According to the latest docket posted, on December 23, 1998, the Court entered the Stipulation and Order preliminarily approving the settlement and approving the conditional settlement class. On March 17, 1999, the Court entered the Order For Final Judgment and the Judgment by U.S. District Judge Ann D. Montgomery.

As reported in the firm's 10-QSB filing dated November 20, 1998, this suit and another were consolidated in July of 1997. In April 1998, all parties to the lawsuit participated in a mediation, and a tentative settlement was reached, subject to approval by the court. Under the terms of this tentative settlement, the Company has agreed to pay $50,000 in cash, issue five-year warrants valued at up to $500,000 to purchase common stock of the Company for $4.00 per share, and issue shares of common stock worth $1,725,000 less the value of shares of the Company's stock being contributed by another defendant. The Company's estimated liability under this settlement, based on the market price of the Company's common stock as of the date of the tentative settlement, is $2,050,000. This estimate is subject to change based on fluctuations in the market price of the Company's common stock between now and final approval by the court. The settlement is also contingent upon the Company's common stock becoming listed on a stock exchange and the registration of the common stock and the common stock issuable upon exercise of the warrants within a six-month period following the date of the tentative settlement. Because of these contingencies, certain of which are beyond the control of the Company, it is possible the Company may be unable to ultimately consummate this settlement as it is currently proposed.

The original complaint alleges that Photran and certain of its officers and directors violated the federal securities laws by issuing false and misleading statements including a Registration Statement and Prospectus regarding, among other things, Photran's operating results and accounts receivable for the first nine months of 1996. The complaint alleges that as a result of these misrepresentations and omissions, Photran's stock was artificially inflated throughout the class period.