreements for our intellectual property assets, the timing and extent of payments received by us from licensees, whether we will achieve a successful outcome of our investment in ILiAD, and the timing and our ability to achieve revenue from future strategic relationships.
Based upon the success we achieved from licensing our Remote Power Patent (twenty-eight (28) license agreements and in excess of $188,000,000 of revenue through December 31, 2023), the revenue we generated from our Mirror Worlds Patent Portfolio ($47,150,000) and establishing a patent portfolio currently consisting of one hundred (100) U.S. patents and fifteen (15) foreign patents as well as our cash position, we believe we have the expertise and sufficient capital to compete in the patent monetization market and to enter strategic relationships with third parties to develop, commercialize, license or otherwise monetize their patents.
Based upon the success we achieved from licensing our Remote Power Patent (twenty-eight (28) license agreements and in excess of $188,000,000 of revenue through December 31, 2024), the revenue we generated from our Mirror Worlds Patent Portfolio ($47,150,000), establishing a patent portfolio currently consisting of one hundred and six (106) U.S. patents and sixteen (16) foreign patents, and our cash position, we believe we have the expertise and sufficient capital to compete in the patent monetization market and to enter strategic relationships with third parties to develop, commercialize, license or otherwise monetize their patents.
To date we have invested $7,000,000 in ILiAD, a privately held clinical stage biotechnology company, with focus on validating its proprietary intranasal vaccine (BPZE1) for the prevention of pertussis (whopping cough). Notwithstanding the aforementioned, ILiAD still faces material risks going forward. Accordingly, our investment in ILiAD remains subject to substantial risks.
We have invested $7,000,000 in ILiAD, a privately held clinical stage biotechnology company, with focus on validating its proprietary intranasal vaccine (BPZE1) for the prevention of pertussis (whopping cough). Notwithstanding the aforementioned, ILiAD still faces material risks going forward.
We may not have success in enforcing or defending our patents, which would have a negative impact on our business. We may not be able to capitalize in the future on our strategy to acquire high quality patents with significant licensing opportunities or enter into strategic relationships with third parties to license or otherwise monetize their intellectual property.
We may not be able to capitalize in the future on our strategy to acquire high quality patents with significant licensing opportunities or enter into strategic relationships with third parties to license or otherwise monetize their intellectual property.
As of February 15 , 2024, our executive officers and directors beneficially owned 32% of our outstanding common stock.
As of February 15 , 2025, our executive officers and directors beneficially owned 31.9% of our outstanding common stock.
Unfavorable outcomes in our litigation or IPRs may reduce our ability to enforce our patents or have other adverse consequences. If we are unable to protect our patents or otherwise realize value for them, our business would be negatively impacted. The outcome of our substantial investment in ILiAD is uncertain.
Unfavorable outcomes in our litigation or IPRs may reduce our ability to enforce our patents or have other adverse consequences. If we are unable to protect our patents or otherwise realize value for them, our business, financial condition and operating results would be negatively impacted.
As a result of the expiration of our Remote Power Patent on March 7, 2020, we no longer receive revenue from such patent for any period subsequent to the expiration date.
We had no revenue in 2022 and revenue from our Remote Power Patent constituted 100% of our revenue for 2021 ($36,029,000), 2020 ($4,403,000) and 2019 ($3,037,000). As a result of the expiration of our Remote Power Patent on March 7, 2020, we no longer receive revenue from such patent for any period subsequent to the expiration date.
Furthermore, the proliferation of AI may lead to the emergence of new market participants with innovative solutions that challenge our patents' validity or enforceability.
AI technologies are increasingly capable of developing solutions that either design around existing patents or create alternative technologies that may not infringe our intellectual property. Furthermore, the proliferation of AI may lead to the emergence of new market participants with innovative solutions that challenge our patents' validity or enforceability.
We have been dependent upon our Remote Power Patent for a significant portion of our revenue and we may not be able to generate future revenue from our other patents. Our Remote Power Patent has generated revenue for us in excess of $188,000,000 from May 2007 through December 31, 2023.
Accordingly, our investment in ILiAD remains subject to substantial risks. -11- We have been dependent upon our Remote Power Patent for a significant portion of our revenue in the past and we may not be able to generate future revenue from our other patents.
We have pending litigations involving our Cox Patent Portfolio, Mirror Worlds Patent Portfolio (pending appeal to the Federal Circuit of dismissal of our Facebook (Meta Platforms, Inc.) litigation) and Remote Power Patent (see “Legal Proceedings” at pages 19 - 21 of this Annual Report).
We have pending litigations involving our HFT Patent Portfolio and a pending appeal to the Federal Circuit of dismissal of our litigation against Google and YouTube involving certain patents within our Cox Patent Portfolio (see “Legal Proceedings” at page 20 of this Annual Report).
Our revenue is dependent upon our litigation outcomes. We currently have pending litigation involving our Cox Patent Portfolio and Mirror Worlds Patent Portfolio as well as our Remote Power Patent (see “Legal Proceedings” at pages 19 - 21 hereof).
Our revenue is dependent upon our litigation outcomes. We currently have pending patent infringement litigations involving our HFT Patent Portfolio and a pending appeal of dismissal of litigation involving our Cox Patent Portfolio (see “Legal Proceedings” at page 20 hereof).
Our failure to successfully monetize our other patents would have a negative impact on our business, financial condition and operating results. -11- We may not achieve successful outcomes of our pending or future litigation which would have a negative impact on our business.
Our failure to successfully monetize our other patents, including our HFT Patent Portfolio and M2M/IoT Patent Portfolio, would have a negative impact on our business, financial condition and operating results.
Our quarterly and annual operating and financial results are difficult to predict and may fluctuate significantly from period to period. In 2023, we had revenue of $2,601,000 and incurred a net loss of $1,457,000. In 2022, we had no revenue and incurred a net loss of $2,326,000.
Our quarterly and annual operating and financial results are difficult to predict and may fluctuate significantly from period to period.
Revenue from our Remote Power Patent constituted 100% of our revenue ($2,601,000) for 2023. We had no revenue in 2022 and revenue from our Remote Power Patent constituted 100% of our revenue for 2021 ($36,029,000), 2020 ($4,403,000) and 2019 ($3,037,000).
