Authentidate's Trac Medical Solutions to extend CareCert(TM) to physician community

SCHENECTADY, N.Y.
Oct 7, 2004

Authentidate Holding Corp. (Nasdaq:ADAT) today announced that it has entered into a financial letter of intent with HealthFusion(R), Inc. of San Diego, CA in an effort to extend the reach of one of Authentidate's subsidiaries, Trac Medical Solutions, Inc. (TracMed). HealthFusion is a healthcare applications company that provides online real-time eligibility, referrals and other verification of benefits as well as electronic claims submission and payment for physicians and insurance providers through Web-enabled computing products and communications services.

Under the terms of the letter of intent, Authentidate will invest $750,000 in HealthFusion and will have the option to invest a minimum of an additional $750,000 within six months provided Health Fusion achieves certain financial or other metric objectives. Once $1.5 million is fully invested, Authentidate will own 7.3 percent of HealthFusion.

Currently more than 19,000 physicians and other healthcare personnel have registered with HealthFusion that enables physicians and hospitals to handle various administration tasks by automating key day-to-day activities in seconds using a standard computer with access to the Internet. The HealthFusion suite of products allows providers to exchange information with health plans such as Aetna, which has a nationwide network of more than 633,000 health care professionals. Upon completing the transactions, physicians using HealthFusion will have access to TracMed's offerings.

Authentidate's investment is subject to customary closing conditions, including the completion of due diligence and the negotiation and execution of a definitive agreement. In addition, Authentidate's obligations are subject to HealthFusion and TracMed entering into a separate agreement to integrate and co-market their products.

Upon TracMed and HealthFusion finalizing their agreement, TracMed will have access to HealthFusion's system and software, which ultimately provides registered physicians with a more cost-effective and time-efficient way to handle a variety of administrative functions. Backed by the United States Postal Service(R) Electronic Postmark(R), TracMed's CareCert is an innovative, Web-based solution that automates and speeds the process of securing and credentialing electronic healthcare forms and is fully HIPAA compliant. CareCert is the home medical equipment industry standard for processing electronic Certificates of Medical Necessity (eCMNs) and Written Orders.

"This relationship will enable physicians using HealthFusion to further enhance their ability to save time and administrative costs as a result of our agreement with Authentidate and TracMed," said Joseph A. Walsh, Executive Vice President and Director of Provider Networking, HealthFusion. "We see this as an opportunity to extend our reach within the healthcare industry and develop a more significant relationship with Authentidate."

"Authentidate's investment in HealthFusion will strengthen TracMed's commitment to providing efficient and innovative alternatives to forms processing for the healthcare industry," said John Botti, Chairman and CEO, Authentidate. "We seek to further extend our offering to thousands of physicians throughout the country and provide them with an easier and more efficient alternative to the traditional time-intensive paper process, enabling doctors to spend more time where they are needed the most - with their patients."

Additional information about Trac Medical's CareCert technology and the eCMN solution is available at www.tracmed.com.

About HealthFusion

HealthFusion is a healthcare communication services and applications company dedicated to connecting healthcare industry participants in the United States. The Company facilitates online real-time information exchange between healthcare insurers and health maintenance organizations (commonly referred to collectively as "payers"), physicians, physician organizations, hospitals, surgery centers, and medical billing companies (commonly referred to collectively as "providers"), thereby reducing administrative costs involved in transferring healthcare information. The Company also facilitates data exchange in batch format, performing a clearinghouse claims function. The Company develops and distributes products and services to assist healthcare industry participants to reduce healthcare expenditures, enhance workflow, and improve the quality of patient care. For more information: www.HealthFusion.com, Joseph Walsh (215) 393-4731.

About Authentidate Holding Corp.

Authentidate Holding Corp. (AHC) is the holding company of five business units; DocStar, Authentidate International AG, Authentidate, Inc., DJS Marketing Group/Computer Professionals International and Trac Medical Solutions, Inc. DocStar sells proprietary document imaging software that includes the Authentidate technology. Authentidate and Authentidate AG provide the authentication of digital data through its proprietary and patent pending technology. Authentidate intends to establish itself as the authority on "content security" as it is a growing sector of the electronic network security infrastructure market. DJS delivers professional services centered around technology systems integration projects, staff augmentation, out-tasking, outsourcing services and resells computer related products. Trac Medical offers an electronic form processing solution and utilizes the Authentidate technology to prove the authenticity of the content represented in completed healthcare forms.

This press release contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Act of 1934. When used in this release, the words "believe," "anticipate," "think," "intend," "plan," "will be," "expect," and similar expressions identify such forward-looking statements. Such statements regarding future events and/or the future financial performance of The Company are subject to certain risks and uncertainties, which could cause actual events or the actual future results of the Company to differ materially from any forward-looking statement. Such risks and uncertainties include, among other things, the availability of any needed financing, the Company's ability to implement its business plan for various applications of its technologies, the impact of competition, the management of growth, and the other risks and uncertainties that may be detailed from time to time in the Company's reports filed with the Securities and Exchange Commission. In light of the significant risks and uncertainties inherent in the forward-looking statements included herein, the inclusion of such statements should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

SOURCE: Authentidate Holding Corp.