ACT Announces Lawsuit Settlement
Advanced Cell Technology (ACT) of Marlborough said it has reached a settlement agreement in a lawsuit it faced over the conversion of debt notes and the exercise price of certain warrants.
The biotech firm said it will pay $12.5 million to two investors – CAMOFI and CAMZHN Master LDC – who claimed that the conversion price for unsecured debt, or debentures, and warrants they held should have been adjusted as a result of a 2010 transaction between ACT’s previous management and an investor.
ACT said it will also pay legal expenses of about $2 million, $4.5 million in restricted common stock and $6 million through the issuance of an 8-percent amortizing redeemable convertible debenture that matures in June 2015.
“The resolution of this litigation represents a significant step in resolving past potential liabilities and in enhancing the company’s ability to attract a broader shareholder base,” said Gary Rabin, chairman and CEO of ACT.
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