LOS ANGELES, July 21, 2006 (PRIMEZONE) -- Glancy Binkow & Goldberg LLP - representing shareholders of InfoSonics Corporation - announces 24 days remaining to move to be a lead plaintiff in the shareholder lawsuit. All persons and institutions who purchased securities of InfoSonics Corporation ("InfoSonics" or the "Company")(AMEX:IFO) between May 8, 2006 and June 12, 2006, inclusive (the "Class Period"), may move the Court not later than August 14, 2006, to serve as lead plaintiff, however, you must meet certain legal requirements.
If you wish to receive a copy of the Complaint, or have any questions concerning your rights or interests with respect to these matters, please contact Michael Goldberg, Esquire, of Glancy Binkow & Goldberg LLP, 1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067, by telephone at (310) 201-9150, Toll Free at (888) 773-9224, or e-mail to info@glancylaw.com, or visit our website at www.glancylaw.com.
The Complaint charges InfoSonics and certain of the Company's executive officers with violations of federal securities laws. Among other things, plaintiff claims that defendants' material omissions and dissemination of materially false and misleading statements concerning InfoSonics' financial performance caused the Company's stock price to become artificially inflated, inflicting damages on investors. InfoSonics distributes wireless handsets and accessories in the United States and Latin America. The Complaint alleges that during the Class Period defendants filed a quarterly report with the SEC and made false and misleading statements to the investing public concerning InfoSonics' financial condition. Those financial statements were false and misleading because they improperly classified the Company's previously issued warrants as derivative liability rather than equity, thereby artificially inflating InfoSonics' net income by more than 33%.
On June 12, 2006, the Company filed with the SEC an amended Form 10-Q for the period ended March 31, 2006, and announced that its previously filed Form 10-Q was false and required restatement. Specifically, the Company admitted that it had failed to comply with Generally Accepted Accounting Principles ("GAAP"), Financial Accounting Standards No. 133, and Emerging Issues Task Force ("EITF 00-19") when it originally classified previously issued warrants as a liability when they should have been classified as equity. That classification, when made and issued, was contrary to GAAP and thereby false.
As a result of the restatement, the Company's first-quarter net income was reduced to $1.2 million, or $0.15 per share, from its previously reported $1.7 million, or $0.22 per share. The restatement reduced the Company's previous first-quarter net income by approximately 33%.
The news that InfoSonics had materially misrepresented its financial condition and would need to issue a restatement caused the Company's stock to plummet, from the previous day's closing price of $24.22 to $17.05 - a $7.17 drop or nearly 30%. During the Class Period, the stock traded as high as $33.53 per share.
Plaintiff seeks to recover damages on behalf of Class members and is represented by Glancy Binkow & Goldberg LLP, a law firm with significant experience in prosecuting shareholder lawsuits, and substantial expertise in actions involving corporate fraud.
If you are a member of the Class described above, you may move the Court, not later than August 14, 2006, to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this Notice or your rights or interests with respect to these matters, please contact Michael Goldberg, Esquire, of Glancy Binkow & Goldberg LLP, 1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067, by telephone at (310) 201-9150 or Toll Free at (888) 773-9224 or by e-mail to info@glancylaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.