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NME Inc. to Acquire FKH Electronic A.S. in Central Europe


LOS ANGELES, Oct. 3 /-- New Medium Enterprises (NME) (BULLETIN BOARD: NMEN) -- today announced that FKH Electronic A.S. with headquarters in Slovakia, have agreed to be acquired by New Medium Enterprises Inc. for US$ 11 million. The estimated time of completion is the Q4 in 2007.

FKH Electronic A.S. is a leading producer and distributor of home appliances and consumer electronics devices in Central Europe, marketing its products under the successful brand name Orava. The Orava brand brings with it over 50 years of history in electronics. GFK Europe rated the Orava brand as having 18% market share in 2005 and ranked it number one in DVD player sales in Slovakia. It supplies more than one million units of various electronic products annually and has sold over 16 million TV sets to date. Since its inception, FKH Electronic has proven to be profitable and in the last 3 years has posted an annual turnover in excess of US $25 million.

FKH Electronic is currently selling Orava brand products in mega stores like Carrefour, Tesco, Metro, AHOLD, and in more than 1700 other retail outlets. With more then 270 employees worldwide, its Central European operation includes large warehousing facilities and a comprehensive fulfilment centre with global distribution capabilities. Orava's products are also backed by a strong after sales network with rapid turnaround on service and repairs.

Vladimir Florek, Managing Director of FKH Electronic A.S. states, "We have been a leading electronics manufacturer and supplier with a very strong brand and are privileged to be the very first producer for HD VMD products in Europe. With our core strengths, we are confident that we'll be successful in promoting and selling this new HD format in Europe and worldwide."

Mahesh Jayanarayan, CEO of NME Inc. says, "With the production, distribution and logistics expertise of FKH and the strong brand image, it is a perfect fit for our launch this year. This region is one of the fastest growing logistic hubs in Europe, attracting a number of major hi-tech brands like LG, Samsung, Philips and Sony. Slovakia is a booming economy, and a real window to the EU and international markets. As it's now part of the European Union, it can offer us attractive commercial advantages."

NME expects this strategic acquisition to furnish it with a source of revenue of approximately US $30 million. FKH Electronic will bring to NME an assembly division for its HD VMD players and drives, guaranteeing fast and reliable delivery of products to both the European and overseas markets. In an important interim arrangement effective immediately, FKH Electronic will immediately open to NME its entire supply chain infrastructure, finance and management facilities in order to intensify the launch of its HD VMD products this quarter.

What you should know about HD VMD:

HD VMD (Versatile Multilayer Disc) is NME's proprietary high definition disc format based on established red laser technology. NME's patented 2p process method succeeded in solving the technological problems which limited DVDs to two information layers. HD VMD's seamless and cost-effective manufacturing solutions for High Definition products are based on the existing DVD production and industrial infrastructure. HD VMD prices and costs are very close to DVDs and bring a quality that rivals both Blu-ray and HD DVD.

HD VMD is a true HD format with 1920 x 1080i/p resolution, up to 40 Mbps bit rate playback, DVD up-scaling so users can watch their existing DVD collection and achieve premium picture quality through their HD TV monitors. The HD VMD player is suitable for playback on all HD-capable display devices and will support existing optical disc formats: CD, DVD. HD VMD players also feature Advanced Encryption Standard (AES) and all region codes for greater film viewing flexibility.

HD VMD is currently being adopted by content providers and distributors in more than a dozen regions worldwide, including Australia, Brazil, Central Europe, China, France, Germany, Iceland, India, Japan, Scandinavia, Middle East, Russia and the United States.

About NME:
New Medium Enterprises Inc. is listed on the OTC BB exchange in the U.S. under the symbol NMEN; NME's HD VMD drives offer the world's first affordable solution in true High Definition based on current red laser technology and the existing DVD industrial infrastructure. Incorporating break-through optical storage capacity, red laser-based players, the HD VMD file format, copyright encryption, authoring tools and compression technologies, NME is providing the only high-quality and high-value offering for the consumer electronics market. For additional information about NME, please visit: http://nmeinc.com/.

Source: New Medium Enterprises Inc.

CONTACT: NME Inc. USA Office, Yelena Popovic, Executive VP US Operations, +1-310-967-3084, yelena@nmeinc.com, or NME Inc. Global Office, Patrick Henningsen, Director of Communications, +44208749 9955, patrick@nmeinc.com, both of New Medium Enterprises Inc.; or Central Europe, Vladimir Florek, Managing Director of FKH Electronic A.S., Bernolakova 1, 028
01 Trstena, Slovakia

Web site: http://nmeinc.com/
http://www.orava.info/

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