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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2007.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ to___________
Commission file number: 0-16159
LECTEC CORPORATION
(Exact name of small business issuer as specified in its charter)
Minnesota 41-1301878
- --------------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5610 Lincoln Drive, Edina, Minnesota 55436
- ---------------------------------------- ------------------------
(Address of principal executive offices) (Zip Code)
(952) 933-2291
(Issuer's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [ X ] No [ ]
Indicate by check mark whether registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes [ ] No [ X ]
The number of shares outstanding of the issuer's common stock as of May 14, 2007
was 4,153,998 shares.
Transitional Small Business Disclosure Format (Check one).
Yes [ ] No [ X ]
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LECTEC CORPORATION
REPORT ON FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2007
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Condensed Financial Statements and Notes to Condensed Financial Statements (unaudited) I-1
Item 2. Management's Discussion and Analysis or Plan of Operation. . . . . . . . . . . . . . . . . I-7
Item 3. Controls and Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. . . . . . . . . . . . . . . . II-1
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . . . . . . . . . . . . . . II-1
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
Item 6. Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-2
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FORWARD-LOOKING STATEMENTS
From time to time, in reports filed with the Securities and Exchange
Commission (including this Form 10-QSB), in press releases, and in other
communications to shareholders or the investment community, the Company may
provide forward-looking statements concerning possible or anticipated future
results of operations or business developments which are typically preceded
by the words "believes," "wants," "expects," "anticipates," "intends,"
"will," "may," "should," 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 Company's dependence on royalty payments from Novartis
Consumer Health, Inc. ("Novartis"), which is not currently selling the
Company's licensed product, the Company'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 licensing agreements related to patents that the Company holds,
limitations on market expansion opportunities, and other risks and
uncertainties as described in the "Cautionary Statements" filed as Exhibit
99.01 to Form 10-KSB for the year ended December 31, 2006.
PART 1 -- FINANCIAL INFORMATION
ITEM 1 -- CONDENSED FINANCIAL STATEMENTS AND NOTES TO CONDENSED
FINANCIAL STATEMENTS
LECTEC CORPORATION
CONDENSED BALANCE SHEETS
March 31, December 31,
ASSETS 2007 2006
------------- -------------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 1,228,391 $ 1,281,785
Prepaid expenses and other 57,370 66,285
------------- -------------
Total current assets 1,285,761 1,348,070
OTHER ASSETS:
Patent costs 59,338 65,191
Prepaid insurance -- director and officer 91,257 101,396
------------- -------------
150,595 166,587
------------- -------------
TOTAL ASSETS $ 1,436,356 $ 1,514,657
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 53,524 $ 14,479
Accrued expenses 68,825 73,395
Discontinued operations 130,000 130,000
------------- -------------
Total current liabilities 252,349 217,874
------------- -------------
COMMITMENTS AND CONTINGENCIES - -
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value; 15,000,000 shares authorized; 4,153,998 and
4,148,998 shares issued and outstanding at March 31, 2007
and December 31, 2006, respectively 41,540 41,490
Additional contributed capital 11,849,036 11,847,536
Accumulated deficit (10,706,569) (10,592,243)
------------- -------------
1,184,007 1,296,783
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,436,356 $ 1,514,657
============= =============
The accompanying notes are an integral part of these condensed financial
statements.
I-1
LECTEC CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
2007 2006
------------ -------------
CONTINUING OPERATIONS:
Revenue -- royalty and licensing fees $ - $ 92,277
Operating expenses 129,202 155,354
------------ -------------
Loss from operations (129,202) (63,077)
Interest income 14,876 11,504
------------ -------------
NET LOSS $ (114,326) $ (51,573)
============ =============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted 4,153,831 4,148,998
LOSS PER COMMON SHARE:
Basic and diluted $ (0.03) $ (0.01)
============ =============
The accompanying notes are an integral part of these condensed financial
statements.
