SOURCE: VHM VideoMovieHouse

November 14, 2005 07:00 ET

VMH VideoMovieHouse.com Announces Company's Change of Direction and Unaudited 1st Quarter Results

VANCOUVER, BC -- (MARKET WIRE) -- November 14, 2005 -- Steve Gaspar, President of VMH VideoMovieHouse.com Inc. (OTC BB: VMHVF), announces that unaudited losses for the quarter ended September 30, 2005, were approximately $565,000 USD and total gross revenues earned by the company are expected to be lower in next quarter.

"It is becoming increasingly difficult, if not virtually impossible, to earn a profit as a third-party seller of DVDs through Amazon.com, and effective October 20, 2005, the Company ceased acting as a third-party seller on Amazon.com, citing high commissions, unreliable product supply lines and the continuing negative impact of an ever-weakening US dollar as causes for making this re-seller program unprofitable. The Company expects this move to have a significant negative effect on top-line revenues in the short term, but feels a move such as this is necessary to attain future overall profitability. The Company will now focus its marketing efforts towards expanding its online DVD rental business, achieving sales growth through its own online selling platforms and launching its own third-party sales platform. The company believes this change of direction is necessary to reduce future losses and eliminate dependence on other sites to market its products. Also, continuing to operate unprofitably as a third-party seller on competitors sites does not make good corporate sense when you are planning the launch of your own third-party selling platform," according to Mr. Steve Gaspar.

On September 15, 2005, the Company announced it had signed a Memorandum of Understanding to acquire the assets and business of DVD Marketplace.com, www.dvdmarketplace.com, an established online DVD retailer offering entertainment products for sale from third-party merchants in the USA. Currently this agreement is in the due diligence stage.

On October 14, 2005, the Company announced it had signed an agreement for the worldwide distribution rights for Columbia Film's line of Tamil Indian Films which it plans to market through its new website www.videomoviehouse.in in addition to its other sites.

"The On-line Marketplace is changing and we must adapt our operations to meet new challenges head-on. With this change of direction being implemented now, a return to profitability can be anticipated in the hopefully not too distant future," according to Mr. Steve Gaspar.

Safe Harbor Act Notice:

This information contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 (the "Act''). In particular, when used in the preceding discussion, the words "plan,'' "confident that,'' "believe,'' "scheduled,'' "expect,'' or "intend to,'' and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act and are subject to the safe harbor created by the Act. Such statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. Such risks and uncertainties include, but are not limited to, market conditions, the availability of components and successful production of the Company's products, general acceptance of the Company's products and technologies, competitive factors, timing, and other risks described in the Company's SEC reports and filings. Third-party statements contained herein and information contained on any third party website is not endorsed by or adopted by the Company.

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