SOURCE: Infosmart Group, Inc.

April 03, 2007 09:31 ET

Infosmart Group, Inc. Reports Record Annual Revenue of $27.1 Million

HONG KONG -- (MARKET WIRE) -- April 3, 2007 -- Infosmart Group, Inc. ("Infosmart" or the "Company") (OTCBB: IFSG), Hong Kong's leading recordable digital versatile disk ("DVDR") manufacturing company, has announced operating results for the quarter ended December 31, 2006 and year ended December 31, 2006.

Infosmart reported revenue of approximately $7.0 million for the quarter ended December 31, 2006, compared to approximately $6.1 million for the quarter ended December 31, 2005 -- a 14.8% increase. Infosmart reported revenue of approximately $27.1 million for the year ended December 31, 2006, compared to approximately $24.6 million for the year ended December 31, 2005 -- a 10.2% increase. This increase in revenue was primarily attributable to the affect of new market sales generated in Brazil and a substantial increase in sales in Australia, Asia and North America.

Infosmart also reported operating income of approximately $0.7 million for the quarter ended December 31, 2006, compared to approximately $0.8 million for the quarter ended December 31, 2005 -- a 12.5% decrease. Infosmart reported operating income of approximately $4.8 million for the year ended December 31, 2006, compared to approximately $5.0 million for the year ended December 31, 2005 -- a 4% decrease.

Infosmart reported net income applicable to common shareholders for the quarter ended December 31, 2006 of approximately $0.4 million, compared to net income applicable to common shareholders for the quarter ended December 31, 2005 of approximately $0.4 million. Infosmart reported a net loss applicable to common shareholders for the year ended December 31, 2006 of approximately $1.4 million, compared to net income applicable to common shareholders of approximately $4.2 million for the year ended December 31, 2005. Excluding approximately $5.1 million of one-time charges associated with its reverse merger and private placement transaction ($2.8 million) and a deemed dividend associated with the Series B Convertible Preferred Stock ($2.3 million), which were taken as an expense in the third quarter of 2006, Infosmart would have reported net income applicable to common shareholders of approximately $3.6 million for the year ended December 31, 2006.

Based on the weighted average of shares outstanding of approximately 119,188,957 as of December 31, 2006, Infosmart reported a profit of approximately $0.003 per share for the quarter ended December 31, 2006, compared to a profit of approximately $0.004 per share for the quarter ended December 31, 2005. Infosmart reported a net loss of approximately $0.01 per share for the year ended December 31, 2006, compared to a profit of $0.04 per share for the year ended December 31, 2005. Excluding approximately $5.1 million of one-time charges associated with its reverse merger and private placement transaction ($2.8 million) and a deemed dividend associated with the Series B Convertible Preferred Stock ($2.3 million), which were taken as an expense in the third quarter of 2006, Infosmart would have reported a net profit of approximately $0.03 per share for the year ended December 31, 2006.

As of December 31, 2006, a total of 191,701,894 shares of common stock were issued and outstanding on a fully diluted basis which included: 1) 135,801,426 basic common shares, 2) 24,459,088 common shares underlying the Series B Convertible Preferred Stock (on an as converted basis) and 3) 31,441,380 common shares underlying the outstanding warrants.

Earnings Conference Call

Infosmart will host a conference call on Thursday, April 5, 2007 to review 2006 earnings results. The conference call is scheduled for 9:00 a.m., Eastern Time (ET). To participate in the call, please dial:

U.S. and Canada:    1 (800) 374-0113
International:      1 (706) 758-9607
Conference ID:      3475615
A replay of the call will be available two hours after completion. You will be able to access it at any time through the Infosmart Website at www.infosmart.com.hk, or by phone until May 5, 2007. To access the replay by phone, please dial:
U.S. and Canada:    1 (800) 642-1687
International:      1 (706) 645-9291
Conference ID:      3475615
About Infosmart Group, Inc.

Infosmart operates a state of the art DVDR production facility in Hong Kong and is preparing to manufacture new writable High Density media (HD-DVDR). In addition, the Company expects to become one of the largest manufacturers of DVDR discs in Brazil in 2007. 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-KS 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.
(FORMERLY CYBER MERCHANTS EXCHANGE INC.)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
(Stated in US Dollars)

                                               Year ended December 31
                                           -------------------------------
                                              2006              2005

Net sales                                  $  27,102,441     $  24,577,206

Cost of sales                                (19,570,525)      (17,911,674)
                                           -------------     -------------

Gross profit                                   7,531,916         6,665,532

Administrative expenses                       (1,997,379)         (816,553)

