AuthentiDate's Subsidiary WebCMN Acquires Trac Medical; New Firm, Called Trac Medical, Will Target Electronic Medical Forms Processing.

Business & Technology Editors

SCHENECTADY, N.Y.--(BUSINESS WIRE)--Oct. 31, 2001

WebCMN, Inc., a majority owned subsidiary of AuthentiDate Holding Corporation (NASDAQ: ADAT), today acquired the assets of Trac Medical, Inc., a privately owned company based in Raleigh, N.C., under undisclosed terms.

WebCMN now will be called Trac Medical, Inc., and will remain headquartered in Schenectady, N.Y.

The consolidation of two firms aggressively targeting the emerging market for electronic medical forms solutions establishes a solid financial and management base for the new Trac Medical, strengthening the company's ability to dramatically improve the speed, accuracy, integrity and efficiency of healthcare forms processing activities.

The newly named firm's solutions will build upon Trac Medical's previous offerings by integrating AuthentiDate(TM) electronic content authentication technology. This advanced technology virtually eliminates any possibility of altering forms without detection, thereby guarding against the potential for fraud and abuse in the healthcare industry. The marriage of the two companies' respective technologies will spawn a new solution developed specifically to meet new federal government regulations for security and privacy in handling healthcare information in digital form.

John Botti, chairman and chief executive officer of AuthentiDate Holding Corp. (AHC), will serve as chairman of the new firm. Bradley Pivar and Jeffery Frankel, WebCMN founders, have been named chief executive officer and chief operating officer, respectively. Terry Williams, founder of the original Trac Medical, will become chief technology officer. Jack Pivar, the third WebCMN founder, will act as a senior consultant on legal and regulatory compliance issues. John A. "Jack" Matyka, Jr., a veteran AHC manager, is overseeing the development of Trac Medical's business plan and is leading its customer demand-creation and awareness-building efforts as the organization's top marketing executive.

"Terry Williams has been a driving force in advancing the vision of using the Internet to dramatically improve medical forms processing," Botti said. "Bringing together his expertise, the resources of Trac Medical, the deep healthcare industry experience of our WebCMN management team and AuthentiDate technology creates an undisputed leader that will turn this vision into reality."

Rapid, Accurate Completion of Medical Forms

"Over the past two years, Trac Medical has worked closely with government agencies and health provider organizations to build common standards for Web-based medical forms processing," Williams added. "The new company will build upon this effort by developing secure, fraud-proof medical forms solutions that leverage AuthentiDate technology. This type of technology will be a critical element of any offering that meets these emerging standards."

The new Trac Medical is developing a private, secure, Internet-based transaction network to facilitate rapid and accurate completion of Certificates of Medical Necessity (CMNs) and other electronic medical forms. These documents are required for medical equipment suppliers to seek reimbursement from government-funded healthcare programs, such as Medicare.

According to the Centers for Medicare & Medicaid Services (CMS), Medicare processed more than 146 million claims and paid more than $8 billion for durable medical equipment supplied to its beneficiaries in 1999, representing a huge business opportunity for the new company.

The Trac Medical network solution created to capture this market will employ Internet and security technologies from AuthentiDate and other suppliers. It will be delivered through an Application Service Provider (ASP) model where the CMNs and other electronic forms reside on Trac Medical servers. These forms will be accessed and completed by medical suppliers and healthcare providers via a standard Web browser.

The solution promises to cut the time- and labor-intensive process of obtaining Medicare reimbursement for durable medical equipment, while reducing the potential for fraud, waste and abuse in the Medicare billing system. It will benefit medical equipment suppliers by cutting administrative costs, increasing revenues and dramatically accelerating collections to improve cash flows.

About AuthentiDate Holding Corporation

AuthentiDate Holding Corp. (NASDAQ: ADAT) is the parent company of three businesses: AuthentiDate(TM)Inc., DocSTAR and DJS Marketing Group/Computer Professionals International. AuthentiDate, Inc. has received patent-pending status for its innovative technology that can verify the authenticity of digital data with virtual certainty. DocSTAR is a complete solution for storing and retrieving paper files electronically. DJS Marketing Group/Computer Professionals International performs computer integration services and sells computer products.

Statements in this news release that are not descriptions of historical facts are forward-looking statements that are subject to risks and uncertainties. Words such as "expects," "intends," "believes," "plans," "anticipates" and "likely" also identify forward-looking statements. All forward-looking statements are based on current facts and analyses. Actual results may differ materially from those currently anticipated due to a number of factors including, but not limited to history of operating losses, anticipated future losses, competition, future capital needs, the need for market acceptance, dependence upon third parties, disruption of vital infrastructure and intellectual property rights. All forward-looking statements are made pursuant to the Securities Litigation Reform Act of 1995. Additional information on factors that may affect the business and financial results of the AuthentiDate Holding Corporation can be found its filings with the Securities and Exchange Commission.