Baron Capital Enterprise Inc (BCAP)

[rhou]

On September 28, 2006, the Company was served with a summons filed in Supreme Court in New York, the suit is relative to the purchase agreements signed in October of 2003 and February of 2004 concerning Total Identity Systems, Inc. During January 2007 our motion to compel arbitration and stay the lawsuit was granted pending the outcome of the arbitration. During February 2007, the plaintiff appealed the decision and we are awaiting the outcome of the appeal.