I-2
LECTEC CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months ended March 31,
2007 2006
------------ ------------
Cash flows from operating activities:
Net loss $ (114,326) $ (51,573)
Adjustments to reconcile net loss from operations to net
cash (used in) provided by operating activities:
Amortization of patent costs 5,853 6,739
Changes in operating assets and liabilities:
Royalty receivable - 125,516
Prepaid expenses and other 19,054 21,780
Accounts payable 39,045 3,953
Accrued expenses (4,570) 13,453
------------ ------------
Net cash (used in) provided by operating activities (54,944) 119,868
------------ ------------
Cash flows from financing activities:
Proceeds from the exercise of stock options 1,550 -
------------ -------------
Net (decrease) increase in cash and cash equivalents (53,394) 119,868
Cash and cash equivalents -- beginning of period 1,281,785 1,310,578
------------ -------------
Cash and cash equivalents -- end of period $ 1,228,391 $ 1,430,446
============ =============
The accompanying notes are an integral part of these condensed financial
statements.
I-3
LECTEC CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2007 AND 2006
(UNAUDITED)
(1) GENERAL
The accompanying condensed financial statements include the accounts of
LecTec Corporation (the "Company") as of March 31, 2007 and December 31, 2006
and for the three month periods ended March 31, 2007 and 2006. The Company's
condensed financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America and should be read
in conjunction with the Company's Annual Report on Form 10-KSB for the year
ended December 31, 2006. The interim condensed financial statements are
unaudited and in the opinion of management, reflect all adjustments necessary
for a fair presentation of results for the periods presented. Results for
interim periods are not necessarily indicative of results for the full year.
(2) BUSINESS SUMMARY AND CRITICAL ACCOUNTING POLICIES
BUSINESS SUMMARY
The Company is an intellectual property licensing and holding company.
The Company earns royalties and licensing fees from licensing agreements
pertaining to the Company's patents. The Company has one licensing agreement
("Novartis Agreement" or "Agreement") with Novartis, which pays royalties to the
Company from time to time, within the terms of the Agreement, based upon a
percentage of Novartis net sales of licensed products. Previously, the Company
was a contract manufacturer of hydrogel topical patches which were sold to major
pharmaceutical customers until the Company ceased its manufacturing operations
in December 2004. The Company holds multiple domestic and international patents
on its hydrogel technology. A hydrogel is a gel-like material having an affinity
for water and similar compounds. These gels are ideal for delivering medication
onto the skin.
CRITICAL ACCOUNTING POLICIES
Some of the Company's most critical accounting policies include:
Revenue Recognition. Royalty and licensing fees are recognized when
earned under the terms of the Agreement with Novartis, based upon sales
information of licensed products sold by Novartis, and collection is reasonably
assured.
Patent Costs. The carrying value of patent costs is reviewed
periodically or when factors indicating impairment are present. Any impairment
loss is measured as the amount by which the carrying value of the assets exceeds
the fair value of the assets. The Company believes no impairment currently
exists.
Royalty Receivable. The Company grants credit to its only customer,
Novartis, in the normal course of business and under the terms contained in the
Agreement. Pursuant to the Agreement, Novartis pays royalty income within the
terms defined in the Agreement. At March 31, 2007, the Company did not have an
outstanding royalty receivable with Novartis due to a voluntary nationwide
recall of licensed products of the Company by Novartis. The Company is currently
engaged in an audit of royalties that are due to the Company pursuant to the
Agreement. The audit period was from January 1, 2005, up to the product recall
in June 2006. Royalty income is recognized based on net sales information
provided by Novartis, covering sales of products under the License Agreement for
the applicable periods. The Company believes it has earned and been paid all
royalty income due to the Company in the North America territory up to the point
of the product recall in June 2006. To date, the Company has not been able to
audit the amount of royalties that may be due to the Company from sales of
licensed products in Canada and Mexico, which are listed as additional fields of
use in the Agreement. The Company has contacted Novartis to obtain the
additional information it needs to complete the audit. The Company has not
recorded any additional royalty income due to the audit because of this
uncertainty. Management believes, based upon past collection experience, that
any and all amounts outstanding from time to time are fully collectible.
