Health & Fitness
Health and Fitness
Health and Fitness 
Thu, March 31, 2011
Wed, March 30, 2011
TEXARKANA, Texas--([ BUSINESS WIRE ])--LecTec Corporation (OTCBB: LECT) announced today that it has released its fiscal 2010 financial information. LecTeca™s cash and cash equivalents decreased $8,689,280 for the year ended December 31, 2010, to $7,076,827, from cash and cash equivalents of $15,766,107 at December 31, 2009. In addition to cash and cash equivalents, the Company had investments in certificates of deposits that were insured by the Federal Deposit Insurance Corporation (aFDICa) of 1,959,573 with maturities of six months or less at December 31, 2010. Cash and cash equivalents does not include our litigation escrow account of $432,344 as of December 31, 2010. The decrease in cash and cash equivalents resulted primarily from a cash dividend of $4,298,350, payment of income taxes of approximately $1,100,000 and operating expenses in fiscal 2010. Operating expenses for the year ended December 31, 2010 were $1,939,798, a decrease of $7,015,797 from operating expenses of $8,955,595 for the comparable period in 2009. The decrease in operating expenses for 2010 resulted primarily from a decrease in legal expenses of approximately $7.3 million due to the lack of infringement income and related contingent settlement fees for 2010, partially offset with increases in salaries, management and director transition costs, consulting, litigation expenses and travel expenses. Royalty income was $91,273 for 2010, a decrease of $20,103 from 2009, which continued the trend of lower sales by Novartis of its patch products using LecTec licensed intellectual property. We did not have any infringement income in 2010 as no litigation was settled in such period.
"Aligning LecTeca™s initiatives has taken more effort than anticipated. However, the Board of Directors is confident that we are now positioned to implement our business strategy and bring more clarity to the Companya™s business plan in 2011."
Greg Freitag, LecTeca™s CEO stated: a2010 was a year of change for LecTec as we continued the pursuit of our litigation, while ramping up our merger and acquisition efforts and aligning our costs with respect to our intellectual property with rate of return considerations. By the end of 2010 we reduced certain operating expenses related to salaries, rent and research and development and during 2011 will continue to reduce non-M&A related costs. Our settlement with Chattem, Inc. on March 23, 2011 will provide additional capital to LecTec and will result in reduced litigation expenses, other than contingent legal fees owed, going forward.a
Mr. Freitag continued, aAligning LecTeca™s initiatives has taken more effort than anticipated. However, the Board of Directors is confident that we are now positioned to implement our business strategy and bring more clarity to the Companya™s business plan in 2011.a
About LecTec
LecTec Corporation (the aCompanya or aLecTeca) is an intellectual property (aIPa) licensing and holding company with $9 million in cash, cash equivalents and FDIC-insured certificates of deposit, as of December 31, 2010. LecTec is pursuing a merger and acquisition strategy, which is intended to leverage its cash asset and improve shareholder value and liquidity. LecTec holds multiple domestic and international patents based on its original hydrogel patch technology and has filed patent applications ona hand sanitizer patch. LecTec also has a licensing agreement (aNovartis Agreementa) with Novartis Consumer Health, Inc., under which LecTec receives royalties from time to time based upon a percentage of Novartisa™ net sales of licensed products. LecTec takes legal action as necessary to protect its intellectual property and is currently involved in one patent infringement action against Prince of Peace Enterprises, Inc., which is scheduled for trial in April 2011, with court ordered mediation to occur on March 30, 2011. The LecTec hydrogel patch technology allows for a number of potential applications, while its anti-microbial hand sanitizer patch is intended to be dry, thereby rendering the patch harmless in the event that it is licked, chewed, or exposed to the eye. An initial prototype of the hand sanitizer patch has been developed and LecTec is exploring the engagement of a strategic partner to complete its hand sanitizer patch development. An effort to monetize products from LecTeca™s intellectual property is also ongoing. The Companya™s website is [ www.lectec.com ].
Cautionary Statements
This press release contains forwarda"looking statements concerning possible or anticipated future results of operations or business developments, which are typically preceded by the words abelieves,a awants,a aexpects,a aanticipates,a aintends,a awill,a amay,a ashould,a or similar expressions. Such forward-looking statements are subject to risks and uncertainties, which could cause results or developments to differ materially from those indicated in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the outcome of pending patent infringement litigation against Prince of Peace Enterprises, Inc., pursuit of, and competition for, business opportunities, desired outcome of merger and acquisition strategy, dilutive transactions, the Companya™s receipt of royalty payments from Novartis Consumer Health, Inc., which is selling an adult vapor patch licensed by the Company, the Companya™s dependence on key personnel and Board of Director members, the success or failure of any attempt by the Company to protect or enforce its patents and territories of coverage, the issuance of new accounting pronouncements, the availability of opportunities for license, sale or strategic partner agreements related to patents that the Company holds, volatility in the price of our common stock and other risks and uncertainties as described in aRisk Factorsa included in our Form 10a"K for the year ended December 31, 2010.