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Infinium Inc. Sued by Investment Firm, Denies Allegations

According to a series of dueling press releases, investment bank SBI USA has initiated a lawsuit claiming breach of contract and fraud against Phantom console hardware ma...
According to a series of dueling press releases, investment bank SBI USA has initiated a lawsuit claiming breach of contract and fraud against Phantom console hardware manufacturer Infinium Labs and its CEO, Timothy M. Roberts. In return, Infinium has hit back in a strongly worded statement, indicating that the company "categorically denies each and every allegation... and believes SBI's lawsuit to be frivolous, without merit, and intended to interfere with Infinium's business and operations." SBI's suit, filed at the United States District Court, Central District of California, alleged that, following an Investment Banker/Advisor Agreement signed with Infinium in March 2004, it was agreed that SBI would be "paid a certain percentage of all financing received for the 12 months following execution of the agreement." It then explains: "Although Infinium Labs Inc. is believed to have raised more than $30 million in debt and equity financing since March 2004, SBI-USA, LLC has not been compensated." Although recent Infinium financial results seem to indicate the company has not been wholly successful in raising capital, but is nonetheless still operating, Timothy Roberts, CEO of Infinium Inc argues that this is irrelevant, since, in his words: "Infinium's agreement with SBI provided that SBI would be paid, under certain circumstances, for investments made by parties with whom SBI had a pre-existing substantive relationship." Roberts suggests that this was as far as the agreement went: "SBI was wholly unsuccessful in its efforts and was unable to raise any funding whatsoever from such investors. As a result, Infinium terminated its agreement with SBI." Infinium has not yet reviewed the legal complaint, but it's likely that SBI, also participants in an earlier agreement with Infinium that involved the SBI-affiliated SBI-Brightline VI purchasing $7.5 million of stock in the company, will pursue its claim further. However, no court dates have yet been set for the dispute, and Infinium's Phantom console is still set for release in the second quarter of 2005.

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