According to the Company’s FORM 10-K for the fiscal year ended December 31, 2001, the Company, the other individually named defendants and the plaintiffs stipulated to the dismissal of an appeal of the securities class-action lawsuit. The stipulation followed a dismissal with prejudice by the trial court and the filing of a notice of appeal by the plaintiffs. On November 21, 2001, the Ninth Circuit Court of Appeals entered an order granting the dismissal. No defendant or insurer is paying any amounts in connection with the dismissal.

As summarized by the Company’s FORM 10-Q for the quarterly period ended June 30, 2001, in March 2000 several class-action lawsuits were filed in the United States District Court for the Western District of Washington alleging that during the period January 20, 2000 through March 17, 2000, the Company and several officers and directors made or participated in misrepresentations about the Company's ability to achieve revenue expectations for the first quarter of 2000. The court has approved appointment of three plaintiffs to act as Lead Plaintiffs and has consolidated all lawsuits into a single action. No class has been certified. On January 25, 2001, the Court granted Captaris' motion to dismiss the consolidated complaints on the grounds that "none of the four events relied upon by plaintiffs, whether considered separately or in combination, gives rise to a strong inference that any of the defendant directors or officers acted with knowledge or deliberate recklessness." The Court dismissed the claims against four Captaris officers and directors with prejudice. Based on additional representations made by plaintiffs' counsel at oral argument, the Court granted plaintiffs' request that they be allowed to file an amended complaint to attempt to correct the legal deficiencies the Court identified in the consolidated complaint as to Captaris and two officers. Plaintiffs filed their Second Consolidated Amended Complaint on February 25, 2001. Captaris and the two remaining individual defendants have filed a motion to dismiss the Second Consolidated Amended Complaint with prejudice. On July 2, the Court granted Captaris' motion and ruled in its favor, dismissing all claims against the plaintiffs with prejudice. The plaintiffs filed a notice of appeal on July 31, 2001.

The original Complaint alleges that defendants issued a series of false and misleading statements during the Class Period which concealed AVT's true financial condition in order to prevent the decline in the price of AVT stock, in order to reap more than $46 million in insider trading proceeds. On March 17, 2000, the Company stunned investors revealing that it would fall desperately short of meeting its forecasted earnings for the first quarter 2000 and for the entire year 2000. This revelation caused AVT stock to be halted on NASDAQ and ultimately to plummet to $11.38 per share, a decline of approximately 34% from its Class Period high of $33.25, on extraordinary volume of 18,142,800 shares (compared to AVT's three-month average volume of 288,762 shares).