As reported by the Company's Form 10-Q for the quarterly period ended June 30, 1999, the class action was voluntarily dismissed without prejudice by lead plaintiffs' counsel on May 3, 1999.

According to the docket posted, the court ordered the consolidation of all cases on August 25, 1998 under the lead case 98-CV-1146. The consolidated complaint was never filed.

The Complaint alleges that defendants falsely represented that there was a statistically significant difference in complete wound closure rate in patents with diabetic foot ulcers who were treated with Dermagraft compared to control patients. In fact, the Complaint alleges, the difference was not statistically significant by standard statistical measures. As a result, the Dermagraft study data did not meet the standards for approval by the U.S. Food & Drug Administration ("FDA"). Moreover, more patients treated with Dermagraft needed wound site surgery than control patients and Dermagraft-treated patients had a higher infection rate. On June 11, 1998, Advanced Tissue announced that the FDA had determined that the Dermagraft study data was inadequate for marketing approval. Following that announcement the price of Advanced Tissue stock, which was as high as $17 per share during the Class Period, fell to less than $3.85 per share, from more than $7 per share the previous day, on volume of
almost 7.5 million shares.