SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB
(Mark One)

[X]      ANNUAL  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
         EXCHANGE ACT OF 1934. [No Fee Required)

For the fiscal year ended March 31, 1999

[ ]      TRANSACTION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934. [No Fee Required]

For the transition period from                       to
                               ---------------------    ---------------------
Commission file number                      0-24140
                       ----------------------------

LIFESTAR CORPORATION
(Name of small business issuer in its charter)
          Utah
(State of incorporation                              87-64268939
   or organization)                        (I.R.S. Employer Identification No.)

233 Wilshire Blvd., Suite 325, Santa Monica, CA                       90401
--------------------------------------------------------------------------------
(Address of principal executive offices)                           (Zip Code)

                                  310-395-1134
                (Issuer's telephone number, including area code)
       Securities registered under Section 12(b) of the Exchange Act: None
         Securities registered under Section 12(g) of the Exchange Act:


                           Common stock, no par value
--------------------------------------------------------------------------------
                                 Title of Class
Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities  Exchange Act during the preceding 12 months,  and
(2) has been subject to such filing requirement for the past 90 days.
                                                  [X]      YES      [ ]     NO

As of  March  31,  1999.  49,033,829  common  shares  were  outstanding  and the
aggregate  market  value of the common  shares  (based  upon the average bid and
asked  prices  on  such  date)  of the  Registrant  held  by  nonaffiliates  was
approximately $1,000.00.

Check if there is no disclosure of delinquent  filers in response to item 405 of
Regulation  S-B contained in this form and no disclosure  will be contained,  to
the best of registrant's knowledge, in definitive proxy or information statement
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB [X]

Revenues for the fiscal year ended March 31, 1999 totaled $-0-.
Documents incorporated by reference: None.


<PAGE>

<TABLE>
<CAPTION>

                              LIFESTAR CORPORATION
                                   FORM 10-KSB

                                TABLE OF CONTENTS

                                     PART I

<S>               <C>                                                                           <C>
Item 1            Description of Business                                                        3

Item 2            Description of Property                                                       34

Item 3            Legal Proceedings                                                             34

Item 4            Submission of Matters to a Vote of Security Holders                           34

                                     PART II

Item 5            Market for Common Equity and Related Stockholder Matters                      34

Item 6            Management's Discussion and Analysis of Plan of Operation                     35

Item 7            Financial Statements                                                          40

Item 8            Changes in and Disagreement with Accountants on Accounting
                  and Financial Disclosure                                                      41

                                    PART III

Item 9            Directors, Executive Officers, Promoters and Control Persons;
                  Compliance with Section 16(a) of the Exchange Act                             41

Item 10           Executive Compensation                                                        42

Item 11           Security Ownership of Certain Beneficial Owners and Management                42

Item 12           Certain Relationships and Related Transactions                                43

Item 13           Exhibits, List and Reports on Form 8-K                                        46
</TABLE>

                                       2
<PAGE>

ITEM 1.           DESCRIPTION OF BUSINESS

History of the Company

LifeStar  Corporation   ("LifeStar")  and  HealthCare  Express  Limited  ("HCX")
(jointly  referred to herein as "the Company").  The Company was incorporated in
Utah in September,  1985 under the name Zohoz  Funding,  Inc. and went public in
December of 1985 under that name. Thereafter,  its name was changed twice before
changing its name to LifeStar  Corporation in May, 1994.  Management  changed at
that time and an entirely new board of  directors  and  officers  were  elected.
Prior to that date,  the Company had not engaged in any active  business but has
attempted to acquire several on-going  businesses which  acquisition  never were
consummated.  In May,  1994,  the Company  acquired an exclusive  United  States
license for the LifeStar  technology from the National Medical Research Council.
This  license  allows the Company to  commercialize  on the  Council's  patented
LifeStar  technology which consists of Interactive  Medicine software technology
and its interactive-content PersonalCast and HouseCalls programs.

The Directors of the National Medical Research Council felt that this technology
has potentially  significant  commercial  applications and that their profitable
realization as outside the scope of its  non-profit  charter.  As a result,  the
Council   reorganized   its  management  to  permit  the  rapid  and  widespread
commercialization  of its technology.  The development team responsible for this
technologies  conception  and design  left the Council and joined the Company in
March, 1995. (See  "Relationship  with the National Medical Research  Council.")
The  commercialization  of its licensed LifeStar technology is at an early stage
of development.  Other than grant proceeds from the National Institute of Health
and National  Institute on Aging for the  development  of its licensed  LifeStar
technology, the Company has recognized no revenues to date.

                                   The Company


LifeStar is building the first single-focused  telecommunication network service
to deliver streamlined healthcare in a more economical manner. It has identified
and  targeted a vast profit  opportunity--the  high-end of  value-added  telecom
services created  specifically for medical care.  LifeStar is now developing the
network  infrastructure to capture this opportunity.  It is building a universal
telecommunication highway that provides specialized mass connectivity for better
quality care delivery.  This  infrastructure  will  eventually link nearly every
individual over the age of 40 to healthcare  databases.  LifeStar calls this new
patented1 network service Medical Dial Tone.

Medical  Dial Tone  economically  monitors  and tracks  patients  in their daily
lives. It uniquely uses proactive or outbound communication that creates greater
efficiency and convenience for both medical provider and patient. LifeStar first
identifies each healthcare  organization's  patient communication needs. It then
immediately delivers precisely tailored patient-centric solutions for healthcare
providers that create cost reduction,  productivity gains, risk  identification,
prediction and more confident  decision  support.  Medical Dial Tone's  superior
communicating  functionality  is derived  from its  ability to reach out to each
patient and motivate better  self-care on a proactive  basis,  while at the same
time gathering invaluable medical data.

                                       3
<PAGE>

LifeStar sees new converging technologies in the field of telecommunications and
the Internet,  combined with current healthcare market  conditions,  as an ideal
business  opportunity.  This dynamic  creates the  foundation  for a new kind of
telecommunication  enterprise.  In seizing this  telecommunication  opportunity,
LifeStar seeks to capture only the highest profit kernel of value-added  network
services and adapt them to specialized healthcare offerings.


LifeStar's Game Plan for Speed to Market Roll-out

LifeStar has created a game plan that  guarantees its speed to market  roll-out.
Traditionally,  fixed  infrastructure bound telecoms spend years building costly
facilities.   LifeStar's   approach  forsakes   traditional  return  from  fixed
infrastructure  investment.  Instead,  LifeStar  has  uncovered  the  need for a
service  offering  that  incurs a smaller  fixed  investment  and creates a more
favorable  risk to reward ratio and gross internal ratio of return of 250:1 over
five years with minimal downside.  LifeStar has identified potential profit that
can be  created by a unique  high  value-added  service  delivered  by  scalable
communication  servers  run  from  a  central  facility.  LifeStar's  end-to-end
flexible communications infrastructure creates the central communication gateway
for the  healthcare  industry  using servers and  convenient  access  interfaces
overlayed  upon  existing  public  switched  networks,  as well as the Internet.
During the past year,  LifeStar has attained the following  accomplishments  for
accelerating its deployment of Medical Dial Tone network services:

(1)      Attained broad patent and intellectual property coverage;
(2)      Secured a $13.4 million  investment  commitment from an industry leader
         (NYSE) in information processing technology;
(3)      Completed a field-tested  stand-alone  working system and competitively
         bid the construction of its network facility;
(4)      Successfully  demonstrated  proof-of-concept  of a  100:1  productivity
         advantage at a major national managed care organization; and
(5)      Brought aboard a proven management team.


Successful Field Trials

Prototype field trial systems and application  modules of LifeStar's  technology
have been tested in the field on over 1,100 patients of one of America's largest
and most respected  managed care  organizations.  An independent  audit of these
results  by the  Department  of  Communication  at San  Diego  State  University
dramatically  revealed  that the  frequency  of care  delivered  using  LifeStar
technology resulted in a 69% decline in physician visits.
(See LifeStar Field Trial Results)

A second,  just completed,  controlled study showed a statistically  significant
and dramatic reduction in stress levels of patients receiving LifeStar's planned
network  services.  (The control  group showed no  significant  change in stress
levels during the same period.).  The  experimental  group showed a reduction in
medical visits of 68%,  cross-validating  the earlier  retrospective  study.  An
analysis of these  studies can  demonstrate  a  potential  $500 in medical  cost
savings per year for each  chronic  care  patient  when  LifeStar's  basic level
network  services are used.  Overall,  these findings  corroborate  the system's
significant impact on improved care and resulting cost reductions, as well as on
greater patient satisfaction for members of managed care organizations.

                                       4
<PAGE>


LifeStar's Clear Communication Advantage

The Journal of the American Medical Association, researchers at the government's
Centers for Disease Control and medical  researchers at Harvard  University have
recently  called  for  the   establishment  of  a  truly  universal   healthcare
communication  highway directly to the patient. The Internet is often cited as a
likely mode.  However,  projections  for U.S.  individuals  online  through 2003
suggest  that the  Internet  alone  would not be  sufficient  to  provide  truly
universal population access.

[Graphic Ommitted]

Projected U.S. and Europe Individuals Online*
*Source: Nortel Networks and Jupiter Communications

It is now projected that Internet  access will still be a little over 55% in the
U.S and less  than  35% in  Western  Europe  in 2003.  Moreover,  healthcare  is
recognized as being one of the most notoriously technophobic industries, thereby
slowing Internet adoption for remote healthcare.

