Pittsburgh Law Office of Alfred G. Yates Jr., PC Announces Class Action Suit Against iMergent, Inc. - IIG

Business Wire, March 14, 2005

PITTSBURGH -- Notice is hereby given by the Law Office of Alfred G. Yates Jr., PC that a class action lawsuit was filed in the United States District Court for the District of Utah on behalf of purchasers of iMergent, Inc. ("iMergent") (AMEX:IIG) publicly traded securities during the period between November 30, 2004 and February 25, 2005 (the "Class Period") .

If you wish to serve as lead plaintiff, you must move the Court no later than May 9, 2005. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Alfred G. Yates, Jr. at 1-800-391-5164 or via e-mail at yateslaw@aol.com. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

The complaint charges iMergent and certain of its officers and directors with violations of the Securities Exchange Act of 1934. iMergent sells Internet merchant services through its StoresOnline, Inc. subsidiary. Through its subsidiary, iMergent mass markets storefront software and service packages through marketing seminars to small businesses to facilitate their online sales.

The complaint alleges that throughout the Class Period, iMergent represented to the investment community that it was a successful software company while concealing that its sales practices violated the laws of many of the states it operates in and the full extent of the uncollectibility of its installment contracts with its clients, many of which did not meet the Company's own credit criteria. On February 22, 2005, it was disclosed that the Texas Attorney General had filed suit against iMergent, the Company's Chairman, Donald L. Danks ("Danks"), and the Company's President, Brandon B. Lewis, alleging the Company's wholly owned subsidiary, StoresOnline.com, was selling defective storefront software and service packages and extorting thousands of dollars in additional "executive mentoring" fees from its customers when they could not use the software packages. In addition, Danks admitted at an investment conference held on February 25, 2005, that iMergent had been selling the software packages in installment contracts to customers with subprime credit. Many of these customers had little or no success with the Company's software and simply walked away from their contractual obligations when their new online "businesses" failed. Danks admitted that in the aggregate, only approximately 56% of the purchase price was eventually collected from these subprime customers through installment contracts.

According to the complaint, as a result of defendants' false statements, iMergent's stock traded at inflated levels during the Class Period, increasing to above $25 per share on February 9, 2005, at which time the Company's top officers and directors sold or otherwise disposed of more than $6.5 million worth of their own shares. As the market digested this news, the Company's stock price plummeted from its Class Period high of over $25 per share on February 9, 2005 to below $12 per share on March 1, 2005, when trading was halted.