SOURCE: Infosmart Group, Inc.

August 22, 2007 06:30 ET

Infosmart Files Amended Quarterly Report on Form 10-QSB/A for Quarter Ended June 30, 2007 and Restates Total Stockholders' Equity

Total Stockholders' Equity as of June 30, 2007 Restated From $23,307,549 to $20,875,859

HONG KONG--(Marketwire - August 22, 2007) - Infosmart Group, Inc. ("Infosmart" or the "Company") (OTCBB: IFSG), Hong Kong's leading recordable digital versatile disk ("DVDR") manufacturing company, announced today that it has filed an amended quarterly report on Form 10-QSB/A (the "Amended Quarterly Report") to restate the financial statements and the financial notes in its quarterly report on Form 10-QSB (the Quarterly Report") filed on August 15, 2007. An inadvertent transcription error necessitated the restatements. The Amended Quarterly Report, filed on August 17, 2007, restates the financial statements and the financial notes contained in the Quarterly Report. The Company's financial statements, as restated, did not contain any material changes other than the total shareholders' equity figure, which was restated from $23,307,549 to $20,875,859. The Company has also filed its current report on Form 8-K on August 21, 2007, advising that the financial statements and financial notes in the Quarterly Report should no longer be relied upon.

About Infosmart Group, Inc.

Infosmart operates state-of-the-art DVDR production facilities in Hong Kong and Brazil and is preparing to manufacture new writable High Density media (HD-DVDR). In addition, the Company is one of the largest manufacturers of DVDR discs in Brazil and all of South America. Optical disc media will be the storage media of choice for years to come, whether as HD-DVDR for mature markets or traditional DVDR for developing markets. No other storage media available rivals its combination of high capacity, low cost and exceptional portability.

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements, as defined in the Securities Reform Act of 1995 (the "Reform Act"). The safe harbor for forward-looking statements provided to companies by the Reform Act does not apply to Infosmart Group, Inc. (the "Company"). However, actual events or results may differ from the Company's expectations on a negative or positive basis and are subject to a number of known and unknown risks and uncertainties including, but not limited to, competition with larger companies, development of and demand for a new technology, risks associated with a startup company, risks associated with international transactions, general economic conditions, availability of funds for capital expenditure by customers, availability of timely financing, cash flow, timely delivery by suppliers, ability to produce our DVDRs and their components, ability to maintain quality control, collection-related risks from international transactions, or the Company's ability to manage growth. Other risk factors attributable to the Company's business may affect the actual results achieved by the Company including those that are found in the Company's Annual Report on Form 10-KBS filed with the SEC on April 2, 2007, and subsequent Quarterly Reports on Form 10-QSB and subsequent Current Reports filed on Form 8-K that will be included with or prior to the filing of the Company's next Quarterly or Annual Report.

INFOSMART GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2007 and 2006
(Unaudited)
(Stated in US Dollars)

                       Three months ended            Six months ended
                             June 30,                    June 30,
                    --------------------------  --------------------------
                        2007          2006          2007          2006

Net sales           $ 19,608,031  $  6,330,486  $ 27,306,446  $ 12,562,004

Cost of sales        (14,506,478)   (4,436,765)  (20,419,825)   (9,077,139)
                    ------------  ------------  ------------  ------------

Gross profit           5,101,553     1,893,721     6,886,621     3,484,865

Administrative
 expenses             (1,254,629)     (399,731)   (2,185,679)     (731,409)

Selling and
 distributing costs     (161,533)     (150,426)     (241,049)     (198,713)
                    ------------  ------------  ------------  ------------

Income from
 operations            3,685,391     1,343,564     4,459,893     2,554,743

Other income              90,740       119,725       579,699       171,250

Interest expenses       (191,900)     (127,335)     (334,440)     (275,486)
                    ------------  ------------  ------------  ------------

Income before
 income taxes          3,584,231     1,335,954     4,705,151     2,450,507

Income taxes            (287,540)     (242,048)     (503,177)     (437,095)
                    ------------  ------------  ------------  ------------

Net income             3,296,691  $  1,093,906     4,201,974  $  2,013,412

Minority interest          5,024                       5,024

Net income before
 dividend              3,301,715                   4,206,998

Series B preferred
 dividend               (124,712)            -      (250,123)            -
                    ------------  ------------  ------------  ------------