LifeStar has successfully  bridged this problem with a intermodal  communication
strategy.  It has created Medical Dial Tone, which integrates both the telephone
and the Internet for what they do best for healthcare  delivery.  The telephone,
after all, is presently  universally  accepted and reaches 95% of the population
in the U.S. and 85% in Europe.  And while the Internet is ideal for economically
delivering content-rich healthcare information, its use is inherently restricted
by often cited problems associated with navigation,  literacy, comprehension and
individual motivation.

                                       5
<PAGE>

The  simplicity,  ubiquity and  reliability  of the  telephone  complements  the
Internet in fine-tuning care delivery. To many patients the telephone represents
a trusted intimate space, and it supplements the Internet's information delivery
capability as a more effective mode for  individual  motivation,  encouragement,
support  and  comfort.  Furthermore,  the  telephone  can  reach  patients  in a
proactive  outbound mode.  Embracing both the telephone and the Internet through
Medical Dial Tone permits  LifeStar to create a  recognizably  superior tool for
healthcare communication, as follows:

(6)      Medical  Dial  Tone  provides  more  frequent,  efficient  and low cost
         contact with  patients  anywhere,  anytime.  It creates,  in effect,  a
         dedicated line between  patients and caregivers 24 hours a day. For the
         first time, it permits the  micro-management  and  fine-tuning of large
         patient  population  care  delivery for chronic  disease.  More precise
         fine-tuning of care reduces  medical risk,  keeps chronic disease under
         control,  and helps  patients  to make minor  adjustments  over time in
         their own self-care. It prevents the need for major adjustments later.
(7)      By  leveraging  provider  time  100:1  or more,  the low cost  frequent
         contact delivered through Medical Dial Tone ensures higher quality care
         while permitting physicians more time to see patients. (It has recently
         been proven to reduce routine office visits by 69%.)
(8)      Medical Dial Tone directly connects patients to healthcare databases to
         create  what will  become the  world's  largest  real world  laboratory
         environment. The network becomes the laboratory.
(9)      A new higher level of  healthcare  communication  is created by Medical
         Dial Tone which uses more  convenient  proactive  and outbound  contact
         with  patients  originated  from their own  healthcare  provider.  This
         streamlined   direct  care   delivery   from  a  concerned   healthcare
         professional   guarantees  better  patient   cooperation  with  medical
         programs,  energizes  individual  motivation,  and  results  in greater
         customer satisfaction.

Integrating the simplicity of the telephone with the Internet creates  objective
true universal access and  connectivity  for everyone.  Medical Dial Tone brings
back the personal touch to the art and science of the practice of medicine.


Internet Strategy

Medical  Dial Tone  creates an  entirely  new medium of  communication  - radial
personal  networks  - which  allow a single  individual  (such  as a  physician,
pharmacist or nurse) to personally  interact with 500 or more patients each day.
LifeStar's  Internet  strategy is, in part,  to permit the thousands of existing
eHealth  websites  to  transform  their role as routine  healthcare  information
distribution  vehicles into a mass care delivery medium using  individual  local
healthcare professionals.

Personal  healthcare  is  essentially  local  in  nature  and  subject  to local
licensing  requirements.  In  contrast to  personal  face-to-face  care by local
healthcare  professionals,  eHealth websites publish customized  information and
content.   Each  eHealth   website   represents  a  potential   entry-point  for
distributing LifeStar's localized outbound  telecommunication  services. As part
of an expanded  offering,  LifeStar  believes non face-to-face  care delivery by
local  healthcare  providers  through eHealth portals  habituates the patient to
return to the site, thus  guaranteeing the more frequent  delivery of care. This
results in selected eHealth  websites being able to warrant premium  advertising
rates and have greater transaction volume consistent with their present business
models.  Medical Dial Tone  represents an additional  revenue stream to Web site
operators,  who  will  share  in  LifeStar's  telecommunications  usage  charges
generated   by  local   healthcare   providers.   The   balance  of   LifeStar's
telecommunication  strategy  for  the  Internet  is  subject  to  non-disclosure
protocols.

                                       6
<PAGE>


Business Model

LifeStar  has  designed  a  business   model  unique  to  both   healthcare  and
telecommunications.  Designed as a telecom,  LifeStar  charges by the minute for
facilitating  more frequent,  economical and personalized care delivery while it
gathers vital patient data. It charges premium rates for convenient, streamlined
access and instant  remote  availability  to busy  patients on the go  anywhere,
anytime. As a healthcare telecom network, LifeStar sees the entire care delivery
process  in  terms  of  a  closed-loop   system,  with  feed-forward  of  highly
personalized  care to the patient,  and feedback of essential  qualitative  data
from the patient, for precise management of outpatient populations.

LifeStar's  comprehensive  solution  provides a new context for informed medical
decision  making  that  results  in the  creation  of a  significant  source  of
competitive  advantage for healthcare  organizations.  LifeStar's business model
includes the following key elements:

(10)     It  capitalizes  on  the  obvious  market  for  specialized  healthcare
         telecommunications through a telecom per-minute usage model;
(11)     It executes through  a unique switchboard/exchange profit strategy; and
(12)     It leverages  advanced  database  technology  and analytics  originally
         developed in other  industries for more  economical  management of mass
         patient populations.


Market Opportunity

Presently,  two-thirds or more of all patient  medical costs are associated with
chronic  rather  than  infectious  disease.  Chronic  disease  patients  require
frequent  monitoring  and  tracking,  often for the  remainder  of their  lives.
Telecommunications  today is ideally suited to chronic  disease care delivery in
following-up on large patient populations for healthcare organizations. LifeStar
believes a huge market exists for its telecommunication  network services in the
monitoring  and  follow-up  of the  aging,  non-acute  chronic  disease  patient
population  of over 200 million in the United States and Europe  combined.  This
opportunity   has   compelled   LifeStar   Corporation   to  create  the  unique
infrastructure  for building a next-generation  international  telecommunication
enterprise focused on healthcare.


LifeStar's Value Proposition for Healthcare Organizations

The LifeStar  value  proposition  for its Medical  Dial Tone network  service is
based on four fundamental benefits to the healthcare industry as a whole:

(13)     a 100:1 or greater productivity cost advantage in routine care delivery
         in addition to higher quality and more frequent care;

                                       7
<PAGE>

(14)     economical  connectivity  previously  unavailable  between  millions of
         chronic  disease  patients and healthcare  databases  resulting in more
         effective population, provider and contractor management;
(15)     previously  inaccessible and invaluable qualitative data for scientific
         validation,  differentiation  and cost  comparison  of existing and new
         pharmaceuticals, medical processes and treatment regimens;
(16)     no  front-end  capital  cost of  software  and  implementation  for the
         customer; and
(17)     the much needed  patient-centric  tool for creating a limitless variety
         of new services and products, and increasing customer satisfaction.

For the first time  LifeStar's  network  service,  Medical  Dial  Tone,  enables
healthcare providers,  managed care organizations and pharmaceutical researchers
to now track hundreds of invaluable metrics, such as:

(18)     the rate of progression or alleviation of illness;
(19)     severity and sequence of symptoms; and
(20)     degree of effectiveness of medication and treatment over time, while at
         the same time delivering less expensive and more frequent care.


Value-Based Pricing

Using  value-based  pricing of specialized its telecom  services,  LifeStar will
seek to charge for each  component of its combined  care and data  feedback loop
based on a small  fraction  of the value it  creates.  This is  accomplished  by
developing  service levels or tiers of service  tailored to both the present and
anticipated needs of the healthcare industry.  Initially,  LifeStar is deploying
five levels of specialized  network services for two identified primary segments
of the  healthcare  industry:  managed  care  organizations  and  pharmaceutical
manufacturers.  Parallel  offerings  will  be  made  to  self-insured  corporate
employers  and  eHealth  website  operators,   to  be  followed  later  by  home
healthcare,   pharmacy,   psychotherapy  and  other  professional   specialists.
Additional  higher  premium  service  levels and niche  specific  offerings will
eventually be added by LifeStar,  based on anticipated market demand. Due to the
essential  nature of each  individual  level of service,  bundles or packages of
service offerings will later be created,  following roll-out and introduction of
each separate level.


Technology Description

LifeStar's  patented  technology  delivers  personalized  two-way  voice care to
patients on a synchronized basis through voice and/or text, either separately or
simultaneously.  It also  collects  data in the  form of  patient  responses  to
queries in a digital format.  Patients and members of managed care organizations
are most often called by telephone on an outbound and proactive  basis and asked
questions about their treatment regimen.  E-mail and personal web pages are used
to support the treatment plan.

LifeStar has adapted  evolving  methodology in database  analytics,  call center
management,  and  Internet and  computer  telephony  to mass medical  population
management.  Key  telecommunication  patents are licensed on an exclusive  basis
from LifeStar's  affiliate  non-profit  foundation,  National  Medical  Research
Council.

                                       8
<PAGE>


Network Service Roll Out

Following  an  extensive  competitive  bidding  process by LifeStar  for a prime
network builder for Medical Dial Tone, Affiliated Computer Services, Inc. (NYSE)
was chosen as the prime  contractor  and systems  integrator  for all aspects of
infrastructure construction,  development,  operation,  monitoring,  billing and
facilities  management.  Later,  Affiliated  Computer  Services  (ACS) agreed to
invest $13.4 million in LifeStar, staged to its network infrastructure build-out
costing $89 million. LifeStar network service will be built in three phases: (1)
a mini-system for further testing;  (2) a Dallas stateside  standby system;  and
(3) a Bermuda based international service facility.


