Article: I/OMagic Corporation Files Form 8-K, Item 4.02 - Non-Reliance on Previously Issued Financial Statements.

Company Will Restate Previously Issued Financial Statements for 2004, 2005 and First Three Quarters of 2006

IRVINE, Calif. -- I/OMagic Corporation (OTCBB:IOMG), a provider of data storage and digital entertainment products, today announced that on March 23, 2007, the Company's Audit Committee concluded that the Company's financial statements for 2004 and 2005, the interim periods contained in 2004 and 2005, and the interim periods for the first nine months of 2006, should no longer be relied upon because of errors in such financial statements. As a result of these errors, the Company will restate the financial statements described above to correct its accounting ...

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