According to the Company’s FORM 10-Q For The Quarterly Period Ended June 30, 2000, on January 28, 2000, the court dismissed the complaint with prejudice. Plaintiffs appealed the dismissal. However, the plaintiff decided not to pursue the appeal and the appeal was dismissed on July 6, 2000. The District Court's judgment in favor of the Company, therefore, is final.

As previously reported by the Company’s FORM 10-Q For The Quarterly Period Ended June 30, 1999, on November 5, 1997, an action entitled Dalarne Partners, Ltd. Vs. Sync Research, Inc., et al., No. SACV97-877 AHS(Eex) was filed against the Company and certain of its directors and officers. The action was filed in the U.S. District Court for the Central District of California, Southern Division. The action purported to be a class action lawsuit brought on behalf of purchasers of the Company's common stock during the period from November 18, 1996 through March 20, 1997. The complaint asserted claims for violation of the Securities Exchange Act of 1934. On February 17, 1999, the U.S. District Court issued an order granting the Company's motion to dismiss the first amended complaint, granting leave to amend. The plaintiffs filed a second amended complaint on March 22, 1999. The Company and the other defendants have moved to dismiss the second amended complaint; which currently is scheduled for hearing on September 13, 1999.

The original Complaint charges Sync and certain of its officers and directors with violations of federal securities laws. Plaintiff complains of Sync's fraudulent scheme and deceptive course of business that injured purchasers of Sync stock during the Class Period. This case involves defendants' material omissions and their dissemination of materially false and misleading statements regarding the demand for and market acceptance of Sync's products, the strength of its technologies and its competitiveness and the trends in its business.