According to a press release dated May 22, 2003, on May 20, 2003, Federal Judge, the Honorable John L. Kane, approved the final settlement of the Accelr8 Technology Corporation (BULLETIN BOARD: ACLY) Securities Litigation Civil Action No. 00-K-938. Previously, Accelr8 announced the agreement to settle the class action lawsuit, subject to approval of the court. The final approval marks the end of three and a half years of litigation surrounding the alleged violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder relating to the Company's accounting and public disclosure from October 1997 to March 1999. The final terms of the settlement call for the payment of $450,000 and the issuance of 375,000 shares of Accelr8 common stock to a settlement fund. Monies were paid to the settlement fund March 4, 2003. In approving the settlement, the Court noted the difficulties the class faced in proving any right to recovery. David A. Zisser of Isaacson, Rosenbaum, Woods & Levy, attorney for Accelr8, recommended approval of the settlement, citing the sound business decision to terminate an open ended litigation expense. As previously reported, Accelr8's liability insurance carrier, Agricultural Excess and Surplus Insurance Company (AESIC) paid Accelr8 $825,000 cash to settle a lawsuit brought by the insurance carrier in 1999 against Accelr8 for allegedly filing false representations in its 1998 10K regarding product capability and the accounting for its Year 2000 toolset. Thomas V. Geimer, Chairman and CEO of Accelr8, noted that this payment offsets the costs of settlement of the class action.

As summarized in the Notice of Pendency, on October 16, 2000 Consolidated Amended Class Action Complaint that was filed. On November 22, 2000, the Defendants filed a motion to dismiss the Complaint, which the Plaintiffs opposed, and, on January 23, 2001, the Honorable John L. Kane, Jr. issued an Order certifying the Class. The Court denied Defendants’ motion to dismiss the Complaint on May 17, 2001.

The original Complaint alleges that Accelr8 and certain of its officers violated section 10(b) of the Securities Exchange Act of 1934. Specifically, the Complaint alleges that defendants, among other things, materially overstated the Company's revenue, improperly recognized revenue relating to licensing and maintenance fees, failed to amortize capitalized software development costs, and failed to disclose that Accelr8's Navig8 2000 software, created to fix the millennium bug, was not available as a general Year 2000 remediation tool to the total universe of the programs that need Year 2000 solutions as represented during the Class Period. The Complaint alleges that, as a result of these material misstatements and omissions, Accelr8's stock price was artificially inflated throughout the Class Period.