SOURCE: Grand Entertainment & Music, Inc.

October 31, 2006 07:00 ET

Grand Entertainment & Music, Inc. Offers Update on Acquisition Proposal

MONTREAL -- (MARKET WIRE) -- October 31, 2006 -- Grand Entertainment & Music, Inc. (PINKSHEETS: GMSC) offers update on recently announced proposal to acquire an independent record label.

On October 25th, Grand Entertainment announced that it had signed a letter of intent to purchase 50% of an independent U.S. record label. Over the weekend, executives and consultants from both companies met to further discuss this acquisition. Grand Entertainment is pleased to announce that it has completed its due-diligence and has offered its verbal commitment. Attorneys from both companies are now working together to finalize all the necessary contracts.

Once completed, Grand Entertainment will own 50% of Lost City Records, a label based out of New York. The label has a long operating history and has over a half dozen signed and award winning artists. Completion of the deal will give Grand Entertainment access to the label's 500+ song catalogue, as well as their studio and equipment.

"This is a rare and exceptional opportunity to expand our company and our musical talent," stated president Fred Berlin. "I know this deal may seem rushed, but I have known the executives from Lost City for a long time and as I stated in our recent newsletter, I have kept in contact with them over the last twelve months." Berlin went on to say, "Both sides are committed to this deal and we hope to have everything wrapped up by the end of next week. I want to reiterate that this acquisition is a non-share, cash only transaction and will not dilute the shareholder equity in any way. I look forward to finalizing the deal, and I can't wait to start announcing Grand Entertainment and Lost City joint ventures in the near future."

About Grand Entertainment & Music, Inc.

Based in Montreal, Canada and incorporated in November 1998, the Company is an independent music entity that produces, promotes, markets and controls the copyrights on music recordings in multiple formats. Additionally, the Company's multi-million dollar studio, Cherry Studios, has produced voice-overs and sound tracks for commercials and film. In addition, Cherry Studios has also produced thousands of recordings and has to its credit a total of 23 gold and platinum albums. GEM has recently found success in the reggaeton market with its signature artist, Qbanito. Qbanito's debut album has already generated a #1 hit in Canada and is currently being marketed by Universal Music in Europe. Grand Entertainment also controls exclusive rights to vast catalogues of previously unreleased recordings from Cuban music archives. In addition to these assets, the company will focus on growth through acquisitions over the next twelve months in an effort to reach its mission of becoming a premier production, recording, publishing, and internet distribution company.

Safe Harbor Statement

This release contains forward-looking statements with respect to the results of operations and business of Grand Entertainment & Music (GEM) Inc., which involves risks and uncertainties. The Company's actual future results could materially differ from those discussed. The company intends that such statements about the Company's future expectations, including future revenues and earnings, and all other forward-looking statements be subject to the "Safe Harbors" provision of the Private Securities Litigation Reform Act of 1995.

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