According to the Company’s FORM 10-K for the fiscal year ended December 31, 2004, nine securities class action lawsuits were filed against Leap, and certain of its officers and directors, in the United States District Court for the Southern District of California on behalf of all persons who purchased or otherwise acquired Leap’s common stock from February 11, 2002 through July 24, 2002. Those lawsuits were all virtually identical to one another. The plaintiffs alleged that the defendants were responsible for the dissemination of a series of material misrepresentations to the market during the class period, thereby artificially inflating the price of Leap’s common stock. The complaint sought an unspecified amount of damages, plus costs and expenses related to bringing the actions. No class was certified in the lawsuit. The defendants filed a motion to dismiss the amended complaint, stating that the amended complaint failed to plead any facts which show that any representations were made by Leap or any other defendants or that any of the alleged misrepresentations caused a change in the value of Leap’s shares. On August 26, 2004, the court granted the defendants’ motion to dismiss, but granted the plaintiffs leave to amend their complaint. The plaintiffs did not file an amended complaint and a court order voluntarily dismissing the action with prejudice was issued on January 7, 2005

On April 13, 2003, Leap filed a voluntary petition for bankruptcy protection under Chapter 11 in the United States Bankruptcy Court for the Southern District of California. Accordingly, Leap is currently not a defendant.

The original Complaint alleges defendants Leap and certain of its officers and directions defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market during the Class Period thereby artificially inflating the price of Leap's securities. Specifically, the Complaint alleges that in starting on February 11, 2002, the day after the Company publicly announced its financial results for its fiscal year ending December 31, 2002, defendants concealed the deteriorated value of its wireless license assets by undertaking a fraudulent impairment test of those assets which grossly overstated the value of Leap's wireless license assets in its financial statements. The Complaint alleges that defendants were motivated by the need to preserve the image of Leap as a viable wireless company with valuable assets, sufficient to persuade lenders, investors and vendors to provide capital, loans and equipment to the Company. Defendants issued materially false and misleading statements on February 11, 2002, April 24, 2002 and May 2, 2002. On July 24, 2002, the last day of the class period, Leap announced its financial results for its second quarter of 2002 and admitted for the first time that circumstances existed throughout the year were adversely affecting the Company. On this news the market price of Leap shares fell from a Class Period high of $10.00 to below $1.00 and are presently trading at less that $.40 per share.