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 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 Washington,
D.C. 20549

 FORM 10-K

 ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

 SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December 31, 2023

 TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

 SECURITIES EXCHANGE ACT OF 1934

 For the transition period from ____________ to ___________.

 Commission File Number: 1-15288

 NETWORK-1 TECHNOLOGIES, INC.

 (Exact Name of Registrant as Specified in Its Charter)

 Delaware

 11-3027591

 (State
 or Other Jurisdiction of

 Incorporation
 or Organization)

 (I.R.S.
 Employer

 Identification
 Number)

 65 Locust Avenue, Third Floor

 New Canaan, Connecticut 06840

 (Address
 of Principal Executive Offices)

 Registrant's telephone number, including area code:
 (203) 920-1055

 Securities registered pursuant to Section 12(b) of the
Act:

 Title
 of each class

 Trading
 symbol

 Name
 of each exchange on which registered

 Common
 Stock $.01 par value

 NTIP

 NYSE
 American

 Securities registered under Section 12(g) of the Act:

 Common Stock, $.01 par value

 (Title of Class)

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934. Yes No

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes No

 - 1 -

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer",
"smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large
 accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller Reporting Company

 Emerging growth
 company

 If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in this filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D.1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 The
aggregate market value of the voting and non-voting common stock held by non-affiliates computed by reference to the price at which the
common stock was last sold as of June 30, 2023 was approximately $ 38,052,926 based on the closing price as reported on NYSE American
Exchange. Shares of voting stock held by each officer and director and by each person, who as of June 30, 2023, the last business
day of the Registrant's most recently completed second quarter, may be deemed to have beneficially owned more than 10% of the voting
stock have been excluded. This determination of affiliate status is not necessarily a conclusive determination of affiliate status for
any other purpose.

 The
number of shares outstanding of Registrant's common stock as of March 1, 2024 was 23,510,019.

 - 2 -

 2023
FORM 10-K

 TABLE
OF CONTENTS

 Page
No.

 PART
I

 Item
 1. Business

 Item
 1A. Risk Factors

 Item
 1B. Unresolved Staff Comments

 Item 1C. Cybersecurity

 Item
 2. Properties

 Item
 3. Legal Proceedings

 Item
 4. Mine Safety Disclosures

 PART
 II

 Item 5. Market
 For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item
 6. (Reserved)

 Item
 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item
 7A. Quantitative and Qualitative Disclosures About Market Risk

 Item
 8. Financial Statements and Supplementary Data

 Item
 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

 Item
 9A. Controls and Procedures

 Item
 9B. Other Information

 Item
 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 PART
 III

 Item
 10. Directors, Executive Officers and Corporate Governance

 Item
 11. Executive Compensation

 Item
 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item
 13. Certain Relationships and Related Transactions and Director Independence

 Item
 14. Principal Accountant Fees and Services

 PART
 IV

 Item
 15. Exhibits and Financial Statement Schedules

 Signatures

 - 1 -

 PART
I

 Forward-looking
statements:

 THIS
ANNUAL REPORT ON FORM 10-K CONTAINS STATEMENTS ABOUT FUTURE EVENTS AND EXPECTATIONS WHICH ARE "FORWARD-LOOKING
STATEMENTS". ANY STATEMENT IN THIS 10-K THAT IS NOT A STATEMENT OF HISTORICAL FACT MAY BE DEEMED TO BE A FORWARD-LOOKING
STATEMENT WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED, OR SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED. FORWARD-LOOKING STATEMENTS PROVIDE CURRENT EXPECTATIONS OF FUTURE EVENTS BASED
ON CERTAIN ASSUMPTIONS AND INCLUDE ANY STATEMENT THAT DOES NOT DIRECTLY RELATE TO ANY HISTORICAL OR CURRENT FACT. STATEMENTS
CONTAINING SUCH WORDS AS "MAY," "WILL," "EXPECT," "BELIEVE,"
"ANTICIPATE," "INTEND," "COULD," "ESTIMATE," "CONTINUE" OR
"PLAN" AND SIMILAR EXPRESSIONS OR VARIATIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE
STATEMENTS ARE BASED ON THE BELIEFS AND ASSUMPTIONS OF OUR MANAGEMENT BASED ON INFORMATION CURRENTLY AVAILABLE TO MANAGEMENT. SUCH
FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CURRENT RISKS, UNCERTAINTIES AND ASSUMPTIONS RELATED TO VARIOUS FACTORS SET FORTH IN
THIS REPORT AND IN OTHER FILINGS MADE BY US WITH THE SECURITIES AND EXCHANGE COMMISSION. BASED UPON CHANGING CONDITIONS, SHOULD ANY
ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALIZE, INCLUDING THOSE DISCUSSED AS "RISK FACTORS" IN ITEM 1A AND
ELSEWHERE IN THIS REPORT, OR SHOULD ANY OF OUR UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE
DESCRIBED IN THIS REPORT. WE UNDERTAKE NO OBLIGATION TO UPDATE, AND WE DO NOT HAVE A POLICY OF UPDATING OR REVISING THESE
FORWARD-LOOKING STATEMENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF
THE DATE THE STATEMENT WAS MADE. UNLESS THE CONTEXT OTHERWISE REQUIRES, THE TERMS
"NETWORK-1","COMPANY","WE," "OUR," "US" MEAN NETWORK-1 TECHNOLOGIES,
INC. AND ITS WHOLLY-OWNED SUBSIDIARIES, MIRROR WORLDS TECHNOLOGIES, LLC AND HFT SOLUTIONS, LLC.

 ITEM
1. BUSINESS

 Overview

 Our
principal business is the development, licensing and protection of our intellectual property assets. We 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. 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. 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. In addition, we continue to seek to
acquire additional intellectual property assets to develop, commercialize, license or otherwise monetize. Our strategy includes working
with inventors and patent owners to assist in the development and monetization of their patented technologies. Our 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 we have achieved with respect to our Remote Power Patent and our Mirror Worlds Patent Portfolio. 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. We no longer receive revenue for our Remote Power Patent for any period
subsequent to March 7, 2020 (the expiration date of the patent). 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.

 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. (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. 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. 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. 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. Ingemar Cox in February 2013, currently consists of thirty-nine (39) U.S. patents relating to
enabling technology for identifying media content on the Internet, such as audio and video, and taking further actions to be performed
based on such identification. All of the patents within our Cox patent portfolio have expired. 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. Since the acquisition
of the Cox Patent Portfolio in February 2013, we have been issued thirty-four (34) additional patents relating to this portfolio. The
claims in these thirty-four (34) additional patents are generally directed towards systems of content identification and performing actions
following therefrom.

 We
are obligated to pay Dr. Cox 12.5% of the net proceeds generated by us from licensing, sale or enforcement of the Cox Patent Portfolio.
Dr. Cox provides consulting services to us with respect to the Cox Patent Portfolio and assists our efforts to develop the patent portfolio.

 Dr.
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. He
is a Fellow of the ACM, IEEE, the IET (formerly IEE), and the British Computer Society and is a member of the UK Computing Research Committee.
In 2019, Dr. Cox was the recipient of the Tony Kent Strix Award in recognition of his contribution to the field of information retrieval.
He was founding co-editor in chief of the IEE Proc. on Information Security and was an associate editor of the IEEE
Trans. on Information Forensics and Security. He is co-author of a book entitled "Digital Watermarking" and its second edition
"Digital Watermarking and Steganography". 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. 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. 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.

 We
have an obligation to pay M2M 14% of the first $100 million of net proceeds (after deduction of expenses) and 5% of net proceeds greater
than $100 million from Monetization Activities (as defined) related to our M2M/IoT Patent Portfolio. In addition, M2M will be entitled
to receive from us $250,000 of additional consideration upon the occurrence of certain future events related to the patent portfolio.

 John
Nix, the Managing Member of M2M, provides consulting services to us with respect to our M2M/IoT Patent Portfolio. Mr. 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. 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.

 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. 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. 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). 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. 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.

 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. Pursuant to the
terms of the agreement with us, we are obligated to pay Recognition an interest in the net proceeds realized from our monetization of
the Mirror Worlds Patent Portfolio as follows: (i) 10% of the first $125 million of net proceeds; (ii) 15% of the next $125 million of
net proceeds; and (iii) 20% of any portion of the net proceeds in excess of $250 million. 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. 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.
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).

 On
June 13, 2003, the Institute of Electrical Engineers (IEEE), a non-profit, technical professional association, approved the 802.3af Power
over Ethernet standard (the "Standard"), which covers technologies deployed in delivering power over Ethernet networks. The
Standard provides for the Power Sourcing Equipment (PSE) to bedeployed in switches or as standalone
midspan hubs to provide power to remote devices such as wireless access points, IP phones and network-based cameras. The technology is
commonly referred to as Power over Ethernet ("PoE"). 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.

 - 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. 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. 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. Based on our cash position, we review opportunities
to acquire additional intellectual property as well as evaluate other strategic alternatives.

 In
connection with our activities relating to the protection of our intellectual property assets, or the intellectual property assets of
third parties with whom we may have strategic relationships in the future, it may be necessary to assert patent infringement claims against
third parties whom we believe are infringing our patents or those of our strategic partners. 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 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 -

Concentration

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
anticipate that our future revenue will continue to be derived from a few parties.

 Competition

 With
respect to our ability to acquire additional intellectual property assets or enter into strategic relationships with third parties to
monetize their intellectual property assets, we face considerable competition from other companies, many of which have significantly
greater financial and other resources than we have. The patent licensing and enforcement industry has grown and there has been a material
increase in the number of companies seeking to acquire intellectual property assets from third parties or to provide financing to third
parties seeking to monetize their intellectual property. Entities including, among others, Acacia Research Corporation (NASDAQ:ACTG),
Intellectual Ventures, WI-LAN Inc., VirnetX Holdings Corporation (NYSE MKT:VHC) and RPX Corporation, seek to acquire intellectual
property or partner with third parties to license or enforce intellectual property rights. In addition, we also compete with strategic
corporate buyers with respect to the acquisition of intellectual property assets. It is expected that others will enter this market as
well. Many of these competitors have significantly greater financial and human resources than us.

 We
may also compete with litigation funding firms such as Burford Capital Limited, Validity Finance, LLC, Fortress Investment Group, LLC,
Parabellum Capital LLC and Bentham Capital LLC, venture capital firms and hedge funds for intellectual property acquisitions and licensing
opportunities. Many of these competitors also have greater financial resources and human resources than us.

 Regulatory
Environment

 If
new legislation, regulations or rules are implemented either by Congress, the USPTO or the courts that impact the patent application
process, the patent enforcement process or the rights of patent holders, these changes could negatively affect our business,
financial condition and results of operations. Certain legislation, regulations, and rulings by the courts and actions by the USPTO
have materially increased the risk and cost of enforcement of patents. U.S. patent laws were amended by the Leahy-Smith America
Invents Act, referred to as the "America Invents Act", which became effective on March 16, 2013. The America Invents Act
included a number of significant changes to U.S. patent law. 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) and Covered Business Method Review (CBM) proceedings which provide third parties a timely and cost
effective alternative to district court litigation to challenge the validity of an issued patent. The America Invents Act and its
implementation increased the uncertainties and costs
surrounding the enforcement of patent rights has made it more difficult to successfully enforce our patents.

 - 8 -

 In
addition, future changes in patent law could adversely impact our business. Such changes may not be advantageous to us and may make it
more difficult to obtain adequate patent protection to enforce our patents. Increased focus on the growing number of patent lawsuits,
particularly by non-practicing entities (NPEs), may result in legislative changes which increase the risk and costs of asserting patent
litigation.

 Investment
in ILiAD Biotechnologies

the period December 2018 to date, we made aggregate investments of $7,000,000 in ILiAD, a privately held clinical stage biotechnology
company dedicated to the prevention and treatment of human disease caused by Bordetella pertussis. ILiAD is currently focused
on validating its proprietary intranasal vaccine, BPZE1, for the prevention of pertussis (whooping cough). 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. 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). In connection with our investment, Corey Horowitz, our Chairman and Chief Executive Officer,
became a member of ILiAD's Board of Managers and receives the same compensation for service on the Board as the other non-management
Board members.

 BPZE1
was developed in the laboratory of Camille Locht, PhD, at the Institut Pasteur de Lille (IPL) and French National Institute of Health
and Medical research. BPZE1 is a live-attenuated intranasal vaccine designed to overcome deficiencies of current pertussis vaccines,
including poor durability of protection and failure to prevent nasopharyngeal Bordetella pertussis infections that lead to escape
mutants and transmission to vulnerable infants.

 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. 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. 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. You may obtain, free of charge on our Internet website, copies
of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, Section 16 filings
and amendments to those reports or statements filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably
practicable after we electronically file such material with, or furnish it to, the SEC. The information we post on our website is intended
for reference purposes only; none of the information posted on our website is part of this Annual Report or incorporated by reference
herein.

 In
addition to the materials that are posted on our website, you may read and copy any materials we file with the SEC at the SEC's Public
Reference Room at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that contains reports, proxy and other information statements,
and other information regarding issuers, including us, that file electronically with the SEC. The address of the SEC's Internet
site is

 Employees
and Consultants

 We
currently have two full-time employees and two consultants providing monthly services to us.

 ITEM 1A. RISK FACTORS

 Our
operations and financial results are subject to various material risks and uncertainties, including those described below, which could
adversely affect our business, financial condition, results of operations, cash flow, and the trading price of our common stock. You
should carefully consider the material risks and uncertainties described below in addition to the other information set forth in this
Annual Report on Form 10-K, including, but not limited to, the section titled "Management's Discussion and Analysis of Financial
Condition and Results of Operations." The material risks described below are not the only risks we face. Additional risks that
we do not know of or that we currently believe are immaterial may also impair our business operations. If any of the following risks
actually occur, our business, financial condition, results of operations and cash flow could be materially adversely affected, and the
trading price of our common stock could decline significantly.

 - 10 -

 Risks
Related to Our Business

 Our
revenue is uncertain as it is dependent upon litigation outcomes involving our patents which we cannot predict.

 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). Patent litigation
is inherently risky and uncertain and we cannot assure you that any of our current or future litigation will result in a favorable outcome
for us. Accordingly, our revenue is uncertain.

 If
we are unable to protect our patents, our business would be negatively impacted.

 We
believe our patents are valid, enforceable and valuable. Despite this belief, third parties typically defend assertion of our patents
by asserting defenses, among others, of non-infringement and invalidity. In addition, in the future certain of our patents may be subject
to USPTO post-grant inter partes review proceedings (IPRs) which could result in all or a part of our patents being invalidated
or the claims being limited. 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.

 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 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. 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). 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. 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.

 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. 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. 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.

 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. Our strategy is to focus on acquiring high
quality patent assets which management believes have the potential for significant licensing opportunities. However, we may not be able
to acquire such additional high quality patents or, if acquired, we may not achieve material revenue or profit from such patents. Acquisitions
of patent assets are competitive, time consuming, complex and costly to consummate. High quality patents with significant licensing
opportunities are difficult to find and are often very competitive to acquire. In addition, such acquisitions present material
risks. Even if we acquire such additional patent assets, we may not be able to achieve significant licensing revenue or even generate
sufficient revenue related to such patent assets to offset the acquisition costs and the legal fees and expenses which may be incurred
to enforce, license or otherwise monetize such patents. In addition, we may not be able to enter into strategic relationships with third
parties to license or otherwise monetize their intellectual property and, even if we consummate such strategic relationships, we may
not achieve material revenue or profit from such relationships.

 The
patent monetization cycle is long, costly and unpredictable.

 There
is generally a significant time lag between acquiring a patent portfolio and recognizing revenue from those patent assets. During this
time lag, significant costs are likely to be incurred which may have a negative impact on our results of operations, cash flow and financial
position. Furthermore, the outcome of our efforts to monetize our patents is uncertain and we may not be successful.

 - 12 -

 Our
quarterly and annual operating and financial results, including our revenue, are difficult to predict and are likely to fluctuate significantly
in future periods.

 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.
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. 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.

 In
the future we could be classified as a Personal Holding Company resulting in a 20% tax on our PHC Income that we do not distribute to
our shareholders.

 The
personal holding company ("PHC") rules under the Internal Revenue Code impose a 20% tax on a PHC's undistributed personal
holding company income ("UPHCI"), which means, in general, taxable income subject to certain adjustments and reduced by certain
distributions to shareholders. For a corporation to be classified as a PHC, it must satisfy two tests: (1) that more than 50% in value
of its outstanding shares must be owned directly or indirectly by five or fewer individuals at any time during the second half of the
year (after applying constructive ownership rules to attribute stock owned by entities to their beneficial owners and among certain family
members and other related parties) (the "Ownership Test") and (2) at least 60% of its adjusted ordinary gross income for
a taxable year consists of dividends, interest, royalties, annuities and rents (the "Income Test"). 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. 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.