Our Remote Power Patent has generated revenue for us in excess of $188,000,000 from May 2007 through December 31, 2024. Revenue from our Remote Power Patent constituted 100% of our revenue for 2024 ($100,000) and 2023 ($2,601,000).
Removed
We are currently enforcing certain patents within our Cox Patent Portfolio against Google and YouTube, who are challenging these patents and we are also asserting our Remote Power Patent against Ubiquity Inc. and Honeywell International Inc.
Added
We may not achieve successful outcomes of litigations involving our HFT Patent Portfolio or be able to monetize our M2M/IoT Patent Portfolio, which would have a material negative impact on our ability to achieve significant revenue and net income in the future.
Removed
We have appealed to the Federal Circuit the District Court decision granting Facebook (Meta Platforms, Inc.), summary judgment of non-infringement and dismissing our case involving certain patents within our Mirror Worlds Patent Portfolio (see “Legal Proceedings” at pages 19 - 20 hereof). In addition, our M2M/IoT Patent Portfolio and HFT Patent Portfolio are not currently being asserted.
Added
On December 26, 2024, we commenced patent litigations against Citadel Securities, LLC and Jump Trading, LLC in the United States District Court for the Northern District of Illinois for infringement of certain patents within our HFT Patent Portfolio (see “Legal Proceedings” at page 20 hereof). We also intend to make efforts to monetize our M2M/IoT Patent Portfolio.
Removed
We had revenue of $36,029,000 and net income of $14,281,000 for 2021, as compared to revenue of $4,403,000 and a net loss of $1,709,000 for 2020.
Added
We may not achieve successful outcomes in these patent litigations involving our HFT Patent Portfolio or be able to monetize our M2M/IoT Patent Portfolio which would have a material negative impact on our ability to achieve significant revenue and net income in the future. The outcome of our substantial investment in ILiAD is uncertain.
Removed
AI technologies are increasingly capable of developing solutions that either design around existing patents or create alternative technologies that may not infringe on our intellectual property. As AI evolves, it may accelerate the pace at which our patents become obsolete or irrelevant, reducing our ability to monetize our patent portfolio effectively.
Removed
The integration of AI technologies into the products and services of the companies we may assert claims against could also complicate infringement analyses and legal arguments, potentially affecting the outcomes of our enforcement actions.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+0 added−0 removed3 unchanged
Biggest changeWe have recently implemented overall risk procedures which incorporate certain uniform processes. To date, we have not engaged any consultants, auditors or other third parties in connection with our risk management system or processes. In connection with our use of third party services providers, we have certain processes in place to oversee and identify cybersecurity risks from threats and incidents.
Biggest changeWe have recently implemented overall risk procedures which incorporate certain uniform processes. To date, we have not engaged any consultants, auditors or other third parties in connection with our risk management system or processes. In connection with our use of third party service providers, we have certain processes in place to oversee and identify cybersecurity risks from threats and incidents.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeOn September 29, 2023, we exercised our early termination right under the lease to terminate the lease on December 31, 2023, which has been extended to March 31, 2024. We believe that our office facility is suitable and appropriate to support our current needs.
Biggest changeWe believe that our office facility is suitable and appropriate to support our current needs. -19-

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRemote Power Patent Litigation October-November 2022 Litigation In October and November 2022, we initiated nine separate litigations against ten defendants for infringement of our Remote Power Patent seeking monetary damages based upon reasonable royalties, as follows: (i) on October 6, 2022, we initiated such litigation against Arista Networks, Inc., Fortinet, Inc., Honeywell International Inc. and Ubiquiti Inc. in the United States District Court, District of Delaware; (ii) on October 27, 2022, and November 3, 2022, we initiated such litigation against TP-Link USA Corporation and Hikvision USA, Inc. in the United States District Court for the Central District of California;(iii) on November 4, 2022, we initiated such litigation against Panasonic Holdings Corporation and Panasonic Corporation of North America in the United States District Court for the Eastern District of Texas (Marshall Division); and (iv) on November 8, 2022 and November 16, 2022, we initiated such litigation against Antaira Technologies, LLC and Dahua Technology USA in the United States District Court for the Central District of California. -20- During the year ended December 31, 2023, we entered into settlement agreements with Arista Networks, Inc., Antaira Technologies, LLC, Dahua Technology USA, Inc., Fortinet, Inc., Hikvision USA, Inc., Panasonic Holdings Corporation and TP-Link USA Corporation with respect to the above referenced litigations resulting in aggregate settlement payments to us of $2,601,000 and a conditional payment of $150,000.
Biggest changeCourt of Appeals for the Federal Circuit and the appeal is pending. -20- Remote Power Patent Litigation In October and November 2022, we initiated nine separate litigations against ten defendants for infringement of our Remote Power Patent seeking monetary damages based upon reasonable royalties, as follows: (i) on October 6, 2022, we initiated such litigation against Arista Networks, Inc., Fortinet, Inc., Honeywell International Inc. and Ubiquiti Inc. in the United States District Court, District of Delaware; (ii) on October 27, 2022, and November 3, 2022, we initiated such litigation against TP-Link USA Corporation and Hikvision USA, Inc. in the United States District Court for the Central District of California; (iii) on November 4, 2022, we initiated such litigation against Panasonic Holdings Corporation and Panasonic Corporation of North America in the United States District Court for the Eastern District of Texas (Marshall Division); and (iv) on November 8, 2022 and November 16, 2022, we initiated such litigation against Antaira Technologies, LLC and Dahua Technology USA in the United States District Court for the Central District of California.
In its ruling the Court (i) denied Meta’s motion that the asserted patents were invalid by concluding that all asserted claims were patent eligible under §101 of the Patent Act and (ii) granted summary judgment of non-infringement in favor of Meta and dismissed the case.
In its ruling, the District Court (i) denied Meta’s motion that the asserted patents were invalid by concluding that all asserted claims were patent eligible under §101 of the Patent Act and (ii) granted summary judgment of non-infringement in favor of Meta and dismissed the case.
Court of Appeals for the Federal Circuit ruled in our favor and reversed the summary judgment finding on non-infringement of the District Court and remanded the litigation to the Southern District of New York for further proceedings.
