SOURCE: AuctionCities.com, Inc.

January 22, 2006 02:32 ET

AuctionCities, Inc. Issues Correction and Cancels Transaction With Auction Video, Inc.

Misstatement of Information Supplied by Auction Video Prompts AuctionCities to Apologize to SANYO

VALENCIA, CA -- (MARKET WIRE) -- January 22, 2006 -- In a series of unfortunate events, AuctionCities.com, Inc. (OTC: AUCC) (www.auctioncities.com) finds itself a victim of misstatement of information and subsequently, was forced to cancel its relationship with Auction Video, Inc. due to a statement issued Thursday, over BUSINESS WIRE (TOKYO - Jan. 19, 2006) by Sanyo Electric Co., Ltd. Spokesperson, Ryan Watson, denied the licensing agreement between NTT-DATA SANYO and Auction Video, Inc. In Thursday's release, Watson stated, "NTT-DATA SANYO SYSTEM has absolutely no business with... AuctionVideo.com."

Details of the AuctionCities.com announcement from the Sanyo Booth at the recent Consumer Electronics Show, as communicated by Auction Video, are denied by NTT_DATA SANYO. Thereby, the terms of the AuctionCities.com, Inc. and Auction Video, Inc. transaction are cancelled.

Statements in AuctionCities.com press releases (Jan. 5, 7, 13, 2006) as represented by Auction Video, Inc. to AuctionCities.com, Inc. as valid, appear to have been unapproved by persons unknown to AuctionCities.com, Inc. at the time of the press releases. Therefore, the following points, while they occurred on January 5, 2006, are no longer valid:

1. The new SANYO VideoCellphone was officially unveiled at CES.

2. An exclusive licensing agreement does not exist with NTT-DATA SANYO and Auction Video.com.

3. The NTT-DATA SANYO Video Communications Cell Phone schedule for U.S. rollout is unknown.

4. No agreement currently exists, whereby AuctionCities.com will be the exclusive U.S. Internet distributor of this exciting new device.

While AuctionCities.com, Inc. apologizes for any embarrassment, because photographic and video evidence exists, we cannot deny statements and events that actually happened in the historical chronology of Jan 5, 2006.

Additionally, in the (Jan. 5, 2006) AuctionCities.com news release, a comment reported and furnished by Auction Video attributed to NTT-DATA SANYO, seems to have been fabricated and distributed by someone other than AuctionCities.com, Inc. It has, recently, been reported to AuctionCities that said person and department do not exist.

AuctionCities.com, Inc. CEO, Michael S. Berman stated, "I apologize for the aforementioned news releases which were, evidently and absolutely, not based on facts, as reported to AuctionCities.com, Inc. I regret the embarrassment caused to Sanyo and those associated with Auctioncities.com, including our members and shareholders. We rely on the integrity of our business associates and up to this point, our 'due diligence inquiries' have not presumed to venture beyond the information provided by our proposed partners. In the future, in order that this sort of information delivery doesn't cause harm, we will take the utmost caution regarding information disclosure."

About AuctionCities.com, Inc.

AuctionCities.com is the state- of-the-art way of convenient local auctioning and shopping. We host local auctions in over 40,000 U.S. Zip-code specific sites using our patent-pending business methods and technologies.

The factors discussed above and elsewhere in this Memorandum could adversely affect the value of the Company's Common Stock. In addition, the factors discussed above and elsewhere in this Memorandum may constitute forward-looking statements and, as such, may involve known or unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements or the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Any forward-looking statements contained in this Memorandum should not be relied upon as predictions of future events. Such forward-looking statements can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," "could," "seeks," or anticipates," or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. Such statements are necessarily dependent on assumptions, data or methods that may be incorrect or imprecise and they may be incapable of being realized. The following factors may constitute or include cautionary, forward-looking statements identifying important factors with respect to such forward-looking statements, including certain risks and uncertainties that could cause actual results to vary materially from the future results covered in such forward-looking statements.

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