SOURCE: Infosmart Group, Inc.

August 15, 2007 16:35 ET

Infosmart Revenue up 210% to $19.6 Million and Net Income up 190% to $3.2 Million for the Quarter Ended June 30, 2007

For the Six Months Ended June 30, 2007, Revenue up 117% Percent to $27.3 Million and Net Income up 97% to $3.9 Million

Best Quarterly Financial Results in the Company's History

HONG KONG--(Marketwire - August 15, 2007) - Infosmart Group, Inc. ("Infosmart" or the "Company") (OTCBB: IFSG), Hong Kong's leading recordable digital versatile disc ("DVDR") manufacturing company, announced record operating results for the quarter and six months ended June 30, 2007.

Infosmart reported record revenue of approximately $19.6 million for the quarter ended June 30, 2007, compared to approximately $6.3 million for the quarter ended June 30, 2006 -- a 210% increase. For the six months ended June 30, 2007, Infosmart reported record revenue of approximately $27.3 million, compared to approximately $12.6 million for the six months ended June 30, 2006 -- a 117% increase. The substantial increase in revenue was primarily attributable to the explosive growth in the Company's Brazilian operations. In addition, Infosmart has initiated product diversification through certain distributors into other non-disk storage media, such as flash products, to test the demand for such other products in Brazil and throughout South America.

Infosmart reported record net income applicable to common shareholders for the quarter ended June 30, 2007 of approximately $3.2 million, compared to net income applicable to common shareholders for the quarter ended June 30, 2006 of approximately $1.1 million -- a 190% increase. For the six months ended June 30, 2007, Infosmart reported record net income applicable to common shareholders of approximately $3.9 million, compared to net income applicable to common shareholders of approximately $2.0 million for the six months ended June 30, 2006 -- a 97% increase.

Based on 137,224,640 of weighted shares of common stock outstanding during the second quarter, Infosmart reported a profit applicable to common shareholders of approximately $0.02 per share for the quarter ended June 30, 2007 and $0.03 per share for the six months ended June 30, 2007.

"Our record results for the second quarter and first half of the year are concrete evidence of our blockbuster success in Brazil and a huge milestone for our Company," stated Mr. Andy Kwok, President and CEO of Infosmart. "The six month revenue number of approximately $27.3 million is already slightly higher than our sales for all of 2006. Our Brazilian business has exceeded our most optimistic expectations and has become the catalyst for the expansion and diversification of our business into other non-disk storage media," added Mr. Kwok.

Earnings Conference Call

Infosmart will host a conference call on Wednesday, August 22, 2007 to review second quarter 2007 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:          3568922

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 September 22, 2007. To access the replay by phone, please dial:

       U.S. and Canada:        1 (800) 642-1687
       International:          1 (706) 645-9291
       Conference ID:          3568922

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             23,307,549   16,614,003
                                     ------------ ------------

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

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