Court of Appeals for the Federal Circuit ruled in our favor and reversed the summary judgment finding on non-infringement of the District Court and remanded the litigation to the Southern District of New York for further proceedings. -21- On March 7, 2022, the U.S.
District Court of Appeals for the Federal Circuit. Pursuant to a joint stipulation and order, entered on January 2, 2019, the parties agreed, among other things, that the stays with respect to the litigations were lifted. In January 2019, the two litigations against Google and YouTube were consolidated.
Pursuant to a joint stipulation and order, entered on January 2, 2019, the parties agreed, among other things, that the stays with respect to the litigations were lifted. In January 2019, the two litigations against Google and YouTube were consolidated. The consolidated actions proceeded and discovery was subsequently completed.
On March 7, 2022, the District Court entered a ruling granting in part and denying in part a motion for summary judgment by Meta.
District Court for the Southern District of New York entered a ruling granting in part and denying in part a motion for summary judgment by Meta.
District Court for the Southern District of New York, for infringement of U.S. Patent No. 6,006,227, U.S. Patent No. 7,865,538 and U.S. Patent No. 8,255,439 (among the patents within our Mirror Worlds Patent Portfolio). The lawsuit alleges that the asserted patents are infringed by Meta’s core technologies that enable Meta’s Newsfeed and Timeline features.
Patent No. 6,006,227, U.S. Patent No. 7,865,538 and U.S. Patent No. 8,255,439 (among the patents within our Mirror Worlds Patent Portfolio). The lawsuit alleges that the asserted patents are infringed by Meta’s core technologies that enable Meta’s Newsfeed and Timeline features. We seek, among other things, monetary damages based upon reasonable royalties. On August 11, 2018, the U.S.
We seek, among other things, monetary damages based upon reasonable royalties. On August 11, 2018, the Court issued an order granting Meta’s motion for summary judgment of non-infringement and dismissed the case. On January 23, 2020, the U.S.
District Court for the Southern District of New York District Court issued an order granting Meta’s motion for summary judgment of non-infringement and dismissed the case. On January 23, 2020, the U.S.
District Court for the Southern District of New York for infringement of several of our patents within our Cox Patent Portfolio which relate to the identification of media content on the Internet.
Cox Patent Portfolio Litigation On April 4, 2014 and December 3, 2014, we initiated litigation against Google Inc. (“Google”) and YouTube, LLC (“YouTube”) in the U.S. District Court for the Southern District of New York for infringement of several of our patents within our Cox Patent Portfolio which relate to the identification of media content on the Internet.
The lawsuit alleges that Google and YouTube have infringed and continue to infringe certain of our patents by making, using, selling and offering to sell unlicensed systems and related products and services, which include YouTube’s Content ID system. -19- The litigations against Google and YouTube were subject to court ordered stays which were in effect from July 2, 2015 until January 2, 2019 as a result of proceedings then pending at the Patent Trial and Appeal Board (PTAB) and appeals to the U.S.
The litigations against Google and YouTube were subject to court ordered stays which were in effect from July 2, 2015 until January 2, 2019 as a result of proceedings then pending at the Patent Trial and Appeal Board (PTAB) and appeals to the U.S. District Court of Appeals for the Federal Circuit.
We strongly disagree with the decision on non-infringement and on April 4, 2022, we filed an appeal to the U.S. Court of Appeals for the Federal Circuit. The appeal is pending.
On April 4, 2022, we filed an appeal of the District Court decision to the U.S. Court of Appeals for the Federal Circuit. On December 4, 2024, the U.S. Court of Appeals for the Federal Circuit affirmed the judgment of the District Court granting Meta’s motion for summary judgment of non-infringement dismissing our claims against Meta.
Discovery is complete and the parties have each submitted summary judgment motions which are pending. A trial date has not yet been set. Mirror Worlds Patent Portfolio Litigation Meta (Facebook) Litigation On May 9, 2017, Mirror Worlds Technologies, LLC, our wholly-owned subsidiary, initiated litigation against Facebook, Inc. (“now Meta Platforms, Inc., “Meta”) in the U.S.
On February 13, 2025, the Court granted the parties joint motion to dismiss the litigation. Mirror Worlds Patent Portfolio Litigation On May 9, 2017, Mirror Worlds Technologies, LLC, our wholly-owned subsidiary, initiated litigation against Facebook, Inc. (“now Meta Platforms, Inc., “Meta”) in the U.S. District Court for the Southern District of New York, for infringement of U.S.
Removed
ITEM 3. LEGAL PROCEEDINGS Cox Patent Portfolio Litigation On April 4, 2014 and December 3, 2014, we initiated litigation against Google Inc. (“Google”) and YouTube, LLC (“YouTube”) in the U.S.
Added
ITEM 3. LEGAL PROCEEDINGS HFT Patent Portfolio Litigation On December 24, 2024, our wholly-owned subsidiary, HFT Solutions, LLC (“HFT”), initiated patent litigations against Citadel Securities, LLC and Jump Trading, LLC in the United States District Court for the Northern District of Illinois for infringement of U.S. Patent No. 10,931,286, U.S. Patent No. 11,128,305, and U.S. Patent No. 11,575,381.
Removed
Our litigations against Ubiquity Inc and Honeywell International Inc. remain pending .
Added
The asserted patents are part of the HFT Patent Portfolio acquired by us in March 2022.
Removed
Netgear Litigation On December 15, 2020, we filed a lawsuit against Netgear in the Supreme Court of the State of New York, County of New York, for breach of a Settlement and License Agreement, dated May 22, 2009, with us for Netgear’s failure to make royalty payments, and provide corresponding royalty reports to us based on sales of Netgear’s PoE products.
Added
The HFT Patent Portfolio relates to, among other things, 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 where the difference between success and failure may be measured in nanoseconds.
Removed
On October 22, 2021, Netgear filed a Demand for Arbitration with the American Arbitration Association (“AAA”) seeking to arbitrate certain issues raised in the litigation in the Supreme Court, State of New York, County of New York. We have objected to jurisdiction at the AAA.
