Mar 31 2011
LecTec Corporation (OTCBB: LECT) announced today that it has released its fiscal 2010 financial information. LecTec'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 ("FDIC") 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.
Greg Freitag, LecTec's CEO stated: "2010 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."
Mr. Freitag continued, "Aligning LecTec'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 Company's business plan in 2011."