Axesstel Inc (OTC: AXST) Investor Securities Class Action Lawsuit 04/24/2014

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Company Name(s): 
Axesstel
Case Name: 
Axesstel Shareholder Class Action Lawsuit 04/24/2014
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
OTCMKTS: AXST
OTC: AXST
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
04/24/2014
Class Period Begin: 
02/28/2013
Class Period End: 
10/17/2013
Court of Filing: 
U.S. District Court for the Southern District of California
Deadline To File for Lead: 
06/23/2014
Date Settled: 
06/19/2015
Settlement Amount: 
$1,250,000
Deadline to Participate in Settlement: 
10/19/2015
Settlement Notice: 
Settlement Proof: 
Summary: 

October 23, 2015 - The court approved the settlement including the plan of allocation, the motion for attorneys’ fees and expenses, and dismissed the action with prejudice.

October 15, 2015 - The court held a final settlement hearing.

June 19, 2015 - The court preliminarily approved the settlement.

June 10, 2015 - Parties filed a stipulation of settlement.

February 13, 2015 - The court denied the defendants' motion to dismiss.

September 22, 2014 - The lead plaintiff filed an amended complaint on behalf of investors who purchased Axesstel Inc (OTC: AXST) common shares between February 28, 2013 and October 17, 2013. The lead plaintiff alleges that the defendants violated the Securities Exchange Act of 1934 by issuing false and misleading statements between February 28, 2013 and October 17, 2013.

July 22, 2014 - The lead plaintiff and lead counsel were appointed.

June 23, 2014 - Lead plaintiff motions were filed.

April 24, 2014 - An investor in shares of Axesstel Inc (OTC: AXST) filed a lawsuit in the U.S. District Court for the Southern District of California against Axesstel Inc over alleged violations of Federal Securities Laws in connection with certain allegedly false and misleading statements made between February 25, 2013 and March 31, 2014.

According to the complaint the plaintiff alleges on behalf of all persons or entities who purchased or otherwise acquired securities of Axesstel Inc (OTC: AXST) between February 25, 2013 and March 31, 2014, that Axesstel Inc and certain of its officers violated Federal Securities Laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

More specifically, the plaintiff claims that the defendants between February 25, 2013 and March 31, 2014 issued allegedly false and misleading statements or failed to disclose that Axesstel Inc was facing issues that were negatively impacting the rollout of Axesstel Inc’s new Home Alert product line, that certain aspects of sales to two customers in Africa in the first quarter of 2013, including payment terms and market allowances, were not finalized by the end of the quarter, that Axesstel Inc improperly recognized revenue from the foregoing sales to the two customers in Africa, in violation of Axesstel Inc’s stated revenue recognition policy, that as a result, Axesstel Inc’s revenue and financial results were overstated, and Axesstel Inc misrepresented the progress of the rollout of the new Home Alert product line, as well as the true demand for the new product line, that Axesstel Inc’s financial statements were not prepared in accordance with Generally Accepted Accounting Principles (GAAP), that Axesstel Inc lacked adequate internal and financial controls, and that as a result of the foregoing, Axesstel Inc’s financial statements and other statements about Axesstel Inc's business, operations, and prospects were materially false and misleading at all relevant times and/or lacked a reasonable basis.

Axesstel Inc (OTC: AXST) reported that its annual Total Revenue rose from $54.13 million in 2012 to $59.66 million in 2012 and that its Net Income increased from $1.10 million to $4.31 million. Shares of Axesstel Inc (OTC: AXST) grew from $0.069 per share in May 2011 to as high as $1.90 per share in early 2013.

On June 13, 2013, Axesstel Inc provided a company update. Among other things, Axesstel Inc said that it was anticipating a weak 2013 second quarter “due to slower demand in Europe, product launches in Africa that were delayed to the second quarter as a result of minor warranty issues, and a slower than expected rollout of Axesstel Inc’s new products in 2013.”

Shares of Axesstel Inc (OTC: AXST) declined from $1.90 in early 2013 to as low as $0.077 per share in October 2013

On April 24, 2014, Axesstel Inc (OTC: AXST) shares closed at $0.09 per share.