Barriers to Entry/Competitive Advantage for Medical Dial Tone

LifeStar's  competitive  advantage  over other telecoms lies in the fact that it
enjoys  potentially  wider margins through offering tightly focused  value-added
services  without  related  costly  transmission  infrastructure  and  overhead.
LifeStar's  proven  business  strategy is to rapidly  establish its  competitive
advantage by building  relationships  with healthcare  organizations  to provide
needed  administrative  and  clinical  solutions.  As  these  relationships  are
consummated,  LifeStar  establishes  itself as the low-cost  provider of focused
patient/member   access  using  its  exclusive  and  patented  core  competency.
LifeStar's  greatest  source of initial  competitive  advantage for its patented
solution is that it more conveniently and economically delivers personal care to
500 or more patients/members per provider per day.

LifeStar's  business  design  and  related  network  service  create  a  growing
repertoire of strategic  control points for  competitive  advantage.  Below is a
list  of  principal  control  points  with  analogous   corporate   examples  in
parentheses:

|X|      Patent Protection (Pfizer, Merck)
|X|      Ownership of Customer Relationship (GE, IBM)
|X|      Significant Product Development Lead Time and Experience Curve (Intel)
|X|      100:1 Cost Differential (Level 3)
|X|      Control of Distribution/Delivery Mechanism (AOL)
|X|      Regulatory Tax Advantage (Starwood, Global Crossing)
|X|      Proprietary Network /Open Architecture (Cable Industry)
|X|      Specialization in a Vertical Market (MBNA, EDS)
|X|      High Switching Costs (Microsoft, IBM)
|X|      Enabling Technology (SAP)
|X|      Value Chain Position (Blockbuster, Yahoo, VerticalNet)
|X|      Stickiness (AOL, Fed Ex)
|X|      Network Centric Architecture (DoubleClick, National Data Corporation)


                                       9
<PAGE>

<TABLE>
<CAPTION>


<S>                                        <C>                                     <C>
LifeStar                                   HEDCOM                                  HealthCare Express, JV

Phase I                                    Phase II                                Phase III
LifeStar Corporation (USA)                 HealthCare Express, Ltd. (Bermuda)      HealthCare Express JV (Europe)
                                           HEDCOM                                  Joint Venture

Software development, systems              Construction and acceptance of planned  Formation of joint marketing ventures for
integration and testing;                   Data and Communication Center;          country-by-country marketing;

Preview telecommunications facility for    Level II marketing to health care       European population and disease management
advance marketing of Bermuda center;       organization in America;                supported by the Bermuda facility;

Level I Advance marketing to healthcare    Application of advanced outcomes        Joint development of advanced healthcare
organzations and testing within academic   research tools for data mining of       applications catering to the European
medical community;                         longitudinal outcomes;                  market.

Convert system after construction of       Support for large ptient connectivity
Bermuda facility to support standby        and disease management programs.
capability.

</TABLE>




                                      10
<PAGE>



Specialization in Telecommunication -Three Vital Questions



Q:   What is the  economic  logic for  building  a telecom  entirely  around the
     healthcare industry?

A:   With deregulation and globalization of  telecommunications,  a company must
     either have overwhelming  physical and intangible scale advantages,  or the
     ability to add new  functionality  and service  dimensions  to a product in
     order to permit commoditization.  At the moment, unique economies clustered
     around   rapidly   increasing   capacity  and  commodity  type  pricing  in
     telecommunications  favor specialization.  Advancing technology in computer
     telephony allow a new generation of specialized networks to be overlayed on
     the public networks and the Internet by utilizing customized  communication
     servers and proprietary interfaces.

         The   healthcare   industry  is  a  natural   market  for   specialized
         telecommunication  services that provide labor-saving solutions.  Faced
         with growing costs, large patient  populations,  and a need to increase
         medical follow-up services, the healthcare industry is always searching
         for labor-saving  alternatives and innovative  solutions.  The need now
         exists to extend  patient  care  beyond the  face-to-face  visits  into
         ongoing and long-term interactive  relationships.  This is particularly
         true for the  management  of  chronic  disease  patients,  who  require
         frequent monitoring, reinforcement and support in order to change their
         lifestyles  and improve  their health  status.  As a telecom,  LifeStar
         offers  such  tightly  focused   telecommunication-based   productivity
         solutions, more economical care delivery and decision support.

         LifeStar believes  healthcare  provides the largest  opportunity in the
         field of  telecommunications  for delivering higher value-added pricing
         based of services.  Services that deliver lower medical  costs,  better
         decision  support and greater  convenience  can demand  premium  rates.
         Generally,  industry tailored  customized  offerings enjoy wider profit
         margins and  increased  profits  which can enable the  creation of even
         more specialized  offerings.  This cycle of increasing returns based on
         specialized  services  becomes  an  additional  source  of  competitive
         advantage. Such a portfolio of specialized healthcare applications will
         constitute  a  formidable  barrier for others  hoping to break into the
         market.

Q:  Why is  LifeStar's  network  service the optimal  solution  for  healthcare
    communication?

     A:  LifeStar first  identified  the field of healthcare as benefiting  from
         the impact of  advanced  computing  and  communications  technology  on
         labor-intensive   interaction   costs.   LifeStar  has  been  first  to
         demonstrate  these dramatic  potential cost savings in field trials and
         to then  translate  these findings up to low-cost  industrial  strength
         network  architecture that will deliver service to patient  populations
         on both sides of the  Atlantic.  It is first to use simple,  ubiquitous
         and convenient front-end interfaces that mask a high degree of back-end
         data and  communication  processing  complexity.  LifeStar  has a clear
         telecom first mover advantage protected by a broad patent portfolio. In
         designing its advanced  communication service for healthcare,  LifeStar
         has drawn widely from  research  leaders and theorists in the fields of
         Learning,  Cognition and Behavioral Medicine at Harvard, Yale, Stanford
         and the University of  California.  LifeStar has shaped and crafted its
         business  design  with the aid of  market  intelligence  from  Andersen
         Consulting,  Ernst & Young,  McKinsey & Company,  Mercer Management and
         First Consulting Group.


                                       11
<PAGE>


Three Vital Questions (cont.)


Q:  How will Medical Dial Tone change the practice of medicine?

     A:  Discovery  lies at the heart of medicine.  The vast majority of medical
         procedures,  treatments,  protocols and  pharmaceuticals  have not been
         scientifically validated in a real world environment with patients over
         extended  time  intervals.   Side  effects,   safety   profiles,   drug
         interactions  and  real  world  lifestyle  factors  all  influence  the
         therapeutic effectiveness of diagnosis and treatment.

         LifeStar  believes that the mass  connectivity to healthcare  databases
         afforded  by  Medical  Dial Tone  creates  what will grow to become the
         world's largest real world laboratory environment.  The telecom network
         becomes  the  laboratory.   Mass  patient  connectivity  to  healthcare
         databases  provides an enormous  payoff for  international  research in
         prediction,  diagnosis and treatment of human  ailments such as cancer,
         arthritis,  diabetes and heart  disease,  as well as for the ability to
         eventually forestall the effects of aging.

         Measurement  provides the basis for all risk assessment and prediction.
         Whether in finance,  engineering, or medicine,  measurement lies at the
         heart of risk  assessment and informed  decision  making.  Medical Dial
         Tone  economically  tracks and measures the degree of effectiveness and
         safety of medications and medical treatments.  It dynamically plots the
         progression  or  alleviation  of illness and  measures the severity and
         sequence  of symptoms  by types in real world  time.  It  measures  the
         impact of patient health characteristics,  their health behaviors,  and
         choices on the  progression  and management of their  illness.  Medical
         Dial Tone facilitates  lower overall medical costs, more profitable and
         accurate  pricing  of  healthcare  services,   more  effective  disease
         management  and  self-care  programs,  and an entire  new  prescription
         formulary of individually tailored and personally customized drugs.



                                       12
<PAGE>



                          LIFESTAR FIELD TRIAL RESULTS

LifeStar has prototyped and field-tested  its initial  platform  application and
other network services under the guidance of its head of clinical  studies,  Dr.
Brian Alman. Most recently,  two studies were conducted to evaluate the efficacy
and usefulness of LifeStar's new prototype to end-users (patients) and potential
customers (managed care organizations).  Over 1,100 patients (mostly from Kaiser
Permanente)  have received  prototype  network  services for varying  periods of
time. An independent  sampling of these patients was surveyed by Dr. Wayne Beach
at the Department of Communication, San Diego State University.

Controlled Study Finds Cost Savings of $500 per Patient per Year

LifeStar conducted a controlled study using prototypes of its Stress and Anxiety
Management  Application.  Preliminary results show that both patient anxiety and
medical  utilization  levels are reduced as a result of relaxation  response and
patient instruction in self-regulatory skills using LifeStar's service.  Medical
utilization  was shown to be  significantly  reduced  (68% or 2.84 visits over 5
months - see figure  below) for the  experimental  group (who  received  network
services), while the control group failed to show any significant change.

