On September 30, 2002, the Court entered the Memorandum Opinion and Order granting the defendants' motions to dismiss the second amended consolidated class action complaint. The Court dismissed the case with prejudice. Leave to amend the complaint was also denied.

According to the Company’s FORM 10-Q For The Quarterly Period Ended June 30, 2002, several similar actions were filed in the same court. All of these actions have been consolidated. On January 22, 2001, a consolidated amended complaint was filed. The Company moved to dismiss the consolidated complaint. On July 31, 2001, the Court granted the motion to dismiss. The Court granted plaintiffs 30 days leave to file an amended complaint. On August 30, 2001, plaintiffs filed an amended complaint. On September 21, 2001, the Company moved to dismiss the amended complaint. The Court has not yet ruled on the Company’s motion to dismiss. There has been no discovery to date, and no trial date has been established.

The original complaint charges Entrust and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Entrust develops, markets, and sells products and services that allow enterprises to manage trusted, secure electronic communications and transactions over networks. The complaint alleges that defendants misrepresented the revenues that Entrust was deriving from its public key infrastructure business and from its newly acquired enCommerce business, which together with defendants' false representations that Entrust would post 2Q 2000 EPS of $0.08, operated to artificially inflate the price of Entrust stock to a Class Period high of $82-3/4 on 6/30/00. This upsurge in Entrust's stock caused by defendants'false and misleading statements enabled Entrust to complete the $703 million stock-for-stock acquisition of enCommerce. On 7/5/00, two business days after the acquisition of enCommerce was completed, Entrust revealed that it was in fact suffering a huge decline in revenues, was not posting earnings per share growth, and contrary to defendants' repeated assurances, Entrust was forced to reveal the problems it had been experiencing during the Class Period in attempting to grow its business. This announcement caused its stock price to drop to as low as $34-3/8 (or over $40 per share) on record volume of 19 million shares on 7/5/00, causing hundreds of millions of dollars in damages to members of the Class.