 Our
success is largely dependent upon the personal efforts of Corey M. Horowitz, our Chairman, Chief Executive Officer and Chairman of our
Board of Directors. On March 22, 2022, we entered into a new four year employment agreement with Mr. Horowitz pursuant to which
he continues to serve as our Chairman and Chief Executive Officer. The loss of the services of Mr. Horowitz would have a material adverse
effect on our business
and prospects. We do not maintain key-man life insurance on the life of Mr. Horowitz.

 - 13 -

 Cash
dividends may not be continued to be paid.

 Our
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. We have paid such semi-annual dividends since our dividend policy was enacted in December 2016. At this
time, we anticipate continuing to pay dividends consistent with our policy. 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. We may not be in a position to continue to pay dividends in the future.

 Legislation,
regulations, court rulings and actions by the USPTO have materially increased the risk and cost of enforcement of patents and may continue
to do so in the future.

 Legislation,
regulations, court rulings and actions by the USPTO have materially increased the risk and cost of enforcing patents. U.S. patent laws
were amended by the Leahy-Smith America Invents Act, referred to as the America Invents Act, which became effective on March 16, 2013.
The America Invents Act included a number of significant changes to U.S. patent law. 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 addition, the America Invents Act changed the way that parties may be joined in patent
infringement actions, and increased the likelihood that such actions will need to be brought against individual parties allegedly infringing
by their respective individual actions or activities. 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.

 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. 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. Furthermore, the proliferation of AI may lead to the emergence of new market participants with innovative
solutions that challenge our patents' validity or enforceability. Such challenges could result in lengthy legal battles or the invalidation
of our patents, thereby impacting our potential future revenue.

 - 14 -

 AI
driven legal analytics tools can also empower potential infringers with sophisticated insights into the strengths and weaknesses of
our patent claims, potentially reducing our leverage in litigation and licensing negotiations. 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. Investors are advised that our financial results could be
adversely affected if we are unable to adapt to the rapid changes brought about by AI and ML technologies, and our ability to
enforce our patent rights is consequently diminished.

 Changes
in patent law could adversely impact our business.

 Patent
laws may continue to change and may alter the protections afforded to owners of patent rights. Such changes may not be advantageous to
us and may make it more difficult to obtain adequate patent protection to enforce our patents. Increased focus on the growing number
of patent lawsuits, particularly by non-practicing entities (NPEs), may result in further legislative changes which increase the risk
and costs of asserting patent litigation.

 Our
pending patent infringement litigations are time consuming and costly.

 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). While we have contingent legal fee arrangements, or a contingency plus a fixed cash amount arrangement,
with our patent litigation counsel in each litigation, we are responsible for all or a portion of the expenses which are anticipated
to be material. In addition, the time and effort required of our management to effectively pursue these litigations is likely to be significant
and it may adversely affect other business opportunities.

 We
face intense competition to acquire intellectual property and enter into strategic relationships.

 With
respect to our ability to acquire additional intellectual property or enter into strategic relationships with third parties to monetize
their intellectual property, we face considerable competition from other companies, many of which have significantly greater financial
and other resources than we have. We face a number of competitors in the patent licensing and enforcement business seeking to acquire
intellectual property rights from third parties. Many of these competitors have significantly more financial and human resources than
us.

 We
may also compete with strategic corporate buyers, litigation funding firms, venture capital firms and hedge funds for intellectual property
acquisitions and licensing opportunities. 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. The introduction of products embodying new technologies
and the emergence of new industry standards may render our technologies obsolete or less marketable.

 In
addition, other companies may develop competing technologies that offer better or less expensive alternatives to the technologies covered
by our intellectual property. Moreover, technological advances or entirely different approaches developed by other companies or adopted
by various standards groups could render our patents obsolete, less marketable or unenforceable.

 The
burdens of being a public company may adversely affect us including our ability to pursue litigation.

 As
a public company, our management must devote substantial time, attention and financial resources to comply with U.S. securities laws.
This may have a material adverse effect on management's ability to effectively and efficiently pursue its business. In addition, our
disclosure obligations under U.S. securities laws require us to disclose information publicly that will be available to litigation opponents.
We may, from time to time, be required to disclose information that may have a material adverse effect on our litigation strategies.
This information may enable our litigation opponents to develop effective litigation strategies that are contrary to our interests.

 General
Risk Factors

 Investors
may have limited influence on stockholder decisions because ownership of our common stock is concentrated.

 As
of February 15, 2024, our executive officers and directors beneficially owned 32% of our outstanding common stock. As a result,
these stockholders may be able to exercise substantial control over all matters requiring stockholder approval, including the election
of directors and approval of significant corporate transactions, such as a merger or other sale of our company or its assets. This concentration
of ownership will limit other stockholders' ability to influence corporate matters and may have the effect of delaying or preventing
a third party from acquiring control over us.

 - 16 -

 Our
common stock may be delisted from the NYSE American exchange if we fail to comply with continued listing standards.

 Our
common stock is currently traded on the NYSE American exchange under the symbol "NTIP". If we fail to meet any of the continued
listing standards of the NYSE American exchange, our common stock could be delisted. Such delisting could adversely affect the price
and trading (including liquidity) of our common stock.

 There
are inherent uncertainties involved in estimates, judgments and assumptions used in the preparation of financial statements in accordance
with U.S. GAAP. Any changes in estimates, judgments and assumptions could have a material adverse effect on our business, financial condition,
and operating results.

 The
preparation of financial statements in accordance with accounting principles generally accepted in the United States involves making
estimates, judgments and assumptions that affect reported amounts of assets (including intangible assets), liabilities and related reserves,
revenues, expenses, and income. Estimates, judgments, and assumptions are inherently subject to change in the future, and any such changes
could result in corresponding changes to the amounts of assets, liabilities, expenses, and income. Any such changes could have a material
adverse effect on our business, financial condition, and operating results.

 Provisions
in our corporate charter, by-laws and in Delaware law could make it more difficult for a third party to acquire us, discourage a takeover
and adversely affect existing stockholders.

 Our
certificate of incorporation authorizes the Board of Directors to issue up to 10,000,000 shares of preferred stock. The preferred
stock may be issued in one or more series, the terms of which may be determined at the time of issuance by our Board of Directors, without
further action by stockholders, and may include, among other things, voting rights (including the right to vote as a series on particular
matters), preferences as to dividends and liquidation, conversion and redemption rights, and sinking fund provisions, any of which could
adversely affect holders of our common stock. Although there are currently no shares of preferred stock outstanding, future holders of
preferred stock may have rights superior to our common stock and such rights could also be used to restrict our ability to merge with
or sell our assets to third parties.

 We
are also subject to the "anti-takeover" provisions of Section 203 of the Delaware General Corporation Law, which could prevent
us from engaging in a "business combination" with a 15% or greater stockholder for a period of three years from the date
such person acquired that status unless appropriate board or stockholder approvals are obtained.

 In
addition, our By-laws contain advance notice requirements for director nominations and for new business to be brought up at
stockholder meetings. Stockholders wishing to submit director nominations or raise matters to a vote of stockholders must provide
notice to us within specified date windows and in very specific forms in order to have that matter voted on at a stockholders
meeting.

 The
aforementioned provisions could deter unsolicited takeovers or delay or prevent changes in our control or management, including transactions
in which stockholders might otherwise receive a premium for their shares over the then current market price. These provisions may also
limit the ability of stockholders to delay, deter or prevent a change of control, or approve transactions that they may deem to be in
their best interests.

 - 17 -

 Our
stock price may be volatile.

 The
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.

 In
addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to
the operating performance of particular companies. These market fluctuations may also have a
material and adverse effect on the market price of our common stock.

 - 18 -

 ITEM 1B. UNRESOLVED STAFF COMMENTS

 None.

 ITEM 1C. CYBERSECURITY

 Based
on our small size (two employees and two consultants), we rely extensively on information technology systems managed by third party major
service providers to securely process, store and transmit our data to conduct business. Our employees and consultants utilize end point
security tools, such as firewalls and anti-virus protection, to protect our data. We 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. To date, we have not been materially impacted by risks from cybersecurity threats or incidents and we are
not aware of cybersecurity threats or incidents that are reasonably likely to materially affect our business. However, there could be
cybersecurity threats or incidents in the future that may adversely affect our business.

 Our
Executive Vice President oversees risks of cybersecurity threats and reports quarterly, and as necessary, to the Board of Directors,
including promptly reporting any cybersecurity incidents that may pose a significant risk to us. Our Executive Vice President has over
ten years of experience with developers of access management, network security and data protection solutions.

 ITEM 2. PROPERTIES

 Our
principal executive offices are located in New Canaan, Connecticut, where we lease approximately 2,000 square feet of office space at
a base rent of $5,500 per month pursuant to a lease amendment, dated May 1, 2022, which term expires on April 30, 2025. On 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.

 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. 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. 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.
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. 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. 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. 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.

 On
March 7, 2022, the District Court entered a ruling granting in part and denying in part a motion for summary judgment by Meta. 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. 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.

 Remote
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 -

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.
Our litigations against Ubiquity Inc and Honeywell International Inc. remain pending.

 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. 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. 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. 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. 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.

 ITEM
4. MINE SAFETY DISCLOSURES

 None.

 - 21 -

 PART
II

 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. 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. Our 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. 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 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 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. 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. 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. 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
Share Repurchase Program may be increased, suspended or discontinued at any time.

 - 22 -

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

 1, 2023 to

December 31, 2023

 8,581

 $2.17

 8,581

 $4,372,705

 Total

 116,814

 $2.20

 116,814

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.

 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.

 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"). Adopting a trading plan that satisfies the conditions of Rule 10b5-1 allows a company to
repurchase its shares at times when it might otherwise be prevented from doing so due to self-imposed trading black-outs or pursuant
to insider trading laws. 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. 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 -

Compensation Plan Information

 The
following table summarizes share and exercise price information for our equity compensation plans as of December 31, 2023.

 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)

 compensation plans

 approved by security holders

 587,500
 (1)

 $
 — (2)

 2,180,000 (3)

 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.

 (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.

 Our
2022 Stock Incentive Plan ("2022 Plan") provides for the grant of any or all of the following types of awards: (a) stock
options, (b) restricted stock units (c) restricted stock, (d) stock appreciation rights, (e) unrestricted stock awards, (f) cash based
awards, and (g) other stock-based awards. Awards under the 2022 Plan may be granted singly, in combination, or in tandem. Subject
to standard anti-dilution adjustments as provided in the 2022 Plan, the 2022 Plan provides for an aggregate of 2,300,000 shares of our
common stock to be available for distribution pursuant to the 2022 Plan. 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.
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").

 ITEM
6. (RESERVED)

 Not
applicable.

 - 24 -

 ITEM
7.
 MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 The
following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial
statements and related notes contained elsewhere in this Annual Report on Form 10-K. The following discussion contains forward-looking
statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking
statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report
on Form 10-K, particularly in the "Risk Factors" Section on pages 10 - 18 hereof.

 OVERVIEW

 Our
principal business is the development, licensing and protection of our intellectual property assets. We 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.

 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. 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.

 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.

 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. 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). 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 2023, we entered into settlement agreements with eight of the defendants with respect to the aforementioned litigation resulting
in aggregate settlement payments made to us of $2,601,000 and a future conditional payment of $150,000 (see Note K to our consolidated
financial statements included herein). All of our revenue for 2023 was from these settlements involving our Remote Power Patent. If we
are unable to successfully monetize our other patent portfolios or achieve a successful outcome of our investment in ILiAD, our business,
financial condition and results of operations will be negatively impacted.

 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.

 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 strategy includes working with inventors and patent owners to assist in the development and monetization of
their patented technologies. We may also enter into strategic relationships with third parties to develop, commercialize, license or
otherwise monetize their intellectual property. Our 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 we have achieved with respect
to our Remote Power Patent and Mirror Worlds Patent Portfolio.

 The
significant components of expenses, when revenue is recorded, that may impact our net income (loss) relate to contingent legal fees and
expenses related to our patent litigation (see Note I[1] to our consolidated financial statements included herein) and incentive compensation
payable to our Chairman and Chief Executive Officer pursuant to his employment agreement (see Note J[1] to our consolidated financial
statements included herein). Both such components of expenses are based on a percentage of the revenue received by us as a result of
litigation or otherwise.

 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. 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. If this is the case, we would be subject to a 20% tax on
the amount of any undistributed personal holding company income (as defined) for such year that we do not distribute to our shareholders
(see Note E to our consolidated financial statements included in this Annual Report).

 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. 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.
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).

Expenses. Operating expenses for 2023 were $4,836,000 as compared to $3,903,000 for 2022. 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. 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).

 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. These increases were offset somewhat by reductions in office rent of $71,000 and employee benefits
costs of $60,000.

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.

 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. 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. 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. 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.

Taxes. 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.
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. 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). 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. 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. 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.
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. 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. 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. 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. 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. 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.

 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.

 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.

 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.

 CONTRACTUAL
OBLIGATIONS

 We
do not have any long-term debt, capital lease obligations, purchase obligations or other long-term liabilities.

 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. To the extent that
there are material differences between these estimates and actual results, our financial condition or results of operations would be
affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account
of our circumstances and expectations for the future based on available information. 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. There are items within our financial statements that require estimation but are
not deemed critical, as defined above.

 For
a detailed discussion of our significant accounting policies and related judgments, see Note B to our consolidated financial statements
included herein.

 - 31 -

 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 Not
applicable.

 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 The
consolidated financial statements required hereby are located on pages F-1 through F-24 which follow Part III.

 ITEM
9. CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 None.

 ITEM 9A. CONTROLS AND PROCEDURES

 (a) Evaluation
of Disclosure Controls and Procedures

 Our
Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as defined
in Rule 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this Annual Report on Form 10-K. Based
upon this review, our executive officers concluded that, as of the end of the period covered by this Annual Report on Form 10-K, our
disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports we file or
submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in
applicable rules and forms and is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial
Officer, to allow timely decisions regarding required disclosure.

 (b) Internal Control Over Financial Reporting

 (i) Management's
Annual Report on Internal Control over Financial Reporting

 Our
management is also responsible for establishing and maintaining adequate "internal control over financial reporting" of the
Company, as defined in Rule 13a-15(f) of the Exchange Act. Internal control over financial reporting is defined as a process
designed by, or under the supervision of, the issuer's principal executive and principal financial officer and effected by the
board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A
company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally

 - 32 -

 accepted
accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management
and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of the company's assets that could have a material effect on the financial statements.

 Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.

 Our
Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of our internal control over financial
reporting as of December 31, 2023 using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO) in Internal Control - Integrated Framework (2013). Based upon that evaluation, our Chief Executive Officer and Chief
Financial Officer concluded that our internal controls over financial reporting were effective as of the end of the period covered by
this report.

 (ii) Attestation Report of Registered Public Accounting Firm

 We
are a "smaller reporting company" as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended,
and as such, are not required to provide the information contained in this sub-section pursuant to Item 308(b) of Regulation S-K. Accordingly,
this Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control
over financial reporting.

 (iii) Changes
in Internal Control over Financial Reporting

 There
was no change in our internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2023,
that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 ITEM 9B. OTHER INFORMATION

 None.

 - 33 -

 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 Not
Applicable.

 PART
III

 ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 The
following information includes information each director and executive officer has given us about his or her age, all positions he or
she holds, his or her principal occupation and business experience for at least the past five years, and the names of other publicly-held
companies of which he or she currently serves as a director or has served as a director during the past five years. In addition to the
information presented regarding each director's specific experience, qualifications, attributes and skills that led our Board to
the conclusion that he or she should serve as a director, we also believe that all of our directors have a reputation for integrity,
honesty and adherence to high ethical standards. They each have demonstrated business acumen, exercise sound judgment, and a commitment
of service to Network-1 and our Board.

 Information
about the number of shares of our common stock beneficially owned by each executive officer and director appears in this Annual Report
under the heading "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" beginning
on page 44 hereof. There are no family relationships among any of our directors and executive officers.

