So, this is going to sound weird. Roughly a week after I criticizedTASER (NASDAQ:TASR) for being less than forthcoming on the subject of settlements, the company agreed to pay roughly $21.8 million to settle a class action shareholder suit and derivative litigation that accused it of being less than forthcoming about the safety of its stun guns.

I think it's a steal.

Yes, you read that right. A steal. Here's why: TASER has recently seen big improvements in its core business, and that's led to huge improvements in cash flow. According to the 10-Q quarterly report filed with the SEC yesterday, the business has produced $6.1 million in cash from operations thus far in 2006, with two-thirds of that, or $4.1 million, generated during Q2. All told, it has added $5 million in cash and investments since December.

Interestingly, that's more than half what it needs to fund the cash portion of the settlement, which is expected to be $7.9 million, assuming the deal is approved as is. The remaining $13.9 million would come from insurance and stock, though $8 million of that can be paid in cash at the company's discretion.

TASER may want to. Assuming no further acceleration in its cash-generating ability, investors should expect business to produce at least $10 million in real free cash flow during 2006. Subtract the maximum cash management expects to pay -- $15.9 million -- and that leaves $38 million in the company coffers, just 14% less than the $43.9 million it had at the end of December.

TASER says another option is to buy back any shares it issues for the settlements with up to $10 million in company funds. Certainly it has the liquidity to support such a move, but what's the point? Paying the bulk of the settlement in cash eliminates extra steps and achieves the same result: less dilution for existing shareholders.

There's still good reason to remain skeptical of every news announcement that comes from TASER. History suggests that's Foolish. But after a little digging, I can find no fault with this deal. It may even prove to be cheap.

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Fool contributor Tim Beyers isn't easily shocked, but he's pretty sure a TASER shot would do the trick. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. Get the skinny on everything Tim is invested in by checking his Fool profile. The Motley Fool has an ironclad disclosure policy.