Former Infinium Labs Officer Files Multimillion Dollar Lawsuit Against Company; Phantom Games -- Phantom Pay?

Business Editors/High-Tech Writers

DALLAS--(BUSINESS WIRE)--April 14, 2004

A former Executive Vice President of Infinium Labs, Inc. (OTCBB:IFLB) is suing the company and its principal officers for fraud and breach of contract. Terry Nagy says Infinium used him and his knowledge of the video game industry, while promising him a big payoff in shares of company stock. In the end, however, Mr. Nagy ended up with nothing.

Mr. Nagy's lawsuit, filed in the 134th District Court in Dallas County, Texas, names the company and Timothy M. Roberts and Robert Shambro as defendants. Mr. Nagy is seeking the value of the Infinium stock the company owes him for his work.

Mr. Nagy began work for Infinium in 2002. His job was to acquire gaming content that would give buyers of the Phantom(TM) Gaming System something to play. The system will allow players to test, rent and buy a broad choice of video games through a broadband Internet connection.

Mr. Nagy alleges Roberts and Shambro named him Executive Vice President and used his reputation and experience in the industry to generate publicity and credibility for the system and to raise approximately $15 million in venture capital. They promised him 110,000 shares of pre-split Infinium stock as compensation.

But in the fall of 2003, Infinium cancelled Mr. Nagy's e-mail and cell telephone service, and Roberts and Shambro stopped returning his calls. Shortly thereafter, Infinium merged into a "shell" company and a public market for its stock developed. Roberts and Shambro netted millions of shares of stock, then trading between $17 and $36 per share, and Mr. Nagy received nothing.

"It's very clear what happened here," says Mr. Nagy's attorney, Michael Hurst of Godwin Gruber in Dallas. "Infinium used Terry, plain and simple. They used his knowledge and contacts, and even made him a corporate officer. Then, just as the payoff was about to happen, they dumped him over the side."

Godwin Gruber is a 130-member law firm that represents Fortune 500 and middle-market industry leaders in Mission Critical Litigation(R) in Texas and throughout the U.S.

For more information on the case involving Terry Nagy and Infinium Labs, contact Mark Annick at 800-559-4534, pager 214-967-2299 or [e-mail].