UNITED STATES SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 17622 / July 17, 2002

SECURITIES AND EXCHANGE COMMISSION v. Richard S. Berger, Misc. Action No. 4-02-MC-008-Y, USDC, NDTX (Fort Worth Division)

U.S. DISTRICT COURT ISSUES ORDER REQUIRING COMPLIANCE
IN SEC SUBPONEA ENFORCEMENT ACTION

On July 11, 2002, the U.S. District Court for the Northern District of Texas granted the SEC's application for enforcement of an investigative subpoena against Richard S. Berger, the former Chief Financial Officer for Piranha, Inc. In its order, the Court denied motions brought by Berger, including one to prohibit the SEC from bringing an enforcement action against Berger for 60 days and another to force the SEC to "cooperate" with Berger. The Court ordered Berger to produce all responsive documents on or before July 21, 2002.

In finding that the subpoena was enforceable as written, the Court held that Berger failed to demonstrate that the SEC's subpoena was issued in bad faith, or was overbroad in scope. The Court also held that Berger did not have a "privacy interest" in his personal tax returns and that Berger failed to show any circumstances that warranted delaying the SEC's investigation.

The SEC filed its Motion for Immediate Order Directing Compliance with Subponea Duces Tecum on April 24, 2002. The subpoena seeks documents regarding, among other things, whether Berger, Piranha, or others issued false and misleading press releases, overstated the value of assets in its SEC filings, understated amortization expenses, and failed to disclose over $600,000 in unauthorized payments to Berger. The SEC's motion alleges that the subpoenaed documents are needed to determine if Berger, Piranha, or others have violated or are about to violate provisions of the federal securities laws.

Piranha is a Richardson, Texas, development stage company in the business of data-compression and other computer and Internet related technology. Piranha's common stock is registered with the Commission and is quoted on the OTC Bulletin Board (symbol BYTE), an electronic quotation service operated by the National Association of Securities Dealers. Besides being the former CFO, Berger is Piranha's largest single shareholder and a member of its Board of Directors.