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Infosmart Group, Inc. Posts Record Annual Revenue Of $27.1 Million


WEBWIRE

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.



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