Added
The lawsuit alleged that Google and YouTube had infringed and continued to infringe certain of our patents by making, using, selling and offering to sell unlicensed systems and related products and services, which included YouTube’s Content ID system.
Removed
On April 22, 2022, Netgear filed a counterclaim in the New York court action alleging that we breached the license agreement by not offering Netgear lower royalties. On September 22, 2022, the arbitration brought by Netgear was dismissed by the AAA on jurisdiction grounds.
Added
On April 24, 2024, following a motion for summary judgment by the defendants, the U.S.
Removed
On August 27, 2023, the Court granted Netgear’s cross-motion for summary judgment and dismissed our claims and also denied our summary judgment motion with respect to Netgear’s counterclaim for breach of the license agreement. We appealed the court’s decision.
Added
District Court for the Southern District of New York issued a judgment dismissing our patent infringement claims finding that the asserted claims of two of the patents are invalid for indefiniteness and granting summary judgment that the asserted claims of another asserted patent are not infringed by Google’s accused system.
Removed
On February 20, 2024, the Appellate Division, First Department, upheld the lower court decision dismissing our complaint and granted our motion to dismiss Netgear’s counterclaim that we breached the most favored license provision concerning two licensees, but said there was a triable issue of fact with respect to one licensee.
Added
The Court’s ruling disposes of all of our claims in the case. On May 14, 2024, we filed a notice of appeal to the U.S.
Added
During the year ended December 31, 2023, we entered into settlement agreements with eight of the defendants resulting in aggregate settlement payments to us of $2,601,000 and a conditional payment of $150,000. On February 21, 2025, we received the conditional payment of $150,000 from a defendant as the conditions were satisfied in accordance with the settlement agreement.
Added
During the year ended December 31, 2024, we entered into a settlement agreement with one additional defendant resulting in a settlement payment to us of $100,000. On January 14, 2025, the U.S. District Court for the District of Delaware granted Ubiquiti’s partial motion for summary judgment on indirect infringement.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

17 edited+0 added−0 removed4 unchanged
Biggest changeThe Share Repurchase Program may be increased, suspended or discontinued at any time. -22- During the months of October, November and December 2023, we repurchased common stock pursuant to our Share Repurchase Program as indicated below: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares) that May Yet Be Purchased Under the Plans or Programs October 1, 2023 to October 31, 2023 31,146 $2.22 31,146 $4,561,139 November 1, 2023 to November 30, 2023 77,087 $2.20 77,087 $4,391,365 December 1, 2023 to December 31, 2023 8,581 $2.17 8,581 $4,372,705 Total 116,814 $2.20 116,814 During the year ended December 31, 2023, we repurchased an aggregate of 428,132 shares of our common stock pursuant to our Share Repurchase Program at a cost of $955,182 (exclusive of commissions) or an average price per share of $ 2.23.
Biggest changeOur Share Repurchase Program may be increased, suspended or discontinued at any time. -23- During the months of October, November and December 2024, we repurchased common stock pursuant to our Share Repurchase Program as indicated below: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares) that May Yet Be Purchased Under the Plans or Programs October 1, 2024 to October 31, 2024 142,274 $1.35 142,274 $3,120,855 November 1, 2024 to November 30, 2024 12,653 $1.32 12,653 $3,104,155 December 1, 2024 to December 31, 2024 1,449 $1.30 1,449 $3,102,266 Total 156,376 $1.35 156,376 During the year ended December 31, 2024, we repurchased an aggregate of 733,436 shares of our common stock pursuant to our Share Repurchase Program at a cost of $1,270,438 (exclusive of commissions) or an average price per share of $1.73.
(2) Does not take into account outstanding restricted stock units as these awards have no exercise price. (3) Represents shares of common stock reserved for issuance under our 2022 Stock Incentive Plan. We have discontinued issuing awards under our 2013 Stock Incentive Plan as a result of adoption of the 2022 Stock Incentive Plan.
(2) Does not take into account outstanding restricted stock units as these awards have no exercise price. (3) Represents shares of common stock reserved for issuance under our 2022 Stock Incentive Plan. We discontinued issuing awards under our 2013 Stock Incentive Plan as a result of adoption of the 2022 Stock Incentive Plan.
There were no unregistered sales of equity securities during the quarter ended December 31, 2023. Stock Repurchases. On June 14, 2023, our Board of Directors authorized an extension and increase of the share repurchase program (“Share Repurchase Program”) to repurchase up to $5,000,000 of shares of our common stock over the subsequent 24 month period.
There were no unregistered sales of equity securities during the quarter ended December 31, 2024. Stock Repurchases. On June 14, 2023, our Board of Directors authorized an extension and increase of our share repurchase program (“Share Repurchase Program”) to repurchase up to $5,000,000 of shares of our common stock over the subsequent 24 month period.
The Compensation Committee (or the Board of Directors) will generally have the authority to administer the 2022 Plan, determine participants who will be granted awards under the 2022 Plan, the size and types of awards, the terms and conditions of awards and the form and content of the award agreements representing awards.
The Compensation Committee (or the Board of Directors) generally has the authority to administer the 2022 Plan, determine participants who will be granted awards under the 2022 Plan, the size and types of awards, the terms and conditions of awards and the form and content of the award agreements representing awards.
Number of securities to be issued upon exercise of outstanding options and rights Weighted-average exercise price of outstanding options and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column(a)) (a) (b) (c) Equity compensation plans approved by security holders 587,500 (1) $ — (2) 2,180,000 (3) Equity compensation plans not approved by security holders $ — $ — — Total 587,500 $ — 2,180,000 _______________ (1) Consists of shares issuable upon vesting of outstanding restricted stock units issued under the 2022 Stock Incentive Plan and the 2013 Stock Incentive Plan.
Number of securities to be issued upon exercise of outstanding options and rights Weighted-average exercise price of outstanding options and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column(a)) (a) (b) (c) Equity compensation plans approved by security holders 487,500 (1) $ — (2) 2,110,000 (3) Equity compensation plans not approved by security holders $ — $ — — Total 487,500 $ — 2,110,000 ___________________ (1) Consists of shares issuable upon vesting of outstanding restricted stock units issued under the 2022 Stock Incentive Plan and the 2013 Stock Incentive Plan.