Most valuable to managed care  organizations  is the actual reduction in medical
visits and resulting  reduction in medical  costs.  A cost analysis  suggests an
additional  $209.40 savings (costs saved by the  experimental  group minus costs
saved by the control  group) to managed  care was  obtained  using the  LifeStar
system over five months, which translates to a cost saving of approximately $500
per patient per year.  LifeStar  believes that these results can be achieved for
patient  populations  that exhibit  other  related  medical  conditions  such as
anxiety,  depression,  cancer, heart disease and diabetes. An in depth review of
the findings and background in the field of interactive healthcare communication
applications is contained in the LifeStar Internal Report Interim Field Trials.

[Chart depicting]

Reduction in  Trait-Anxiety  levels for control
and experimental group.

Reduction   in  medical   visits  for  control  and
experimental group.


                                       13
<PAGE>

Longitudinal and Retrospective Study Finds High Level of Satisfaction

In another independent longitudinal, retrospective study (Beach, 1999) conducted
by  the  Department  of  Communication,  San  Diego  State  University,  similar
reductions were observed in the utilization of medical resources associated with
provider  visits.  Patients  currently  receiving or who had  received  LifeStar
network  services were surveyed as to: (i) their  satisfaction  with the service
and the level of  appropriateness of its communication  functionality,  and (ii)
medical  resource  utilization  before,  during  and  after  receiving  LifeStar
service.
[Chart depicting]

Self-reported medical visits before and after LifeStar service intervention.

Over  90%  of  the  patients   reported  that  they  were   satisfied  with  the
communication  service and that their needs as patients were consequently better
met. A very high percentage  (91%) reported that they experienced the service as
individually  tailored to their  medical  needs.  An average  reduction  of 39.3
visits to the healthcare provider, or 69% change, was reported by these patients
- suggesting a dramatic reduction in costly healthcare resource utilization (see
chart).

                                       14
<PAGE>


                  COMPETITIVE ADVANTAGE & POTENTIAL COMPETITION


Competitive Advantage and Barriers to Competition

Competitive  advantage and barriers to  competition  are of foremost  concern to
security  analysts  and  investors  because  they can ensure  stable,  long-term
revenue streams. We will jointly address  competitive  advantage and barriers to
competition  as an  integrated  concept.  First,  LifeStar  believes  that  as a
telecommunication company, its emphasis on providing specialized custom tailored
healthcare services for reduces the threat of immediate  competition from larger
universal  provider  telecoms.  Past  business  experience  shows that threat of
competition  is usually low in market  niches  until a robust  business  case is
proven.  By then, a niche  telecommunication  player such as LifeStar has had an
opportunity to build leadership based on delivering focused solutions.  LifeStar
believes the timing of its execution will provide further competitive  advantage
as follows:

Specialization

The LifeStar system is an enabling  technology.  This feature can translate into
an overwhelming  competitive  advantage for LifeStar by enabling a myriad of new
communication performance vectors that buy needed cost savings, greater customer
satisfaction, new products and higher quality care delivery.

LifeStar is  marketing  to a vertical  telecommunications  market -  healthcare.
Presently,  telecommunication  companies  are not creating  customer  healthcare
applications,  but rather acting as universal service providers and they lack an
intimate  knowledge of the needs of the vast healthcare  marketplace.  They also
lack  the  requisite  medical  science  base  required  to  configure   advanced
telecommunication  platforms  to the  specialized  needs of  managed  care.  The
relationship  and intimacy  created in  developing  telecommunication  solutions
customized to customer  needs builds an  entrenched  and  formidable  barrier to
competition.

Jumbo vertical  markets like healthcare are often ideal places to make money. By
sequentially  drilling-down on individual segments of the healthcare market to a
degree that competing telecommunication companies are either unwilling or unable
to match,  LifeStar has the  opportunity  to own the customer and exclude  tough
competition.

LifeStar has developed a profound  understanding  of the true dynamics and value
chain of each of its chosen healthcare market segments in order to address their
needs for greater profits.  This, in turn, permits value-based pricing, which is
the most  profitable  form of pricing.  Business  history also shows that once a
market segment adopts a market leading solution,  loyalty lasts to the grave. An
additional  advantage of specialization is that each highly competitive vertical
market  segment in healthcare has its own  professional  trade  association  and
strong word of mouth channel, which in turn, reduces LifeStar marketing costs.

                                       15
<PAGE>

Timing

Speed to market,  product  development  lead-time and the timing of entry into a
market all confer  advantage.  The firm that has more experience  developing and
delivering a product or service generally is more profitable than a firm without
experience.  The market for direct to patient  telecommunication has been primed
by  heightened  managed  care  motivation  to  find  ways  to  create  "clinical
outreach",  "distance  medicine",  "access" and "availability".  In its industry
review, First Consulting Group identified  outreach,  access and availability of
members as a strategy  being  adopted by nearly all managed care  organizations.
The report states  "Outreach is important in  establishing a partnership in care
and managing care needs in a more timely and reliable way. Outreach requires new
mechanisms  for  tracking  patients and  following up with them." And,  Anderson
Consulting has found,  "Soon,  healthcare  will be available at anytime,  in any
place.  The winning  strategy is to bring care  directly  to  consumers  through
telecommunications.  Thus,  the need for  consumers  or  providers  to travel to
receive   services  -  most  of  which  are  information   based  -  is  largely
diminished."2

Establishing  ongoing  connectivity  to the end-user  customer  enables  patient
self-reporting.  The self-reporting  facility shifts healthcare from an episodic
encounter  to a continuous  flow of patient  information  allowing  managed-care
firms to view the direction and flow of patient behavior.  It allows these firms
to  anticipate  where the  patient  is  heading  and to  develop  their  service
responses and offerings in response to these movements.

Over ten thousand websites are now providing  medical  information to consumers.
The  establishment of the Science Panel on Interactive  Communication and Health
by the U.S. Department of Health and Human Services,  and a growing science base
of peer reviewed literature, supports the timeliness of an entry into healthcare
telecommunications.  A  well-timed  entry  with a  needed  solution  creates  an
opportunity   for   strategic    advantage.    First-to-market   in   healthcare
telecommunications provides the opportunity to create the standard in a vertical
market  against  which all  later  competitors  must  fight.  It  confers a huge
competitive advantage to grasp market share, which can last for years to come.

LifeStar's  product  development  time  also  confers  advantage.  LifeStar  has
licensed ground breaking patents on an exclusive basis from the National Medical
Research  Council  (NMRC),  a  non-profit  foundation  where  LifeStar's  senior
management  was  part  of the  original  development  team  at.  The  underlying
healthcare   communication   technology   strategy   was   developed   with  the
contributions of over a dozen department heads at such academic  institutions as
Harvard,  Yale,  UCLA and  Stanford and  represents  the state of the art in the
field of Behavioral Medicine, Learning and Cognition. LifeStar benefits from the
extensive   experience   curve,   experiments   and   field   testing   of   its
telecommunication system. Experience curve is in itself identified as a separate
and  distinct  component  of  profit  strategy  and is a source  of  competitive
advantage.

Network-Centric Architectural Model

The  network-centric  design presently appears to be the last evolution for some
time to come in both computing and telephony.  Presently, no competing computing
paradigm is forecast to replace the network centric model for sometime according
to industry  leaders.  The present  large  commitment  and heavy  investment  in
telecommunication  infrastructure  by  telecom  acts as a barrier  to change and
obsolescence for the foreseeable future.

High Switching Cost

Rapidly  building  lifetime  patient  connectivity to healthcare  organizations'
databases creates an installed base. Once  established,  the work to swap it out
might be prohibitively costly. Like a personal telephone directory, LifeStar One
Touch  Personal IVR  (Interactive  Voice  Retrieval)  menu  selection  keys each
individual's  own  providers,  pharmacists,  nurses,  therapists,  trainers  and
becomes a one-touch means of communication.

                                       16
<PAGE>

LifeStar's  approach  to  creating a critical  mass of users is to have open and
free interfaces  allowing  disease  management  program  developers to integrate
their products with its network service. By proliferating usage through LifeStar
proprietary  network  infrastructure  with  its open  and  free  interfaces,  in
addition to distributing  development tools, LifeStar eliminates  bottlenecks to
growth and  accomplishes its goal of rapid market  development  while increasing
switching costs.

In general,  the emergence of managed care has reduced traditional bonds between
the patient,  healthcare providers and healthcare management  organizations.  In
response  to this  challenge,  many  healthcare  organizations  are  working  to
minimize the lifetime cost and understand the value of each member. As in retail
offerings,  companies that succeed in better  understanding  their customers can
provide  better  service  through  providing  more  personalized   interactions.
Information  derived from either retail  customers or healthcare  patients allow
companies to better  anticipate or predict demand and optimize service delivery.
It has been shown in the  marketing of retail  products  and services  that this
personalization  results in more frequent customer  interactions,  which in turn
further enriches the organization's knowledge of its customers.

LifeStar  believes  that  the  principles  learned  in  database  marketing  and
Web-based  marketing of products  apply  readily to healthcare  delivery.  As in
retail  marketing,  the frequency of customer  interactions  and a  personalized
relationship can become so compelling that working with  competition  becomes an
inconvenient alternative. In the process of building a personal relationship for
managed care delivery,  LifeStar  network services will leverage the strength of
its end-user  relationship to execute health specific  marketing  strategies and
sell complementary service packages.

