Date: August 21, 2002

I/OMagic's Newest Product Offering Moves Company Into Movie and Video Storage Arena

Initial Orders Exceed $2.5 Million in Revenue within the First Thirty Days

SANTA ANA, Calif.--(BUSINESS WIRE)--Aug. 21, 2002--I/OMagic Corporation (OTCBB: IOMC - News), a leading developer and marketer of optical storage, digital entertainment, multimedia and computer input devices, revealed the Company's newest technology platform today -- the DVD+RW/+R drive -- a technological step-up from a CD-RW drive. I/OMagic, already a dominant player in the data storage market, also announced that in the first thirty days of its release, orders in excess of $2.5 million have been received from four of its top customers. ADVERTISEMENT

"The DVD+RW/+R drive is a logical extension to our optical storage offering. It opens the door for consumers to easily store movies and videos, an improvement to the typical applications of storing data, audio and photos on a CD-RW drive," said Tony Andrews, vice president of Engineering and Product Development.

"The DVD+RW/+R drive complements our current offering yet increases the Company's optical storage average selling price from sub-$100 (typically for CD-RW drives) to sub-$400 (for DVD+RW/+R drives) -- a 400 percent increase per retail register ring," Andrews continued.

I/OMagic's new DVD+RW/+R drive is an external USB 2.0 DVD+Re-Writable drive with 4.7 GB of storage space. These second generation drives are the most effective way to store data per megabyte, they give users the option to back-up and archive huge amounts of data at about 6.7 times the capacity per disc. This technology platform also allows users to create DVDs that are compatible with a majority of home DVD players. Consumers will also be able to easily create home movies, photo discs or music CDs, as well as have the ability to watch their favorite DVDs on their computer. The drive writes DVD+RW at 2.4X, DVD+R at 2.4X and CD-RW at a rate of 12X10X32X speeds.

"The combination of features these drives provide are a convenient `all-in-one' solution for consumers," Andrews continued. "Early response has been tremendous, as the Company sold out of its first production run of the I/OMagic DVD+RW/+R drive."

I/OMagic Corporation is a member of DVD+RW alliance. The alliance is a voluntary group of industry-leading personal computing manufacturers, optical storage and electronics manufacturers who promote the universally compatible, rewritable DVD+RW format that enables true convergence between personal computing and consumer electronics products.

For more product information, visit www.iomagic.com.

About I/OMagic
I/OMagic develops and markets optical storage, digital entertainment, multimedia and computer input devices. Business units include: Optical Storage (CD-ROM, CD-RW drives & media, DVD-ROM & DVD+RW/+R drives) Digital Entertainment (MP3 Jukebox, MP3 portable players, Digital Web Cameras & LCD Flat Panel TV Monitors), Multimedia (audio cards, video display cards & personal video recorder cards) and Input/Output Devices (modems, keyboards, mice, floppy drives, floppy diskettes and other peripheral accessories). The Company sells its many products, under three brand names -- I/OMagic, Hi-Val & Digital Research Technologies -- through nationally and internationally recognized computer retail outlets, such as Best Buy, Circuit City, CompUSA, Costco, Office Depot, OfficeMax, Radio Shack U.S. and Future Shop of Canada. For more information, please visit the I/OMagic web site at www.iomagic.com.

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties including, but not limited to, dependence on the PC and consumer electronics industries and on product lines based on new technologies; foundry capacity, availability and reliability; competition and pricing pressures; and other risks detailed from time to time in the company's periodic reports filed with the Securities and Exchange Commission.