InternetStudios Enters into Agreement to Acquire Renowned Post Production Studio Airwaves Digital.

SANTA MONICA, Calif. -- InternetStudios, Inc. (OTCBB:ISTO) announced that it has entered into an agreement to acquire Airwaves Digital and Airwaves Sound (collectively, Airwaves) of Vancouver, BC in an all-stock transaction. The agreement was struck between Robert MacLean, Chairman of InternetStudios and Alex Downie, President and majority shareholder of Airwaves. Mr. Downie will join InternetStudios executive management team and continue to oversee the operations of Airwaves as well as international re-mastering, production and delivery of InternetStudios DVD business upon the close of this transaction. The parties anticipate concluding a detailed agreement and closing the transaction within 30 days.

Airwaves was established in 1974 making it one of the longest running Post Production Studios in Western North America. Airwaves services the $1Billion film and television industry in British Columbia along with an impressive international client base. Airwaves occupies an 18,000 square foot state of the art studio facility with capabilities extending to every area of post production services. The Airwaves acquisition comes with an estimated $6,000,000 in equipment and facilities.

Mr. Downie began his career in the mid 60's in the U.K. with Decca records, leading into a 7-year stint with RCA as a recording engineer/producer in Toronto, Montreal, Nashville and New York. After RCA Downie joined A&R recording and Heider Filmways for two years in New York and Los Angeles. Mr. Downie moved to Vancouver, Canada in 1974 when he formed the founding company that is now Airwaves Sound Design.

Mr. Downie's 30-year legacy in the recording and post production business along with his international clientele are expected to bring great value to the company.

Robert MacLean, Chairman of ISTO commented "with Alex, the Airwaves team and facilities, we expect to develop and extremely efficient model to assure the quality of product, timing of release schedules and delivery to augment distribution. This supports our focus of building revenues from our classic library titles."

Alex Downie added, "The Airwaves InternetStudios merger has significant synergies for both companies. I believe that Airwaves will become stronger and more diversified by being in the DVD production business. The two companies are a great fit and will operate seamlessly. Airwaves has the talent and the technology to deliver a world class product to market for InternetStudios." InternetStudios continues to focus on the acquisition of niche market filmed entertainment content to re-master, author and distribute on Digital Video Disc (DVD) format and in television markets worldwide.

(x) Note: The reference to $6,000,000 in equipment and facilities is based on Airwaves estimate of current replacement value, not GAP account standards or any accounting practices that govern publicly traded companies. This news release contains forward-looking statements regarding the Company's business strategies and future plans of operations. Forward-looking statements involve known and unknown risk and uncertainties. The company's risks and uncertainties include: intense price competition, economic, political and regulatory uncertainties, the need to raise additional capital for growth and expansion, its ability to acquire other companies or assets at reasonable prices, and its ability to hire and retain qualified employees to implement its business strategy. The forward-looking statements contained in this news release speak only as of the date hereof and the Company disclaims any obligation to provide public updates, revisions or amendments to any forward-looking statements made herein to reflect changes in he Company's expectations or future events.