ExtendMedia Inc.

ExtendMedia Inc.

October 19, 2005 10:53 ET

ExtendMedia Inc. Announces Further Increase in Principal Amount of Bridge Financing

TORONTO, ONTARIO--(CCNMatthews - Oct. 19, 2005) - ExtendMedia Inc. ("ExtendMedia" or the "Company") today announced that it has obtained a further advance under an outstanding grid promissory note held by Leland Verner (the "Lender"). The Lender has loaned an additional amount of $28,600, increasing the total principal amount outstanding to $690,056 pursuant to the terms of the promissory notes. As this amount exceeds the previously agreed maximum of future advances, the parties have agreed to waive such maximum and permit the advance.

The secured loans bear interest at 15% per annum. The Lender has the option to convert the full amount owing into common shares of ExtendMedia at a conversion price of $0.000379 per share at any time prior to maturity. In the event the full principal amount and interest is not paid by ExtendMedia on or before maturity, the Lender has the option of either enforcing on his security or converting the full amount owing into common shares of ExtendMedia at a conversion price of $0.000379 per share.

Leland Verner currently holds 131,926,121 common shares, representing 11.70% of all common shares on a non-diluted basis (12.76% on a fully diluted basis). In addition, (a) if the Leland Verner note is not repaid at maturity, Leland Verner may at his option convert the note, after the additional advance, into an aggregate of 260,232,163 common shares of the Company (a conversion rate of $0.000379 per share) in respect of principal and additional common shares at the same rate in respect of any unpaid interest; and (b) Leland Verner holds a warrant expiring April 26, 2006 to purchase additional common shares to provide it under the warrant with approximately 1.43% of the number of common shares outstanding on a fully-diluted basis on the date of exercise, for an aggregate exercise price of $1.00. Leland Verner agreed to make the additional advance in order to assist the Company with its current working capital requirements. Leland Verner has no current intention to acquire additional securities of the Company.

Further information can be obtained by contacting:

Leland Verner

(416) 823-7474

About ExtendMedia

ExtendMedia knows content services. Our in-depth knowledge has been acquired though 15 years of experience working closely with such successful and innovative communications and media companies as Cablevision, ESPN, Sony, BCE and Tribune. Our OpenCASE™ solution is the foundation of the connected future, offering compelling services, elegant user interfaces, and freedom for consumers to control and enjoy their media experience. For more information, please visit us at www.extend.com.

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