Court Rules in Favor of GK Intelligent Systems in U.S. Quest Case.

HOUSTON--(BUSINESS WIRE)--March 18, 1999--GK Intelligent Systems Inc. (AMEX:GKI) today announced that U.S. District Judge Lynn N. Hughes granted the company's Motion for Summary Judgment and dismissed a lawsuit filed in January 1998 against GKI and Chief Executive Officer Gary Kimmons by U.S. Quest Ltd. and Jocody Financial Inc.

The court found that GKI did not breach its contract with former consultant Bob Jordan or the companies he controls, U.S. Quest and Jocody Financial. The court also found that GKI did not commit fraud and did not violate state or federal securities laws, as alleged by the plaintiffs.

"We are pleased that the court moved quickly to resolve this case after determining that the lawsuit was without merit," Kimmons said. "We will continue to vigorously defend ourselves against such lawsuits in order to preserve our company's reputation and protect our shareholders' investment."

In its suit against the company, U.S. Quest and Jocody Financial claimed that Jordan's companies were entitled to more than 500,000 shares of the company's common stock or damages in excess of $500,000 as additional compensation for services.

During an oral hearing on GKI's summary judgement motion, Judge Hughes said that "Quest was in no way misled about the nature or quality or a characteristic of (the company's) stock," and further commented that "nowhere has Jordan identified a present material fact which GK knew was false when it was represented to him, on which he reasonably relied to his material detriment. We have a post-execution dispute about performance under the contract. There's no common-law fraud, there's no state or federal securities law fraud."

The court ruled in final judgment that Jordan is entitled to 10,000 warrants to purchase 10,000 shares of common stock at a strike price of $2.00 per share through Dec. 31, 2007, and ruled that U.S. Quest and Jocody Financial Inc., take nothing from Kimmons or GKI on all other claims.

GK Intelligent Systems Inc., with headquarters in Houston, is developing intelligent training software that dynamically adapts to the learning styles and abilities of individual users. The company is creating products to meet the education and information needs of consumers, corporate training managers and executive decision-makers.

Statements in this news release that are not historical facts, including statements about plans and expectations regarding products and opportunities, demand and acceptance of new or existing products, capital resources and future financial results are forward-looking. Forward-looking statements involve risks and uncertainties which may cause the Company's actual results in future periods to differ materially from those expressed. These uncertainties and risks include changing consumer preferences, lack of success of new products, loss of the Company's customers, competition and other factors discussed from time to time in the Company's filings with the Securities and Exchange Commission.