INFOSONICS REACHES COMPREHENSIVE SETTLEMENT IN SECURITIES CLASS ACTION AND DERIVATIVE LAWSUITS

Settlement subject to court approval; InfoSonics admits no wrongdoing

SAN DIEGO, CA, August 12, 2008 – InfoSonics Corporation (NASDAQ: IFON), today announced that the Company reached a settlement in both the securities class action lawsuit entitled In Re: InfoSonics Corporation Securities Litigation, Lead Case No. 06 CV 1231, and the derivative lawsuit entitled In Re: InfoSonics Corporation Derivative Litigation, Lead Case No. 06 CV 1336; both cases pending in the United States District Court for the Southern District of California.

The parties in these cases entered into Memorandums of Understanding (which will be followed by Stipulations of Settlement) regarding the settlement terms.  These settlements, which are subject to among other things preliminary and final Court approval after appropriate notice, would resolve all the claims in both lawsuits.  The Company settled these lawsuits to avoid the expense and continued disruption to the business of protracted litigation and the Company and its current and former officers and directors deny any liability or responsibility for the claims made and make no admission of any wrongdoing.

As part of the settlements, and in exchange for dismissals of the lawsuits and releases, in the securities class action the Company has agreed to authorize payment of $3.8 million (said sum to be inclusive of plaintiffs’ attorneys’ fees, in an amount to be determined by the Court) and in the derivative action the Company has agreed to make certain corporate governance changes and to authorize payment of up to $350,000 for plaintiffs’ attorneys fees. It is anticipated that these settlement payments will be funded entirely by the Company’s insurer.

The securities class action lawsuit relates to the Company’s restatement of first quarter 2006 financial statements and claims relating to the Company’s distribution of a former manufacturer’s cellular phone in the U.S.  The derivative lawsuit relates to the Company’s restatement of its first quarter 2006 financial statements and a grant of stock options in December 2005. 

About InfoSonics Corporation

InfoSonics is one of the premier providers and distributors of wireless handsets and accessories serving Latin America and the United States.  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 and the United States. For additional information, please visit www.infosonics.com.

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, including without limitation to 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 which, if realized, 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, including, without limitation: (1) intense competition, regionally and internationally, including competition from alternative business models, such as manufacturer-to-carrier sales, which may lead to reduced prices, lower sales or reduced sales growth, lower gross margins, extended payment terms with customers, increased capital investment and interest costs, bad debt risks and product supply shortages; (2) inability to secure adequate supply of competitive products on a timely basis and on commercially reasonable terms; (3) foreign exchange rate fluctuations, devaluation of a foreign currency, adverse governmental controls or actions, political or economic instability, or disruption of a foreign market, and other related risks of our international operations; (4) 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; (5) 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; (6) significant changes in supplier terms and relationships; (7) termination of a supply or services agreement with a major supplier or product supply shortages; (8) continued consolidation in the wireless handset carrier market; (9) extended general economic downturn; (10) loss of business from one or more significant customers; (11) customer and geographical accounts receivable concentration risk; (12) rapid product improvement and technological change resulting in inventory obsolescence; (13) future terrorist or military actions; (14) the loss of a key executive officer or other key employees; (15) changes in consumer demand for multimedia wireless handset products and features; (16) our failure to adequately adapt to industry changes and to manage potential growth and/or contractions; (17) future periodic assessments required by current or new accounting standards such as those relating to long-lived assets, goodwill and other intangible assets and expensing of stock options and valuing gain or loss on fair value of derivatives may result in additional non-cash income or expenses; (18) seasonal buying patterns; (19) dependency on Latin American sales; (20) uncertain political and economic conditions internationally; (21) the impact, if any, of changes in EITF 00-19 or SFAS 133 guidance as it relates to warrants and registration rights and SFAS 123R as it relates to stock options; (22) the resolution of any litigation 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 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, 2006 and Quarterly Reports on Form 10-Q for the periods ended March 31, 2007, June 30, 2007 and September 30, 2007; 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.

Contacts:

Jeffrey A. Klausner
Chief Financial Officer
ir@InfoSonics.com
858-373-1600

Bonnie Mc Bride or Todd Kehrli
MKR Group, Inc.
ifon@mkr-group.com
323-468-2300