PURCHASE, N.Y.-Spectrum Information Technologies Inc. signed an agreement to sell its AXCELL cellular interface business along with its rights from a related patent license agreement back to Telular Corp.
Telular originally licensed the patent rights to Spectrum in an agreement dated March 23, 1992. Spectrum said the AXCELL business and related patents are not part of its core patent portfolio and related businesses and do not contribute to the royalty stream the company derives from licenses it has entered into for its direct-connect wireless data transmission technology.
“We believe this agreement is in the best interest of both parties. For Spectrum, this transaction enables us to exit a non-core business and strengthens the company’s financial condition as we continue our reorganization efforts and focus on our core patents for mobile wireless data transmission technology,” said Donald Amoruso, Spectrum’s chairman and chief executive officer.
Spectrum is in the process of developing and implementing a plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code.
Spectrum said it has received an initial payment of $500,000 in cash and will receive an additional $2.5 million in cash on final closing of the transaction, which is to occur no later than June 30.
In related news, Spectrum was delisted from the Nasdaq National Market System because it does not meet the minimum requirement of $4 million in net tangible asset value nor certain bid price criteria. The company also recently moved its corporate headquarters from Manhasset, N.Y., to Purchase, N.Y.