 NAME

 AGE

 POSITION

 Corey

 Chairman,
 Chief Executive Officer and Chairman of the Board of Directors

 E. Greene

 Executive
 Vice President, Secretary and a Director

 M. Mahan

 Chief
 Financial Officer

 R. Pearlman

 Niv
 Harizman

 Hoffman

 - 34 -

 Corey
M. Horowitz has been our Chairman and Chief Executive Officer since December 2003. Mr. Horowitz has also served as Chairman of our
Board of Directors since January 1996 and has been a member of our Board of Directors since April 1994. In December 2018, Mr. Horowitz
became a member of the Board of Managers of ILiAD Biotechnologies, LLC, a privately held biotechnology company, in connection with our
investment in the company (see "Business-Investment in ILiAD Biotechnologies" at page 9 of this Annual Report). Mr. Horowitz
is also a member of the Life Sciences Institute Leadership Council at the University of Michigan. We believe Mr. Horowitz's
qualifications to serve on our Board of Directors include his significant experience and expertise as an executive in the intellectual
property field, his understanding of our intellectual property and the patent acquisition, licensing and enforcement business combined
with his private equity and corporate transactional experience.

E. Greene became our Executive Vice President in October 2013 and our Secretary and a member of our Board of Directors in September
2022. He served as a consultant to the Company from December 2004 until March 2013, providing technical and marketing analysis for our
intellectual property portfolio. Mr. Greene became an employee of Network-1 in March 2013. From April 2006 to February 2009,
Mr. Greene served as a marketing consultant for Avatier Corporation, a developer of identity management software. From August 2003
until December 2004, he served as a consultant to Neartek, Inc., a storage management software company (August 2003 until October 2003)
and Kavado Inc., a security software company (November 2003 until December 2004). We believe Mr. Greene's qualifications to serve
on our Board include his engineering and technical expertise to assist us in our patent acquisition, licensing and enforcement business.

M. Mahan became our Chief Financial Officer in December 2022. Mr. Mahan currently serves as President of Management and Financial
Services, Inc., a consulting firm that he founded in 2011 which provides general management, financial and operations consulting services
to private and public companies. In March 2023, he also became and continues to serve as Chief Financial Officer of Back Office Staffing
Solutions, LLC, a private company providing back office processing services for staffing firms. From May 2021 to February 2022, Mr. Mahan
served as Interim Chief Financial Officer of Loft Orbital Solutions, Inc., a space infrastructure company that designs, launches and
operates low earth orbit satellites. From April 2019 to May 2021, he served as the Interim Chief Financial Officer of XWELL, Inc., formerly
XpresSpa Group, Inc., (NASDAQ: XWEL),a global health and wellness holding company operating XpresCheck, XpresSpa, and Treat
locations in airports. From November 2016 through April 2019, Mr. Mahan served as the Chief Financial Officer of SkyBell Technologies,
Inc., a company engaged in the video doorbell and smart home industry. Mr. Mahan began his career in the audit practice of PricewaterhouseCoopers
from 1989 through 1992 and as a Controller/Division Chief Financial Officer of Tommy Hilfiger USA, Inc. from 1992 – 2001.

 - 35 -

R. Pearlman has been a member of our Board of Directors since January 2012, and also serves as Chairman of our Audit Committee
and a member of our Nominating and Corporate Governance Committee. Mr. Pearlman currently serves as the Chairman and Chief Executive
Officer of Liberation Investment Group, a New York based investment management and financial consulting firm, which he founded in
January 2003. From March 2023 to July 2023, Mr. Pearlman was a member of the Board of Directors of QualTek Services Inc.
(NASDAQ:QTEK), a turnkey provider of infrastructure services to North American 5G wireless, telecom, power grid modernization and
renewable energy sectors, which became a private company in July 2023. Mr. Pearlman also served as a member of the Special Committee
of the Board to review and approve strategic and financial alternatives. In March 2023, Mr. Pearlman also became a member of the
Board of Directors of MidCap Financial Investment Corporation (NASDAQ:MFIC), a closed-end externally managed, non-diversified
management investment company that has elected to be treated as a business development company. Mr. Pearlman also serves on the
Audit, Nominating and Corporate Governance, and Compensation Committee of MidCap Financial Investment Corp. In February 2023, Mr.
Pearlman became a member of the Board of Directors of Diebold Nixdorf, Inc.(NYSE: DBD), a multinational financial and retail
technology company, and serves as a member of its Finance Committee and the People and Compensation Committee. From March 2022 to
April 2022, he was a member of the Board of Directors and Chair of the Strategic Review Committee of Red Box Entertainment, Inc.
(NASDAQ:RDBX), an entertainment company that provides consumers access to a large variety of content across digital and physical
media. From October 2020 to September 2021, Mr. Pearlman was a member of the Board of Directors of Atlas Crest Investment Corp.
(NYSE:ACIC) and during the period February 2021 until June 2022, he served on the Board of Directors of Atlas Crest Investment Corp.
II (NYSE:ACII), each entity was a special purpose acquisition company (SPAC). Mr. Pearlman served as Chairman of the Audit Committee
and a member of the Compensation Committee and Nomination & Governance Committee of Atlas Crest Investment Corp. until September
2021 and held the same committee positions for Atlas Crest Investment Corp. II until June 2022. Mr. Pearlman served as Executive
Chairman of Empire Resorts, Inc. (NASDAQ:NYNY) from June 2016 until November 2019, served as Non-Executive Chairman of the Board
from September 2010 through May 2016, and served on the Board of Directors from May 2010 to November 2019. Mr. Pearlman was a member
of the Board of Directors of CEVA Logistics, AG (SIX:CEVA) from May 2018 until October 2019 and served on its Audit Committee from
May 2018 through October 2019 and its Nomination and Governance Committee from May 2018 through May 2019. We believe Mr.
Pearlman's qualifications to serve on our Board include his significant investment and financial experience and expertise
combined with his Board experience.

 Niv
Harizman has been a member of our Board of Directors since December 2012 and serves as Chair of our Nominating and Corporate
Governance Committee and a member of our Compensation Committee. Mr. Harizman is a Managing Member of Tyto Capital Partners LLC, a
private investment firm specializing in debt and equity investments in middle market companies and special situations, a position he
has held since August 2010. Since March 2010, Mr. Harizman has also been the Managing Member of NHK Partners LLC, an entity that
makes private investments and provides consulting services. Since November 2013, Mr. Harizman has been affiliated with Riverside
Management Group, a merchant banking firm, and BCW Securities LLC, its affiliated broker-dealer. Mr. Harizman previously held
senior investment banking positions at Credit Suisse First Boston LLC, Deutsche Bank and BT AlexBrown Incorporated. We believe
Mr. Harizman's qualifications to serve on our Board include his significant investment and financial transactional experience
and expertise.

 - 36 -

Hoffman has been a member of our Board of Directors since December 2012 and serves as Chair of our Compensation Committee and a member
of our Audit Committee. Since August 2020, Ms. Hoffman has served as General Counsel of Phreesia, Inc. (NYSE:PHR), a leading provider
of software solutions that healthcare organizations use to manage the patient intake process. From January 2016 until August 2020,
Ms. Hoffman served as Chief Legal Officer and Chief Administrative Officer at Intersection Parent, Inc., an urban experience company
that utilizes technology to make cities better, including bringing free Wi-Fi throughout New York City. We believe that Ms. Hoffman's
qualifications to serve on our Board include her extensive legal background and transactional experience.

 Committees
of the Board of Directors

 Our
Board of Directors currently has four standing committees: an Audit Committee; a Compensation Committee; a Nominating and Corporate Governance
Committee and a Strategic Development Committee. Each of the Audit Committee, Compensation Committee and Nominating and Corporate
Governance Committee has a charter. These charters are available on our website at:  Network-1.com/governance-docs.
Each member of each committee is an "independent" director under the standards of the NYSE American LLC Company Guide. Three
of our current five directors, Emanuel Pearlman, Allison Hoffman and Niv Harizman, are considered independent directors under Rule 803A(2)
of the NYSE American LLC Company Guide.

 Audit
Committee

 Our
Board of Directors has a separately standing audit committee in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of
1934, as amended, and Section 803B of the NYSE American Company LLC Guide consisting of Emanuel Pearlman (Chairman) and Allison Hoffman. Emanuel
Pearlman qualifies as an audit committee financial expert under applicable SEC rules. Mr. Pearlman and Ms. Hoffman qualify as "independent"
as independence for audit committee members is defined under Rule 10A-3 under the Securities Exchange Act of 1934, as amended, and Section
803B(2) of the NYSE American LLC Company Guide.

 The
Audit Committee is appointed by our Board of Directors to provide assistance to the Board in fulfilling its oversight responsibility
with respect to, among other things, (i) the integrity of our financial statements, (ii) our compliance with legal and regulatory requirements,
(iii) selecting and evaluating the qualifications and independence of our independent registered public accounting firm, (iv) evaluating
the performance of our internal audit function and independent registered public accounting firm, and (v) our internal controls and procedures.

 - 37 -

 Compensation
Committee

 The
Compensation Committee consists of Allison Hoffman (Chair) and Niv Harizman. The Compensation Committee is appointed by our Board of
Directors to assist the Board in carrying out its responsibilities relating to the compensation of our executive officers and directors. The
Committee has overall responsibility for evaluating and approving the officer and director compensation plans, policies and our programs.

 Nominating
and Corporate Governance Committee

 Our
Board has a Nominating and Corporate Governance Committee consisting of Niv Harizman (Chair) and Emanuel Pearlman. The Nominating
and Corporate Governance Committee is responsible for, among other things, developing and recommending to the Board a set of corporate
governance policies for the Company, establishing criteria for selecting new directors, and identifying, screening and recruiting new
directors. The Committee also recommends to the Board nominees for directors and recommends directors for committee membership to the
Board.

 Strategic
Development Committee

 We
also have a Strategic Development Committee to assist our Chairman and Chief Executive Officer in strategic development and planning
of our business relating to identifying potential strategic partners, the acquisition of new IP and other strategic opportunities. The
Committee also assists in capital markets related activities. Niv Harizman is the sole member of the Strategic Development Committee.

 Code
of Ethics

 We
have adopted a Code of Ethics that applies to our executive officers, directors and employees. Copies of the Code of Ethics may
be obtained, without charge, upon written request addressed to: Network-1 Technologies, Inc., 65 Locust Avenue, Third Floor, New Canaan,
Connecticut 06840, Attn: Chief Executive Officer.

 Insider
Trading Policies and Procedures

 We
have adopted insider trading policies and procedures governing the purchase, sale and/or other disposition of our securities by directors,
officers, employees and consultants(who have access to material non-public information) or us, that are reasonably designed to promote
compliance with insider trading laws, rules and regulations, and listing standards applicable to us. Under this policy, all of our officers,
employees, non-employee directors and consultants who are in possession of material non- public information are prohibited from trading
in the Company's securities, except for trades made pursuant to plans approved by our compliance officer and counsel in accordance
the insider trading policy that are intended to comply with Rule 10b5-1 under the Exchange Act.

 - 38 -

 ITEM
11. EXECUTIVE COMPENSATION

 The
following table summarizes compensation for the years ended December 31, 2023 and December 31, 2022, awarded to, earned by or paid to
our Chief Executive Officer ("CEO") and to each of our executive officers who received total compensation in excess of $100,000
for the year ended December 31, 2023 for services rendered in all capacities to us (collectively, the "Named Executive Officers").

 Summary
Compensation Table

 Name
 and
 Principal Position

 Year

 Salary
 ($)

 Bonus
 ($)

 Stock

 Awards($) (3)

 All
 Other
 Compensation($) (1)

 Total($)

 Corey

 2023

 $
 545,572

 $
 305,000
 (2)

 $
 —

 $
 53,500

 (4)

 $
 904,072

 Chairman
 and Chief Executive Officer

 2022

 $
 535,000

 $

 175,000
 (2)

 $
 1,102,940

 $
 109,675

 (4)

 $
 1,922,615

 Robert Mahan

 2023

 $
 175,000

 $
 —

 $
 115,000

 (5)

 $
 —

 $
 290,000

 Chief
 Financial Officer

 Greene

 2023

 $
 200,000

 $
 25,000

 $
 33,900

 $
 30,409

 (6)

 $
 289,309

 Executive
 Vice President

 2022

 $
 200,000

 $
 25,000

 $
 41,100

 $
 20,419

 (6)

 $
 286,519

 _____________________________

 (1)
We have concluded that the aggregate amount of perquisites and other personal benefits paid in 2023 and 2022 to either Mr. Horowitz,
Mr. Mahan or Mr. Greene did not exceed $10,000.

 (2)
Mr. Horowitz received the following cash incentive bonus payments for 2023: (i) an annual discretionary bonus of $175,000 and (ii) incentive
bonus compensation of $130,000 pursuant to his employment agreement (see "Employment Agreements – Termination of Employment
Agreement and Change in Control Arrangements" below). Mr. Horowitz received for 2022 an annual discretionary bonus of $175,000.

 (3)
The amounts in this column represent the aggregate grant date fair value of restricted stock unit awards granted to the Named Executive
Officers computed in accordance with FASB ASC Topic 718. In accordance with SEC rules, the grant date fair value of an award that is
subject to a performance condition is based on the probable outcome of the performance condition. See Note B[10] to our consolidated
financial statements included in this Annual Report for a discussion of the assumptions made by the Company in determining the grant
date fair value.

 (4)
Includes 401(k) matching funds contributions by the Company and profit sharing under the Company's 401(k) Plan for the benefit of Mr.
Horowitz of $ 43,500 for 2023 and $40,500 for 2022, respectively. Also includes dividends (dividend equivalent rights) earned or paid
upon vesting of restricted stock units owned by Mr. Horowitz in 2023 of $10,000 and $69,175 in 2022.

 (5)
Mr. Mahan became Chief Financial Officer of the Company on December 21, 2022.

 (6)
Includes 401(k) matching funds contributions by the Company and profit sharing under the Company's 401(k) Plan for the benefit of Mr.
Greene of $29,659 for 2023 and $20,419 for 2022. Also includes dividend (dividend equivalent rights) earned upon vesting of
restricted stock units owned by Mr. Greene in 2023 of $750.

 - 39 -

 Narrative
Disclosure to Summary Compensation Table

 Employment
Agreements, Termination of Employment and Change-In-Control Arrangements

 On
March 22, 2022, we entered into a new employment agreement ("Agreement") with Corey M. Horowitz, our Chairman and Chief Executive
Officer, pursuant to which he continues to serve as our Chairman and Chief Executive Officer for a four year term ("Term"),
at an annual base salary of $535,000 subject to increases of 3% per annum during the Term. The Agreement established an annual target
bonus of $175,000 for our Chairman and Chief Executive Officer based upon performance. For the year ended December 31, 2023 and 2022,
our Chairman and Chief Executive Officer received an annual discretionary bonus of $175,000.

 In
addition, pursuant to the Agreement, we granted to our Chairman and Chief Executive Officer, under our 2013 Plan, 600,000 restricted
stock units (the "RSUs", each RSU awarded by us to our officers, directors and consultants represents a contingent right
to receive one share of our common stock) which terms provided for vesting in four tranches, as follows: (1) 175,000 RSUs vested
100,000 RSUs on March 22, 2023 and 75,000 RSUs will vest on March 22,2024,subject to Mr. Horowitz's continued employment by us
through each such vesting date (the "Employment Condition") ("Tranche 1"); (2) 150,000 RSUs shall vest if at
any time during the Term our common stock achieves a closing price for twenty (20) consecutive trading days ("Closing Price")
of a minimum of $3.50 per share (subject to adjustment for stock splits) and the Employment Condition is satisfied through the date such
minimum per share Closing Price is achieved ("Tranche 2"); (3) 150,000 RSUs shall vest if at any time during the Term
our common stock achieves a Closing Price of a minimum of $4.00 per share (subject to adjustment for stock splits) and the Employment
Condition is satisfied through the date such minimum per share Closing Price is achieved ("Tranche 3"); and (4) 125,000
RSUs shall vest if at any time during the Term, our common stock achieves a Closing Price of a minimum of $4.50 per share (subject to
adjustment for stock splits) and the Employment Condition is satisfied through the date such minimum per share Closing Price is achieved
("Tranche 4"). In the event of a Change of Control (as defined), Termination Other Than for Cause (as defined)
or a termination by Mr. Horowitz for Good Reason (as defined) in each case prior to the last day of the Term, the vesting of all RSUs
(Tranches 1, 2, 3 and 4) shall accelerate (and not be subject to any conditions) and all RSUs shall become immediately fully vested.
All RSUs granted by us to our officers, directors or consultants have dividend equivalent rights.

