According to the Company’s FORM 10-Q for the quarterly period ended September 30, 2000, on July 11, 2000, the Court dismissed without prejudice the class action complaint. The Court found that the plaintiff had failed to allege sufficient facts to state a claim in light of the heightened pleading standards applicable to the allegations made in the complaint. Under the Court's order, the plaintiff was granted an opportunity to amend his complaint at any time within 30 days of the Court's order to attempt to state a cognizable claim. The parties subsequently entered into a stipulation to voluntarily dismiss the action, which was entered by the court on September 5, 2000.
The Complaint charges Eco Soil and several of its top officers with violations of the securities laws and regulations of the United States. The Complaint alleges that defendants issued a series of false and misleading statements and omissions concerning the Company's revenue and operations. Specifically, the Complaint alleges that the Company presented itself as one whose business was primarily focused on the golf course industry and completely failed to disclose its reliance on and risks involved with its Mexican agricultural operations. Upon the announcement that it anticipated a $3 million shortfall in revenue due to problems in the Mexican tomato industry, the Company's stock price dropped approximately 41% on extraordinarily heavy trading volume.