EXHIBIT 99.1

COSINE COMMUNICATIONS ANNOUNCES FINANCIAL RESULTS

FOR THE QUARTER ENDED JUNE 30, 2007

SAN JOSE, CALIF., July 26, 2007 -- CoSine Communications, Inc. (COSN.PK) today announced net income of $122,000 or $0.01 per share for the three months ended June 30, 2007 as compared to a net income of $205,000 or $0.02 per share for the three months ended June 30, 2006. Net income for the six months ended June 30, 2007 was $216,000, or $0.02 per share, as compared to net income of $79,000 or $0.01 per share in the six months ended June 30, 2006.

CoSine’s strategic plan is to redeploy its existing resources to identify and acquire new business operations. As a part of its strategic plan, the Company completed the sale of its intellectual property and closed its customer service operations effective December 31, 2006.

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 candidates have been identified, and 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.

For additional information contact:

CoSine Communications, Inc.

Terry Gibson                         

(408) 399-6494

E-mail: Terry.Gibson@Cosinecom.com

CoSine Communications, Inc.

CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, except per share data)

	Three months ended						Six months ended
	June 30,						June 30,
	2007			2006			2007			2006
Revenue:
Product	$	-		$	-		$	-		$	-
Service		-			520			-			1,099
Total revenue		-			520			-			1,099
Cost of revenue		-			533			-			1,103
Gross profit (loss)		-			(13	)		-			(4	)
Operating expenses:
Research and development		-			-			-			-
Sales and marketing		-			-			-			-
General and administrative		170			234			367			611
Total operating expenses		170			234			367			611
Loss from operations		(170	)		(247	)		(367	)		(615	)
Interest income and other		292			452			583			694
Income before taxes		122			205			216			79
Income tax provision		-			-			-			-
Net income	$	122		$	205		$	216		$	79
Basic net income per share	$	0.01		$	0.02		$	0.02		$	0.01
Diluted net income per share	$	0.01		$	0.02		$	0.02		$	0.01
Shares used in computing basic and diluted net income per share
Basic		10,091			10,091			10,091			10,091
Diluted		10,122			10,091			10,122			10,091

CoSine Communications, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

	June 30, 2007 (Unaudited)			December 31, 2006 (1)
ASSETS
Current assets:
Cash and cash equivalents	$	4,526		$	5,207
Short-term investments		18,342			17,650
Accounts receivable, trade		-			55
Other receivables		83			68
Prepaid expenses and other current assets		26			56
Total current assets		22,977			23,036
Long-term deposits		3			-
	$	22,980		$	23,036
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	176		$	320
Other accrued liabilities		92			239
Total current liabilities		268			559
Stockholders' equity:
Common stock		1			1
Additional paid-in capital		539,006			538,987
Accumulated other comprehensive income		17			17
Accumulated deficit		(516,312	)		(516,528	)
Total stockholders' equity		22,712			22,477
	$	22,980		$	23,036

¹ Amounts are derived from the December 31, 2006 audited financial statements.