 Under
the terms of the Agreement, so long as Mr. Horowitz continues to serve as an executive officer of the Company, whether pursuant to
the Agreement or otherwise, Mr. Horowitz shall also receive incentive compensation in an amount equal to 5% of our gross royalties
or other payments from Licensing Activities (as defined) (without deduction of legal fees or any other expenses) with respect to our
Remote Power Patent and a 10% net interest (gross royalties and other payments after deduction of all legal fees and litigation
expenses related to licensing, enforcement and sale activities, but in no event shall he receive less than 6.25% of the gross
recovery) of our royalties and other payments relating to Licensing Activities with respect to patents other than our Remote Power
Patent (including all of our existing patent portfolios and our investment in ILiAD) (collectively, the "Incentive
Compensation"). During the year ended December 31, 2023 and December 31, 2022, Mr. Horowitz earned Incentive Compensation of
$130,000 and $-0-, respectively.

 - 40 -

 The
Incentive Compensation shall continue to be paid to Mr. Horowitz for the life of each of our patents with respect to licenses entered
into with third parties during the Term or at any time thereafter, whether he is employed by us or not; provided, that, the employment
of Mr. Horowitz has not been terminated by us "For Cause" (as defined) or terminated by him without "Good Reason"
(as defined). In the event of a merger or sale of substantially all of our assets, we have the option to extinguish the right of Mr.
Horowitz to receive future Incentive Compensation by payment to him of a lump sum payment, in an amount equal to the fair market value
of such future interest as determined by an independent third party expert if the parties do not reach agreement as to such value. In
the event that Mr. Horowitz's employment is terminated by us "Other Than For Cause" (as defined) or by him for "Good
Reason" (as defined), Mr. Horowitz shall also be entitled to (i) a lump sum severance payment of 12 months base salary, (ii) a
pro-rated portion of the $175,000 target bonus provided bonus criteria have been satisfied on a pro-rated basis through the calendar
quarter in which the termination occurs and (iii) accelerated vesting of all unvested options, RSUs or other awards.

 In
connection with the Agreement, Mr. Horowitz has also agreed not to compete with us as follows: (i) during the Term and for a period of
12 months thereafter if his employment is terminated "Other Than For Cause" (as defined) provided he is paid his 12 month
base salary severance amount and (ii) for a period of two years from the termination date, if terminated "For Cause" by us
or "Without Good Reason" by Mr. Horowitz.

Greene serves as our Executive Vice President and Secretary on an at-will basis at an annual base salary of $200,000. Mr. Greene received
a discretionary annual bonus of $25,000 for each of 2023 and 2022. On January 8, 2024, Mr. Greene was granted 15,000 RSUs under the 2022
Plan, 50% of such RSUs vested on the one year anniversary of the date of grant (January 8, 2025) and 50% of such RSUs vested on
the two year anniversary of the grant (January 8, 2026). On January 24, 2023, Mr. Greene was granted 15,000 RSUs under the 2022
Plan, 50% of such RSUs vested on the one year anniversary of the date of grant (January 24, 2023) and 50% of such RSUs vested on the
two year anniversary of the grant (January 24, 2024).

Mahan serves as our Chief Financial Officer since December 21, 2022 on a consulting basis at an annual compensation of $175,000. On September
8, 2023, Mr. Mahan was granted 50,000 RSUs under the 2022 Plan, 50% of such RSUs vest on the one year anniversary of the grant (September
8, 2024) and 50% of the RSUs vest on the two year anniversary date of grant (September 8, 2025).

 - 41 -

 Profit
Sharing 401(k) Plan

 We
offer all employees who have completed a year of service (as defined) participation in a 401(k) retirement savings plan, which provides
a tax-advantaged method of saving for retirement. We expensed matching contributions and profit sharing of $73,159 and $78,194 under
the 401(k) plan for the years ended December 31, 2023 and 2022, respectively.

Compensation

 In
2023, we compensated each non-management director of our Company by granting to each such outside director 15,000 RSUs. The RSUs vested
in equal amounts of 3,750 RSUs on each of March 15, 2023, June 15, 2023, September 15, 2023 and December 15, 2023. In addition, we pay
our non-management directors cash director fees of $40,000 per annum ($10,000 per quarter). Non-management directors also receive additional
cash compensation on an annual basis for serving on the following Board committees: The Audit Committee Chairperson receives $7,500 and
members receive $5,000; the Chairperson and members of each of the Compensation Committee and Nominating and Corporate Governance Committee
receive annual fees of $3,750 and $2,500, respectively.

 The
following table sets forth the compensation awarded to, earned by or paid to all persons who served as members of our Board of Directors
(other than our Named Executive Officers) during the year ended December 31, 2023. No director who is also a Named Executive Officer
received any compensation for services as a director in 2023.

 Name

 Fees
 earned or paid in cash ($) (1)

 Stock
 Awards

 ($) (2) (3)

 All
 other compensation ($) (4)

 Total

 ($)

 Pearlman

 $50,000

 $33,750

 $ 1,125

 $
 84,875

 Niv
 Harizman

 $46,250

 $33,750

 $ 1,125

 $
 81,125

 Hoffman

 $48,750

 $33,750

 $ 1,125

 $
 83,625

 ___________________________

 (1)
 Represents
 directors' fees payable in cash to each non-management director of $10,000 per quarter
 ($40,000 per annum) for 2023 plus additional cash fees for serving on Board committees as
 disclosed above.

 (2)
 The
 amounts included in this column represent the grant date fair value of restricted stock unit
 awards (RSUs) granted to directors, computed in accordance with FASB ASC Topic 718. For a
 discussion of valuation assumptions see Note B[10] to our consolidated financial statements
 included in this Annual Report. The 15,000 RSUs granted to each non-management director vested
 on a quarterly basis beginning March 15, 2023. Each RSU represents a contingent right to
 receive one share of common stock.

 (3)
 As
 of December 31, 2023, no stock options were owned by any of the above listed directors.

 (4)
 dividends (dividend equivalent rights) earned upon vesting of RSUs in 2023.

 - 42 -

 Outstanding
Equity Awards at December 31, 2023

 The
following table sets forth information relating to outstanding equity awards consisting of unvested restricted stock units for each Named
Executive Officer as of December 31, 2023 (there were no outstanding stock options):

 Option
 Awards

 Stock
 Awards

 Name

 Number of Securities

 Underlying Unexercised

 Options

 Option
 Exercise

 Price ($)

 Option
 Expiration

 Date

 incentive plan awards: Number of unearned shares, units or other rights that have not vested

 incentive plan awards: Market value of unearned shares, units or other rights that have not
 vested (1) ($)

 Exercisable

 Unexercisable

 Corey

 Chairman
 and CEO

 —

 —

 —

 —

 500,000 (2)

 $1,090,000

 M. Mahan

Chief Financial Officer

 —

 —

 —

 —

 50,000 (3)

 $ 109,000

 Greene

 Executive Vice President

 —

 —

 —

 —

 22,500 (4)

 $ 49,050

 ________________________________

 (1)
 In
 accordance with SEC rules, market value is based on $2.18 per share representing the closing
 price of our common stock on the last trading day of the year.

 (2)
 Represents
 500,000 unvested restricted stock units, the terms of the vesting of such restricted stock
 units are disclosed on page 40 under "Employment Agreements - Termination of Employment
 and Change-In-Control Arrangements."

 (3)
 Represents
 50,000 unvested restricted stock units, of which 25,000 restricted stock units vest on September
 8, 2024 and 25,000 restricted stock units vest on September 8, 2025, subject to Mr. Mahan's
 continued engagement.

 (4)
 Represents
 22,500 unvested restricted stock units, of which (i) 7,500 restricted stock units vested
 on January 18, 2024, (ii) 7,500 restricted stock units vested on January 24, 2024, and (iii)
 7,500 restricted stock units will vest on January 24, 2025, subject to Mr. Greene's
 continued employment.

 Policies
and Procedures for Equity Grant Awards/ Material Non- Public Information

 Under
our equity award policy, the Compensation Committee generally grants equity awards to our executive officers, directors on an annual
basis with the exception of our Chairman and Chief Executive Officer who typically receives awards at the time of renewal of his employment
agreement. For a number of years, we have awarded restricted stock units to our executive officers, directors and consultants and have
not awarded stock options. In the event that the Compensation Committee were to make awards of stock options in the future, it will take
into account material non-public information when determining the timing and terms of such option awards by generally making such awards
on an annual basis on a pre-determined schedule. We do not time the disclosure of material non-public information for the purpose of
affecting executive compensation.

 - 43 -

 ITEM 12.
 SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 The
following table sets forth information regarding the beneficial ownership of our common stock as of February 15, 2024 for (i) each of
our directors, (ii) each of our executive officers, (iii) each person known by us to be the beneficial owner of more than 5% of our outstanding
shares of common stock, and (iv) all of our executive officers and directors as a group.

 NAME
 AND ADDRESS

 OF BENEFICIAL OWNER

 AMOUNT
 AND NATURE
 OF BENEFICIAL

 OWNERSHIP (1)(2)

 PERCENTAGE

 OF COMMON STOCK BENEFICIALLY OWNED (2)

 Executive
 Officers and Directors:

 Corey
 M. Horowitz (3)

 6,895,942

 29.2%

 CMH
 Capital Management Corp. (4)

 2,291,372

 9.7%

 Niv
 Harizman (5)

 305,985

 1.3%

 Pearlman (6)

 132,059

 *

 E. Greene (7)

 103,597

 *

 Hoffman (8)

 94,311

 *

 Mahan (9)

 —

 —

 All
 officers and directors as a group

 (6 Persons)

 7,531,894

 32%

 5%
 Stockholders:

 Steven
 D. Heinemann (10)

 1,941,696

 8.2%

 Goose
 Hill Capital LLC (11)

 1,356,563

 5.8%

 Clayton
 Partners LLC (12)

 1,435,200

 6.1%

 _____________________________________

 *Less
than 1%.

 (1)
 Unless
 otherwise indicated, we believe that all persons named in the above table have sole voting
 and investment power with respect to all shares of our common stock beneficially owned by
 them. Unless otherwise indicated the address for each listed beneficial owner is c/o Network-1
 Technologies, Inc., 65 Locust Avenue, Third Floor, New Canaan, Connecticut 06840.

 - 44 -

 (2)
 A
 person is deemed to be the beneficial owner of shares of common stock that can be acquired
 by such person within 60 days from February 15, 2024 upon the exercise of
stock options, vesting of restricted stock units or the conversion of other convertible securities within such 60 day period. Each beneficial
owner's percentage ownership is determined by assuming that all stock options and restricted stock units held by such person (but not
those held by any other person) and which are exercisable or vest within 60 days from February 15, 2024 have been exercised or vested. Assumes
a base of 23,552,564 shares of our common stock outstanding as of February 15, 2024.

 (3)
 (i) 4,007,559 shares of common stock owned by Mr. Horowitz, (ii) 75,000 shares of common
 stock subject to restricted stock units that vest within 60 days of February 15, 2024 (iii) 2,157,097
 shares of common stock held by CMH Capital Management Corp., an entity solely owned by Mr.
 Horowitz, (iv) 134,275 shares of common stock owned by the CMH Capital Management Corp. Profit
 Sharing Plan, of which Mr. Horowitz is the trustee, (v) 67,470 shares of common stock
 owned by Donna Slavitt, the wife of Mr. Horowitz, (vi) an aggregate of 452,250 shares of
 common stock held by two trusts and a custodian account for the benefit of Mr. Horowitz's
 three children, and (vii) 2,291 shares of common stock held by Horowitz Partners, a general
 partnership of which Mr. Horowitz is a partner. Does not include 425,000 restricted stock
 units owned by Mr. Horowitz that do not vest within 60 days of February 15,2024.

 (4)
 2,157,097 shares of common stock owned by CMH Capital Management Corp. and 134,275 shares
 of common stock owned by CMH Capital Management Corp. Profit Sharing Plan. Corey
 M. Horowitz, by virtue of being the sole officer, director and shareholder of CMH Capital
 Management Corp. and the trustee of the CMH Capital Management Corp. Profit Sharing Plan,
 has the sole power to vote and dispose of the shares of common stock owned by CMH Capital
 Management Corp. and the CMH Capital Management Corp. Profit Sharing Plan.

 (5)
 (i) 302,235 shares of common stock and (ii) 3,750 shares of common stock subject to restricted
 stock units that vest within 60 days of February 15, 2024. Does not include 11,250 shares
 of common stock subject to restricted stock units owned by Mr. Harizman that do not vest
 within 60 days from February 15, 2024.

 (6)
 (i) 128,309 shares of common stock and (ii) 3,750 shares of common stock subject to restricted
 stock units that vest within 60 days of February 15,2024. Does not include 11,250 shares
 of common stock subject to restricted stock units owned by Mr. Pearlman that do not vest
 within 60 days from February 15, 2024.

 (7)
 103,597 shares of common stock. Does not include 22,500 shares of common stock
 subject to restricted stock units owned by Mr. Greene that do not vest within 60 days from
 February 15, 2024.

 (8)
 (i) 90,561 shares of common stock and (ii) 3,750 shares of common stock subject to restricted
 stock units that vest within 60 days of February 15, 2024. Does not include 11,250 shares
 of common stock subject to restricted stock units owned by Ms. Hoffman that do not vest within
 60 days from February 15, 2024.

 - 45 -

 (9)
 Does
 not include 50,000 shares of common stock subject to restricted stock units owned by Mr.
 Mahan that do not vest within 60 days of February 15, 2024.

 (10)
 585,133 shares of common stock owned by Mr. Heinemann and 1,356,563 shares of common
 stock owned by Goose Hill Capital LLC. Goose Hill Capital LLC is a limited liability company
 of which Mr. Heinemann is the sole member. Mr. Heinemann, by virtue of being the sole
 member of Goose Hill Capital LLC, has the sole power to vote and dispose of the shares of
 common stock owned by Goose Hill Capital LLC. The aforementioned beneficial ownership is
 based upon Amendment No. 11 to Schedule 13G filed by Mr. Heinemann with the SEC on January
 29, 2024. The address for Mr. Heinemann is c/o Goose Hill Capital, LLC, 12378
 Indian Road, North Palm Beach, Florida 33408.

 (11)
 1,356,563 shares of common stock. Steven D. Heinemann, by virtue of being the sole member
 of Goose Hill Capital LLC, has the sole power to vote and dispose of the shares of common
 stock owned by Goose Hill Capital LLC. The aforementioned beneficial ownership is based upon
 Amendment No. 11 to Schedule 13G filed by Mr. Heinemann with the SEC on January 29,
 2024. The address for Goose Hill Capital LLC is 12378 Indian Road, North Palm Beach, Florida
 33408.

 (12)
 1,435,200 shares of common stock owned by Clayton Partners LLC based upon Amendment No.1
 Schedule 13G filed by Clayton Partners LLC with the SEC on February 13, 2024. The address
 for Clayton Partners is 3160 College Avenue, Suite 203, Berkeley, California 94705.

 ITEM 13.
 CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

 Review,
Approval or Ratification of Transactions with Related Persons

 The
Audit Committee has responsibility for reviewing and approving related-persons transactions in accordance with its charter. A related
person is any executive officer, director, nominee for director or more than 5% stockholder of the Company, including immediate family
members, and any entity owned or controlled by such persons. In addition, pursuant to our Code of Ethics, all of our officers, directors
and employees are to avoid conflicts of interest and to refrain from taking part or exercising influence in any transaction in which
such party's personal interest may conflict with the best interest of the Company. Except for provisions of the Audit Committee
Charter, there are no written procedures governing review of related-persons transactions.

Independence

 Three
of our five directors, Emanuel Pearlman, Niv Harizman and Allison Hoffman, are considered independent directors in compliance with the
standard of independence in Section 803A(2) of the NYSE American LLC Company Guide.

 - 46 -

 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 Audit
Fees

 Marcum
LLP, our independent registered public accounting firm as of October 11, 2022, billed us aggregate fees of $156,000 for the year ended
December 31, 2023, for the audit of our annual financial statements, review of our financial statements included in our Form 10-Qs
and for other services in connection with statutory or regulatory filings. Marcum LLP billed us aggregate fees of $103,200 for the year
ended December 31, 2022 for the audit of our financial statements for 2022, review of our financial statements included in our Form 10-Q
for the three months ended September 30, 2022 and for other services in connection with statutory and regulatory filings. Certain
assets of our prior independent registered public accounting firm, Friedman LLP ("Friedman"), were acquired by Marcum LLP
effective September 1, 2022. Friedman, our independent registered public accounting firm until October 11, 2022, billed us
aggregate fees of $48,832 for the year ended December 31, 2022 for review of our financial statements included in our Form 10-Qs for
the three months ended March 31, 2022 and June 30,2022 and for other services in connection with statutory and regulatory filings.

