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InfoSonics Enters Into Agreement To Establish Wireless Handset Engineering And Design Facility In China

InfoSonics Corporation (NASDAQ: IFON), one of the premier providers of wireless handset solutions serving Latin America, today announced the execution of a Memorandum of Understanding with KingRoger Technology Company Limited, a British Virgin Island Company headquartered in Beijing, China (KingRoger).

Under this agreement, KingRoger will partner with InfoSonics’ newly created Beijing-based subsidiary, Verykool Wireless Technologies Limited (VWTL), to provide engineering and design services including second (2G) and third generation (3G) wireless technologies for InfoSonics’ verykool® product lines. KingRoger members will collectively hold an indirect minority interest in the venture. VWTL’s operations are subject to securing necessary authorizations from applicable governmental authorities.

“We are enthusiastic about the long term potential for this relationship,” stated Joseph Ram, president and CEO of InfoSonics. “We will be able to invest in and establish a new engineering and design facility based in China where KingRoger will provide the requisite technical expertise and know-how to develop new and exciting products in China for sale and distribution to Latin America as well as other markets worldwide.

“This agreement is part of our overall strategy to enhance our verykool® product lineup and add new models to our current product offering throughout Latin America. We believe this presence in Asia, will also give us greater flexibility as we look to enter new markets with our verykool® product offerings.”

About InfoSonics Corporation

InfoSonics is one of the premier providers of wireless handsets solutions serving Latin America. For the wireless telecommunications industry, InfoSonics provides flexible and cost effective solutions, including product assembly, purchasing, marketing, selling, warehousing, order assembly, programming, packing, shipping, and delivery. InfoSonics supports manufacturers in moving their products to agents, resellers, distributors, independent dealers, retailers and wireless network operators in Latin America. For additional information, please visit www.infosonics.com.

About verykool ®

InfoSonics’ verykool ® proprietary line of mobile phones covers a full spectrum of product offerings, including entry level handsets and full featured phones, both mid-tier and high end. The verykool ® phones are compact, stylish handsets, available in multiple fashion color options and filled with the most popular features demanded by consumers, such as, audio and multimedia players; cameras; PC Sync; expansion memory slots; and GSM ‘world phone’ standards. InfoSonics is initially focused on selling its proprietary verykool® line of products to carrier customers in Latin America, with the potential for geographic expansion opportunities in the future. To view InfoSonics’ verykool ® product lineup please visit www.verykool.net and our verykool ® members participation zone at www.verykool.net/zone.

Cautionary Statement for the Purpose of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995

The matters in this press release that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements about future revenues, sales levels, operating income and margins, wireless handset sales, stock-based compensation expense, gain/loss in value of derivatives, cost synergies, operating efficiencies, profitability, market share, and rates of return, are based on current management expectations that involve certain risks and uncertainties. These risks and uncertainties, in whole or in part, could cause such expectations to fail to be achieved and have a material adverse effect on InfoSonics’ business, financial condition and results of operations, and include, without limitation: (1) intense competition internationally, including competition from alternative business models, such as manufacturer-to-carrier sales, which may lead to reduced prices, lower sales, lower gross margins, extended payment terms with customers, increased capital investment and interest costs, bad debt risks and product supply shortages; (2) dependency on Latin American sales a majority of which are from Argentina, which may be significantly reduced or eliminated as a result of the recently adopted tax/duty by Argentina; (3) the ability of the Company to successfully design, manufacture, introduce and sell its verykool® products and the related inventory risk of such products; (4) the ability of the Company to successfully establish, integrate and operate its new design facility in Beijing, China, (5) extended general economic downturn; (6) inability to secure adequate supply of competitive products on a timely basis and on commercially reasonable terms; (7) foreign exchange rate fluctuations, devaluation of a foreign currency, adverse governmental controls or actions, political or economic instability, or disruption of a foreign market, including, without limitation, the imposition, creation, increase or modification of tariffs, taxes, duties, levies and other charges and other related risks of our international operations, such as the recently adopted tax/duty change in Argentina on certain electronics (including cellular phones) which could significantly increase selling prices to our customers and end-users; (8) the ability to attract new sources of profitable business from expansion of products or services or risks associated with entry into new markets, including geographies, products and services; (9) an interruption or failure of our information systems or subversion of access or other system controls may result in a significant loss of business, assets, or competitive information; (10) significant changes in supplier terms and relationships; (11) termination of a supply or services agreement with a major supplier or product supply shortages; (12) continued consolidation in the wireless handset carrier market; (13) loss of business from one or more significant customers; (14) customer and geographical accounts receivable concentration risk and other related risks; (15) rapid product improvement and technological change resulting in inventory obsolescence; (16) terrorist or military actions; (17) the loss of a key executive officer or other key employees; (18) changes in consumer demand for multimedia wireless handset products and features; (19) our failure to adequately adapt to industry changes and to manage potential growth and/or contractions; (20) seasonal buying patterns; (21) uncertain political and economic conditions internationally; (22) the resolution of any litigation for or against the Company; and (23) the ability of the Company to generate taxable income in future periods in order to utilize and realize any quarterly tax benefits recorded. Our actual results and condition could differ materially from those anticipated in our forward-looking statements.

InfoSonics has instituted in the past and continues to institute changes to its strategies, operations and processes to address these risk factors and to mitigate their impact on InfoSonics’ results of operations and financial condition. However, no assurances can be given that InfoSonics will be successful in these efforts. For a further discussion of significant factors to consider in connection with forward-looking statements concerning InfoSonics, reference is made to Item 1A Risk Factors of InfoSonics’ Annual Report on Form 10-K for the year ended December 31, 2009; other risks or uncertainties may be detailed from time to time in InfoSonics’ future SEC filings. InfoSonics does not intend to update any forward-looking statements.

Copyright Business Wire 2010

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