On June 11, 2002, a Stipulation of Settlement was filed, and on October 9, 2002, the Court entered the Final Judgment and Order of Dismissal with Prejudice by U.S. District Judge Margaret M. Morrow. Pursuant to Rule 23 of the FRCP, the Court approved the settlement as set forth in Stipulation and the case was terminated. The Court further entered the Order awarding attorney fees equal to 20% of the settlement fund, litigation costs in the amount of $54,576.92, and awarded $2,000.00 and $750.00 to lead plaintiffs Sanford Israel and Thomas Becker, respectively.

According to the Company’s Form 10-K for the fiscal year ended February 28, 2003, on June 18, 2001, the twenty actions were consolidated into a single action pursuant to stipulation of the parties, and lead plaintiffs' counsel was appointed. In July 2001, all of the Company's directors were named as defendants in the above-entitled shareholder derivative lawsuit filed in Los Angeles Superior Court. In December 2001, the parties reached an agreement to settle both the class action litigation and the shareholder derivative lawsuit for the aggregate sum of $1.5 million, subject to final Court approval. Of this amount, the Company's primary directors and officers liability insurance carrier agreed to contribute $575,000 toward the settlement, which amount was paid in December 2001. The Company accrued its $925,000 share of the settlement in the fiscal year ended February 28, 2002. Of this amount, $425,000 was paid by the Company in December 2001, and the remaining $500,000 was paid in October 2002 upon the Court's final approval of the settlement agreement.

The original complaint was filed charging California Amplifier with violations of the Securities Exchange Act of 1934. On March 29, 2001, California Amplifier announced that it will restate its fiscal 2000 financial statements because of accounting misstatements.