 Tax
Fees and Other Fees

 Marcum
LLP provided various tax and compliance services for which it billed us $2,500 and $30,320 for the years ended December 31, 2023 and
2022. Friedman LLP provided various tax and compliance services for which it billed us $3,271 for the year ended December 31, 2022 which
included preparation of our tax returns. Marcum LLP and Friedman LLP did not render any other professional services other than those
discussed above for 2023 and 2022.

 Audit
Committee Pre-Approval Policies and Procedures

 Our
audit committee charter provides that our audit committee must comply with SEC rules to maintain auditor independence as set forth in
Rule 2-01(c)(7)(i) of Regulation S-X. The Audit Committee has a policy to pre-approve all audit and permissible non-audit services to
be provided by our independent registered public accounting firm. All the services above were approved in advance by our Board of Directors.

 - 47 -

to Consolidated Financial Statements

 Page

 Report of Independent Registered Public Accounting Firm (PCAOB Firm ID 688)

 Consolidated Balance Sheets as of December 31, 2023 and 2022

 Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2023 and 2022

 Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2023 and 2022

 Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022

 Notes to Consolidated Financial Statements

 - 48 -

 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To
the Shareholders and Board of Directors of

Network-1 Technologies, Inc.

 Opinion
on the Financial Statements

 We
have audited the accompanying consolidated balance sheets of Network-1 Technologies, Inc. (the "Company") as of December
31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, stockholders' equity and cash flows
for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial
statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period
ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

 Basis
for Opinion

 These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
 we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.

 Critical
Audit Matters

 Critical
audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be
communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and
(2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

 /s/ Marcum
 llp

 Marcum
llp

 We have
served as the Company's auditor since 2014.

 New
York, New York
March 8, 2024

 CONSOLIDATED
BALANCE SHEETS

 31,

 2023

 2022

 ASSETS:

 CURRENT
 ASSETS:

 Cash
 and cash equivalents

 $
 16,896,000

 $
 13,448,000

 Marketable
 securities, at fair value

 28,571,000

 34,991,000

 Prepaid
 taxes

 —

 177,000

 Other
 current assets

 206,000

 348,000

 Total
 Current Assets

 45,673,000

 48,964,000

 OTHER ASSETS:

 Patents,
 net of accumulated amortization

 1,326,000

 1,592,000

 investment

 5,249,000

 7,252,000

 leases right of use asset

 16,000

 161,000

 Security
 deposits

 13,000

 —

 Total
 Other Assets

 6,604,000

 9,005,000

 TOTAL
 ASSETS

 $
 52,277,000

 $
 57,969,000

 LIABILITIES
 AND STOCKHOLDERS' EQUITY:

 CURRENT
 LIABILITIES:

 Accounts
 payable

 $
 125,000

 $
 507,000

 taxes payable

 —

 115,000

 Accrued
 payroll

 378,000

 317,000

 Other
 accrued expenses

 297,000

 587,000

 lease obligations, current

 79,000

 Total
 Current Liabilities

 823,000

 1,605,000

 LONG TERM
 LIABILITIES:

 tax liability

 762,000

 1,161,000

 lease obligation, non-current

 —

 94,000

 TOTAL
 LIABILITIES

 $
 1,585,000

 $
 2,860,000

 COMMITMENTS
 AND CONTINGENCIES (See Note I)

 STOCKHOLDERS'
 EQUITY

 Preferred
 stock, $ 0.01 par value; authorized 10,000,000 shares;
 none issued and outstanding at December 31, 2023 and December 31, 2022

 $
 —

 $
 —

 Common
 stock, $ 0.01 par value; authorized 50,000,000 shares;
 23,553,908 and 23,863,639 shares issued and outstanding at December 31,
 2023 and December 31, 2022, respectively

 235,000

 239,000

 Additional
 paid-in capital

 67,446,000

 66,939,000

 deficit

 ( 16,989,000
)

 ( 12,055,000
)

 other comprehensive loss

 —

 ( 14,000
)

 TOTAL
 STOCKHOLDERS' EQUITY

 50,692,000

 55,109,000

 TOTAL
 LIABILITIES AND STOCKHOLDERS' EQUITY

 $
 52,277,000

 $
 57,969,000

 The
accompanying notes are an integral part of the consolidated financial statements

 CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

 Years
 Ended
 December 31,

 2023

 2022

 REVENUE

 $
 2,601,000

 $
 —

 OPERATING
 EXPENSES:

 Costs of revenue

 874,000

 —

 Professional
 fees and related costs

 807,000

 809,000

 General
 and administrative

 2,889,000

 2,778,000

 Amortization
 of patents

 266,000

 316,000

 TOTAL
 OPERATING EXPENSES

 4,836,000

 3,903,000

 OPERATING
 LOSS

 ( 2,235,000
)

 ( 3,903,000
)

 OTHER INCOME

 Interest
 and dividend income, net

 1,868,000

 1,020,000

 Gain
 on conversion of note

 —

 271,000

 Gain
 on equity method investment

 —

 3,883,000

 Net
 realized and unrealized gain (loss) on marketable securities

 525,000

 ( 1,351,000
)

 Total
 other income, net

 2,393,000

 3,823,000

 INCOME (LOSS)
 BEFORE INCOME TAXES AND SHARE OF

 NET LOSSES
 OF EQUITY METHOD INVESTEE

 158,000

 ( 80,000
)

 INCOME TAXES
 PROVISION:

 Current

 11,000

 —

 taxes, net

 ( 399,000
)

 Total
 income taxes (benefit) expense

 ( 388,000
)

 INCOME
 (LOSS) BEFORE SHARE OF NET LOSSES OF
 EQUITY
 METHOD INVESTEE:

 546,000

 ( 687,000
)

 SHARE
 OF NET LOSSES OF EQUITY METHOD INVESTEE

 ( 2,003,000
)

 ( 1,639,000
)

 NET LOSS

 $
)

 $
)

 Net Loss Per Share:

 Basic

 $
 ( 0.06
)

 $
 ( 0.10
)

 Diluted

 $
 ( 0.06
)

 $
 ( 0.10
)

 Weighted average common shares outstanding:

 Basic

 23,791,287

 23,825,917

 Diluted

 23,791,287

 23,825,917

 Cash dividends declared per share

 $
 0.10

 $
 0.10

 NET
 LOSS

 $
)

 $
)

 OTHER COMPREHENSIVE
 INCOME (LOSS)

 Net
 unrealized holding gain (loss) on corporate bonds and notes arising during the year, net of tax

 14,000

 ( 2,000
)

 COMPREHENSIVE
 LOSS

 $
 ( 1,443,000
)

 $
 ( 2,328,000
)

 The
accompanying notes are an integral part of the consolidated financial statements

 CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

 Total Stockholders' Equity

 Common
 Stock

 Additional
 Paid-in Capital

 Shares

 Amount

 Additional
 Paid-in

Capital

 Deficit

 Other Comprehensive Income (Loss)

 Total

 Stockholders'

 Balance –
 January 1, 2022

 23,792,212

 $
 238,000

 $
 66,361,000

 $
 ( 6,428,000
)

 $
 ( 12,000
)

 $
 60,159,000

 Dividends
 and dividend equivalents declared

 —

 —

 —

 ( 2,418,000
)

 —

 ( 2,418,000
)

 Stock-based
 compensation

 —

 —

 585,000

 —

 —

 585,000

 Vesting
 of restricted stock units

 182,500

 2,000

 ( 2,000
)

 —

 —

 —

 Cashless exercise of stock
 options

 500,000

 5,000

 ( 5,000
)

 —

 —

 —

 Value of shares delivered
 to pay exercise price and withholding taxes

 ( 382,543
)

 ( 3,000
)

 —

 ( 352,000
)

 —

 ( 355,000
)

 Treasury
 stock purchased and retired

 ( 228,530
)

 ( 3,000
)

 —

 ( 531,000
)

 —

 ( 534,000
)

 Net unrealized
 loss on corporate bonds and notes

 —

 —

 —

 —

 ( 2,000
)

 ( 2,000
)

 Net
 loss

 —

 —

 —

)

 —

)

 Balance
 – December 31, 2022

 23,863,639

 $
 239,000

 $
 66,939,000

 $
 ( 12,055,000
)

 $
 ( 14,000
)

 $
 55,109,000

 Dividends
 and dividend equivalents declared

 —

 —

 —

 ( 2,433,000
)

 —

 ( 2,433,000
)

 Stock-based
 compensation

 —

 —

 508,000

 —

 —

 508,000

 Vesting
 of restricted stock units

 157,500

 1,000

 ( 1,000
)

 —

 —

 —

 Value
 of shares delivered to pay withholding taxes

 ( 39,099
)

 —

 —

 ( 83,000
)

 —

 ( 83,000
)

 Treasury
 stock purchased and retired

 ( 428,132
)

 ( 5,000
)

 —

 ( 961,000
)

 —

 ( 966,000
)

 Realized
 gain on corporate bonds

 —

 —

 —

 —

 14,000

 14,000

 Net
 loss

 —

 —

 —

)

 —

)

 Balance
 – December 31, 2023

 23,553,908

 $
 235,000

 $
 67,446,000

 $
 ( 16,989,000
)

 —

 $
 50,692,000

 The
accompanying notes are an integral part of the consolidated financial statements

 CONSOLIDATED
STATEMENTS OF CASH FLOWS

 Years
 Ended

 31,

 2023

 2022

 CASH FLOWS
 FROM OPERATING ACTIVITIES:

 Net
 loss

 $
)

 $
)

 Adjustments
 to reconcile net loss to net cash
provided by (used in) operating activities:

 Amortization of patents

 266,000

 316,000

 Stock-based
 compensation

 508,000

 585,000

 Loss allocated
 from equity investment

 2,003,000

 1,639,000

 tax (benefit) expense

 ( 399,000
)

 Amortization
 of right of use asset, net

 65,000

 43,000

 Gain on
 equity method investment

 —

 ( 3,883,000
)

 Accrued
 interest on convertible note

 —

 ( 86,000
)

 Gain on
 conversion of note

 —

 ( 271,000
)

 Unrealized
 (gain) loss on marketable securities

 ( 103,000
)

 880,000

 Changes
 in operating assets and liabilities:

 Other
 current assets

 142,000

 ( 208,000
)

 Prepaid
 taxes

 177,000

 ( 167,000
)

 Accounts
 payable

 ( 382,000
)

 48,000

 taxes payable

 ( 115,000
)

 ( 2,837,000
)

 Security
 deposit

 ( 13,000
)

 13,000

 lease obligations

 ( 70,000
)

 ( 31,000
)

 Accrued
 expenses

 ( 291,000
)

 242,000

 NET CASH
 PROVIDED BY (USED IN) OPERATING ACTIVITIES

 331,000

 ( 5,436,000
)

 CASH FLOWS
 FROM INVESTING ACTIVITIES:

 Sales
 of marketable securities

 53,521,000

 13,156,000

 Purchases
 of marketable securities

 ( 46,984,000
)

 ( 33,903,000
)

 Development of patents

 —

 ( 524,000
)

 Investment

 —

 ( 1,000,000
)

 NET CASH
 PROVIDED BY (USED IN) INVESTING ACTIVITIES

 6,537,000

 ( 22,271,000
)

 CASH FLOWS
 FROM FINANCING ACTIVITIES:

 Cash dividends
 paid

 ( 2,371,000
)

 ( 2,453,000
)

 Value of shares delivered
 to fund withholding taxes

 ( 83,000
)

 ( 355,000
)

 Repurchases
 of common stock, inclusive of commissions

 ( 966,000
)

 ( 534,000
)

 NET CASH
 USED IN FINANCING ACTIVITIES

 ( 3,420,000
)

 ( 3,342,000
)

 NET
 (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

 3,448,000

 ( 31,049,000
)

 CASH AND
 CASH EQUIVALENTS, beginning of year

 13,448,000

 44,497,000

 CASH AND
 CASH EQUIVALENTS, end of year

 $
 16,896,000

 $
 13,448,000

 SUPPLEMENTAL
 DISCLOSURE OF CASH FLOW INFORMATION:

 Cash
 paid during the years for:

 Interest

 $
 —

 $
 —

 taxes

 $
 65,000

 $
 3,004,000

 NON-CASH
 FINANCING ACTIVITY

 Accrued
 dividend rights on restricted stock units

 $
 65,000

 $
 37,000

 Modification
 of right-of-use asset

 $
 80,000

 $
 204,000

 Conversion
 of note receivable

 $
 —

 $
 1,086,000

 The
accompanying notes are an integral part of the consolidated financial statements

 Note
A – Business

 Network-1
Technologies, Inc. (the "Company") is engaged in the development, licensing and protection of its intellectual property
assets. The Company presently owns one hundred ( 100)
U.S. patents, fifty-four ( 54)
of such patents have expired, and fifteen ( 15)
foreign patents related to (i) the 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) the M2M/IoT
patent portfolio (the "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, and automobiles; (iii) the 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) the 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) the remote power patent (the "Remote Power
Patent") covering 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.

 The
Company's current strategy includes continuing to pursue licensing opportunities for its intellectual property assets. In addition,
the Company reviews opportunities to acquire or license additional intellectual property as well as other strategic alternatives. The
Company's 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 the Company has achieved with respect to its Remote Power Patent and
Mirror Worlds Patent Portfolio. In addition, the Company may also enter into strategic relationships with third parties to develop, commercialize,
license or otherwise monetize their intellectual property.

 The
Company has made equity investments totaling $ 7,000,000 in ILiAD Biotechnologies, LLC ("ILiAD"), a clinical stage biotechnology
company (see Note H hereof).

 Note
of Significant Accounting Policies

 [1]
 Principles
 of Consolidation

 The
Company's consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the
United States of America ("U.S. GAAP"). The accompanying financial statements include the accounts of the Company and its
wholly-owned subsidiaries, Mirror Worlds Technologies, LLC and HFT Solutions, LLC. All intercompany transactions and balances are eliminated
in consolidation.

 [2]
 Use
 of Estimates and Assumptions

 The
preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated
financial statements, and the reported amounts of revenues and expenses during the reporting periods. The estimates and assumptions
made in the preparation of the Company's consolidated financial statements primarily include costs related to the Company's
assertion of litigation, the valuation of the Company's patent portfolios, stock-based compensation, the recoverability of deferred
tax assets and the carrying value of the Company's equity method investments. Actual results could be materially different from
those estimates, upon which the carrying values were based.

 Certain
amounts recorded to reflect the Company's share of the income or losses of its equity method investee, accounted for under the
equity method, are based on estimates and the unaudited results of operations of the equity method investee, and may require adjustment
in the future when the audit is complete. The Company reports its share of the results of its equity method investee on a one quarter
lag basis.

 Note

 [3]
 Cash
 and Cash Equivalents

 The
Company maintains cash deposits in high quality financial institutions insured by the Federal Deposit Insurance Corporation ("FDIC").
Accounts at each institution are insured by the FDIC up to $ 250,000. At December 31, 2023 and 2022, the Company had $ 2,403,000 and $ 1,715,000,
respectively, in excess of the FDIC insured limit. As of December 31, 2023 and 2022, the Company had cash equivalents of $ 15,327,000
and $ 5,316,000, respectively, that were not insured by the FDIC.

 The
Company considers all highly liquid short-term investments, including certificates of deposit and money market funds, which are purchased
with an original maturity of three months or less to be cash equivalents.

 [4]
 Marketable
 Securities

 The
Company's marketable securities are comprised of certificates of deposit with an original maturity greater than three months from
date of purchase, government securities and fixed income mutual funds. (see Note G hereof). At December 31, 2023 and December
31, 2022, included in marketable securities, the Company had aggregate certificates of deposit of $ 6,077,000 and $ 2,976,000, respectively.
The Company's marketable securities are measured at fair value and are accounted for in accordance with ASU 2016-01. Unrealized
holding gains and losses on certificates of deposit, government securities, and fixed income mutual funds are recorded in net realized
and unrealized gain (loss) from investments on the consolidated statements of operations and comprehensive (loss). Unrealized holding
gains and losses, net of the related tax effect, on corporate bonds and notes are excluded from earnings and are reported as a separate
component of stockholders' equity until realized. Dividend and interest income are recognized when earned. Realized gains and losses
are included in earnings and are derived using the specific identification method for determining the cost of the marketable securities.

 [5]
 Recognition

 Under
ASC 606, revenue is recognized when the Company completes the licensing of its intellectual property to its licensees or enters into
a litigation settlement agreement involving any of its expired patents. With respect to licensing its intellectual property or such litigation
settlement agreement, revenue is recognized in an amount that reflects the consideration the Company expects to be entitled to in exchange
for licensing its intellectual property or in settlement of the litigation.