Purchases under the 10b5-1 Plan may be made during the following periods: (1) beginning on January 9, 2024 until two trading days after we issue a press release announcing our financial results for the year ended December 31, 2023, and (2) beginning on April 1, 2024 until two trading days after we issue a press release announcing our financial results for the quarter ended March 31, 2024.
Purchases under the 10b5-1 Plan may be made during the following periods: (1) beginning on January 2, 2025 until two trading days after we issue a press release announcing our financial results for the year ended December 31, 2024, and (2) beginning on April 1, 2025 until two trading days after we issue a press release announcing our financial results for the quarter ended March 31, 2025.
Under the 10b5-1 Plan, our third party broker may purchase up to 1,000,000 shares of our common stock, subject to certain price, market, volume and timing constraints, in accordance with the terms of the plan and subject to Rule 10b5-1 and Rule 10b-18 of the Exchange Act. -23- Equity Compensation Plan Information The following table summarizes share and exercise price information for our equity compensation plans as of December 31, 2023.
Under the 10b5-1 Plan, our third party broker may purchase up to 1,000,000 shares of our common stock, subject to certain price, market, volume and timing constraints, in accordance with the terms of the plan and subject to Rule 10b5-1 and Rule 10b-18 of the Exchange Act. -24- Equity Compensation Plan Information The following table summarizes share and exercise price information for our equity compensation plans as of December 31, 2024.
However, our dividend policy undergoes a periodic review by our Board of Directors and is subject to change at any time depending upon our earnings, financial requirements and other factors existing at the time. As of December 31, 2023, we accrued dividends of $99,000 for unvested restricted stock units with dividend equivalent rights. Recent Issuances of Unregistered Securities .
However, our dividend policy undergoes a periodic review by our Board of Directors and is subject to change at any time depending upon our earnings, financial requirements and other factors existing at the time. As of December 31, 2024, we had accrued dividends of $121,000 for unvested restricted stock units with dividend equivalent rights. Recent Issuances of Unregistered Securities .
On December 29, 2023, we entered into a written trading plan( the “10b5-1 Plan”) under Rule 10b5-1 of the Securities Exchange Act of 1934 (the” Exchange Act”).
On December 23, 2024, we entered into a written trading plan (the “10b5-1 Plan”) under Rule 10b5-1 of the Securities Exchange Act of 1934 (the” Exchange Act”).
The common stock may be repurchased from time to time in open market transactions or privately negotiated transactions in our discretion. The timing and amount of the shares repurchased is determined by management based on its evaluation of market conditions and other factors.
The common stock may be repurchased from time to time in open market transactions or privately negotiated transactions in our discretion. The timing and amount of the shares repurchased is determined by management (excluding repurchases under our 10b5-1 plans) based on its evaluation of market conditions and other factors.
Awards under the 2022 Plan may be granted to our employees, directors and consultants. As of December 31, 2023, there were 75,000 shares issuable upon vesting of outstanding restricted stock units under our 2022 Plan and 512,500 shares issuable upon vesting outstanding restricted stock units under our 2013 Stock Incentive Plan (“2013 Plan”).
Awards under the 2022 Plan may be granted to our employees, directors and consultants. As of December 31, 2024, there were 62,500 shares issuable upon vesting of outstanding restricted stock units under our 2022 Plan and 425,000 shares issuable upon vesting outstanding restricted stock units under our 2013 Stock Incentive Plan (“2013 Plan”).
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information . Our common stock is listed for trading on the NYSE American exchange under the symbol “NTIP”. On March 1 , 2024, the closing price for our common stock as reported on the NYSE American exchange was $2.15 per share.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information . Our common stock is listed for trading on the NYSE American exchange under the symbol “NTIP”. On February 24 , 2025, the closing price for our common stock as reported on the NYSE American exchange was $1.38 per share.
On February 23, 2024, our Board of Directors declared a semi-annual cash dividend of $0.05 per share with a payment date of March 29, 2024 to all common shareholders of record as of March 15 , 2024. At this time, we anticipate continuing to pay dividends consistent with our policy.
On February 19, 2025, our Board of Directors declared a semi-annual cash dividend of $0.05 per share with a payment date of March 28, 2025 to all common shareholders of record as of March 14 , 2025. At this time, we anticipate continuing to pay dividends consistent with our policy.
On March 3, 2023, our Board of Directors declared a semi-annual cash dividend of $0.05 per share with a payment date of March 31, 2023 to all common shareholders of record as of March 15, 2023.
On February 23, 2024, our Board of Directors declared a semi-annual cash dividend of $0.05 per share with a payment date of March 29, 2024 to all common shareholders of record as of March 15, 2024.
On September 8, 2023, our Board of Directors declared a semi-annual cash dividend of $0.05 per share with a payment date of September 29, 2023 to all common shareholders of record as of September 19, 2023.
On August 27 , 2024, our Board of Directors declared a semi-annual cash dividend of $0.05 per share with a payment date of September 26, 2024 to all common shareholders of record as of September 12, 2024.
The number of record holders of our common stock was 37 as of March 1 , 2024. In addition, we believe there were in excess of approximately 1,000 holders of our common stock in “street name” as of March 1, 2024. Dividend Policy .
The number of record holders of our common stock was 36 as of February 24, 2025. In addition, we believe there were in excess of approximately 1200 holders of our common stock in “street name” as of February 24, 2025. Dividend Policy .
Since inception of our Share Repurchase Program (August 2011) to December 31, 2023, we repurchased an aggregate of 9,523,982 shares of our common stock at a cost of $18,712,916 (exclusive of commissions) or an average per share price of $1.94.
Since the inception of our Share Repurchase Program (August 2011) to December 31, 2024, we have repurchased an aggregate of 10,374,232 shares of our common stock at a cost of $19,983,354 (exclusive of commissions) or an average per share price of $1.93.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

28 edited+6 added−13 removed12 unchanged
Biggest changeWe presently own one hundred (100) U.S. patents and fifteen (15) foreign patents relating to: (i) 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; (ii) 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; (iii) 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 where the difference between success and failure may be measured in nanoseconds; (iv) our Mirror Worlds Patent Portfolio relating to foundational technologies that enable unified search and indexing, displaying and archiving of documents in a computer system; and (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.