Use of Estimates. In preparing financial statements in conformity with
accounting principles generally accepted in the United States of America,
management is required to make estimates and assumptions that affect certain
reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements
I-4
and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Stock-Based Compensation. There were no stock options granted during
the first quarters ended March 31, 2007 or 2006 and therefore, the Company did
not record any stock compensation expense. The Company has no back dating issues
relating to current outstanding options. All outstanding options were issued at
fair market value at the time of grant.
In December 2004, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 123(R), "Share-Based Payment," which requires that compensation
cost relating to share-based payment transactions (including the cost of all
employee stock options) be recognized in the financial statements. That cost is
measured based on the estimated fair value of the equity or liability
instruments issued. SFAS No. 123(R) covers a wide range of share-based
compensation arrangements including share options, restricted share plans,
performance-based awards, share appreciation rights, and employee share purchase
plans. SFAS No. 123(R) replaces SFAS No. 123, "Accounting for Stock-Based
Compensation," and supersedes Accounting Principles Board ("APB") Opinion No.
25, "Accounting for Stock Issued to Employees." The Company was required to
apply SFAS No. 123(R) effective January 1, 2006. Thus, the Company's financial
statements reflect the cost for (a) all share-based compensation arrangements
granted after December 31, 2005 and for any such arrangements that are modified,
cancelled, or repurchased after that date, and (b) the portion of previous
share-based awards for which the requisite service had not been rendered as of
that date, based on the grant date estimated fair value.
All of the Company's options were fully vested as of December 31, 2006
and there were no new grants, or modifications to existing grants, during the
quarter ended March 31, 2007. Therefore, the adoption of SFAS No. 123(R) had no
impact on the Company's financial statements.
(3) LOSS PER COMMON SHARE
Basic loss per common share is computed by dividing net loss by the
weighted average number of common shares outstanding. Diluted loss per common
share is computed by dividing net loss by the weighted average number of common
shares outstanding and common share equivalents related to stock options and
warrants when dilutive. Common stock options and warrants to purchase 265,250
and 471,250 shares of common stock with a weighted average exercise price of
$1.52 and $2.02 were outstanding as of March 31, 2007 and 2006, respectively.
Because the Company had a loss from operations during the three months ended
March 31, 2007 and 2006, those shares were excluded from the loss per share
computations because they were antidilutive.
(4) INCOME TAXES
The provision for income taxes for the three months ended March 31,
2007 and 2006, was offset by a valuation allowance for deferred taxes. No
federal or state income tax benefit was provided for the three months ended
March 31, 2007 and 2006, as the realization of such benefit is not reasonably
assured.
In July 2006, the FASB issued Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes" ("FIN 48"). FIN 48 creates a single model to
address uncertainty in income tax positions. FIN 48 clarifies the accounting for
income taxes by prescribing the minimum recognition threshold a tax position is
required to meet before being recognized in the financial statements. It also
provides guidance on de-recognition, measurement, classification, interest and
penalties, accounting in interim periods, disclosures and transition. FIN 48 is
effective for an entity's fiscal year beginning after December 15, 2006. The
Company does not believe the adoption of FIN 48 has any impact on its financial
statements because the realization of any federal or state income tax benefit is
not reasonably assured.
(5) NOVARTIS SUPPLY AND LICENSE AGREEMENT
In July 2004, the Company entered into a supply and license agreement,
effective as of January 1, 2004 (the "Agreement"), with Novartis. Under the
Agreement, the Company also granted to Novartis an exclusive license (the
"License") to all of the intellectual property of the Company to the extent that
it is used or useful in the production of the vapor patches being supplied under
the Agreement. The License will continue for the duration of any patents
included in the licensed intellectual property and, with respect to all other
elements of the licensed intellectual property, for the maximum duration (14
years) permitted under applicable law. Upon the expiration of the patents
included in the licensed intellectual property, Novartis will have a
non-revocable, perpetual, fully paid-up license to the intellectual property
used or useful in the
I-5
production of vapor patches for the pediatric market and the adult cough/cold
market. Commencing January 1, 2005, Novartis is required by the Agreement to pay
royalties at an agreed upon percentage to the Company based on net sales as
defined in the Agreement of vapor patches by Novartis for each year the License
is in effect.