Tax Free Status

By  operating  its  network  service  facility  offshore,   LifeStar  affiliate,
Healthcare  Express,  enjoys the  flexibility to devote a  significantly  larger
portion of its revenues to building value on a pre-taxed basis. When competition
for its services emerges from larger telecommunication providers,  LifeStar will
have the advantage of being able to lower its usage prices while still retaining
a greater portion of tax-free profit than its competitors.

Strategic Control Points in LifeStar's Business Design

LifeStar  sees  building  strategic  control as a  derivation  of its ability to
protect its profit stream against both  competition  and customer  power. In one
sense,  strategic control points and business models represent bundles of future
options. Stock market capitalization is derived from future prospects. A company
benefits  from  this  option  effect  when its  stock  represents  more than one
potential  source of  competitive  advantage - the more sources and models,  the
greater the effect.3  Strategic  control points protect the profit stream of the
business.  The greater the strategic  control the greater the  predictability of
earnings; and the greater the predictability,  the higher the valuation. This is
based on the idea that part of the value of the  equity is that it  participates
in more than one possible future.

                                       17
<PAGE>

LifeStar's  business  design  and  related  network  service  create  a  growing
repertoire of strategic  control points for  competitive  advantage.  Below is a
list  of  principal  control  points  with  analogous   corporate   examples  in
parentheses:

|X|      Patent Protection (Pfizer, Merck)
|X|      Ownership of Customer Relationship (GE, IBM)
|X|      Significant Product Development Lead Time and Experience Curve (Intel)
|X|      100:1 Cost Differential (Level 3)
|X|      Control of Distribution/Delivery Mechanism (AOL)
|X|      Regulatory Tax Advantage (Starwood, Global Crossing)
|X|      Proprietary Network /Open Architecture (Cable Industry)
|X|      Specialization in a Vertical Market (MBNA, EDS)
|X|      High Switching Costs (Microsoft, IBM)
|X|      Enabling Technology (SAP)
|X|      Value Chain Position (Blockbuster, Yahoo, VerticalNet)
|X|      Stickiness (AOL, Fed Ex)
|X|      Network Centric Architecture (DoubleClick, National Data Corporation)

Potential Competition

Within  the  field  of  telecommunications,  there  presently  are no  companies
specializing in communication solutions for healthcare. LifeStar recognizes that
the  total  market  size  and  wide  value-added  margins  found  in  healthcare
communications will make it attractive for  telecommunication  carriers to enter
at some point. LifeStar believes that traditional telecommunication companies do
not  recognize  the  real  drivers  of  profitability   nor  have  they  created
specialized  value-added  solutions  for  the  healthcare  industry.  Therefore,
LifeStar   does   not   anticipate    immediate    competition   from   existing
telecommunication  companies such as AT&T,  Worldcom MCI (and Sprint),  Regional
Bell Operating Companies (RBOCs).

Several   next-generation   companies,   such  as   Qwest,   Level  3  or  Enron
Communications,  are looking to vertical markets.  However,  these companies are
generally  facilities-based with huge up-front investments of time and money for
building the network  backbone.  In comparison,  LifeStar's  network roll out is
low-cost and roll out time is short.  LifeStar does not necessarily compete with
these providers but could potentially engage in partnerships in order to jointly
market their bandwidth along with LifeStar's  network service.  Most competition
might be from  smaller  telecommunication  companies  that  provide  value-added
services.  At the  present  time,  there is no  telecommunication  company  that
provides healthcare services such as Medical Dial Tone and on the scale proposed
by LifeStar.  Therefore,  LifeStar believes that competition from such companies
would not have a substantial impact on the marketplace.

There  are  currently  10,000  or  more  medical  websites  (e.g.,   drkoop.com,
healthcentral.com,  Ask Dr. Weil,  Medscape) offering health  information,  chat
rooms and online support groups,  administration of electronic  medical records,
updates on clinical  trials,  etc. The Internet is presently  passive and cannot
proactively  engage  the  patient  on an  outbound  basis in his or her care,  a
critical  element  in  healthcare  delivery.  It is  limited  in its  scope  for
healthcare.  LifeStar's Internet Strategy is to integrate communication over the
telephone with  communication  through the Internet and provide a  comprehensive
solution for healthcare communication.

                                       18
<PAGE>

                               COMPANY BACKGROUND


National Medical Research Council

The National Medical  Research Council (the "Council"),  in conjunction with the
National Institutes of Health ("NIH"),  has spent years of intensive research on
the problem of reducing  medical costs  associated  with chronic  disease.  Upon
receiving landmark United States patents, NIH licensed this valuable proprietary
technology  to a for-profit  company,  LifeStar  Corporation.  LifeStar has been
created to commercialize this technology and now holds exclusive rights to these
patents.

Intellectual Property

The  LifeStar  Advanced  Telecommunication  Network  Service for the  healthcare
industry is based on core patents granted to National Medical Research  Council,
a healthcare technology nonprofit research foundation,  located in Santa Monica,
CA. LifeStar holds the exclusive  rights to these patents for the United States.
Its sister  company,  Healthcare  Express,  Ltd.  holds the exclusive  rights to
Europe with additional rights to the United States for network  services.  These
granted  patents  stake out the entire field of  prevention  and  management  of
chronic disease through telecommunications.

Beginning with United States Patent  5,377,258,  the National  Medical  Research
Council  described a  telecommunications  system that would be used to provide a
two-way or interactive  dialogue with patients to reinforce  specific  self-care
behavior while motivating individuals to follow medical protocols--the  LifeStar
Personal  Cast. At the same time design  patents Des.  363,069 and Des.  372,126
were issued  covering  wireless  devices for medical  care.  These  patents were
followed by United States Patent 5,596,994,  which describes the use of computer
databases in conjunction with a variety of  telecommunication  platforms for the
delivery of patient  protocols in the field of medicine.  United  States  Patent
5,722,418  was also  granted to the  National  Medical  Research  Council  for a
telecommunications guidance system for medical information exchange processes.

Additional  patents are  pending,  as  submitted  by the  Council,  covering all
aspects of LifeStar's  network-centric,  value added telecommunication services,
utilizing  both public and private  networks.  Patents  have now been granted or
applied for covering all aspects of the LifeStar system throughout  European and
Asian markets, which comprise three-fifths of the world's population.

Research Advisors

Pursuant  to its  Technology  Sharing  Agreement  between the  National  Medical
Research  Council and  LifeStar,  the Council has agreed to make  available  the
services of certain  members of its  current  roster of  distinguished  research
advisors.  In the past,  the  Council  has  retained  the  services  of  various
university research personnel at Harvard,  Yale, Stanford,  UCLA, USC and so on,
with whom it has had a continuing relationship. Many of these professionals have
provided support in the development of the Council's  LifeStar Project including
Dr. Herbert Benson, LifeStar's Chief Consulting Scientist.

                                       19
<PAGE>

The Council has agreed to provide certain liaison  functions in facilitating the
availability  of these  advisors,  wherever  possible  and to the  extent  their
schedules  permit,  to  the  Company  for  technical  support  of  its  LifeStar
technology.  The  Council  will be paid a nominal  overhead  fee plus its out of
pocket costs for the consulting services of each individual researcher. LifeStar
has agreed, under the terms of the Technology Sharing Agreement, not to compete,
consult directly, nor separately,  or to retain the service of these researchers
for a period of two years upon the termination of the agreement.  Presently, the
services  of the  following  researchers  are  covered  under  the  terms of the
agreement.

                                       20
<PAGE>


                             EMPLOYEES & MANAGEMENT


Staffing

LifeStar is  currently  moving  from the  development  and testing  phase of its
technology to a  commercialization  phase consisting of ramp-up,  pre-launch and
roll out  activities.  Its plan with respect to staffing  for  commercialization
consists of outsourcing all network service technical operations while retaining
marketing  and  financial  administration  in-house.  LifeStar has organized its
staffing and recruitment needs into two phases.

Organizational  charts  depicting  LifeStar's  present  executive  officers  and
directors  and  planned  recruits  for  Phase  I and  II  are  displayed  below.
Executives  whose  recruitment  is planned during Phase I are indicated in boxes
with dotted lines.
Phase I
Staffing  during the  architectural  and  mini-system  construction  period of 8
months, and Phase II-Staffing at the beginning of the first full marketing year.

[graphic omitted, but included the following information:]

Board of Directors

Chairman - Carson E. Beadle
Vice Chairman - W. Douglass
Director - Lyle Breaux ----- Strategic Review & Staffing, Ernst & Young

Systems Integration ACS
Chief Technology Officer/VP-Technology - Ram S. Payaga
-----Director of MIS & ACS Liaison
-----chief financial Officer/Treasurer
Controller - George C. Keck

Senior VP-Markets
-----VP-Managed Care Markets
-----VP-Corporate Employer Markets
-----VP-Pharmaceutical Markets
-----VP-eHealth Markets
VP-Seminars & Communications - Kimberley Heart

Chief Consulting Scientist
VP-Clinical Studies - Brian Alman, Ph.D.
VP-Application Development - Rena Brar
Board of Advisors NMRC


                                       21
<PAGE>

Phase II
Phase II provides for planned  succession based on support of network build-out.
During this period,  LifeStar,  with the aid of executive search firms and Ernst
&Young,  will select a CEO with broad  marketing  experience in the managed care
industry.  A  CFO  will  be  selected  in  consultation  with  LifeStar's  newly
designated CEO. Sales and Product Managers will then be hired.