Biggest changeWe presently own one hundred and six (106) U.S. patents and sixteen (16) foreign patents 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 where the difference between success and failure may be measured in nanoseconds; (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 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 (v) our Mirror Worlds Patent Portfolio relating to foundational technologies that enable unified search and indexing, displaying and archiving of documents in a computer system.
CRITICAL ACCOUNTING ESTIMATES We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles, which require our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods.
CRITICAL ACCOUNTING ESTIMATES We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles, which require our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenue and expenses during the reporting periods.
Our current dividend policy consists of semi-annual cash dividends of $0.05 per share ($0.10 per share annually) which have been paid in March and September of each year. In 2023 and 2022, we paid semi-annual cash dividends in accordance with our dividend policy. At this time, we anticipate continuing to pay dividends consistent with our policy.
Our current dividend policy consists of semi-annual cash dividends of $0.05 per share ($0.10 per share annually) which have been paid in March and September of each year. In 2024 and 2023, we paid semi-annual cash dividends in accordance with our dividend policy. At this time, we anticipate continuing to pay dividends consistent with our policy.
Our Remote Power Patent has generated revenue in excess of $188,000,000 from May 2007 through December 31, 2023. We no longer receive licensing revenue for our Remote Power Patent for any period subsequent to March 7, 2020 (the expiration date of the patent).
Our Remote Power Patent has generated revenue in excess of $188,000,000 from May 2007 through December 31, 2024. We no longer receive licensing revenue for our Remote Power Patent for any period subsequent to March 7, 2020 (the expiration date of the patent).
We maintain our cash equivalents and marketable securities in money market funds, government securities, certificates of deposit and short-term fixed income securities. Accordingly, we do not believe that our investments have significant exposure to interest rate risk. OFF-BALANCE SHEET ARRANGEMENTS We do not have any off-balance sheet arrangements.
We maintain our cash equivalents and marketable securities in money market funds, government securities, certificates of deposit, corporate bonds and short-term fixed income securities. Accordingly, we do not believe that our investments have significant exposure to interest rate risk. -30- OFF-BALANCE SHEET ARRANGEMENTS We do not have any off-balance sheet arrangements.
However, our dividend policy undergoes a periodic review by our Board of Directors and is subject to change at any time depending upon our financial requirements, earnings and other factors existing at the time (see Note N to our consolidated financial statements included herein). -27- RESULTS OF OPERATIONS Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenue .
However, our dividend policy undergoes a periodic review by our Board of Directors and is subject to change at any time depending upon our financial requirements, earnings and other factors existing at the time (see Note N to our consolidated financial statements included herein). -28- RESULTS OF OPERATIONS Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Revenue .
We evaluate these estimates on an ongoing basis. -30- We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.
We consider an accounting estimate to be critical if (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.
To date we have invested $7,000,000 in ILiAD, a clinical stage biotechnology company with an exclusive license to seventy(70) patents (see Note H to our consolidated financial statements included herein). Our investment continues to involve significant risk and the outcome is uncertain. -25- We have been dependent upon our Remote Power Patent for a significant portion of our revenue.
To date we have invested $7,000,000 in ILiAD, a clinical stage biotechnology company with an exclusive license to seventy-four (74) patents (see Note H to our consolidated financial statements included herein). Our investment continues to involve significant risk and the outcome is uncertain. -26- We have been dependent upon our Remote Power Patent for a significant portion of our revenue.
With respect to our one hundred (100) U.S. patents, fifty-four (54) of such patents have expired. However, we can assert expired patents against third parties but only for past damages up to the patent expiration date.
With respect to our one hundred and six (106) U.S. patents, fifty-four (54) of such patents have expired. However, we can assert expired patents against third parties but only for past damages up to the patent expiration date.
We had revenue of $2,601,000 for the year ended December 31, 2023 (“2023”) as compared to no revenue for the year ended December 31, 2022 (“2022”). Our revenue for 2023 was from litigation settlements involving our Remote Power Patent (see Note K[4] to our consolidated financial statements included herein). Operating Expenses .
We had revenue of $100,000 for the year ended December 31, 2024 (“2024”) as compared to revenue of $2,601,000 for the year ended December 31, 2023 (“2023”). All of our revenue for 2024 and 2023 was from litigation settlements involving our Remote Power Patent (see Note K[4] to our consolidated financial statements included herein). Operating Expenses .
At December 31, 2023, our principal sources of liquidity consisted of cash and cash equivalents and marketable securities of $45,467,000 and working capital of $44,850,000 . Based on our current cash position, we believe that we will have sufficient cash to fund our operations for the next twelve months and the foreseeable future.
At December 31, 2024, our principal sources of liquidity consisted of cash and cash equivalents and marketable securities of $40,600,000 and working capital of $40,066,000 . Based on our current cash position, we believe that we will have sufficient cash to fund our operations for the next twelve months and the foreseeable future.
At December 31, 2023, our principal sources of liquidity consisted of cash and cash equivalents and marketable securities of $45,467,000 and working capital of $44,850,000 . Based on our cash position, we review opportunities to acquire additional intellectual property as well as evaluate other strategic opportunities.
At December 31, 2024, our principal sources of liquidity consisted of cash and cash equivalents and marketable securities of $40,600,000 and working capital of $40,066,000 . Based on our cash position, we review opportunities to acquire additional intellectual property as well as evaluate other strategic opportunities.
Our current strategy includes continuing our licensing efforts with respect to our intellectual property assets and the monetization of our patent portfolios. In addition, we continue to seek to acquire additional intellectual property assets to develop, commercialize, license or otherwise monetize.
We may not achieve successful outcomes of such litigation, the appeal, or future litigation involving our patent assets. Our current strategy includes continuing our licensing efforts with respect to our intellectual property assets and the monetization of our patent portfolios. In addition, we continue to seek to acquire additional intellectual property assets to develop, commercialize, license or otherwise monetize.
Our patent infringement litigation or realization of our investment in ILiAD may result in a material increase in our liquidity and capital resources. Working capital decreased by $2,509,000 at December 31,2023 to $44,850,000 as compared to working capital of $47,359,000 at December 31, 2022.
