Merit Studios Inc. Acquires ST-Communication AG.

Business Editors

LAS VEGAS--(BUSINESS WIRE)--Dec. 20, 2001

Merit Studios Inc. (OTC:MRIT), Las Vegas announced today the acquisition of ST-Communication in Solothurn (http://www.st-communication.ch) Switzerland. Merit Studios bought the STC from Knorr Capital Partners AG. Final closing is set for end of January 2002 ((http://www.knorrcapital.com) News Center 12.13.01)). Financials on the transaction are not disclosed. Knorr Capital has also agreed to reinvest a portion of the sales price into Merit Studios Inc.

Merit will use ST-Communication to further develop and to market the WormHole Technology compression software in Europe. As stated by Merit Studios Inc. is ST-Communications in negotiations with several European contents providers and expects to enter into its first contracts for the WormHole Technology by the end of February 2002.

On another subject Merit Studios announced that it is rebuilding a new Web site. Completion is expected by end of January. From December 22nd 2001 to January 5th 2002 Merit Studios Inc. is closed for the Holiday season. Merit Studios Inc. wishes every one a happy holidays and a happy and prospered New Year.

This release contains statements that constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act and Section 27A of the Securities Act. Readers are cautioned not to put undue reliance on such forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Certain factors may cause actual results to differ materially from those contained in the forward-looking statements, including but not limited to: the number and timing of sales of Merit Studios Inc.'s software; the development and/or acceptance of new products; the impact of competition on the company's products and/or pricing; and the success of the company's software.