According to the latest docket posted, on January 25, 2001, the plaintiffs filed a Notice of Appeal to the Eighth Circuit Court of Appeals from U.S. District Judge James M. Rosenbaum's Order of 6/29/98, Order of 11/24/98 and final judgment and order entered on 1/17/01. Specifically, the plaintiffs wanted to appeal the earlier dismissal of the Section 11 claim against defendant Ernst & Young LLP. On July 18, 2002, the Court entered the certified copy of the Opinion and Judgment from the Eighth Circuit, reversing and remanding the original dismissal of the Section 11 claim against Ernst & Young. By the Notice of Pendency of Class Action dated August 20, 2004, a settlement with the single remaining defendant, Ernst & Young LLP, was established in the amount of $475,000 in cash. On December 7, 2004, the Court entered the Order and Final Judgment signed by Judge James M. Rosenbaum. Judgment was entered on December 8, 2004.

As reported by the Company’s FORM 10-K for the fiscal year ended December 31, 2000, on October 4, 2000, the Company announced the preliminary approval by the United States District Court of Minnesota of a settlement in the securities cases against the Company of In Re Summit Medical Systems, Inc. Securities Litigation and Teachers' Retirement System of Louisiana v. Summit Medical Systems, Inc. et al. The settlement terms included $750,000 in cash, 100,000 shares of common stock, and warrants to purchase 500,000 shares of common stock at $4.00 over the next five years. On January 17, 2001, the United States District Court of Minnesota filed its order for final judgement, which finalized the settlement.

The original complaint alleges that Summit violated the federal securities laws by issuing a series of materially false and misleading public statements concerning Summit's financial results for 1994, 1995 and 1996. Specifically, the complaint alleges that defendants reported that revenue for the year ended December 31, 1996 would be substantially less than the amount previously announced and that the company would likely restate downwards its financial statements for the years ended 1994 and 1995. The complaint also alleges that the company's revenues were materially misstated during the class period as a result of the company's incorrect recognition of revenue in violation of Generally Accepted Accounting Principles.