SOURCE: Infosmart Group, Inc.

February 26, 2008 11:14 ET

InfoSmart Group, Inc. Provides Update on Blu-ray Disc Strategy

Company's Hedge on Blue-ray Opens New Strategic Opportunities

HONG KONG--(Marketwire - February 26, 2008) - InfoSmart Group, Inc. ("InfoSmart" or the "Company") (OTCBB: IFSG), a leading recordable digital versatile disc ("DVDR") manufacturer in Hong Kong and Brazil, today provided an update on its strategic plans regarding the Blue-ray Disc format.

In 2007, InfoSmart successfully transitioned several of its DVD production lines to the state of Bahia, Brazil, to capitalize on strong demand from South America. In doing so, InfoSmart opened a local subsidiary, Discobras, based in the state's largest city, Salvador. As a local employer and company operating in the computer information sector, Discobras' VAT rate is only 2.26% versus the standard 12% in Salvador and 18% in Sao Paulo. Discobras is equally exempt from paying import duties ("ICMS") on raw material for production. These materials are valued at 70% to 100% fully loaded costs of DVD imports. Both tax benefits will last through June 2016. The Company now intends to utilize this tax advantage as they prepare to enter the Blu-ray Disc market. The tax incentive available to InfoSmart in Brazil is also applicable to other household electronics, telecommunication equipment, and electronic storage media that would further leverage the competitiveness of its product pricing and avail the company to expand into other technology products covered under the tax benefit.

As it has been widely reported, the Blu-ray Disc format has taken a commanding competitive advantage over the HD DVD format. As of February 19, 2008, more than 450 Blu-ray Disc titles have been released in the U.S. and more than 250 in Japan. Blu-ray was locked in a format war with HD DVD until Blu-ray's victory on February 19, 2008. On that day, Toshiba -- the main driving force behind HD DVD -- announced it would no longer develop, manufacture and market HD DVD players and recorders. Some analysts believe that Sony's PlayStation 3 video game console played an important role in the format war as the PlayStation system used a Blu-ray disc drive as its primary information storage medium. They also credited Sony's more thorough and influential marketing campaign.

InfoSmart initiated discussions with Sony and Philips on a Blu-ray Disc licensing agreement in January 2008, and the Company continues to make steady progress in these negotiations. Based on the recent events, it is the Company's intent to accelerate the negotiation process with senior management members of Sony. InfoSmart's intent as a provider of Blu-ray Discs is not just to produce blank Blu-ray Discs, but also higher margin duplications of many entertainment films and material for distributors. InfoSmart has done much of this work since 2002 as an authorized dealer with many film distributors in Asia. These distributors have purchased the rights from various U.S. entertainment giants including Viacom, Sony, Paramount, Vivendi, to name a few examples. The Company is making much headway for new agreements with similar firms in Japan, China, Hong Kong and other Asian countries.

InfoSmart is also in discussions with one of the two Blu-ray Disc producing machine vendors to initiate an agreement regarding their Blu-ray production machines, and is currently testing and planning for their installation. InfoSmart has secured the support from their bankers to move forward with this potential purchase with only 5%-10% down payment and a financing to lease with an option to purchase the Blu-ray Disc machines. InfoSmart is capable of adding Blu-ray Disc production lines in the next 4 -5 months. This will enable the Company to retain their competitive advantage as a pioneer in this industry.

InfoSmart has discussed their strategic plan concerning Blu-ray with their current customers in Brazil and other parts of the world. Based on the current DVD market and existing DVD players, the Company foresees there would be at least a 3-5 year period for the current HD DVDs to remain in the market before they are transitioned which will protect current market pricing and the expanding production capabilities of InfoSmart. InfoSmart believes that the change to Blu-ray provides a good opportunity for the Company to make higher profits, while they maintain their competitive edge in leveraging the Brazilian market through their local manufacturing base and tax-driven advantages in the traditional DVD market.

The Company's President and CEO, Parker Seto, is preparing to transition InfoSmart's international markets to the new standard, Blue-ray formatted discs. "The news was not a big surprise to a lot of us in the industry. We have anticipated a 36 to 72 month transition phase and have begun negotiations with several key partners to develop the new standard moving forward," Seto stated. "This time frame will allow InfoSmart to drive existing HD DVD revenues while simultaneously introducing higher margin Blu-Ray DVD products into our sales channels," Seto concluded.

InfoSmart has already initiated its diversification product strategy through not only Blu-ray Discs, but also MP4, flash cards, and other electronic appliances. Geographically, they are growing throughout South America, Europe, Australian, Asia and the U.S. This strategy will ensure that the Company will not be over-dependent on any one product, market or geographical location.

About InfoSmart Group, Inc.

InfoSmart operates state-of-the-art DVDR and storage media production facilities in Hong Kong and Brazil and is preparing to manufacture Flash card memory, a kind of new writable storage devices, with maximum flexibility to upgrade its production capacity to include production of High-Density (HD) Disk market. In addition, the Company is one of the largest manufacturers of DVDR discs in Brazil and all of South America. Flash memory devices will be the storage media of choice for years to come, whether the Company is being able to manufacture 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 as InfoSmart's current product mix.


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.

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