Loch Harris Inc.

LITIGATION RELEASE NO. 16856 \ January 8, 2001

SECURITIES AND EXCHANGE COMMISSION v. Loch Harris Inc., Misc. Action No. 4-00-MC-0046-Y, USDC, NDTX (Fort Worth Division)

On December 18, 2000, the Securities and Exchange Commission filed an Application for an Order to Show Cause in the United States District Court for the Northern District of Texas against Loch Harris Inc. The Application seeks to have the Court order Loch Harris to produce documents and testimony, pursuant to a subpoena duces tecum issued and served by the Commission in connection with an ongoing Commission investigation. In its Application, the Commission alleges that Loch Harris' failure to comply with the subpoena has impeded the Commission's investigation.

According to the Commission's Application, its investigation involves, among other things, whether Loch Harris and others may have made materially false or misleading statements, or omitted material facts, in connection with the offer, purchase or sale of Loch Harris securities. The possibly false and misleading statements concern technologies or devices known as "Eliminate Landmines Forever" ("ELF") and Vacuum Multi-constituent Monitor for Plasma ("VAMMP"). Over the last twelve months, Loch Harris has issued a series of press releases regarding the development, operation, capabilities, testing and production of ELF and VAMMP. Loch Harris claims and press releases regarding these technologies appear to have influenced trading in the common stock of the company. The Commission's Application alleges that the subpoenaed documents and testimony are necessary to a determination as to whether Loch Harris and others have violated or are about to violate provisions of the federal securities laws.