[graphic omitted, but included the following information:]

Board of Directors

Chairman - Carson E. Beadle
Vice Chairman - W. Douglass
Director
Director
Director - Lyle Breaux ----- Strategic Review & Staffing, Ernst & Young

Strategic Review by Ernst & Young

President & CEO

Systems Integration ACS
Chief Technology Officer/VP-Technology - Ram S. Payaga
-----Director of MIS & ACS Liaison
-----VP Product Development
-----Chief Operating Officer
-----Chief Financial Officer/Treasurer
Controller - George C. Keck

Senior VP-Markets
-----VP-Managed Care Markets
-----VP-Corporate Employer Markets - Carson Beadle (int.)
-----VP-Pharmaceutical Markets
-----VP-Internet Markets
VP-Seminars & Communications - Kimberley Heart
-----VP-Professional Services

Chief Consulting Scientist - Herbert Benson, MD
VP-Clinical Studies - Brian Alman, Ph.D.
VP-Application Development - Rena Brar
Board of Advisors NMRC

                                       22
<PAGE>

Executive Officers, Directors and Consultants


Carson E. Beadle--Chairman, Senior Vice President Marketing
Prior to joining  Lifestar,  Mr.  Beadle held  management  roles as the director
responsible for the New York and Eastern Canada regions of William M. Mercer. In
his  corporate  role,  he initiated  national  marketing,  public  relations and
insurer  performance  standards.   During  this  period,  he  developed  a  deep
understanding of strategic  planning and the needs of corporate  America and the
healthcare  industry.  He held these posts for  twenty-five  years  during which
Mercer became the world's  largest  actuarial and employee  benefits  consulting
firm,  with over one  thousand  actuaries,  more than one  hundred  offices  and
consulting revenues exceeding one billion dollars.

An original developer of the innovative  flexible benefits concept,  he has been
in  constant  demand as a lecturer  and  consultant  on all  aspects of employee
benefits and in negotiations on behalf of the nation's largest corporations with
insurance carriers and healthcare providers. He has chaired health committees of
the  Business  Roundtable,  the US Chamber  of  Commerce  and major  legislative
organizations in Washington,  DC. These  experiences have earned him the respect
of a broad array of senior  executives  and have  produced a highly  significant
network of contacts at the highest  administrative  level within the  healthcare
industry.

As founder and president of the White House supported Health Project, Mr. Beadle
has worked closely with senior members of the healthcare  industry in developing
the high profile C. Everett Koop National Health Awards.  He is also chairman of
the  Business  Forum on Aging of the  American  Society  on Aging,  focusing  on
bridging the essential areas of aging and healthcare,  the two most  significant
influences on the U.S. economy of the future.

He  currently  serves as a director  and member of the  Executive,  Finance  and
Personnel  Committees of the Security Mutual Life Insurance  Company of New York
and chairs their  Strategic  Marketing  Committee.  The company's broad range of
products  includes  specialized  services for the vast credit union field. He is
also a director,  member of the Audit  Committee  and chairman of the  Marketing
Committee of the Security  Equity Life Insurance  Company of New York, a company
focusing on high net-worth individuals.

In addition to his management,  consulting and marketing  roles,  Mr. Beadle has
authored  over100 articles on healthcare  appearing in such  publications as the
New England Journal of Medicine,  Fortune,  Wall Street Journal and The New York
Times and has been the featured speaker at many leading human  relations-related
conferences in the U.S. and abroad. Education: University of Toronto and Queen's
University, Ontario, Canada.

Lyle Breaux --President and Director
While at National  Medical Research  Council,  he was responsible for heading up
the research  team that  developed the LifeStar  project.  Mr. Breaux has over a
dozen  domestic and foreign  patents to his credit and is considered the leading
pioneer and innovator in the field of healthcare telecommunications.

While at NMRC,  he was  first  to file  landmark  patents  for  modifying  human
behavior using computer  telephony and database  technology.  Soon after, he was
first to patent the use of the strong  principles  of  learning,  cognition  and
behavioral medicine delivered through telecommunications. Later, he was first to
apply network based telecommunications and database technology to the individual
management of mass patient populations.  Working with patients and Dr. Alman, he
showed that two-way and  interactive  telephony  could  provide near  comparable
results to face-to-face  treatment in chronic disease  management at a far lower
cost.

                                       23
<PAGE>

Mr. Breaux is responsible for setting  LifeStar's  strategic  business direction
and overseeing the firm's international expansion, beginning with Germany. It is
anticipated  that within six to eight months a chief  executive  officer will be
recruited with a strong  background in healthcare  industry sales and marketing,
in addition to other  members of an expanded  management  team.  Mr.  Breaux has
agreed to serve in a  transitional  capacity as President  and chief  evangelist
until the management  team  recruitment  process is completed,  at which time he
will  direct   overall   corporate   development,   applications   research  and
international expansion.

Prior to  joining  the  National  Medical  Research  Council,  of which he was a
founder with Mr. Smith and others,  Mr.  Breaux was founder and Chief  Executive
Officer of  Radiographic  Systems,  a  nationwide  medical  products and service
company,  directing its expansion and later  profitable  sale.  Mr. Breaux was a
founder of First Pacific Bank, Beverly Hills, serving as Director for ten years.
Mr. Breaux has been associated  with Mr. Smith in a variety of investments  over
the past two  decades.  He  obtained  his B.Sc.  degree  with honors in business
administration  at the  University of  California,  Los Angeles and completed an
additional course of study at UCLA Medical School.


Robert Chan, Pharma D., Director,  Executive Vice President --Chief,  Healthcare
Markets Dr. Chan possesses a distinguished background in both telecommunications
and  healthcare.  He has a doctorate in clinical  pharmacology.  He will head up
LifeStar's   consultative   sales  initiative  to  both  the  managed  care  and
pharmaceutical  markets.  Early in 2000,  Dr.  Chan  left  Ernst & Young to join
LifeStar. While at Ernst & Young he served as their National Director of Managed
Care  Alliances,  giving him access to managed  care,  pharmaceutical  and chain
pharmacy  organizations  at  their  highest  administrative  level.  Dr.  Chan's
combined  telecommunications,  information  processing and healthcare background
uniquely fits LifeStar's business model as a specialized healthcare telecom.


Herbert Benson, MD--Chief Consulting Scientist
Dr.  Benson  of  Harvard  Medial  School  is  without  question  the  preeminent
researcher in the field of patient  self-regulation of chronic disease.  Through
his work he discovered  the  relaxation  response and continues to lead research
into its efficacy in counteracting  the harmful effects of stress and pain while
improving self-care.  His laboratory studies and field research have resulted in
a towering  body of work  consisting  of more than 150  scientific  studies  and
publications  in such peer  reviewed  journals  as The New  England  Journal  of
Medicine, Journal of American Medical Associations, Lancet and Nature. More than
four million copies of Dr.  Benson's books have been printed.  He is the founder
and President of the world famous Mind/Body Medical Institute of Harvard Medical
School and Beth Israel  Deaconess (a Harvard Medical School teaching  hospital).
In addition,  Dr. Benson is Chief of the Division of Behavioral Medicine at Beth
Israel  Deaconess  Medical  Center.  Each year Dr. Benson,  in conjunction  with
Harvard,  hosts  seminars both at Harvard and in other major cities  attended by
over a thousand healthcare providers.

                                       24
<PAGE>

The recipient of numerous national and international  awards,  Dr. Benson is the
world's  pioneering  scientist  on the  effects of stress.  In  laboratories  at
Harvard Medical School,  he first proved the existence and therapeutic  benefits
of evoking the  relaxation  response,  an inborn  natural  human  reflex that is
available to counteract the equally natural  fight-or-flight  reflex. Dr. Benson
showed  that  the  relaxation  response  decreases  oxygen  consumption,   blood
pressure,  heart rate and  respiratory  rate--the  exact  opposite to those that
occur  during  the  stress  response--and  is  effective  in  the  treatment  of
hypertension,   cardiac  arrhythmia,   chronic  pain,   infertility,   insomnia,
premenstrual syndrome,  gastrointestinal disorders, anxiety, mild depression and
chronic  fatigue.   Working  at  Harvard  Medical  School's  Thorndike  Memorial
Laboratory, Boston City Hospital, Beth Israel Hospital and New England Deaconess
Hospital,  Dr. Benson and his staff further defined the relaxation  response and
determined  its  clinical  usefulness.  Later,  he extended his  discoveries  on
physiologic  self-regulation  to  cognitive  self-regulation  for  self-care  of
chronic disease,  including cardiac  rehabilitation  and the many stress related
symptoms of both cancer and AIDS.

Dr. Benson first  identified  and later  quantified  the extent of  relationship
between unnecessary visits to healthcare providers and the patient's involvement
in  self-regulation.  He showed that 60-90% of all medical  office visits in the
United States stem from stress related disorders and that stress in some form is
a precursor to much of chronic disease. He demonstrated that an understanding of
the  mechanisms  of stress and its  treatment is  increasingly  important in the
contemporary management of medical conditions. After identifying one of the root
causes of all unnecessary  medical costs, Dr. Benson recognized the ongoing work
and   patents   by   National   Medical   Research   Council  as  key  to  using
telecommunications  to refocus patients on more frequent  self-care within their
daily lives. Dr. Benson extended this concept into using  telecommunications  to
both  deliver  care  and to  gather  previously  unavailable  medical  data  and
longitudinal  outcomes  leading to what will become the world's  largest medical
laboratory-like  facility  operating  in a  real  world  environment--LifeStar's
Healthcare  Communications  Facility (HEDCOM).  Dr. Benson is an internationally
respected leader in the field of medicine.  He is now acting as LifeStar's Chief
spokesman and is chairman of its Board of Medical Advisors.

