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SmartDisk Acquires Zio Corporation

Fort Myers, Florida — September 1, 2005 –SmartDisk Corporation, a leading provider of portable, network and multimedia storage products and technologies, today announced that it has acquired the business and certain assets of Zio Corporation, a privately held market leader in digital media readers, video editing and mobile telephone products. Terms of the acquisition were not disclosed.

Headquartered in San Jose, California, Zio’s products include the Dazzle, CameraMate and FoneMate brands and are sold through leading retailers in the U.S. and Europe. Plans call for Zio’s U.S. offices and operations to be consolidated into the SmartDisk Fort Myers, Florida headquarters location. Key management personnel will remain at Zio to aid in the integration
of the business and sales activities.

“Zio’s products broaden the SmartDisk line and add premier brands to our market offerings,” said Michael S. Battaglia, President and Chief Executive Officer of SmartDisk Corporation.
“Zio also adds valuable new partners, both retailers on one hand and suppliers on the other.
The addition of Zio will increase SmartDisk revenues, enhance our profitability, and expand
our share of the rapidly growing digital lifestyle market.”

“Zio and SmartDisk are a natural fit, serving the same digital consumer market and reaching consumers through similar channels of distribution,” noted Andrew Warner, Chief Executive Officer of Zio. “Zio’s market leadership position with digital media readers and the potential
of our video and mobile phone solutions, together with SmartDisk’s size and scale, creates a winning combination.”

About SmartDisk Corporation
SmartDisk is a leading provider of portable, network and multimedia storage products and technologies that enable people to enjoy, share and preserve digital content and information. Headquartered in the U.S., with operations in Europe and Asia, SmartDisk sells and supports
its products worldwide. For more information, go to http://www.smartdisk.com.

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