NETWORK-1 SECURITY SOLUTIONS, INC.
Filed Pursuant to Rule 424(b)(3)
Registration No. 333-126013
PROSPECTUS SUPPLEMENT NO. 2
(To Prospectus dated December 22, 2005)
This is a prospectus supplement to our prospectus dated December 22, 2005 (the
"Prospectus") relating to the resale from time to time by selling stockholders
of up to 16,886,267 shares of our Common Stock, including shares issuable upon
exercise of outstanding warrants and options. On February 9, 2006, we filed with
the Securities and Exchange Commission a Current Report on Form 8-K. The text of
the Form 8-K is attached to and a part of this supplement.
This prospectus supplement should be read in conjunction with the Prospectus and
the prior prospectus supplement, and may not be delivered or utilized without
the Prospectus and the prior prospectus supplement. This prospectus supplement
is qualified by reference to the Prospectus, except to the extent that the
information provided by this prospectus supplement supersedes the information
contained in the Prospectus.
The securities offered by the Prospectus involve a high degree of risk. You
should carefully consider the "Risk Factors" referenced on page 7 of the
Prospectus in determining whether to purchase the Common Stock.
The date of this prospectus supplement is February 9, 2006.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 7, 2006
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Network-1 Security Solutions, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-14896 11-3027591
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
445 Park Avenue, Suite 1028, New York, New York 10022
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(Address of principal executive offices)
Registrant's telephone number, including area code: (212) 829-5700
N/A
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of
the following provisions (SEE General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 8.01 OTHER EVENTS
On February 9, 2006 the Company issued a press release regarding the
results of a case management proceeding pertaining to its patent infringement
litigation against D-Link Systems Inc. and its corporate parent, D-Link
Corporation of Taiwan, involving the Company's remote power patent (U.S. Patent
No. 6,218,930). The text of the press release issued by the Company is furnished
as Exhibit 99.1 and is incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
Exhibit Number Description
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99.1 Press Release, dated February 9, 2006
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NETWORK-1 SECURITY SOLUTIONS, INC.
Dated: February 9, 2006 By: /s/ Corey M. Horowitz
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Name: Corey M. Horowitz
Title: Chairman & Chief Executive
Officer
3
EXHIBIT 99.1
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FOR IMMEDIATE RELEASE
Corey M. Horowitz, Chairman and CEO
Network-1 Security Solutions, Inc.
(212) 829-5770
COURT SETS MARKMAN HEARING AND TRIAL DATE FOR '930 PATENT INFRINGEMENT
LITIGATION AGAINST D-LINK SYSTEMS AND D-LINK CORPORATION
COURT ALSO DENIES ALL MOTIONS TO DISMISS OR TRANSFER THE CASE
NEW YORK, FEBRUARY 9, 2006 - Network-1 Security Solutions, Inc. today
announced that, at a case management proceeding on February. 7, 2006, in
Network-1's patent infringement litigation against D-Link Systems Inc. and its
corporate parent D-Link Corporation, Inc. of Taiwan involving United States
Patent No. 6,218,930 in the United States District Court for the Eastern
District of Texas, Tyler Division, Judge Leonard Davis set a Markman hearing on
claim construction for September 19, 2006 and set a trial date of March 7, 2007.
In addition, at the proceeding, all of the outstanding motions to dismiss
or transfer the case made by the D-Link defendants were denied by Judge Davis
and each is expected to file answers with the Court within 20 days. As a result
of these denials, Network-1's patent infringement case against D-Link Systems
and D-Link Corporation will proceed in the Eastern District of Texas, Tyler
Division in a manner consistent with the timetable and rules established by the
Court.
"The D-Link defendants have spent the last six months filing numerous
motions in an unsuccessful attempt to avoid dealing with the merits of our
case," commented Corey M. Horowitz, Chairman and CEO of Network-1. "I am pleased
that after these rulings the litigation will proceed on a timely basis."
ABOUT NETWORK-1 SECURITY SOLUTIONS, INC.
Network-1 Security Solutions, Inc. is engaged in the acquisition, development,
licensing and protection of its intellectual property and proprietary
technologies. As part of its business strategy it is offering licenses to third
parties who Network-1 believes could benefit from the technologies covered by
its patents. In February 2004, the Company initiated its licensing efforts
relating to its patent (U.S. Patent No. 6,218,930) covering the remote delivery
of power over Ethernet cables.
THIS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE "SAFE
HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
THESE STATEMENTS ADDRESS FUTURE EVENTS AND CONDITIONS CONCERNING THE COMPANY'S
BUSINESS PLANS. SUCH STATEMENTS ARE SUBJECT TO A NUMBER OF RISK FACTORS AND
UNCERTAINTIES AS DISCLOSED IN THE COMPANY'S QUARTERLY REPORT ON FORM 10-QSB FOR
THE THREE MONTHS ENDED SEPTEMBER 30, 2005 INCLUDING, AMONG OTHERS, THE ABILITY
OF NETWORK-1 TO OBTAIN LICENSE AGREEMENTS FROM THIRD PARTIES FOR ITS PATENT
PORTFOLIO, UNCERTAINTY OF PATENT LITIGATION, THE COMPANY'S ABILITY TO ACHIEVE
REVENUES AND PROFITS FROM ITS PATENT PORTFOLIO, THE COMPANY'S ABILITY TO RAISE
CAPITAL WHEN NEEDED, FUTURE ECONOMIC CONDITIONS AND TECHNOLOGY CHANGES AND
LEGISLATIVE, REGULATORY AND COMPETITIVE DEVELOPMENTS. EXCEPT AS OTHERWISE
REQUIRED TO BE DISCLOSED IN PERIODIC REPORTS, THE COMPANY EXPRESSLY DISCLAIMS
ANY FUTURE OBLIGATION OR UNDERTAKING TO UPDATE OR REVISE ANY FORWARD-LOOKING
STATEMENT CONTAINED HEREIN.