According to the firm's 10-KSB dated August 17, 2001, in October 1997, the Company and the members of its Board of Directors were sued in a class action lawsuit caused by the decline in the Company's stock price. Due to lack of any evidence of wrongdoing on the part of the Company and its directors, this lawsuit was dismissed with prejudice.

The original complaint alleges violations of Sections 11, 12(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20 (a) of the Securities Exchange Act of 1934. The Complaint alleges the Registration Statement and Prospectus for the Company's May 6, 1996 initial public offering, as well as subsequent public statements made by defendants during the Class Period, contained false and/or misleading statements about the financial condition and prospects of Children's Wonderland.