According to a press release dated FORM 10-K for the fiscal year ended December 31, 2000, on February 6, 2001, the parties entered into a stipulation pursuant to which plaintiffs agreed to voluntarily dismiss the lawsuit without prejudice. By Order dated February 8, 2001, the court approved the parties' stipulation and dismissed the lawsuit. No consideration was exchanged in connection with the dismissal and neither the lead plaintiffs nor their counsel will receive any compensation or reimbursement of expenses.

The complaint charges Scientific and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Scientific develops, markets and sells neuroscience-based software and educational products and services designed to increase human learning and performance. The complaint alleges that defendants' false and misleading statements concerning the revenues to be derived from Scientific's sales of its software artificially inflated the price of Scientific stock to a Class Period high of $23?. This upsurge in Scientific's stock caused by defendants' alleged false and misleading statements enabled defendants to sell 68,300 Scientific shares for proceeds of $1.3 million. On 7/11/00, and days after defendants had received over $1.3 million in trading proceeds, Scientific revealed that it was in fact suffering a huge drop in revenues associated with changes in executive leadership (i.e., superintendent of four separate school districts). Even defendants' explanation for Scientific's disappointing 2ndQ 00 results was false and misleading.