In March 2005, Novartis notified the Company of its intention to enter
the adult market pursuant to an option under the Agreement. The royalty terms
related to sales by Novartis in the adult market are the same as the pediatric
market in the defined fields of use in the Agreement.
In June 2006, Novartis issued a nationwide recall of all of its
Triaminic(R) vapor patch products. The Company has not recorded any royalty
income since June 2006 because of the uncertainties related to the recall. In a
press release issued by Novartis pertaining to the recall, Novartis explained
that the recall was "due to the serious adverse health effects that could result
if the product is ingested by a child removing the patch and chewing on it." At
the same time that Novartis announced this voluntary recall, the U.S. Food and
Drug Administration ("FDA") issued a release warning consumers "not to use the
Triaminic Vapor Patch due to reports of serious adverse events associated with
accidental ingestion by children." Novartis confirmed to the Company that the
patch involved in this incident was not manufactured by the Company.
In January 2007, the Company engaged an independent firm to audit the
royalties due the Company pursuant to the Agreement. The audit period was from
January 1, 2005, up to the product recall in June 2006. Royalty income
recognized during this period was based on net sales information provided by
Novartis, covering sales of products under the Agreement for the applicable
periods. The Company believes that it has earned and been paid all royalty
income due to the Company in the North America territory up to the product
recall in June 2006. To date, the Company has not been able to audit the amount
of royalties that may be due to the Company from sales of licensed products in
Canada and Mexico, which are listed as additional fields of use in the
Agreement. The Company has contacted Novartis to obtain the additional
information it needs to complete the audit. The Company has not recorded any
additional royalty income due to the uncertainty of the pending outstanding
audit issues.
On April 24, 2007, the Company was informed that the United States
Patent & Trademark Office ("USPTO") had completed a re-examination of a critical
patent pertinent to the Agreement the Company has with Novartis and has been
issued a re-examination certificate. The re-issued patent essentially
strengthens the Company's position with respect to protection of its rights
under this patent. The patent is entitled "Non-Occlusive Adhesive Patch for
Applying Medication to the Skin" and covers the design for adhesive patches
which contain a reservoir of medication to be delivered into the body by
absorption through the skin. Patches produced under this patent have been used
for a number of applications including, among others, the localized treatment of
pain and the delivery by infusion of certain medications for systemic
conditions.
(6) DISCONTINUED OPERATIONS
The liability for discontinued operations at March 31, 2007 and
December 31, 2006 consisted of a reserve for sales returns and credits for sales
prior to the discontinuance of operations.
I-6
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
RESULTS OF OPERATIONS
The Company wound down and ceased its previous contract manufacturing
operations at the end of 2004. Because of this, the past and future financial
results related to contract manufacturing have been treated as discontinued
operations for financial reporting purposes. Continuing operations consist of
the Company's current structure as an intellectual property licensing and
holding company. There were no costs involved for discontinued operations for
the first quarter ended March 31, 2007 or 2006.
COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006
RESULTS OF OPERATIONS
The Company did not record any royalty income during the first quarter
ended March 31, 2007, compared to royalty income of $92,277 for the same quarter
of 2006. The decrease is attributable to the previously discussed product recall
by Novartis, (See Note 5 of Notes to Condensed Financial Statements in this Form
10-QSB).
Operating expenses decreased $26,152, to $129,202 for the first quarter
ended March 31, 2007, from operating expenses of $155,354 for the comparable
quarter in 2006. The reduction in operating expenses resulted from reductions in
net lease expenses, legal and accounting costs, and general overall reductions
in operating expenses. The Company anticipates that it can further reduce
operating expenses. However, these savings may be offset with costs related to
actions the Company decides to take with respect to protection of its
intellectual property.
