According to the Company’s FORM 10-Q for the quarterly period ended September 30, 2004, the lawsuit was dismissed on December 19, 2002 for failure to state a claim upon which relief could be granted. The plaintiffs appealed to the United States Court of Appeals for the Fifth Circuit. On July 26, 2004, the Court of Appeals for the Fifth Circuit dismissed the case. On August 6, 2004, the plaintiffs appealed to the Court of Appeals for the Fifth Circuit for a re-hearing, but on August 25, 2004 the re-hearing was denied. A mandate was issued on September 2, 2004 closing the case.
The original Complaint alleges that the defendants violated Sections 11 and 15 of the Securities Act of 1933 by making false and misleading representations in the June 7, 2001 Registration Statement and Prospectus (the Prospectus) prepared and disseminated by defendants in connection with the IPO. Plaintiff alleges, among other things, that the Prospectus contained material misrepresentations concerning the prices of natural gas and oil in the period preceding the IPO, as well as the effect of those prices upon the Company's business and the demand for the Company's services.