 The
Company determines revenue recognition through the following steps:

 •
 identification
 of the license agreement or litigation settlement agreement;

 •
 identification
 of the performance obligations in the license agreement or litigation settlement agreement;

 •
 determination
 of the consideration for the license or settlement;

 •
 allocation
 of the transaction price to the performance obligations in the contract; and

 •
 recognition
 of revenue when the Company satisfies its performance obligations.

disaggregated by source is as follows:

 Schedule of disaggregation of revenue

 Years
 Ended December 31,

 2023

 2022

 Litigation
 Settlements

 $
 2,601,000

 $
 —

 Total

 $
 2,601,000

 $
 —

 See
Note K[4] hereof for further discussion of revenue recognized.

 Note

from the Company's patent licensing and enforcement business is typically generated from negotiated license agreements or settlement
agreements with respect to any of the Company's expired patents. The timing and amount of revenue recognized from each licensee
or such settlement agreement depends upon a variety of factors, including the terms of each agreement and the nature of the obligations
of the parties. These agreements may include, but not be limited to, elements related to past infringement liabilities, non-refundable
upfront license fees, and ongoing royalties on licensed products sold by the licensee. Generally, in the event of settlement of litigation
related to the Company's assertion of patent infringement involving its intellectual property, defendants will either pay (i) a
non-refundable lump sum payment for a non-exclusive fully-paid license, (ii) a non-refundable lump sum payment (license initiation fee)
together with an ongoing obligation to pay quarterly or monthly royalties to the Company for the life of the licensed patent, or (iii)
a lump sum settlement payment with respect to litigation involving the Company's expired patents.

 Fully-paid
licenses provide for a non-refundable up-front payment for which the Company has no future obligations or performance requirements, revenue
is generally recognized when the Company has obtained the signed license agreement, all performance obligations have been substantially
performed, amounts are fixed and determinable, and collectability is reasonably assured. Revenue from fully-paid licenses may consist
of one or more installments. The timing and amount of revenue recognized from each licensee depends upon a number of factors including
the specific terms of each agreement and the nature of the deliverables and obligations.

 [6]
 Method Investments

method investments are equity securities in entities the Company does not control but over which it has the ability to exercise significant
influence. These investments are accounted for under the equity method of accounting in accordance with ASC 323, Investments —
Equity Method and Joint Ventures (see Note H hereof). Equity method investments are measured at cost minus impairment, if any, plus
or minus the Company's share of an investee's income or loss. The Company's proportionate share of the income or loss
from equity method investments is recognized on a one-quarter lag. When the Company's carrying value in an equity method investment
is reduced to zero, no further losses are recorded in the Company's financial statements unless the Company guaranteed obligations
of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will
not record its share of such income until it equals the amount of its share of losses not previously recognized.

 Upon
a sale of an equity method investment by the Company, the difference between sales proceeds and the carrying amount of the equity investment
is recognized in profit or loss. Upon the issuance of securities in an observable price transaction, the Company will account for the
share issuance by the equity method investee as if the Company had sold a proportionate share of its investment in the observable price
transaction. The Company will record a gain or loss associated with the dilution of its investment to reflect third party investments
in the investee and will increase or decrease its basis in the equity method investee accordingly. The gain or loss is recorded within
other income or expense in the Company's consolidated statements of operations and comprehensive loss.

 The
Company performed an assessment to determine significance of the equity method investee under the investment, asset and income tests
utilizing the 20% threshold. The Company determined that the equity method investee satisfied the income test and has included summarized
financial data of the equity method investee in Note H hereof.

 [7]
 Patents

 The
Company owns patents that relate to various technologies. The Company capitalizes the costs associated with acquisition, registration
and maintenance of its acquired patents and amortizes these assets over their remaining useful lives on a straight-line basis. Any further
payments made to maintain or develop the patents would be capitalized and amortized over the balance of the useful life for the patents.

 Note

 [8]
 Costs
 of Revenue and Related Costs

 The
Company includes in costs of revenue for the year ended December 31, 2023 and 2022 contingent legal fees payable to patent litigation
counsel, any other contractual payments to third parties related to net proceeds from monetization of patents (see Note I[1] hereof)
and incentive bonus compensation payable to its Chairman and Chief Executive Officer (see Note J[1] hereof).

 [9]
 Taxes

 The
Company accounts for income taxes in accordance with Financial Accounting Standards Board (FASB) ASC Topic 740, Income Taxes (ASC 740),
which requires the Company to use the assets and liability method of accounting for income taxes. Under the assets and liability method,
deferred income taxes are recognized for the tax consequences of temporary (timing) differences by applying enacted statutory tax rates
applicable to future years to differences between financial statement carrying amounts and the tax bases of existing assets and liabilities
and operating loss and tax credit carry forwards. Under this accounting standard, the effect on deferred income taxes of a change in
tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely
than not that some portion, or all, of a deferred tax asset will not be realized.

 ASC
740-10, Accounting for Uncertainty in Income Taxes, defines uncertainty in income taxes and the evaluation of a tax position as
a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination,
including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure
a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements.
A tax position is measured at the largest amount of benefit that is greater than 50 percent likelihood of being realized upon ultimate
settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first
subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria
should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. The Company had no
uncertain tax positions as of December 31, 2023 and 2022.

 U.S.
federal, state and local income tax returns prior to 2020 are not subject to examination by any applicable tax authorities, except that
tax authorities could challenge returns (only under certain circumstances) for earlier years to the extent they generated loss carry-forwards
that are available for those future years.

 [10]
 Stock-Based
 Compensation

 The
Company accounts for its stock-based compensation awards to employees and directors in accordance with FASB ASC Topic 718, Compensation
 Stock Compensation ("ASC 718"). ASC 718 requires all stock-based compensation to employees,
including grants of employee stock options and restricted stock units, to be recognized in the consolidated statements of operations
and comprehensive income (loss) based on their grant date fair values.

 Compensation
expense related to awards to employees is recognized on a straight-line basis based on the grant date fair value over the associated
service period of the award, which is generally the vesting term. The fair value of restricted stock units is determined based on the number of shares underlying
the grant and either the quoted market price of the Company's common stock on the date of grant for time-based and performance-based
awards, or the fair value on the date of grant using the Monte Carlo Simulation model for market-based awards.

 [11]
 Earnings
 Per Share

 The
Company reports earnings per share in accordance with U.S. GAAP, which requires presentation of basic and diluted earnings per share
in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution
and is computed by dividing income available to common shareholders by the weighted average common shares outstanding during the period.
Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts, such as warrants
and options to purchase common stock were exercised and shares were issued pursuant to outstanding restricted stock units. Common stock
equivalents having an anti-dilutive effect on earnings per share are excluded from the calculation of diluted earnings per share.

 Note

 [12]
 Fair
 Value Measurements

 ASC
Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid
to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction
between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification
based on observable and unobservable inputs when measuring fair value.

 There
are three levels of inputs that may be used to measure fair value:

 Level
1: Observable inputs such as quoted prices (unadjusted) in an active market for identical assets or liabilities.

 Level
2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets
or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

 Level
3: Unobservable inputs that are supported by little or no market activity; therefore, the inputs are developed by the Company using estimates
and assumptions that the Company expects a market participant would use, including pricing models, discounted cash flow methodologies,
or similar techniques.

 The
carrying value of the Company's financial instruments, including cash and cash equivalents and accounts payable, approximates fair
value because of the short-term nature of these financial instruments.

 The
Company's marketable securities are classified within Level 1 because they are valued using quoted market prices in an active market.

 The
Company's equity method investment is measured on a non-recurring basis and is classified within Level 2 as it is valued using
an observable price transaction for similar assets in a market that is not active (see Note B[6] and Note H hereof).

 [13]
 Carrying
 Value, Recoverability and Impairment of Long-Lived Assets

 An
impairment loss shall be recognized only if the carrying amount of a long-lived asset (asset group) is not recoverable and exceeds its
fair value. The carrying amount of a long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash
flows expected to result from the use and eventual disposition of the asset (asset group). That assessment shall be based on the carrying
amount of the asset (asset group) at the date it is tested for recoverability. An impairment loss shall be measured as the amount by
which the carrying amount of a long-lived asset (asset group) exceeds its fair value. If an impairment loss is recognized, the adjusted
carrying amount of a long-lived asset shall be its new cost basis. For a depreciable long-lived asset, the new cost basis shall be depreciated
(amortized) over the remaining useful life of that asset. Restoration of a previously recognized impairment loss is prohibited. At December
31, 2023 and 2022, there was no impairment to the Company's patents and equity investment.

 The
Company's equity investment in ILiAD is evaluated on a non-recurring basis for impairment, when and if a triggering event occurs.

 Note

 [14]
 Leases

 Under
ASC 842, the Company determines if an arrangement is a lease at inception. Right-of-Use ("ROU") assets and related lease
obligations are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this
purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As the Company's lease does
not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date
in determining the present value of lease payments. The Company's determined incremental borrowing rate is a hypothetical rate based
on its understanding of what the Company's credit rating would be. The ROU asset also includes any lease payments made prior to commencement
and is recorded net of any lease incentives received and net of the deferred rent balance on the date of implementation. The Company's
lease terms may include options to extend or terminate the lease and the initial term will be adjusted when it is reasonably certain
that the Company will exercise such options. As permitted under ASC 842, the Company has elected to not recognize ROU assets and related
lease obligations for leases with initial terms of twelve months or less.

 [15]
 Dividend
 Policy

 Cash
dividends are recorded when declared by the Company's Board of Directors. Common stock dividends are charged against retained earnings
when declared or paid (see Note O hereof).

 [16]
 New Accounting
Standards

 Current
Expected Credit Loss

 In
June 2016, the FASB issued ASU 2016-13 "Financial Instruments-Credit Losses-Measurement of Credit Losses on Financial
Instruments". This guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected
credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.
The guidance applies to loans, accounts receivable, trade receivables and other financial assets measured at amortized cost, loan commitments,
held-to-maturity debt securities and beneficial interests in securitized financial assets, but the effect on the Company is projected
to be limited to held-to-maturity debt securities. The guidance was effective for the year beginning on January 1, 2023, including
interim periods within the year. The adoption of this standard did not have a material impact on the Company's consolidated financial
statements.

 Segments

 In
November 2023, the FAS B issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable
Segment Disclosures. ASU 2023-07 updates reportable segment disclosure requirements primarily through enhanced disclosures about
significant segment expenses. ASU 2023-07 is effective for all entities for fiscal years beginning after December 15, 2023, and for interim
periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively
to all prior periods presented in the financial statements. The Company is currently evaluating ASU 2023-07 to determine
its impact on the Company's disclosures, however, the Company does not expect ASU
2023-07 to have a material impact.

 Note
C – Patents

 The
Company's intangible assets at December 31, 2023 include patents with estimated remaining economic useful lives ranging from 10
to 16 years. For all periods presented, all the Company's patents were subject to amortization. The gross carrying amounts and
accumulated amortization related to acquired intangible assets as of December 31, 2023 and 2022 were as follows:

 Schedule of patent

 2023

 2022

 Gross
 carrying amount

 $
 8,473,000

 $
 8,473,000

 amortization

 ( 7,147,000
)

 ( 6,881,000
)

 Patents,
 net

 $
 1,326,000

 $
 1,592,000

 Amortization
expense for the years ended December 31, 2023 and 2022 was $ 266,000 and $ 316,000, respectively. Future amortization of current intangible
assets, net is as follows:

 Schedule of future amortization of current intangible

 For
 the years ended December 31,

 2024

 $
 120,000

 2025

 120,000

 2026

 120,000

 2027

 119,000

 2028

 116,000

 Thereafter

 731,000

 Total

 $
 1,326,000

 The
expiration dates for the M2M/IoT Portfolio range from September 2033 to May 2034. The expiration dates within the Company's HFT
Patent Portfolio range from October 31, 2039 to November 1, 2039. All of the patents within the Company's Mirror Worlds Patent
Portfolio, Cox Portfolio and the Remote Power Patent have expired.

 Note
D – Income (Loss) Per Share

 Basic
Income (Loss) per share is calculated by dividing the net income (loss) by the weighted average number of outstanding common shares during
the period. Diluted per share data included the dilutive effects of restricted stock units. Potentially dilutive shares of 587,500 and
 625,000 at December 31, 2023 and 2022, respectively, consist of restricted stock units. However, as the Company generated a net
loss in 2023 and 2022, all potentially dilutive shares were not reflected in diluted net loss per share because the impact of such instruments
was anti-dilutive. Computations of basic and diluted weighted average common shares outstanding are as follows:

 Schedule of earnings per share

 2023

 2022

 Weighted-average
 common shares outstanding – basic

 23,791,287

 23,825,917

 Dilutive
 effect of restricted stock units

 —

 —

 Weighted-average
 common shares outstanding – diluted

 23,791,287

 23,825,917

 Restricted
 stock units excluded from the computation of diluted income per share because the effect of inclusion would have been anti-dilutive

 587,500

 625,000

 Note
E – Income Taxes

 Significant
components of the income taxes were as follows for the years ended December 31, 2023 and 2022.

 Schedule of components of the income taxes

 2023

 2022

 Current

 State
 and local

 $
 —

 $
 —

 Federal

 11,000

 —

 Total
 Current Tax Expense (Benefit)

 $
 11,000

 $
 —

 State
 and local

 ( 39,000
)

 56,000

 Federal

 ( 360,000
)

 551,000

 Total
 Deferred Tax Expense

 ( 399,000
)

 Total
 Income Taxes

 $
 ( 388,000
)

 $

 Significant
components of deferred tax assets (liability) as of December 31, 2023 and 2022 consisted of the following:

 Schedule of components of deferred tax assets and liability

 2023

 2022

 Deferred tax assets (liability):

 Net
 operating loss carryforward

 $
 804,000

 $
 477,000

 Capital
 loss carryforward

 47,000

 331,000

 Stock options
 and RSU

 27,000

 30,000

 Tax credit
 carryforward

 148,000

 —

 Other

 182,000

 —

 Total
 deferred tax assets

 1,208,000

 838,000

 Valuation
 allowance

 ( 1,208,000
)

 ( 838,000
)

 tax assets, net of valuation allowance

 $
 —

 $
 —

 2023

 2022

 Deferred Tax Liability (1)

 ( 762,000
)

 ( 1,161,000
)

 Total deferred tax liability

 $
 ( 762,000
)

 $
 ( 1,161,000
)

 _________________________

 (1)
 Deferred tax liability primarily as a result of a temporary difference related to the Company's equity method investment.

 As
of December 31, 2023, the Company's estimated aggregate total net operating loss carryforwards (NOLs) were $ 3,364,000 for U.S.
federal tax purposes with an indefinite life. At December 31, 2023, the Company had deferred tax assets of $ 1,201,000, which were
offset by a valuation allowance of $ 1,201,000 as it was determined that it is more likely than not that the deferred tax assets would
not be realized. At December 31, 2023, the Company had a deferred tax liability position of $ 762,000.

 Note
E – Income Taxes (continued)

 The
reconciliation between the taxes as shown and the amount that would be computed by applying the statutory federal income tax rate to
the net income before income taxes is as follows:

 Schedule of reconciliation of income tax

 Years
 Ended

 31,

 2023

 2022

 tax - statutory rate

 21.00
 %

 21.00
 %

 Permanent
 differences

 ( 0.19)
 %

 ( 8.4)
 %

 Change in
 valuation allowance

 ( 1.98)
 %

 ( 48.79)
 %

 State

 2.46
 %

 1.28
 %

 Other

 —

 ( 0.43)
 %

 Total

 21.29
 %

 ( 35.34)
 %

 On
August 16, 2022, the Inflation Reduction Act of 2022 (the "IR Act") was signed into federal law. The IR Act provides for,
among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and
certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed
on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally
1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise
tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value
of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of Treasury
has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.
The excise tax applies in cases where the total value of the stock repurchased during the taxable year exceeds $1,000,000. As the Company
did not meet this threshold in 2023, the excise tax is not applicable for the 2023 tax year (see Note M hereof).