Ram S. Prayaga--Chief Technology Officer
Prior to joining  LifeStar as Chief Technology  Officer,  he was responsible for
the  design of the  patented  PersonalCast(TM)  System at the  National  Medical
Research Council. He joined LifeStar  Corporation as CTO and was responsible for
the   development  of  the  service  level   prototypes   and  network   service
architectural  specifications.  More  recently,  he  has  been  responsible  for
outsourcing  the network  development  and system  integration  for the LifeStar
System. As CTO, he is responsible for articulating the technical architecture of
the System and the central  coordination  of  LifeStar's  relationship  with its
partners, Affiliated Computer Services, Inc.

His past development  experience  includes design and development of an advanced
virtual  reality  system for medical  teaching and design and  development of an
expert system for  manufacturing.  He has conducted  extensive  research work in
neural  networks,  human vision,  artificial  intelligence  and human  interface
design. He has a BS in Computer Science from University of Bergen, Norway, an MS
in  Computer  Science  from  University  of  Southern  California  and  an MA in
cognitive  Science from University of California,  San Diego,  where he had been
employed as a researcher while working on his doctorate in cognitive Science.

                                       25
<PAGE>

Brian Alman, Ph.D.--Vice President, Clinical Studies
He has  supervised  LifeStar's  field  trials  and  application  development  in
collaboration  with Dr.  Benson of  Harvard  Medical  School.  For the past four
years,  he  has  specialized  in  applying  distance  medicine  and  interactive
healthcare  communications to a variety of patient groups suffering from chronic
disease.  He is an  internationally  recognized  authority on self-regulation in
chronic  disease  management.  He has authored  three medical  textbooks on that
subject,  one of which is the definitive  text in the area. Dr. Benson  lectures
annually at seminars in France, Germany, Belgium, India and the United States at
medical   institutions  such  as  Harvard  Medical  School,  the  University  of
Paris-Sorbonne,  University of California,  Scripps Medical Institute and Kaiser
Permanente,  one  of the  largest  healthcare  delivery  systems  in the  world.
Together with Dr. Benson, he has consulted with Procter & Gamble on applications
of LifeStar technology to various healthcare initiatives. For several years, Dr.
Alman has been  testing the  evolving  LifeStar  prototype  network  services on
patients  referred by Kaiser  Permanente in nearly 20 chronic disease issues. He
holds a Bachelors degree from Suffolk University in Boston, Massachusetts and an
MA and Ph.D. in Clinical  Psychology from the California  School of Professional
Psychology in San Diego.

Rena Brar--Vice President, Application Development
She joined the National  Medical Research Council in 1992 where she directed the
original  theoretical  research for the  commercial  application of its LifeStar
project  and  collaborated  with Mr.  Breaux on  authoring a variety of research
papers  and  tutorials  to  support   application   for  funding  for  prototype
development. She is extending and integrating current research findings into the
construction of predictive, compliance and self-regulation models to support the
roll out of network services.

Prior to  joining  the  Council,  she  worked on  research  in human  memory and
cognition  at the Andrus  Gerontology  Institute at the  University  of Southern
California.  She is a member of the California Bar. She has extensive experience
in applied research derived originally from judicial research and later in human
cognition  and  behavior  and  received  a Juris  Doctor  from  USC and an MA in
experimental psychology from the University of California, San Diego.

Kimberly Heart--Vice President, Communication and Seminars
She is a pioneer in the  experimental  application  and delivery of care through
both  telecommunications  and broadcast media. From 1994 until the present,  she
has  worked  with  National  Medical  Research  council on the  development  and
implementation of its patented LifeStar technology. She has appeared as a stress
expert on CBS and various local stations,  including her own  interactive  radio
talk show.  She is a published  author and has written a text on human stress in
relationships.  She has  extensive  experience  in  demonstrating  the  LifeStar
PersonalCast  interface  to large  numbers  of  healthcare  providers  and focus
individuals. She received an MA in psychology from the University of Colorado, a
PA in psychology  from the Medical College of Georgia and BS from the University
of Wisconsin.


                                       26
<PAGE>


ACS-LifeStar Systems Development Management

The LifeStar  systems  development  project  requires  careful  organization and
experienced  management.  Together  with  ACS,  LifeStar  has  planned  a  joint
management  team with an  Executive  Steering  Committee  and Project  Oversight
Committee. The following organization chart illustrates the proposed team:

[graphic omitted, but included the following information:]

Strategic Review, Ernst & Young      ACS/LifeStar          Lyle Breaux
                                     Executive Steering    Ram S. Prayaga
                                     Committee             Darin LaGrange
                                                           Tom Latham
                                                           Bernie Wess

                                     Project Oversight     Ram S.Prayaga
                                     Operational           Mike O'Donnell
                                     Committee             ken Housman
                                                           Dave Arthurs

                                     ACS Project Executive

(lateral)
ADT Development Team Leader - (reporting) Engineers
AIMS Team Leader - (reporting) Engineers
HEDCOM Team Leader - (reporting) Engineers
Data Warehouse Director - (reporting) Engineers
Documentation Manager

[graphic omitted, but included the following information:]



                                       27
<PAGE>


                          RELATED PARTIES TRANSACTIONS


Relationship with National Medical Research Council


Employment of Key Officers And Directors
For several years, National Medical Research Council (NMRC) a non-profit medical
foundation, has had a top priority of creating a viable economic solution to the
problem of spiraling  medical costs in the United States.  Several of LifeStar's
officers and  directors  directly  contributed  to the  development  of LifeStar
technology.  Present  officers or directors of LifeStar who formerly have worked
for NMRC are its President, Lyle Breaux; Rena Brar, Vice President,  Application
Development;  Ram Prayaga,  Vice  President,  Technology  and  LifeStar's  Chief
Technology  Officer,  Herbert Benson,  MD, Chief Consultation  Scientist;  Brian
Alman, Ph.D, Vice President,  Clinical Studies; and W. Douglass Smith,  Director
and Chief of  Marketing.  From time to time in the past,  Messrs.  Bro and Smith
have been principal contributors to NMRC.

Incorporation of HealthCare Express Limited, a Bermuda Company
In 1998, NMRC incorporated  HealthCare  Express to commercialize on developing a
network service computer architecture for its PersonalCast patient communication
technology  for both the  United  States  and  Europe.  NMRC saw that a  network
service would be complimentary to PersonalCast  technology,  licensed previously
to LifeStar  Corporation.  Pursuant to an exclusive agency  agreement,  LifeStar
Corporation  represents HealthCare Express,  Limited for the sale of its network
services for both the United States and Canada.  LifeStar  Corporation  will not
participate in HealthCare Express's provision of its network services to Europe.

Exclusive License and Royalty Agreement with NMRC
Both  LifeStar  Corporation  and  HealthCare  Express have executed an exclusive
license and royalty agreement with NMRC. Both agreements require each respective
company to pay  royalties to NMRC  equivalent  to 5% of gross revenue for use of
the LifeStar  technology and product or corporate names LifeStar,  PersonalCast,
Medical Dial Tone, AIMS,  PULSE and HealthCare  Express.  In addition,  LifeStar
Corporation and HealthCare Express,  Limited have agreed to pay a license fee of
$2.5  million  of  which  $250,000  has  been  paid  thus  far,  and $5  million
respectively to NMRC as consideration for executing these exclusive licenses.



                                       28
<PAGE>

                                REGULATORY ISSUES


Tax Considerations

Taxation of the Company
LifeStar  believes that a significant  portion of its income will not be subject
to tax in  Bermuda,  which  currently  has no  corporate  income  tax,  or other
countries in which the Issuer or its affiliates  conduct  activities or in which
customers of LifeStar are located,  including the United States.  However,  this
belief is based upon the  anticipated  nature and  conduct  of the  business  of
LifeStar,  which may change,  and upon LifeStar's  understanding of its position
under the tax laws of the  various  countries  in which  LifeStar  has assets or
conducts activities,  which position is subject to review and possible challenge
by taxing authorities and to possible changes in law (which may have retroactive
effect).  The extent to which certain taxing  jurisdictions may require LifeStar
to pay tax or to make  payments in lieu of tax cannot be  determined in advance.
In addition,  the  operations of and payments due to LifeStar may be affected by
changes  in  taxation,  including  retroactive  tax  claims  or  assessments  of
withholding  on amounts  payable to  LifeStar  or other  taxes  assessed  at the
source,  in excess of the  taxation  anticipated  by LifeStar  based on business
contacts and practices of LifeStar and the current tax regimes.  There can be no
assurance  that  these  factors  will  not have a  material  adverse  effect  on
LifeStar.

Bermuda Tax Considerations
Under current  Bermuda law,  LifeStar is not subject to tax on income or capital
gains.  Furthermore,  LifeStar  has  obtained  from the  Minister  of Finance of
Bermuda under the Exempted Undertakings Tax Protection Act 1966 (as amended), an
undertaking that, in the event that Bermuda enacts any legislation  imposing tax
computed on profits, income, any capital asset, gain or appreciation, or any tax
in the nature of estate duty or inheritance tax, then the imposition of such tax
will not be applicable to LifeStar or to any of its  operations,  or the shares,
capital or Common Stock of LifeStar, until March 28, 2016. This undertaking does
not,  however,  prevent the  imposition of property  taxes on any company owning
real property or leasehold interests in Bermuda.

