According to the Company’s FORM 1O-KSB for the fiscal year ended December 29, 2001, the court entered a final judgment approving the settlement on November 6, 2001, dismissing the case with prejudice. The settlement provided that all claims asserted in the action be dismissed and settled. Under the settlement, the Company and its Chief Executive Officer deny liability and any and all wrongdoing. The settlement provided for the payment of $455,000 in full, complete, and final settlement of any and all claims. Payment of the $455,000 was covered in full during fiscal 2001 by the Company’s Directors and Officers insurance provider.
As reported by the same SEC filing, in April 2000, the Company filed a motion to transfer venue of the action to the District of Oregon. The Company’s motion was granted on November 14, 2000. On July 13, 2001, the United States District Court for the District of Oregon entered a Preliminary Order providing for, among other things, a fairness hearing by the Court, which was held on September 24, 2001, to consider the proposed settlement arrived at by the Company, its Chief Executive Officer, and the lead plaintiffs.
The complaint alleges that Microfield and the Company's President and Chief Executive Officer of the Company, violated section 10(b) of the Securities Exchange Act of 1934. In particular, it is alleged that defendants issued a series of false and misleading statements concerning, among other things, the purchase agreement with 3M which caused a substantial increase in sales in late 1997 and early 1998 and the Company's failure to disclose that 3M had placed virtually no orders for the third and fourth fiscal quarter of 1998. The Complaint alleges that, as a result of these material misstatements and omissions, Microfield's stock price was artificially inflated throughout the Class Period.