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Weekly News Digest

February 21, 2006 — In addition to this week's NewsBreaks article and the monthly NewsLink Spotlight, Information Today, Inc. (ITI) offers Weekly News Digests that feature recent product news and company announcements. Watch for additional coverage to appear in the next print issue of Information Today. For other up-to-the-minute news, check out ITIís Twitter account: @ITINewsBreaks.

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ProQuest Discovers Accounting Irregularities; Lawsuits Are Filed

ProQuest Company ( announced that during a review related to its internal controls assessment required by the Sarbanes-Oxley Act of 2002, the company discovered material irregularities in its accounting. As a result, the company said it intends to restate its previously issued financial statements, possibly back to 1999. The internal audit found that royalty accounts were materially understated in previously issued financial statements, while prepaid royalty accounts were materially overstated. At least one class action lawsuit on behalf of investors has already been filed; several other law firms have indicated that they will also file suit and that they are seeking investors as claimants.

ProQuest's Audit Committee has initiated an independent investigation that is being conducted with the assistance of Skadden, Arps, Slate, Meagher & Flom, LLP, which was retained solely for this purpose. Skadden has hired forensic accountants from Chicago Partners, LLC to assist it in the investigation. While the Audit Committee believes a restatement will be required, it has not yet determined the time periods involved or the amount of the accounting restatement. ProQuest appointed a new CFO in November 2005, Richard Surratt. Kevin Gregory was the previous CFO. Gregory and ProQuest's chairman and CEO, Alan Aldworth, are named in the lawsuits along with the company.

ProQuest Company has two business segments: ProQuest Information and Learning (, which serves the education and library markets, and ProQuest Business Solutions, which provides business information to the automotive market. The accounting irregularities that have been identified primarily affect ProQuest's Information and Learning division. The company stated it "believes that the accounting irregularities do not affect the company's cash balances, the amounts invoiced to customers, cash receipts from customers, or disbursements to publishers and suppliers."

Source: ProQuest Company

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