 The
personal holding company ("PHC") rules under the Internal Revenue Code impose a 20% tax on a PHC's undistributed personal
holding company income ("UPHCI"), which means, in general, taxable income subject to certain adjustments. For a corporation
to be classified as a PHC, it must satisfy two tests: (i) that more than 50% in value of its outstanding shares must be owned directly
or indirectly by five or fewer individuals at any time during the second half of the year (after applying constructive ownership rules
to attribute stock owned by entities to their beneficial owners and among certain family members and other related parties) (the "Ownership
Test") and (ii) at least 60% of its adjusted ordinary gross income for a taxable year consists of dividends, interest, royalties,
annuities and rents (the "Income Test"). During the second half of 2023, based on available information concerning the Company's
shareholder ownership, the Company did not satisfy the Ownership Test. In addition, the Company did not satisfy the Income Test in 2023.
Thus, the Company was not a PHC for 2023. However, the Company may subsequently be determined to be a PHC in 2024 or in future years
if it satisfies both the Ownership Test and the Income Test. If the Company were to become a PHC in 2024 or any future year, it would
be subject to an additional 20% tax on its UPHCI. In such an event, the Company may issue a special cash dividend to its shareholders
in an amount equal to the UPHCI rather than incur the additional 20% tax.

 N ote
 F – Stockholders' Equity

 The
Company adopted a new 2022 Stock Incentive Plan, (the "2022 Plan"), approved by its Board of Directors on July 25, 2022 and
its stockholders on September 20, 2022. The 2022 Plan provides for the grant of any or all of the following types of awards: (a) stock
options, (b) restricted stock, (c) deferred stock, (d) stock appreciation rights, and (e) other stock-based awards including restricted
stock units. Awards under the 2022 Plan may be granted singly, in combination, or in tandem. Subject to standard anti-dilution adjustments
as provided, the 2022 Plan provides for an aggregate of 2,300,000 shares of the Company's common stock to be available for distribution.
The Company's Compensation Committee generally has the authority to administer the 2022 Plan, determine participants who will be
granted awards, the size and types of awards, the terms and conditions of awards and the form and content of the award agreements representing
awards. Awards under the 2022 Plan may be granted to employees, directors and consultants of the Company and its subsidiaries. As of
December 31, 2023, there were 2,180,000 shares of common stock available for issuance under the 2022 Plan.

 Note
F – Stockholders' equity (continued)

 As
of December 31, 2023, there were 75,000 shares of common stock subject to outstanding awards under the 2022 Plan and 512,500 shares of
common stock subject to outstanding awards under the Company 2013 Stock Incentive Plan ("2013 Plan"). The Company discontinued
issuing awards under its 2013 Plan as a result of the adoption of the 2022 Plan.

 Restricted
Stock Units

 A
summary of restricted stock units granted during the year ended December 31, 2023 and December 31, 2022 is as follows (each restricted
stock unit represents the contingent right to receive one share of the Company's common stock):

 Schedule of stock option activity

 2023

 2022

 Number of Shares

 Weighted-Average Grant
 Date Fair Value

 Number of Shares

 Weighted-Average Grant
 Date Fair Value

 Balance of restricted stock units outstanding at beginning of year

 625,000

 $
 1.87

 12,500

 $
 3.36

 Grants of restricted stock units

 120,000

 2.27

 670,000

 1.92

 Vested restricted stock units

 ( 157,500
)

 ( 2.43
)

 ( 57,500
)

 ( 2.73
)

 Balance of restricted stock units outstanding at end of year

 587,500

 $
 1.81

 625,000

 $
 1.87

 Restricted
stock unit compensation expense was $ 508,000 for the year ended December 31, 2023 and $ 585,000 for the year ended December 31, 2022.

 The
Company has an aggregate of $ 508,000 of unrecognized restricted stock unit compensation expense as of December 31, 2023 to be expensed
over a weighted average period of approximately 2 years.

 The
fair value of restricted stock units is determined based on the number of shares granted and the quoted market price of the Company's
common stock on the date of grant for time-based and performance-based awards and fair value at grant date using the Monte Carlo simulation
model for market-based awards(see Note B[10] hereof). The key inputs into the Monte Carlo simulation used to value the restricted stock
units was a risk free rate of 2.39 %, expected term of 4 years, expected volatility of 40 % and a stock price of $ 2.47 (see Note B[10] hereof).

 All
of the Company's issued restricted stock units have dividend equivalent rights. As of December 31, 2023 and 2022, there was $ 99,000
and $ 37,000 accrued for dividend equivalent rights which were included in other accrued expenses.

 Note
 G – Marketable Securities

 Marketable
securities as of December 31, 2023 and 2022 were composed of:

 Schedule of marketable securities

 31, 2023

 Cost

 Basis

 Gross

 Unrealized

 Gains

 Gross

 Unrealized

 Losses

 Fair Value

 Certificates
 of Deposit

 $
 6,112,000

 $
 —

 $
 ( 35,000
)

 $
 6,077,000

 Government
 securities

 14,701,000

 127,000

 ( 10,000
)

 14,818,000

 Fixed
 income mutual funds

 7,585,000

 91,000

 —

 7,676,000

 Total
 marketable securities

 $
 28,398,000

 $
 218,000

 $
 ( 45,000
)

 $
 28,571,000

 31, 2022

 Cost

 Basis

 Gross
 Unrealized Gains

 Gross
 Unrealized Losses

 Fair
 Value

 Government
 securities

 $
 20,781,000

 $
 67,000

 $
 —

 $
 20,848,000

 Fixed
 income mutual funds

 11,904,000

 —

 915,000

 10,989,000

 Certificates of Deposit

 3,019,500

 —

 ( 43,000
)

 2,976,000

 Corporate
 bonds and notes

 192,000

 —

 ( 14,000
)

 178,000

 Total
 marketable securities

 $
 35,896,000

 $
 67,000

 $
 ( 972,000
)

 $
 34,991,000

 Note
H – Equity Investment

the period December 2018 through August 2022, the Company made aggregate investments of $ 7,000,000 in ILiAD, a privately held clinical
stage biotechnology company dedicated to the prevention and treatment of human disease caused by Bordetella pertussis. ILiAD is focused
on validating its proprietary intranasal vaccine, BPZE1, for the prevention of Pertussis (whooping cough). At December 31, 2023, the
Company 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). In connection with its investment,
the Company's Chairman and Chief Executive Officer obtained a seat on ILiAD's Board of Managers and receives the same compensation
for service on the Board of Managers as other non-management Board members.

 On
August 24, 2022, ILiAD completed a private financing of $ 42,836,000 of its Class D units, of which a multi-national pharmaceutical company
invested $ 30,000,000 (the "Financing"). As part of the Financing, the Company invested $ 1,000,000.This private financing
represented an observable price transaction in accordance with ASC 323 and resulted in dilution in the Company's ownership in the
ILiAD. In accordance with ASC 323-10-40-1, the Company accounted for the dilution as if it had sold a portion of its investment
and therefore recorded an unrealized gain of $ 3,883,000 and a corresponding increase in the carrying value of its investment in ILiAD.
The Company determined the new carrying value of its equity investment using an observable transaction price since the Company determined
the securities owned by the Company were not materially different than the securities sold by ILiAD in the Financing. The unrealized
gain is reflected in the Company's consolidated statements of operations and comprehensive loss for the year ended December 31,
2022.

 In
addition, as part of the Financing, the Company converted its convertible note in the principal amount of $ 1,000,000 plus accrued interest
of $ 86,000, in accordance with its terms, into equity of ILiAD and has accounted for this investment under the equity method of accounting.
The Company recognized a gain on conversion of $ 271,000 which was recognized in its consolidated statements of operations and comprehensive
income loss for the year ended December 31, 2022.

 For
the years ended December 31, 2023 and 2022, the Company recorded an allocated net loss from its equity method investment in ILiAD of
 $ 2,003,000 and $ 1,639,000, respectively.

 Note
H – Equity Investment (continued)

 The
difference between the Company's share of equity in ILiAD's net assets and the purchase price of the investment is due to
an excess amount paid over the book value of the investment of $ 5,515,000 which is accounted for as equity method goodwill.

 The
Company performed an assessment to determine significance of its equity investee using the investment, asset and income tests. The Company
concluded the income test threshold was met for the year ended December 31, 2023. The following table provides certain summarized financial
information for the Company's equity method investee for the periods presented and has been compiled from the equity investee's
financial statement, reported on one quarter lag. As a result of the Company receiving audited financial statements from ILiAD for its
year ended December 31, 2022 (See Note B[2] hereof), the table below includes an additional comprehensive loss of $ 621,000. For the year
ended December 31, 2023, with respect to such additional comprehensive loss of ILiAD, the Company recorded an additional allocated net
loss of $ 42,000.

 Schedule of equity method investments

 Twelve
 Months Ended

September 30,

 2023

 2022

 Loss
 from continuing operations

 $
 24,272,000

 $
 15,246,000

 Comprehensive
 loss

 $
 29,532,000

 $
 17,913,000

 Note
 I – Commitments and Contingencies

 [1]
 Legal
 fees:

 Russ,
August & Kabat provides legal services to the Company with respect to its pending patent litigation filed in May 2017 against Meta
Platforms, Inc. ( formerly, Facebook, Inc.) in the U.S. District Court for the Southern District of New York relating to several patents
within the Company's Mirror Worlds Patent Portfolio (see Note K[2] hereof). The terms of the Company's agreement with Russ,
August & Kabat provide for cash payments on a monthly basis subject to a cap plus a contingency fee ranging between 15 % and 24 % of
the net recovery (after deduction of expenses) depending on the stage of the proceeding in which the result (settlement or judgment)
is achieved. The Company is responsible for all expenses incurred with respect to this litigation.

 Russ,
August & Kabat also provides legal services to the Company with respect to its pending patent litigations filed in April 2014 and
December 2014 against Google Inc. and YouTube, LLC in the U.S. District Court for the Southern District of New York relating to certain
patents within the Cox Patent Portfolio acquired by the Company from Dr. Cox (see Note K[1] hereof). The terms of the Company's
agreement with Russ, August & Kabat provide for legal fees on a full contingency basis ranging from 15 % to 30 % of the net recovery
(after deduction of expenses) depending on the stage of the proceeding in which the result (settlement or judgment) is achieved. The
Company is responsible for all expenses incurred with respect to this litigation.

 Dovel
& Luner, LLP ("Dovel") provided and continues to provide legal services to the Company with respect to its patent litigation
related to the Remote Power Patent (See Note K[4] hereof). The terms of the Company's agreement with Dovel provides,among other
things, for legal fees on a contingency basis ranging from 15 % to 40 % of the net recovery (after deduction of expenses where applicable)
depending on the stage of the proceeding in which the result (settlement or judgement) is achieved. The Company is responsible for a
portion of the expenses incurred with respect to this litigation. During the year ended December 31, 2023, the Company incurred $ 744,000
of such contingent fees and $ 88,000 of these fees are payable and reported in accrued expenses as of December 31, 2023.

 Note
 I – Commitments and Contingencies (Continued)

 [2]
 Patent
 Acquisitions:

 On
March 25, 2022, the Company completed the acquisition of a new patent portfolio (HFT Patent Portfolio) currently consisting of nine U.S.
patents and two pending U.S. patents 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. The Company paid the seller $ 500,000 at the closing and has an obligation
to pay the seller an additional $ 500,000 in cash and $ 375,000 of the Company's common stock (up to a maximum of 375,000 shares)
upon achieving certain milestones with respect to the HFT Patent Portfolio. The Company also has an additional obligation to pay the
seller 15 % of the first $50 million of net proceeds (after deduction of expenses) generated by the patent portfolio and 17.5 % of net
proceeds greater than $50 million.

 In
connection with the Company's acquisition of its Cox Patent Portfolio, the Company is obligated to pay Dr. Cox 12.5 % of the net
proceeds (after deduction of expenses) generated by the Company from licensing, sale or enforcement of the patent portfolio. As of the
years ended December 31, 2023, and 2022, no expense was incurred with respect to the Cox Patent Portfolio. As of December 31, 2023 and
2022, no amounts were accrued with respect to the Cox Patent Portfolio.

 As
part of the acquisition of the Mirror Worlds Patent Portfolio, the Company also entered into an agreement with Recognition
Interface, LLC ("Recognition") pursuant to which Recognition received from the Company an interest in the net proceeds
realized from the monetization of the Mirror Worlds Patent Portfolio, as follows: Obligated to pay recognition, net proceeds (i) 10 %
of the first $125 million of net proceeds; (ii) 15 %
of the next $125 million of net proceeds; and (iii) 20 %
of any portion of the net proceeds in excess of $250 million. Since entering into the agreement with Recognition in May 2013, the
Company has paid Recognition an aggregate of $ 3,127,000
with respect to such net proceeds interest related to the Mirror Worlds Patent Portfolio. No such payments were made by the Company
to Recognition during the years ended December 31, 2023 and 2022.

 In
connection with the Company's acquisition of its M2M/IoT Patent Portfolio, the Company is obligated to pay M2M 14 % of the first
$100 million of net proceeds (after deduction of expenses) and 5 % of net proceeds greater than $100 million from Monetization Activities
(as defined in the acquisition agreement) related to the M2M/IoT Patent Portfolio. In addition, M2M will be entitled to receive from
the Company $ 250,000 of additional consideration upon the occurrence of certain future events related to the patent portfolio.

 [3]
 Savings
 and investment plan:

 The
Company has a Savings and Investment Plan which allows participants to make contributions by salary reduction pursuant to Section 401(k)
of the Internal Revenue Code of 1986. The Company also may make discretionary annual matching and profit sharing contributions in amounts
determined by the Board of Directors, subject to statutory limits. The 401(k) Plan expense for the years ended December 31, 2023
and 2022 was $ 73,000 and $ 78,000, respectively, all of which was accrued as of December 31, 2023 and 2022 and is recorded within payroll
on the Company's consolidated balance sheets.

 [4]
 Leases:

 The
Company has one operating lease for its principal office space in New Canaan, Connecticut that was to expire on April 30, 2025. On September
29, 2023,the Company exercised its early termination right under the lease to terminate the lease as of December 31, 2023 which was
extended on December 27, 2023 until March 31, 2024.

 There
are no material residual guarantees associated with the Company's lease and there are no significant restrictions or covenants
included in the Company's lease.

 The
calculated incremental borrowing rate was approximately 4.2 %, which was calculated based on the remaining lease term of 3 years as of
May 1, 2022. The remaining lease term as of December 31, 2023 was approximately 3 months.

 There
was no sublease rental income for the year ended December 31, 2023, and the Company is not the lessor in any lease arrangement, and there
were no related-party lease agreements.

 Note
I – Commitments and Contingencies (Continued)

 Right-of-use
lease assets and related lease obligations for the Company's operating leases were recorded in the consolidated balance sheet as
follows:

 Schedule of operating leases obligations

 As
 of

 As
 of

 31, 2023

 31, 2022

 lease right-of-use assets

 $
 16,000

 $
 161,000

 lease obligations – current

 79,000

 lease obligations – non-current

 —

 94,000

 Total
 lease obligations

 $

 $
 173,000

 The
table below presents certain information related to the Company's lease costs for the year ended December 31, 2023 and 2022:

 Schedule of leases cost

 For
 the Year Ended
 December 31,

 2023

 2022

 lease cost

 $
 68,000

 $
 48,000

 Short-term
 lease cost

 —

 82,000

 Total
 lease cost

 $
 68,000

 $
 130,000

 Future
lease payments included in the measurement of lease liabilities on the consolidated balance sheet as of December 31, 2023, were as follows:

 Schedule of future minimum leases payments

 Leases

 2024

 $

 2025

 —

 2026

 —

 2027

 —

 2028

 —

 Total
 future minimum lease payments

 Less
 imputed interest

 —

 Total
 operating lease liability

 $

 Note
J – Employment Arrangements and Other Agreements

 [1]
 On March 22, 2022, the Company entered into an employment agreement ("Agreement") with its Chairman and Chief Executive
Officer, pursuant to which he continues to serve as the Company's Chairman and Chief Executive Officer for a four-year term ("Term"),
at an annual base salary of $ 535,000 which shall be increased by 3 % per annum during the Term. The Agreement established an annual target
bonus of $ 175,000 for the Chairman and Chief Executive Officer based upon performance. For each of the years ended December 31,
2023 and 2022, the Chairman and Chief Executive Officer received an annual discretionary bonus of $ 175,000.