The Company recorded a net loss from operations of $(114,326), or $(0.03)
per basic and diluted share, for the first quarter of 2007, compared to a net
loss from operations of $(51,573), or $(0.01) per basic and diluted share, for
the first quarter of 2006. The increase in net loss from operations for the
first quarter of 2007 compared to the same quarter of 2006 was primarily due to
the lack of royalty income for the first quarter of 2007, and partially offset
by a reduction in general operating expenses.
INCOME TAXES
The provision for income tax benefits for the first quarter of 2007 and
2006 was offset principally by a valuation allowance for deferred taxes. No
federal or state income tax benefit was provided for the first quarter of 2007
and 2006, as the realization of such benefits is not reasonably assured.
EFFECT OF INFLATION
Inflation has not had a significant impact on the Company's operations
or cash flow.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents decreased $53,394 during the first quarter
ended March 31, 2007, to $1,228,391, from cash and cash equivalents of
$1,281,785 at December 31, 2006. The decrease in cash and cash equivalents
during the first quarter of 2007 from the end of 2006, was due to the lack of
royalty income from Novartis relating to the previously discussed product
recall, in conjunction with the reduction in cash resulting from the general
outflow of operating expenses.
During the first quarter ended March 31, 2007, the Company did not
collect any royalty cash under the Agreement, compared to the collection of
royalty cash of $217,793 during the comparable quarter of 2006. There were no
material commitments for capital expenditures at March 31, 2007 or 2006.
The Company had working capital of $1,033,412 and a current ratio of
5.10% at March 31, 2007 compared to working capital of $1,130,196 and a current
ratio of 6.19% at December 31, 2006. The decline in working capital and the
current ratio for the first quarter of 2007 compared to December 31, 2006, was
primarily due to the net loss of ($114,326) that the Company incurred during the
first quarter ended March 31, 2007, and partially offset by the exercise of
stock options.
I-7
Shareholders' equity decreased $112,776, to $1,184,007 at March 31,
2007 from $1,296,783 at December 31, 2006, primarily due to the net loss the
Company incurred during the first quarter ended March 31, 2007.
The Company believes its existing cash and cash equivalents will be
sufficient to fund operations through 2007 based upon its current cash on hand,
and the anticipated operating expenses the Company is likely to incur during
2007. The Company earns interest on its available cash. Interest income earned
was $14,876 (4.9% average annual interest) and $11,504 (3.8% average annual
interest) for the quarters ended March 31, 2007 and 2006, respectively.
Management has also been proactive to rejuvenate its revenue stream from
Novartis or other sources in order for the Company to be viable in the future.
Management has been working with Novartis to address the issues surrounding the
product recall as well as exploring other licensing opportunities pertaining to
the intellectual property the Company owns.
The Company's strategy is to pursue additional agreements with Novartis
and concurrently pursue similar agreements with other domestic and foreign
manufacturers to enable them to use the Company's proprietary patch technology
in producing or selling topical patch products in the future. Furthermore, the
Company is assessing the value of its patent portfolio to enhance its options
with respect to future licensing opportunities, attraction of potential merger
or acquisition candidates, or the sale of the Company or public shell as a
whole. The Company is also taking steps to strengthen its primary patents for
territories of use, including Europe and other countries. This effort is also
intended to strengthen the Company's position with respect to other Company's
that may be infringing on the patents the Company owns. It is currently
management's intent to fund operations with royalty income from licensing
agreements or from other income derived from protection of rights pertaining to
the Company's intellectual property.
The Company has recently been granted a re-examination certificate which expands
the Company's prior claims for a major patent the Company holds. This will
enhance and strengthen the Company's position with respect to potential patent
infringement in the marketplace. The Company is taking steps to evaluate its
current position in light of this event.
