Press Release

Network-1 Announces Completion of Private 0ffering

NEW YORK, December 22, 2004--Network-1 Security Solutions, Inc. (OTC: NSSI:OB) today announced that it closed a private offering of $2,085,00 of its securities consisting of shares of Common Stock and Common Stock Purchase Warrants.

The private offering was led by Emigrant Capital, a private equity fund that invests in growth companies, recapitalizations and buyouts. The fund is an affiliate of Emigrant Savings Bank, of the largest privately owned bank in the country. Several other institutions and individuals, including existing Network-1 shareholders, also purchased shares in the private offering.  Network-1 believes the proceeds of the private offering will be sufficient to cover the capital needs of Network-1 for at least the next 12-18 months. 

The Investors purchased 2,085,000 shares of Network-1 Common Stock at a purchase price of $1.00 per share.  The Investors also received three year Warrants to purchase an aggregate of 1,563,750 shares of Common Stock consisting of (i) Warrants to purchase 1,042,500 shares of Common Stock at an exercise price of $1.25 per share and (ii) Warrants to purchase 521,250 shares of Common Stock at an exercise price equal to $1.75 per share.

Under the terms of the Securities Purchase Agreement, Network-1 is obligated to file a registration statement with the Securities and Exchange Commission no later than June 21, 2005, registering for resale the Common Stock and the shares of Common Stock underlying the Warrants purchased in the private offering.  The Securities Purchase Agreement also provides that Network-1 may sell additional Common Stock and Warrants on the same terms for sixty days following this closing. 

Network-1 also announced today that it had extended for twelve months the expiration date of its Series D Preferred Common Stock Purchase Warrants, which were originally scheduled to expire on December 22, 2004, and which now will expire on December 22, 2005.  There are presently outstanding 1,275,469 Series D Warrants each of which are exercisable for one share of Common Stock at exercise prices ranging from $1.00 to $1.11 per share. 

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. The Company owns six patents covering various telecommunications and data networking 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 the Remote Power Patent. The Remote Power Patent relates to, among other things, several key technologies underlying the IEEE 802.3af Power Over Ethernet (PoE) standard that was approved on June 13, 2003 by the Institute of Electrical and Electronic Engineers (IEEE) (the Standard). The Standard governs the delivery of power over Ethernet cables in order to remotely power network connected devices, including wireless switches, wireless access points, RFID card readers, VOIP telephones, enterprise LAN switches and network cameras.