Net income applicable
 to common
 shareholders          3,177,003  $  1,093,906     3,956,875  $  2,013,412
                    ============  ============  ============  ============

Earning per share

  - basic           $       0.02  $  1,093,906  $       0.03  $  2,013,412
                    ============  ============  ============  ============

  - dilutive        $       0.02  $  1,093,906  $       0.03  $  2,013,412
                    ============  ============  ============  ============

Weighted average
 shares outstanding

  - basic            137,224,640             1   137,224,640             1
                    ============  ============  ============  ============

  - dilutive         138,083,549             1   138,083,549             1
                    ============  ============  ============  ============



INFOSMART GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2007 AND DECEMBER 31, 2006
(Stated in US Dollars)

                                               As of
                                     -------------------------
                                        June 30,   December 31,
                                          2007         2006
                                      (Unaudited)   (Audited)

ASSETS
 Current assets
  Cash and cash equivalents          $    611,214 $    206,258
  Restricted cash                         202,892      552,193
  Trade receivables (net of
   allowance for doubtful accounts
   of $Nil for 2007 and 2006)          14,855,580    6,171,366
  Prepaid expenses and other
   receivables                          1,309,585      269,477
  Inventories (net of allowance of
   $Nil for 2007 and 2006)              2,398,827    1,058,039
                                     ------------ ------------

 Total current assets                  19,378,098    8,257,333
 Deferred tax assets                       33,530      459,823
 Plant and equipment, net              32,614,314   33,911,540
 Intangible assets                      1,937,785    2,092,809
                                     ------------ ------------

TOTAL ASSETS                         $ 53,963,727 $ 44,721,505
                                     ============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
 Current liabilities
  Trade payables                     $  8,303,242 $  2,926,078
  Other payables and accrued
   liabilities                          6,311,654    8,756,675
  Income tax payable                      569,515      363,645
  Current portion of bank
   borrowings                           4,909,623    3,503,654
  Finance lease payable                     5,573            -
                                     ------------ ------------
  Current portion of other loans        1,680,456    1,268,044
                                     ------------ ------------

 Total current liabilities             21,780,063   16,818,096
 Non-current portion of bank
  borrowings                            3,463,516    2,893,927
 Non-current portion of other loans     1,421,064    1,884,202
 Non-current portion of finance
  lease payable                             1,066            -
 Advance from a related party           1,178,626      927,991
 Deferred tax liabilities               2,811,843    3,001,360
                                     ------------ ------------

TOTAL LIABILITIES                    $ 30,656,178 $ 25,525,576
                                     ------------ ------------



INFOSMART GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (CONT'D)
AS OF JUNE 30, 2007 AND DECEMBER 31, 2006
(Stated in US Dollars)

                                               As of
                                     -------------------------
                                       June 30,   December 31,
                                         2007         2006
                                     (Unaudited)   (Audited)
COMMITMENTS AND CONTINGENCIES
Series B Redeemable Convertible
 Preferred Stock: No par value

   Authorized 1,800,000 shares;
    Issued and outstanding:
    2007 - 858,909 shares and 2006 -
    911,974.54 shares                $  2,431,690 $  2,581,926
                                     ------------ ------------

STOCKHOLDERS' EQUITY
  Common stock: No par value
   Authorized: 300,000,000 shares;
   Issued and outstanding: 2007 -
   137,224,640.29 shares and 2006 -
   135,801,426.44 shares                1,671,137    1,520,901
  Preferred stock: No par value
   Authorized 7,000,000 shares;
   Issued and outstanding: 2007 and
   2006 - nil shares                            -            -
  Series A Convertible Preferred
   Stock: No par value Authorized
   1,200,000 shares; Issued and
   outstanding: 2007 and 2006 -
   nil shares                                   -            -

 Additional paid-in-capital             8,118,664    8,118,664
 Accumulated other comprehensive
  income                                  127,195       19,237
   Minority interest                       46,787            -
   Retained earnings                   10,912,076    6,955,201
                                     ------------ ------------

TOTAL STOCKHOLDERS' EQUITY             20,875,859   16,614,003
                                     ------------ ------------

TOTAL LIABILITIES AND STOCKHOLDERS'
 EQUITY                              $ 53,963,727 $ 44,721,505
                                     ============ ============

Contact Information