LecTec Corporation (LECT) reaches settlement with Chattem, Inc.

Posted on: Monday, March 28th, 2011
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LecTec Corporation (OTCBB: LECT), enjoyed a 25 cent boost in share prices, a 9.1 percent increase over Friday’s closing price of 2.75 in afternoon trading today after the Company announced it had settled litigation against Chattem, Inc. for patent infringement. LecTec, an intellectual property licensing firm, is still proceeding with the lawsuit against Prince of Peace Enterprises and the trial is expected to commence on April 11, 2011, with court-mandated mediation scheduled for March 30, 2011.

LecTec’s Chief Executive Officer, Greg Freitag, commented, “This settlement provides LecTec with cash now without future risk, and will position the company for a positive future. We fully understand that some of our shareholders will be disappointed that the case against Chattem was not taken to trial, but the Board and I are confident that this settlement is clearly in the best interests of LecTec and its shareholders.”

Per the settlement reached by the two companies, Chattem has agreed to make a one-time, $3,600,000 payment to LecTec for a non-exclusive license to LecTec’s U.S. Patent Nos. 5,536,263 and 5,741,510, as well as any other LecTec patents that claim priority from these two patents, for use in connection with any product or process sold or used by Chattem, Inc. The settlement excludes products covered by exclusive licenses previously granted to other companies.

Texas-based LecTec Corporation reported cash holdings near $10 million on Septemeber 30, 2010 and the Company’s business plan is to pursue 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 on a hand sanitizer patch.

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Category: OTCBB, Technology Stocks
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