 Note
J – Employment Arrangements and Other Agreements (continued)

 In
addition, pursuant to the Agreement, the Company granted the Chairman and Chief Executive Officer, under its 2013 Plan, 600,000 restricted
stock units (the "RSUs", each RSU awarded by the Company to its officers, directors and consultants represents a contingent
right to receive one share of the Company's common stock) which terms provided for vesting in four tranches, as follows: (1)
 175,000 RSUs which vested 100,000 RSUs on March 22, 2023 and 75,000 RSUs will vest on March 22, 2024, subject to the Chairman and Chief
Executive Officer's continued employment by the Company through each such vesting date (the "Employment Condition")
("Tranche 1"); (2) 150,000 RSUs shall vest if at any time during the Term that the Company's common stock achieves
a closing price for twenty (20) consecutive trading days ("Closing Price") of a minimum of $ 3.50 per share (subject to adjustment
for stock splits) and the Employment Condition is satisfied through the date such minimum per share Closing Price is achieved ("Tranche 2");
(3) 150,000 RSUs shall vest if at any time during the Term that the common stock achieves a Closing Price of a minimum of $ 4.00 per share
(subject to adjustment for stock splits) and the Employment Condition is satisfied through the date such minimum per share Closing Price
is achieved ("Tranche 3"); and (4) 125,000 RSUs shall vest if at any time during the Term, that the common stock achieves
a Closing Price of a minimum of $ 4.50 per share (subject to adjustment for stock splits) and the Employment Condition is satisfied through
the date such minimum per share Closing Price is achieved ("Tranche 4"). In the event of a Change of Control (as
defined), Termination Other Than for Cause (as defined) or a termination by the Chairman and Chief Executive Officer for Good Reason
(as defined) in each case prior to the last day of the Term, the vesting of all RSUs (Tranches 1, 2, 3 and 4) shall accelerate (and not
be subject to any conditions) and all RSUs shall become immediately fully vested. All RSUs granted by the Company to its officers, directors
or consultants have dividend equivalent rights.

 Under
the terms of the Agreement, so long as the Chairman and Chief Executive Officer continues to serve as an executive officer of the Company,
whether pursuant to the Agreement or otherwise, the Chairman and Chief Executive Officer shall also receive incentive compensation in
an amount equal to 5% of the Company's gross royalties or other payments from Licensing Activities (as defined) (without deduction
of legal fees or any other expenses) with respect to the Remote Power Patent and a 10% net interest (gross royalties and other payments
after deduction of all legal fees and litigation expenses related to licensing, enforcement and sale activities, but in no event shall
he receive less than 6.25% of the gross recovery) of the Company's royalties and other payments relating to Licensing Activities
with respect to patents other than the Remote Power Patent (including all of the Company's patent portfolios and its investment
in ILiAD) (collectively, the "Incentive Compensation"). During the year ended December 31, 2023 and 2022, the Chairman and
Chief Executive Officer earned Incentive Compensation of $ 130,000 and $- 0 -, respectively.

 The
Incentive Compensation shall continue to be paid to the Chairman and Chief Executive Officer for the life of each of the Company's
patents with respect to licenses entered into with third parties during the term of his employment or at any time thereafter, whether
he is employed by the Company or not; provided, that, the employment of the Chairman and Chief Executive Officer has not been terminated
by the Company "For Cause" (as defined) or terminated by him without "Good Reason" (as defined). In the event
of a merger or sale of substantially all of the Company's assets, the Company has the option to extinguish the right of the Chairman
and Chief Executive Officer to receive future Incentive Compensation by payment to him of a lump sum payment, in an amount equal to the
fair market value of such future interest as determined by an independent third party expert if the parties do not reach agreement as
to such value. In the event that the Chairman and Chief Executive Officer's employment is terminated by the Company "Other
Than For Cause" (as defined) or by him for "Good Reason" (as defined), the Chairman and Chief Executive Officer shall
also be entitled to (i) a lump sum severance payment of 12 months base salary, (ii) a pro-rated portion of the $ 175,000 target bonus
provided bonus criteria have been satisfied on a pro-rated basis through the calendar quarter in which the termination occurs and (iii)
accelerated vesting of all unvested stock options, RSUs or other awards.

 In
connection with the Agreement, the Chairman and Chief Executive Officer has also agreed not to compete with the Company as follows: (i)
during the Term of the Agreement and for a period of 12 months thereafter if his employment is terminated "Other Than For Cause"
(as defined) provided he is paid his 12 months base salary severance amount and (ii) for a period of two years from the termination date,
if terminated "For Cause" by the Company or "Without Good Reason" by the Chairman and Chief Executive Officer.

 Note
J – Employment Arrangements and Other Agreements (continued)

 [2]
 The Company's Executive Vice President serves on an at-will basis at an annual base salary of $200,000. The Executive Vice
President received a discretionary annual bonus of $ 25,000 and for each of the years ended December 31, 2023 and 2022, respectively.
On January 8, 2024, the Company's Executive Vice President was granted 15,000 RSUs under the 2022 Plan, 50% of such RSUs vest on
the one year anniversary of the date of grant (January 8, 2025) and 50% of such RSUs vest on the two year anniversary of the grant (January
8, 2026), subject to continued employment. On January 24, 2023, the Company's Executive Vice President was granted 15,000 RSUs
under the 2022 Plan, 50% of such RSUs vested on the one year anniversary of the date of grant (January 24, 2024) and 50% of such RSUs
will vest on the two year anniversary of the date of grant (January 24, 2025), subject to continued employment.

 [3]
 In December 2022, the Company's Board of Directors elected a new Chief Financial Officer who serves on a consulting basis at
an annual base salary of $ 175,000. On September 8, 2023, the Company's Chief Financial Officer was granted 50,000 RSUs under the
2022 Plan, 50% of such RSUs vest on the one year anniversary date of the grant (September 8, 2024) and 50% of such RSUs vest on the two
year anniversary of the date of the grant (September 8, 2025), subject to continued services.

 Note
K – Legal Proceedings

 [1]
 On April 4, 2014 and December 3, 2014, the Company 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 its patents
within its Cox Patent Portfolio acquired from Dr. Cox 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 the Company's patents by making, using, selling
and offering to sell unlicensed systems and related products and services, which include YouTube's Content ID system. 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 at the Patent Trial and Appeal Board (PTAB) and the appeals of PTAB Final Written Decisions to the U.S. Court
of Appeals for the Federal Circuit. Pursuant to a Joint Stipulation and Order Regarding Lifting of Stays, 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. Discovery is complete and the parties have each submitted summary judgment motions which
remain pending. A trial date has not been set.

 [2]
 On May 9, 2017, Mirror Worlds Technologies, LLC, the Company's 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. Patent No. 6,006,227, U.S. Patent No. 7,865,538 and U.S. Patent No. 8,255,439 (among the patents within the Company's Mirror
Worlds Patent Portfolio). The lawsuit alleged that the asserted patents are infringed by Meta's core technologies that enable Meta's
Newsfeed and Timeline features. On August 11, 2018, the Court issued an order granting Meta's motion for summary judgment of non-infringement
and dismissed the case. On August 17, 2018, the Company filed a Notice of Appeal to appeal the summary judgment decision to the U.S.
Court of Appeals for the Federal Circuit. On January 23, 2020, the U.S. Court of Appeals for the Federal Circuit ruled in the Company's
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.

 Note
K – Legal Proceedings (continued)

 On
March 7, 2022, the District Court entered a ruling granting in part and denying in part a motion for summary judgment by Meta. 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. The Company strongly disagrees with the decision on non-infringement and on April 4, 2022, the Company filed an appeal to the
U.S. Court of Appeals for the Federal Circuit, which is pending.

 [3] On
December 15, 2020, the Company
filed a lawsuit against Netgear, Inc. ("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 (the "License Agreement"), with the Company for failure
to make royalty payments, and provide corresponding royalty reports, to the Company based on sales of Netgear's PoE products.
On October 22, 2021, Netgear filed a Demand for Arbitration at the American Arbitration Association (AAA) seeking to arbitrate
certain issues raised in the litigation. The Company objected to jurisdiction at the AAA. On April 22, 2022, Netgear filed a
counterclaim in the N.Y. court action alleging that the Company 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. The case
remained pending in the Supreme Court of the State of New York, County of New York. On August 27, 2023,the
Court granted Netgear's cross- motion for summary judgment and dismissed the Company's claims and also denied the
Company's summary judgment motion with respect to Netgear's counterclaim for breach of the license agreement. The
Company appealed the decision. On February 20, 2024, the Appellate Division, First Department, upheld the lower court ruling
dismissing the Company's complaint and granted the Company's motion to dismiss Netgear's counterclaim for breach
of the most favored license provision concerning two licensees, but said there was a triable issue of fact as to a third licensee.
As of December 31, 2023, the Company did not accrue for any liability related to the counterclaim.

 [4]
 In October and November 2022, the Company initiated nine separate litigation against ten defendants for infringement of its Remote
Power Patent seeking monetary damages based upon reasonable royalties, as follows: (i) On October 6, 2022, the Company 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, the Company 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, the Company 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,
the Company initiated such litigation against Antaira Technologies, LLC and Dahua Technology USA in the United States District Court
for the Central District of California.

the year ended December 31, 2023, the Company entered into settlement agreements with Arista Networks, Inc, Antaira Technologies,
LLC, Panasonic Holdings Corporation, TP-Link USA Corporation, Hikvision USA Inc., Fortinet Inc., and Dahua Technology USA resulting
in aggregate settlements paid and recognized as revenue of $ 2,601,000
and a conditional payment of $ 150,000
which has not yet been recognized as revenue because the terms of the conditional payment have not been satisfied. The above referenced
litigations against Ubiquiti Inc. and Honeywell International Inc. remain pending.

 Note
L – Concentrations

from the Company's Remote Power Patent constituted 100 % of the Company's revenue for the year ended December 31, 2023, of
which four parties constitute an aggregate of 90 % of the Company's revenue for such year. The Company had no revenue for the year
ended December 31, 2022.

 Note
M – Stock Repurchase Program

 On
June 14, 2023, the Company's Board of Directors authorized an extension and increase of the Share Repurchase Program to repurchase
up to $ 5,000,000 of the Company's common stock over the subsequent 24-month period. The common stock may be repurchased from time
to time in open market transactions or privately negotiated transactions in the Company's discretion. The timing and amount of
the shares repurchased are determined by management based on its evaluation of market conditions and other factors. The repurchase program
may be increased, suspended or discontinued at any time.

the year ended December 31, 2023, the Company repurchased an aggregate of 428,132 shares of its common stock pursuant to the Share Repurchase
Program at a cost of approximately $ 955,000 (exclusive of commissions) or an average price per share of $ 2.23.

 Note
M – Stock Repurchase Program (continued)

 Since
inception of the Share Repurchase Program (August 2011) through December 31, 2023, the Company has repurchased an aggregate of 9,532,982
shares of its common stock at a cost of approximately $ 18,713,000 (exclusive of commissions) or an average per share price of $ 1.94.

 On
December 27, 2023, the Company entered into a written trading plan (the "10b5-1 Plan") under Rule 10b5-1 of the Securities
Exchange Act of 1934 (the "Exchange Act"). Adopting a trading plan that satisfies the conditions of Rule 10b5-1 allows a
company to repurchase its shares at times when it might otherwise be prevented from doing so due to self-imposed trading black-outs or
pursuant to insider trading laws. Purchases under the 10b5-1 Plan may be made during the following periods: (1) beginning on January
9,2024 until two trading days after the Company issues a press release announcing its financial results for the year ended December 31,
2023, and (2) beginning on April 1, 2024 until two trading days after the Company issues a press release announcing its financial results
for the quarter ended March 31, 2024. Under the 10b5-1 Plan, the Company's third party broker may purchase up to 1,0000,000 shares
of the Company's 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.

 Note
N – Dividend Policy

 The
Company's dividend policy consists of a semi-annual cash dividend of $ 0.05 per common share ( $ 0.10 per common share annually) which
have been paid in March and September of each year. On March 3, 2023, the 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 September 8, 2023,
the Board of Directors declared a semi-annual 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. The Company's dividend policy undergoes a periodic review by the Board of Directors and is
subject to change at any time depending upon the Company's earnings, financial requirements and other factors.

 Note
O – Subsequent Events

 [1]
 On February 23, 2024, the Company's 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.

 [2]
 On February 23, 2024, the Company's Board of Directors approved the grant of 15,000 RSUs to each of the Company's
three non-management directors. The RSUs vest over a one year period in equal quarterly installments of 3,750 shares of common stock
on each of March 15, 2024, June 15, 2024, September 15, 2024 and December 15, 2024.

 PART
IV

 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 (a)(1) Financial
Statements:

 The
following are included under Item 8 " Financial Statements and Supplementary Data":

 Report
of Independent Registered Public Accounting Firm

 Consolidated
balance sheets as of December 31, 2023 and 2022

 Consolidated
statements of operations and comprehensive loss for the years ended December 31, 2023 and 2022

 Consolidated
statements of changes in stockholders' equity for the years ended December 31, 2023 and 2022

 Consolidated
statements of cash flows for the years ended December 31, 2023 and 2022

 Notes
to consolidated financial statements

 (a)(2) Financial
Statements Schedules:

 Financial
statement schedules are omitted because the information is not applicable.

 (a)(3) Exhibits:

 3(i)(a)
 Certificate of Incorporation, as amended. Previously filed as Exhibit 3.1 to the Company's Registration Statement on Form SB-2 (Registration No. 333-59617), declared effective by the SEC on November 12, 1998 (the "1998 Registration Statement"), and incorporated herein by reference.

 3(i)(b)
 Certificate of Amendment to the Certificate of Incorporation dated November 27, 2001. Previously filed as Exhibit 3.1.1 to the Company's Registration Statement on Form S-3 (Registration No. 333-81344) declared effective by the SEC on February 12, 2002, and incorporated herein by reference (the "February 2002 Form S-3")

 3(i)(c)
 Certificate of Amendment to the Certificate of Incorporation dated October 9, 2013. Previously filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed on October 10, 2013, and incorporated herein by reference.

 3(ii)
 Second Amended and Restated By-laws. Previously filed as Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2016 filed on November 14, 2016 and incorporated herein by reference.

 4.1
 Description of Common Stock. Previously filed under the header "Common Stock" under the section captioned "Description of Securities" in the Company's Registration Statement on Form S-1A (File No. 333-190719) filed on September 30, 2014 and incorporated herein by reference.

 10.2 +
 Employment Agreement, dated July 14, 2016, between the Company and Corey M. Horowitz, Chairman and Chief Executive Officer. Previously filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on July 19, 2016 and incorporated herein by reference.

 - 48 -

 10.3 +
 Employment Agreement, dated March 22, 2022, between the Company and Corey M. Horowitz, Chairman and Chief Executive Officer. Previously filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on March 28, 2022 and incorporated herein by reference.

 10.4 +
 2013 Stock Incentive Plan. Previously filed as Appendix B to the Company's Schedule 14A (Proxy Statement) filed on August 20, 2013 and incorporated herein by reference.

 10.5 +
 2022 Stock Incentive Plan Previously filed as Exhibit A to the Company's Schedule 14A (Proxy Statement) filed on July 27, 2022 and incorporated herein by reference.

 10.6
 Form of Indemnification Agreement for directors and officers. Previously filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 13, 2019 and incorporated herein by reference.

 Code of Ethics. Previously filed as Exhibit 14 to the Company's Annual Report on Form 10-KSB for the year ended December 31, 2004 filed on April 14, 2004 and incorporated herein by reference.

 19 *
 Insider Trading Policies and Procedures.

 21.1 *
 List of Subsidiaries of Registrant.

 23.1 *
 Consent of Marcum LLP, independent registered public accounting firm.

 31.1 *
 Section 302 Certification of Chief Executive Officer.

 31.2 *
 Section 302 Certification of Chief Financial Officer.

 32.1 *
 Section 906 Certification of Chief Executive Officer.

 32.2 *
 Section 906 Certification of Chief Financial Officer.

 97. *
 Compensation Recovery Policy

 101* Interactive
data files: *

Instance Document.

Scheme Document.

Calculation Linkbase Document.

Definition Linkbase Document.

Label Linkbase Document.

Presentation Linkbase Document

 _____________________

 * Filed
herewith

 + Management
contract or compensatory plan or arrangement

 - 49 -

 SIGNATURES

 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

 By
 /s/ Corey M. Horowitz

 Corey

 Chairman
and Chief Executive Officer

 March

 Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:

 NAME

 TITLE

 DATE

 /s/
 Corey M. Horowitz

 Corey

 Chairman
 and Chief Executive Officer, Chairman of the Board of Directors (principal executive officer)

 March

 /s/
 Robert Mahan

 Mahan

 Chief
 Financial Officer (principal financial officer and principal accounting officer)

 March

 /s/
 Jonathan Greene

 Greene

 Executive
 Vice President, Secretary and a Director

 March

 /s/
 Emanuel Pearlman

 Pearlman

 March

 /s/
 Niv Harizman

 Niv
 Harizman

 March

 /s/
 Allison Hoffman

 Hoffman

 March

 -50-