The Company's working capital requirements are dependent upon adequate levels of
royalty and licensing income to fund operations. Royalty income is uncertain
because it is subject to factors that the Company cannot control. There can be
no assurance that the anticipated revenue stream or the anticipated expenses
will be as planned, or that the Company will be successful in negotiating other
licensing opportunities with Novartis or other companies, due to the
uncertainties and risks described in the "Cautionary Statements" included as
Exhibit 99.01 to the Company's annual report on Form 10-KSB for the fiscal year
ended December 31, 2006.
CRITICAL ACCOUNTING POLICIES
Management believes that the Company has not adopted any critical
accounting policies which, if changed, would result in a material change in
financial estimates, financial condition, results of operation or cash flows for
the three months ended March 31, 2007 and 2006. The critical accounting policies
appear in Note 2 of Notes to Condensed Financial Statements in this Form 10-QSB.
I-8
ITEM 3 - CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management,
including our principal executive officer and principal financial officer, we
have evaluated the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934 (the "Exchange Act")). Based upon this
evaluation, the principal executive officer and principal financial officer have
concluded that, as of the end of the period covered by this report, our
disclosure controls and procedures were effective.
During the three months ended March 31, 2007, there were no changes in
the Company's internal control over financial reporting (as defined in Rule
13a-15(f) under the Exchange Act) that has materially affected, or is reasonably
likely to materially affect, the Company's internal control over financial
reporting.
I-9
PART II --OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 - OTHER INFORMATION
In a voluntary Form 8-K filing on May 7, 2007, the Company announced
that the United States Patent & Trademark Office (USPTO) had completed
a re-examination of LecTec's U.S. Patent No. 5,536,263 and has issued a
re-examination certificate for the patent. The '263 patent is entitled
"Non-Occlusive Adhesive Patch for Applying Medication to the Skin" and
covers the design for adhesive patches which contain a reservoir of
medication to be delivered into the body by absorption through the
skin. Patches produced under the '263 patent have been used for a
number of applications including, among others, the localized treatment
of pain and the delivery by infusion of certain medications for
systemic conditions. The re-examination, which was commenced at the
request of LecTec in December 2000 in Application No. 90/005,877,
concluded with the issuance of the re-examination certificate on April
24, 2007. Additional information concerning the re-issued patent can be
obtained on the USPTO website at www.uspto.gov.
ITEM 6 - EXHIBITS
Exhibit No. Description
----------- -------------------------------------------------
3.01 Articles of Incorporation of LecTec Corporation,
as amended (Incorporated herein by reference to
the Company's Form S-1 Registration Statement
(file number 33-9774C) filed on October 31, 1986
and amended on December 12, 1986).
3.02 Bylaws of LecTec Corporation (Incorporated herein
by reference to the Company's Form S-1
Registration Statement (file number 33-9774C)
filed on October 31, 1986 and amended on December
12, 1986).
31.01 Certification of Principal Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002, filed herewith.
31.02 Certification of Principal Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002, filed herewith.
32.01 Certification Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, filed herewith.
99.01 Cautionary Statements (Incorporated herein by
reference to Exhibit 99.01 to the Company's
Report on Form 10-KSB for the fiscal year ended
December 31, 2006).
II-1
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
LECTEC CORPORATION
Date May 15, 2007 By /s/ Judd A. Berlin
----------------------------------------
Judd A. Berlin
Chief Executive Officer, Chief Financial
Officer, & Director (principal financial
officer and duly authorized officer)
II-2
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------------------------------------------------------------
3.01 Articles of Incorporation of LecTec Corporation, as amended
(Incorporated herein by reference to the Company's Form S-1
Registration Statement (file number 33-9774C) filed on October
31, 1986 and amended on December 12, 1986).
3.02 Bylaws of LecTec Corporation (Incorporated herein by reference to
the Company's Form S-1 Registration Statement (file number
33-9774C) filed on October 31, 1986 and amended on December 12,
1986).
31.01 Certification of Principal Executive Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002, filed herewith.
31.02 Certification of Principle Financial Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.01 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith.
99.01 Cautionary Statements (Incorporated herein by reference to
Exhibit 99.01 to the Company's Report on Form 10-KSB for the
fiscal year ended December 31, 2006).