Our patent infringement litigation or realization of our investment in ILiAD may result in a material increase in our liquidity and capital resources. Working capital decreased by $4,784,000 at December 31,2024 to $40,600,000 as compared to working capital of $44,850,000 at December 31, 2023.
As a result of the foregoing, we realized a net loss of $1,457,000 or $0.06 per share basic and diluted for 2023 compared with a net loss of $2,326,000 or $0.10 per share basic and diluted for 2022.
As a result of the foregoing, we realized a net loss of $3,034,000 or $0.13 per share basic and diluted for 2024 compared with a net loss of $1,457,000 or $0.06 per share basic and diluted for 2023.
We recognized $2,003,000 of net losses during 2023 related to our equity share of ILiAD net losses, as compared to recognized net losses of $1,639,000 for 2022 (see Note H to our consolidated financial statements included herein).
We recognized $1,912,000 of net losses during 2024 related to our equity share of ILiAD net losses, as compared to recognized net losses of $2,003,000 for 2023 (see Note H to our consolidated financial statements included herein). We anticipate continuing to record our share of net losses from ILiAD. Net Loss .
We had costs of revenue of $874,000 and $-0- for 2023 and 2022, respectively. Included in the costs of revenue for 2023 were contingent legal fees of $744,000 and incentive bonus compensation of $130,000 payable to our Chairman and Chief Executive Officer pursuant to his employment agreement (see Note J[1] to our consolidated financial statements included herein).
Included in the costs of revenue for 2023 were contingent legal fees of $744,000 and incentive bonus compensation of $130,000 payable to our Chairman and Chief Executive Officer pursuant to his employment Agreement (see Note J [1] to our consolidated financial statement included herein). General and administrative expenses were $2,614,000 for 2024 as compared to $2,889,000 for 2023.
For 2023, we had a current tax expense for federal, state and local income taxes of $11,000 and a deferred tax benefit of $399,000 . For 2022, we had no current income tax for federal, state and local income taxes and a deferred tax expense of $607,000.
For 2024, we had no current tax expense for federal, state and local income taxes and a deferred tax benefit of $425,000 . For 2023, we had a current income tax for federal, state and local income taxes of $11,000 and a deferred tax benefit of $399,000. Share of Net Losses of Equity Method Investee .
Our annual and quarterly operating and financial results may fluctuate significantly from period to period as a result of a variety of factors that are outside our control, including the timing and our ability to achieve successful outcomes of our patent litigation, our ability and timing of consummating future license agreements for our intellectual property, and whether we will achieve a return on our investment in ILiAD and the timing of any such return. -26- Our future operating results may also be materially impacted by our ability to acquire high quality patents which management believes have the potential to generate significant licensing opportunities.
Both such components of expenses are based on a percentage of the revenue received by us as a result of litigation or otherwise. -27- Our annual and quarterly operating and financial results may fluctuate significantly from period to period as a result of a variety of factors that are outside our control, including the timing and our ability to achieve successful outcomes of our patent litigation, our ability and timing of consummating future license agreements for our intellectual property, and whether we will achieve a return on our investment in ILiAD and the timing of any such return.
During the fourth quarter of 2022, we commenced nine separate litigations against ten defendants involving our Remote Power Patent for patent infringement for the period prior to March 7, 2020.
During the fourth quarter of 2022, we commenced nine separate litigations against ten defendants involving our Remote Power Patent for patent infringement for the period prior to March 7, 2020. During 2024, we entered into a settlement agreement with one defendant for which we received $100,000. Such settlement payment constituted all of our revenue for 2024.
For 2023, we recorded realized and unrealized gains on marketable securities of $525,000 as compared to realized and unrealized losses on marketable securities of $1,351,000 in 2022, primarily due to the more favorable interest rate environment for fixed income securities in 2023 as compared to 2022. Income Taxes .
For 2024, we recorded realized and unrealized gains on marketable securities of $177,000 as compared to realized and unrealized gains on marketable securities of $525,000 in 2023, primarily due to the timing of maturities on marketable securities and the declines in yields on our fixed income holdings. Income Taxes .
We currently have pending litigation involving expired patents including our Remote Power Patent and certain patents within our Cox and Mirror Worlds Patent Portfolios (see Note K to our consolidated financial statements included herein). Our revenue is dependent upon our ability to achieve successful litigation outcomes.
In 2024, our revenue was from our expired Remote Power Patent and we are currently appealing to the Federal Circuit a District Court dismissal of claims involving certain expired patents within our Cox Patent Portfolio (see Note K to our consolidated financial statements included herein). Our revenue is dependent upon our ability to achieve successful litigation outcomes.
The decrease in working capital in 2023 was primarily due to our operating loss of $2,235,000, cash dividends payments of $2,371,000 and share repurchases of $966,000.
The decrease in working capital in 2024 was primarily due to our operating loss of $3,621,000, cash dividends payments of $2,366,000 and share repurchases of $1,295,000, offset by interest and dividend income of $1,897,000.
In addition, we have pending litigation involving certain patents within our Cox Patent Portfolio and have appealed the judgment of the District Court dismissing our litigation against Meta (Facebook) on the grounds of non-infringement involving certain patents within our Mirror Worlds Portfolio. We may not achieve successful outcomes of such litigation, the appeal, or future litigation involving our patent assets.
In addition, we have pending litigation involving certain patents within our HFT Patent Portfolio and have appealed the judgment of the District Court dismissing our litigation against Google and YouTube on the grounds of non-infringement involving certain patents within our Cox Patent Portfolio. In addition, we intend to monetize our M2M/IoT Patent Portfolio.
In the future, we may not be able to identify or consummate such patent acquisitions or, if consummated, achieve significant licensing revenue with respect to such acquisitions. In 2024, and future years we could be classified as a Personal Holding Company.
Our future operating results may also be materially impacted by our ability to acquire high quality patents which management believes have the potential to generate significant licensing opportunities. In the future, we may not be able to identify or consummate such patent acquisitions or, if consummated, achieve significant licensing revenue with respect to such acquisitions.
