Applied Energetics Inc. (AERG) Tuesday said the U.S. District Court for the District of Arizona granted a final approval for the settlement in the consolidated class action lawsuit filed against it.
Under the settlement, those lawsuits were dismissed with prejudice, and Applied Energetics and all other defendants received a full and complete release of all claims asserted against them in the litigation, in exchange for the payment of an aggregate of $5.3 million in cash and the issuance of previously unissued shares of common stock by Applied Energetics valued at $1.2 million.
The Tucson, Arizona-based company said that it will issue 2.88 million shares of its common stock. There was no admission of liability by any of the defendants.
The company used insurance proceeds of $6.2 million, less amounts previously reimbursed to Applied Energetics to pay expenses of the litigations (about $700,000 to date), to fund the settlement payments and related costs. Any remaining cash payments and the stock issuance will be made by Applied Energetics.
The class action lawsuit was originally filed in July 2006 in the U.S. District Court for the District of Arizona against Applied Energetics and its founders.
Last month, the company also entered into a settlement in the derivative action against certain current and former officers and directors originally filed in September 2006 in the Superior Court of the State of Arizona in and for the County of Pima.
AERG is currently trading at $0.48, down 1 cent or 1.63%.
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