Depreciation                                    (223,893)         (214,534)

Selling and distributing costs                  (475,781)         (641,096)
                                           -------------     -------------

Income from operations                         4,834,863         4,993,349

Professional expenses related to
 Restructuring and Share Exchange             (2,753,390)         (320,892)

Reversal of commission payable                         -           718,250

Other income                                     449,985           302,903

Interest expenses                               (511,322)         (520,827)
                                           -------------     -------------

Income before income taxes                     2,020,136         5,172,783

Income taxes                                    (955,592)         (958,022)
                                           -------------     -------------

Net income                                     1,064,544         4,214,761
                                           -------------     -------------

Series B preferred dividends                    (202,069)                -
Series B preferred deemed dividend            (2,297,157)                -
                                           -------------     -------------

                                              (2,499,226)                -
                                           -------------     -------------
Net (loss) income applicable to
 common shareholders                       $  (1,434,682)    $   4,214,761
                                           =============     =============

(Loss) earnings per share
 - basic and dilutive                      $       (0.01)    $        0.04
                                           =============     =============
Weighted average shares outstanding
 - basic and dilutive                        119,188,957       110,236,841
                                           =============     =============



INFOSMART GROUP INC.
(FORMERLY CYBER MERCHANTS EXCHANGE INC.)
CONSOLIDATED BALANCE SHEETS
AS OF DECMEBER 31, 2006 AND 2005
(Stated in US Dollars)

                                                   As of December 31
                                           -------------------------------
                                                2006             2005

ASSETS
Current assets
  Cash and cash equivalents                $     206,258     $     154,368
  Restricted cash                                552,193           263,085
  Trade receivables, net of allowance
   of doubtful debts of $nil in 2006
   and 2005                                    6,171,366         3,252,678
  Prepaid expenses and other receivables         269,477         1,478,343
  Inventories, net                             1,058,039         1,427,790
                                           -------------     -------------

Total current assets                           8,257,333         6,576,264
Deferred tax assets                              459,823            45,724
Plant and equipment                           33,911,540        18,298,753
Intangible assets                              2,092,809                 -
                                           -------------     -------------

TOTAL ASSETS                               $  44,721,505     $  24,920,741
                                           =============     =============

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
Current liabilities
  Trade payables                           $   2,926,078     $   1,800,984
  Other payables and accrued
   liabilities                                 8,756,675         1,102,953
  Income tax payable                             363,645                 -
  Current portion of bank borrowings           3,503,654         4,461,840
  Current obligations under
   capital leases                                      -            52,692
  Current portion of other loans               1,268,044         1,996,614
                                           -------------     -------------

Total current liabilities                     16,818,096         9,415,083
Non-current portion of bank borrowings         2,893,927                 -
Non-current portion of other loans             1,884,202         1,750,131
Advance from a related party                     927,991         2,217,054
Deferred tax liabilities                       3,001,360         2,497,054
                                           -------------     -------------

TOTAL LIABILITIES                          $  25,525,576     $  15,879,322
                                           -------------     -------------

COMMITMENTS AND CONTINGENCIES


INFOSMART GROUP INC.
(FORMERLY CYBER MERCHANTS EXCHANGE INC.)
CONSOLIDATED BALANCE SHEETS (cont'd)
AS OF DECEMBER 31, 2006 AND 2005
(Stated in US Dollars)

                                                   As of December 31
                                           -------------------------------
                                                2006             2005

Series B Redeemable Convertible
 Preferred Stock: No par value
   Authorized 1,800,000 shares; Issued
    and outstanding 911,974.54 shares      $   2,581,926     $           -
                                           -------------     -------------

STOCKHOLDERS' EQUITY
 Common stock: No par value
   Authorized: 2006 - 300,000,000 shares
    and 2005 - 40,000,000 shares; Issued
    and outstanding:
    2006 - 135,801,426.44 shares and
    2005 - 10,119,040 shares                   1,520,901                 1
 Preferred stock: No par value
   Authorized 7,000,000 shares; Issued
    and outstanding: 2006 and
    2005 - nil share                                   -                 -
 Series A Convertible Preferred Stock:
  No par value
   Authorized 1,200,000 shares; Issued
    and outstanding 2006 and
    2005 - nil share                                   -                 -
 Additional paid-in-capital                    8,118,664           619,877
 Accumulated other comprehensive income           19,237            31,658
 Retained earnings                             6,955,201         8,389,883
                                           -------------     -------------

TOTAL STOCKHOLDERS' EQUITY                    16,614,003         9,041,419
                                           -------------     -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $  44,721,505     $  24,920,741
                                           =============     =============

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