Net cash used in financing activities for 2023 and 2022 was $3,420,000 and $3,342,000, respectively. The increase of $78,000 primarily resulted from an increase in repurchases of treasury shares of $432,000 in 2023, offset by a reduction in the value of shares delivered to fund withholding taxes of $272,000.
Net cash used in investing activities during 2024 decreased by $5,488,000 as a result of our holdings of marketable securities declining by $1,049,000 in 2024 as compared to $6,537,000 in 2023. Net cash used in financing activities for 2024 and 2023 was $3,724,000 and $3,420,000, respectively. The increase of $304,000 primarily resulted from higher repurchases of common shares of $329,000.
These increases in 2023 of revenue and income items were offset by an increase in operating expenses of $933,000 and a reduction of income taxes of $995,000 . LIQUIDITY AND CAPITAL RESOURCES We have financed our operations primarily from revenue from licensing our patents.
Our net loss for 2024 increased by $1,577,000 as compared to 2023 primarily due to lower revenue from patent litigation settlements in 2024 of $2,501,000. -29- LIQUIDITY AND CAPITAL RESOURCES We have financed our operations primarily from revenue from licensing our patents.
These increases were offset somewhat by reductions in office rent of $71,000 and employee benefits costs of $60,000. Operating Loss. We had an operating loss of $2,235,000 for 2023 compared with an operating loss of $3,903,000 for 2022. The operating loss decrease of $1,668,000 was due to revenue of $2,601,000 from litigation settlements offset by increased operating expenses of $933,000.
The decrease in general and administrative expenses for 2024 was primarily due to lower payroll and related employer taxes of $159,000 and stock-based compensation of $109,000. Operating Loss. We had an operating loss of $3,621,000 for 2024 compared with an operating loss of $2,235,000 for 2023.
Removed
Both such components of expenses are based on a percentage of the revenue received by us as a result of litigation or otherwise.
Added
In 2025 and future years we could be classified as a Personal Holding Company.
Removed
Operating expenses for 2023 were $4,836,000 as compared to $3,903,000 for 2022.
Added
Operating expenses for 2024 were $3,721,000 as compared to $4,836,000 for 2023. The decrease in operating expenses of $1,115,000 was primarily due to lower costs of revenue of $846,000, general and administrative of $275,000 and amortization of patents of $146,000. These reductions were offset somewhat due to higher professional fees of $152,000.
Removed
The increase in operating expenses of $933,000 was primarily due to increases in costs of revenue of $874,000 related to contingent legal fees and incentive bonus compensation in connection with the litigation settlements and increases in general and administrative expenses of $111,000, offset somewhat by a reduction in amortization of patents of $50,000.
Added
We had costs of revenue of $28,000 and $874,000 for 2024 and 2023, respectively. Included in the costs of revenue for 2024 were contingent legal fees of $23,000 and incentive bonus compensation of $5,000 payable to our Chairman and Chief Executive Officer.
Removed
General and administrative expenses were $2,889,000 for 2023 as compared to $2,778,000 for 2022. The increase in general and administrative expenses for 2023 was primarily due to an increase in state franchise taxes of $175,000 as well as increases in payroll taxes of $98,000 and NYSE American listing fees of $31,000.
Added
The operating loss increase of $1,386,000 was primarily due to lower revenue from patent litigation settlements in 2024 of $2,501,000 as compared to 2023 . Realized and Unrealized Loss on Marketable Securities.
Removed
Interest and Dividend Income. Interest and dividend income for 2023 was $1,868,000 as compared to interest and dividend income of $1,020,000 for 2022. The increase in interest and dividend income of $848,000 for 2023 was primarily due to higher yielding fixed income investments due to generally higher interest rates during 2023. Gain on Equity Method Investment .
Added
Net cash used in operating activities for 2024 increased by $1,407,000 from $1,076,000 used in operating activities for 2024 compared to $331,000 provided by operating activities for 2023, primarily because of the increase in our net loss of $1,577,000.
Removed
For 2022, we recorded a gain on our equity method investment in ILiAD of $3,883,000, as compared to none for 2023, as a result of an observable price transaction relating to ILiAD’s private offering in August 2022( see Note H to our consolidated financial statements included herein). Gain on Conversion of Note .
Added
We evaluate these estimates on an ongoing basis.
Removed
For 2022, we recorded a gain on conversion of our ILiAD convertible note of $271,000, as compared to none for 2023, as a result of an observable price transaction relating to ILiAD’s private offering in August 2022( see Note H to our consolidated financial statements included herein). -28- Realized and Unrealized Loss on Marketable Securities.
Removed
The net decrease in income tax expenses of $995,000 was primarily due to gains on our equity method investment and conversion of our ILiAD note in 2022 compared to no such transactions in 2023. Share of Net Losses of Equity Method Investee .
Removed
The increase in our equity share of the ILiAD net losses of $364,000 for 2023 includes an additional loss of $42,000 recorded on a one quarter lag basis as a result of audited financial information for 2022 received in 2023 from ILiAD (see Note B[2] to our consolidated financial statements included herein). Net Loss .
Removed
Our net loss for 2023 decreased by $869,000 compared to 2022 primarily due to increases in revenue of $2,601,000, interest and dividend income of $848,000, and realized and unrealized gains on investments of $1,876,000, as compared to gains in 2022 of $3,727,000 on our equity investment in ILiAD and $271,000 on conversion of our ILiAD note.
Removed
These uses of working capital were offset somewhat by interest and dividend income of $1,868,000 and realized and unrealized gains on investment of $525,000. -29- Net cash provided by (used in) operating activities for 2023 increased by $5,767,000 from $(5,436,000) for 2022 to $331,000 for 2023, primarily as a result of lower income taxes paid in 2023 of $2,722,000 and increased interest and dividend income of $1,868,000.
Removed
Also, non-cash gains on equity method investment of $3,883,000 and on conversion of the ILiAD note of $271,000 represented uses of cash in 2022 compared to no such transactions in 2023.
Removed
Net cash provided by (used in) investing activities during 2023 increased by $28,808,000 to $6,537,000 as compared to $(22,271,000) for 2022, primarily as a result of a significant shift to investments in marketable securities in 2022 from investments in securities previously classified as cash and cash equivalents.

Other NTIP 10-K year-over-year comparisons