Thursday March 23, 12:31 pm Eastern Time
Company Press Release
Merit Studios Inc. Announces Update on Status of the Iridium Subject
LAS VEGAS--(BUSINESS WIRE)--March 23, 2000--Merit Studios Inc. (OTCBB:MRITP - news) presents a brief update on
the Iridium subject.
Engineers of Iridium confirmed to Merit Chief Executive Officer Michael John that it is indeed possible to use the Iridium satellite constellation for the transmission of
data. The Iridium engineers advised John of the low Baud rate of 2400, but did agree that with the use of the Wormhole technology, the system would be capable of
receiving data, distributing that data throughout the entire satellite system, and then transmitting that data back to earth.
The signal transmitted by the satellites is very weak, which caused problems for Iridium with telephone usage in buildings or covered areas. John pointed out that he
intends to have a receiver for the outside, which transmits the received signal via RF to the receiver at the computer. Again, the Iridium engineers confirmed that this
solution that Merit is proposing would solve the weak signal problem.
To make the Iridium satellite system profitable it will be necessary to be able to run the operation efficiently. John has questioned Iridium engineers as to whether it
would be possible to operate the entire system with one gateway, and they have corroborated that this would be possible. The new setup would therefore consist of
the satellites, the control center, a flight crew, and one gateway.
During a telephone conversation between Ralph Wells of Motorola and John, Wells agreed with the technical possibility for the intended new use of the Iridium
satellite system. Asked by John if it would be possible to reduce costs to around $2.5 million instead of the present $9 million by reorganizing the flight operations,
Wells confirmed that a figure like that would be realistic. The overall impression John had was that Motorola is interested in finding a profitable solution to save the
Iridium system.
Several erroneous news reports have incorrectly stated that Merit is trying to buy Iridium. This is not quite accurate. If the system can be saved, the new structure
that Merit is proposing could be in the following form:
A new company will buy the control center. This company will pay all the costs to run and operate the system. The company will hold the licensed rights for wireless
data transmission with Merit's Wormhole technology. Merit will receive for the license rights 30% of the new company.
The funding of the new company will come from a private group of investors led by John. This group will hold 10% of the company. The remaining 60% will be
distributed among the various creditors, bondholders, and stockholders of the failed Iridium venture.
Merit's chairman and CEO stated: ``It is clear that the system in its present form cannot be saved or run profitably. The tremendous cost and complexity, combined
with the technical weaknesses, prevent the system from being profitable. Only a new use of the system, which would allow operation on a bare minimum of
overhead, can insure profitability.
``Merit intends to use the system as a data distribution system. An I-net in the stratosphere would only be possible by employing the Wormhole data compression
technology. Data transfer rates of the current system are too slow to use it without Wormhole technology. Additionally, transfer rate is relatively irrelevant using
Wormhole.
``Up to this point I have discussed the technical details of this proposal in broad, but practical terms. The next steps are considerations of the financial, business and
legal aspects in which Motorola will be a key player. I hope an understanding and cooperation between Motorola and Merit will be possible. So far, I have found a
great deal of interest in this new concept, and I feel that all concerned parties are eager to find a solution which does not require destroying the satellite system.
``No written agreements have been made yet and several aspects need to be considered before that would be possible. But with the cooperation among the
principals, and I strongly believe that the satellite data distribution system based on Merit's WormHole technology could give the Iridium system a new purpose.'
For Merit Studios Inc.'s home page enter meritstudios.com. To go to GlobeAd enter globead.com. To go to BrowseBreak enter
browsebreak.com. To go to TvWebb enter tvwebb.com. To go to WormHole Technology enter wormholesoftware.com (not
active yet).
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, Merit Studios Inc. advertising spots and 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.
Contact:
Merit Studios Inc.
Michael John, 702/804-2616
e-mail: mritpnet@lvcm.com |
