According to the Company’s FORM 10-Q For the Quarterly Period Ended June 30, 1999, at the January 29, 1999 Annual Meeting of the Company's shareholders, the shareholders authorized the Company's Board of Directors to carry out the reverse stock split at any time before April 1, 1999. Due to increases in the price of the Company's common stock as quoted on The Nasdaq SmallCap Market, the Board determined to forgo the reverse stock split and allowed its authority to execute the stock split to expire unexercised on April 1, 1999. In view of that development, the plaintiffs in the class action lawsuit agreed to dismiss the complaint with prejudice and without any further cost to the Company. Based on this agreement, on July 29, 1999, Judge Rosenbaum dismissed the plaintiffs' complaint with prejudice and without costs to either party. Thus, this matter has been concluded.

The class action complaint charges Destron issued a proxy statement containing false and misleading statements about Destron shareholders' ability to exercise dissenters' rights in connection with their voting on Destron's proposed reverse stock split. The complaint also alleges that Destron's acts have damaged shareholders and that the false and misleading statements contained in the proxy statement violate the federal securities laws. Destron's president and CEO is also named in the suit.