Musicrypt Closes Private Placement; Financial Consultant Retained

Toronto, Canada

Musicrypt Inc. is pleased to announce that it has closed a private placement of $311,500 for the issuance of 445,000 Units at a discounted purchase price of $0.70 per Unit. Each Unit is comprised of one common share and half of a warrant to purchase one common share at $0.85 per share for one year. The common shares will be subject to a hold period expiring December 19, 2004. The TSX Venture Exchange has accepted for filing the documentation with respect to the private placement.

"This private placement follows the exercise of approximately 500,000 warrants at $0.75 each and a private placement in the second quarter," said John Heaven, President & CEO of Musicrypt. "The large majority of the Canadian music and radio industries have adopted Musicrypt's DMDS solution as their preferred secure digital delivery system. Our funding goal is to source the financial sponsorship required to take Musicrypt to its next international growth stage."

Musicrypt is also pleased to announce that it has retained Garry Wallace as an independent financial consultant to assist the Company in its fund raising efforts. Mr. Wallace has many years of experience in sourcing financing for technology companies and was instrumental in contacting investors in the above private placement. Mr. Wallace has been engaged for an eight month contract and is to be compensated with $8,000 per month payable in cash or shares, 100,000 stock options exercisable at $0.86 per share and a cash finders' fee of 5% of the net proceeds of financings where his efforts were of significant assistance.

About Musicrypt: Musicrypt's Digital Media Distribution System (DMDS) is the leading secure B2B digital delivery solution for the music industry. DMDS is a web-based delivery system that pioneers secure digital file distribution by incorporating biometrics, high-value encryption and watermarking. The first application of DMDS replaces the physical distribution of new musical recordings by record companies from the studio, internally, and to radio stations with more secure, more effective and less costly digital distribution via the Internet. DMDS delivers broadcast quality media from the sender securely and on time to authorized recipients. Musicrypt trades on the TSX Venture Exchange (TSX-V) in Toronto under the symbol MCT and has offices in Vancouver, Calgary, Toronto, Richmond Hill, Montreal, London and Paris.

The statements contained in this release that are not purely historical are forward-looking statements and are subject to risks and uncertainties that could cause such statements to differ materially from actual future events or results. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.