HealthStar Corp. Signs Letter of Intent to Merge With Secure Broadband Networking Firm, Assured Digital, Inc.

AVENTURA, Fla., Jan. 2 /PRNewswire/ --

HealthStar Corp. (OTC Bulletin Board: PPOS.OB) announced today that it has entered into a Letter of Intent to merge with Assured Digital, Inc. ("ADI"). ADI designs and distributes advanced virtual private networking (VPN) solutions that automate secure business-to-business (B2B) communications over the public Internet.

According to Infonetics Research, the VPN industry is a $10 billion market projected to grow to $29 billion over the next three years. B2B communications are experiencing significant growth as companies are outsourcing and integrating their critical information systems with business partners. In addition, telecommuting and globalization are two major industry trends driving companies to build global communication networks that are secure and cost-effective.

ADI addresses the B2B infrastructure needs of companies by providing low-cost, robust, worldwide data networks that can connect anyone, at any time, anywhere using a combination of the public Internet and a proprietary VPN line of products based on open standards. ADI products range from a central-office VPN concentrator switch to intelligent VPN edge switches and client software. ADI's hardware/software-based AOS(TM) (Automated Operation and Security) suite is built into each ADI device for automated network connectivity and security management. ADI is one of a limited number of VPN vendors that can support the unique networking requirements of the broadband industry. Cable and telecommunications companies such as Media One and a major Internet service provider have deployed ADI VPN solutions.

"We are excited to offer HealthStar shareholders the opportunity to participate in this rapidly growing area of the Internet infrastructure space," said Edward M. Chism, HealthStar's CEO. "The B2B backbone is where we see the next generation Internet headed, and the contemplated merger would position HealthStar to aggressively compete in this arena," he added. Roland Gerard, CEO of ADI, commented that "The merger with HealthStar will strengthen ADI's competitive positioning, as we become a public company with increased visibility and easier access to the capital markets."

ADI has recently entered into a Letter of Intent to acquire TelekomNet, Inc., a B2B exchange for the telecommunications and networking industry. TelekomNet sells over 50,000 telecom and networking equipment products to IT professionals, OEM's, communication service providers, value-added resellers and systems integrators. This acquisition will give ADI access to the $277 billion telecom infrastructure equipment industry. TelekomNet has over 1,000 corporate customers including Ariba, IBM and Hewlett Packard and has distribution and content alliances with Cisco, 3Com, Cabletron, Toshiba, Nortel, Lucent, Intel, Cable & Wireless, CommerceOne, Nippon Telecom, PSINet and others.

The combined companies will allow network managers to cost-efficiently increase the span of their corporate networks, open secure access to remote users, integrate business partners and their applications, enable enterprises to outsource hosting of servers and applications and provide substantial incremental value-added services.

The merger is subject to a number of customary conditions, including, but not limited to, final due diligence, negotiation and execution of definitive agreements, governmental approvals, and the approval of HealthStar and ADI's shareholders, as well as the consummation of ADI's acquisition of TelekomNet, Inc. Accordingly, there can be no assurance that the merger will occur. Further, if the merger is effectuated pursuant to the letter of intent, the shareholders of HealthStar will own approximately 27.7% of the merged Company, or approximately 22.8% on a fully diluted basis. ADI shareholders would also appoint a majority of the board of directors.

This press release contains "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of HealthStar Corp. and members of its management as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-statements include fluctuation of operating results, the ability to compete successfully and the ability to complete the merger transaction described above. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

For additional information on HealthStar Corp. please contact: Steven A. Marcus, Vice President and Chief Financial Officer at (305) 933-8779. Or visit the Web sites at: www.assured-digital.com or www.telekomnet.com.