CoSine Communications Announces Financial Results for the Quarter Ended September 30, 2009

LOS GATOS, Calif., Nov. 6 /PRNewswire-FirstCall/ -- CoSine Communications, Inc. (Pink Sheets: COSN), today announced net loss of $139,000 or $(0.01) loss per share for the quarter ended September 30, 2009 as compared to net income of $2,000 or $0.00 per share for the quarter ended September 30, 2008.

CoSine's strategic plan is to redeploy its existing resources to identify and acquire new business operations.

About Cosine Communications

CoSine Communications was founded in 1998 as a global telecommunications equipment supplier to empower service providers to deliver a compelling portfolio of managed, network-based IP and broadband services to consumers and business customers. CoSine ceased its customer service operations effective December 31, 2006. CoSine's strategic plan is to redeploy its existing resources to identify and acquire new business operations. CoSine's redeployment strategy will involve the acquisition of one or more operating businesses with existing or prospective taxable earnings. This strategy may allow CoSine to realize future cash flow benefits from its net operating loss carry-forwards ("NOLs"). As of this date, no assurance can be given that CoSine will find suitable candidates, and if it does, that it will be able to utilize its existing NOLs.

Safe Harbor Warning

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements, which include, among others, statements concerning CoSine's expected financial performance, exploration of strategic alternatives, and business outlook, expected performance and developments. The company uses words such as "anticipate," "believe," "plan," "expect," "future," "intend" and similar expressions to identify forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements.

Factors that might cause such a difference include, but are not limited to, Cosine's ability to identify and effectuate desirable strategic acquisitions, the time and costs required to explore and investigate possible transactions and other corporate actions, management and board interest in and distraction due to exploring and investigating strategic alternatives, the reactions, either positive or negative, of investors, competitors, customers, employees and others to CoSine exploring and executing possible strategic acquisitions. A detailed discussion of these factors and other risks that affect CoSine's business is contained in its SEC filings, including its most recent reports on Form 10-K and Form 10-Q, particularly under the heading "Risk Factors." Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof. CoSine undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements.

                          CoSine Communications, Inc.
                           STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)

                                               Three months      Nine months
                                                  ended             ended
                                               September 30,     September 30,
                                               2009    2008      2009    2008
                                               ----    ----      ----    ----

    Revenue:
      Product                                    $-      $-        $-      $-
      Service                                     -       -         -       -
                                                ---     ---       ---     ---
         Total revenue                            -       -         -       -
    Cost of revenue                               -       -         -       -
                                                ---     ---       ---     ---

    Gross profit (loss)                           -       -         -       -

    Operating expenses:
      General and administrative                170     169       583     492
                                                ---     ---       ---     ---
    Total operating expenses                    170     169       583     492
                                                ---     ---       ---     ---

    Loss from operations                       (170)   (169)     (583)   (492)

    Interest income and other                    31     171       139     568
                                                ---     ---       ---     ---

    Income (loss) before income tax provision  (139)      2      (444)     76

    Income tax provision                          -       -         1       -
                                                ---     ---       ---     ---

    Net (loss) income                         $(139)     $2     $(445)    $76
                                              -----     ---     -----     ---

    Basic net (loss) income per share        $(0.01)  $0.00    $(0.04)  $0.01
                                             ======   =====    ======   =====
    Diluted net (loss) income per share      $(0.01)  $0.00    $(0.04)  $0.01
                                             ======   =====    ======   =====
    Shares used in computing basic and
     diluted net income per share
      Basic                                  10,091  10,091    10,091  10,091
                                             ======  ======    ======  ======
      Diluted                                10,091  10,093    10,091  10,093
                                             ======  ======    ======  ======



                          CoSine Communications, Inc.
                           CONDENSED BALANCE SHEETS
                                (in thousands)

                                              September 30,
                                                  2009         December 31,
                                               (Unaudited)       2008 (1)
                                              -------------    ------------

    ASSETS
    Current assets:
      Cash and cash equivalents                     $22,679          $9,155
      Short-term investments                              -          13,997
      Other receivables                                   -              96
      Prepaid expenses and other current assets          39              31
                                                        ---             ---
    Total current assets                             22,718          23,279
    Long-term deposits                                    3               3
                                                        ---             ---
        Total assets                                $22,721         $23,282
                                                    -------         -------

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Accounts payable                                 $173            $207
      Other accrued liabilities                          33              53
                                                        ---             ---
    Total current liabilities                           206             260

    Stockholders' equity:
      Common stock                                        1               1
      Additional paid-in capital                    539,086         539,060
      Accumulated other comprehensive income              -              88
      Accumulated deficit                          (516,572)       (516,127)
                                                   --------        --------
    Total stockholders' equity                       22,515          23,022
                                                     ------          ------
        Total liabilities and stockholders' equity  $22,721         $23,282
                                                    -------         -------

    (1) Amounts are derived from the December 31, 2008 audited financial statements.

    For additional information contact:

    Terry Gibson
    (408) 399-6494
    E-mail: Terry.Gibson@Cosinecom.com