United States Federal Income Tax Considerations
The  Issuer and its  non-United  States  subsidiaries  will be subject to United
States  federal  income tax at  regular  corporate  rates (and to United  States
branch  profits  tax) on their  income that is  effectively  connected  with the
conduct of a trade or business within the United States, and will be required to
file federal  income tax returns  reflecting  that income.  LifeStar  intends to
conduct its  operations  to  minimize  the amount of its  effectively  connected
income.  However,  no assurance can be given that the Internal  Revenue  Service
(the "IRS")  will agree with the  positions  taken by  LifeStar in this  regard.
Moreover, the United States subsidiaries of the Issuer will be subject to United
States federal  income tax on their  worldwide  income  regardless of its source
(subject to reduction by allowable  foreign tax credits),  and  distributions by
such  United  States  subsidiaries  to the  Issuer or its  foreign  subsidiaries
generally will be subject to United States withholding.

                                       29
<PAGE>


Taxation of Stockholders

Bermuda Tax Considerations
Under  current  Bermuda law, no income,  withholding  or other taxes or stamp or
other duties are imposed upon the issue, transfer or sale of the Common Stock or
on  any   payments   thereunder.   See   "Taxation  of   LifeStar--Bermuda   Tax
Considerations"  for a  description  of the  undertaking  on taxes  obtained  by
LifeStar from the Minister of Finance of Bermuda.

United States Federal Income Tax Considerations
The following is a summary of certain  material United States federal income tax
considerations  that apply to the  acquisition,  ownership  and  disposition  of
Common Stock by United States  Holders (as defined below) as of the date hereof.
This summary  deals only with Common Stock that is held as a capital  asset by a
United  States  Holder,  and does not address tax  considerations  applicable to
United States Holders that may be subject to special tax rules,  such as dealers
or  traders  in  securities,   financial   institutions,   insurance  companies,
tax-exempt  entities,  United States Holders that hold Common Stock as part of a
straddle,  conversion  transaction,   constructive  sale  or  other  arrangement
involving more than one position,  United States Holders that own (or are deemed
for United States tax purposes to own under certain  attribution or constructive
ownership  rules)  10%  or  more  of  the  voting  stock  of  the  Issuer  ("10%
stockholders"), United States Holders that have a principal place of business or
"tax home" outside the United States or United States  Holders whose  functional
currency is not the United States  dollar.  In addition,  the summary  generally
does not address the tax  consequences to 10%  Shareholders  (as defined below).
10% Shareholders are advised to consult their own tax advisors regarding the tax
considerations incident to an investment in Common Stock.

The discussion  below is based upon the provisions of the Code, and regulations,
rulings  and  judicial  decisions  thereunder  as of the date  hereof;  any such
authority may be repealed, revoked or modified, perhaps with retroactive effect,
so as to result in United States federal income tax consequences  different from
those discussed below.

THE  DISCUSSION  SET OUT BELOW IS INTENDED  ONLY AS A SUMMARY OF CERTAIN  UNITED
STATES  FEDERAL  INCOME TAX  CONSEQUENCES  OF AN INVESTMENT IN THE COMMON STOCK.
PROSPECTIVE  INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX
CONSEQUENCES OF AN INVESTMENT IN THE COMMON STOCK,  INCLUDING THE APPLICATION TO
THEIR PARTICULAR  SITUATIONS OF THE TAX CONSIDERATIONS  DISCUSSED BELOW, AS WELL
AS THE  APPLICATION  OF STATE,  LOCAL,  FOREIGN OR OTHER  FEDERAL TAX LAWS.  THE
STATEMENTS  OF UNITED STATES  FEDERAL  INCOME TAX LAW SET OUT BELOW ARE BASED ON
THE LAWS IN FORCE AND INTERPRETATIONS THEREOF AS OF THE DATE OF THIS PROSPECTUS,
AND ARE SUBJECT TO ANY CHANGES OCCURRING AFTER THAT DATE.

As used herein,  a "United States Holder" of Common Stock means a holder that is
(i) a  citizen  or  resident  of  the  United  States,  (ii)  a  corporation  or
partnership  created or organized  in or under the laws of the United  States or
any  political  subdivision  thereof,  (iii) an  estate  the  income of which is
subject to United States  federal  income  taxation  regardless of its source or
(iv) a trust which is subject to the  supervision  of a court  within the United
States  and the  control  of a United  States  person as  described  in  section
7701(a)(30) of the Code.

                                       30
<PAGE>

Taxation of Dividends
The gross amount of dividends paid to United States Holders of Common Stock will
be treated as dividend income to such United States Holders,  to the extent paid
out of current or accumulated  earnings and profits,  as determined under United
States federal income tax principles.  Such income will be included in the gross
income of a United States  Holder as ordinary  income on the day received by the
United  States  Holder.  Such  dividends  will not be eligible for the dividends
received  deduction allowed to corporations  under the Code. Subject to the PFIC
rules described below, to the extent that the amount of any distribution exceeds
the Issuer's  current and  accumulated  earnings and profits for a taxable year,
the distribution will first be treated as a tax-free return of capital,  causing
a reduction in the adjusted  basis of the Common Stock  (thereby  increasing the
amount of gain, or decreasing the amount of loss, to be recognized by the United
States Holder on a subsequent  disposition of the Common Stock), and the balance
in excess of adjusted  basis will be taxed as capital gain.  The Issuer does not
anticipate  paying cash  dividends  in the  foreseeable  future.  See  "Dividend
Policy."

For so  long as the  Issuer  is a  "United  States-owned  foreign  corporation,"
distributions  with  respect to the Common  Stock that are taxable as  dividends
generally  will be treated  for United  States  foreign  tax credit  purposes as
either (i) foreign  source  "passive  income" (or, in the case of certain United
States  Holders,  foreign  source  "financial  services  income") or (ii) United
States source income, in proportion to the earnings and profits of the Issuer in
the year of such  distribution  allocable to foreign and United States  sources,
respectively.  For  this  purpose,  the  Issuer  will  be  treated  as a  United
States-owned  foreign  corporation so long as stock  representing 50% or more of
the voting  power or value of the Issuer is owned,  directly or  indirectly,  by
United States Holders.

Taxation of Capital Gains
For United  States  federal  income tax  purposes,  a United  States Holder will
recognize  taxable  gain or loss on any sale or exchange  of Common  Stock in an
amount equal to the difference  between the amount realized for the Common Stock
and the United States  Holder's  adjusted basis in the Common Stock.  Subject to
the PFIC rules discussed below,  such gain or loss will be capital gain or loss.
Capital gain of individuals derived with respect to capital assets held for more
than one year is eligible  for  reduced  rates of  taxation  depending  upon the
holding period of such capital assets.  The  deductibility  of capital losses is
subject to limitations.  Any gain recognized by a United States Holder generally
will be treated as United States source income.  It is presently unclear whether
any loss  realized by a United States Holder will be treated as United States or
foreign source.

                                       31
<PAGE>


Risk Evaluation

LifeStar's  management is keenly aware of the risks  associated  with building a
significant and profitable  business.  In this regard,  management has carefully
analyzed  these  risk  factors  in its  efforts to  achieve  the  objectives  as
described  herein and has taken steps contained in its business design to lessen
these risks. An examination of the most significant of these risk factors in the
opinion of management  and a brief summary of  management's  attempt to mitigate
them are as follows:

Limited Operating History
Because National Medical Research,  the licensor of LifeStar's  technology on an
exclusive basis,  has absorbed or deferred nearly all of LifeStar's  development
costs and its network service infrastructure has not yet been constructed, it is
presently  difficult to forecast its business prospects.  Therefore,  LifeStar's
prospects  must  be  considered  in  the  light  of  the  risks,   expenses  and
difficulties  encountered  in  the  establishment  of a  business  in  a  highly
competitive business such as telecommunication services. Based on this and other
factors,  there can be no  assurance  that the  financial  properties  contained
herein which show positive operating profit and cash flow will be met.

Acceptance of LifeStar's Solution by the Healthcare Industry
To be  successful,  LifeStar  must  attract a  significant  number of  customers
throughout the healthcare  industry.  LifeStar may not achieve the critical mass
of users it believes is necessary to become  successful.  In addition,  LifeStar
expects to generate a significant  portion of its revenue from per-minute  usage
fees.  Consequently,  any  significant  shortfall  in the  amount of usage  fees
occurring over LifeStar's network service  infrastructure would adversely affect
its financial results.

Obsolescence
Delivering  healthcare  telecommunications  competes  with  other  forms of care
delivery  such  as  face-to-face  and  inpatient  treatment.   Further,  medical
information is  increasingly  available  through medical  websites,  ask-a-nurse
hotlines, disease management pamphlets, physicians on-line, etc.

Dependence on Management and Key Personnel
At present  LifeStar is dependent on the services of its management  staff,  the
loss of one or more of whom could have a material adverse effect on the company.

Capital Requirements
LifeStar  expects that funds  raised up to each  development  milestone  will be
sufficient to meet its requirements.  This is due to the predetermined and fixed
nature of its development costs with ACS, the present  foreseability of budgeted
corporate overhead and the anticipated  continuing decline of  telecommunication
charges.  The overall development cycle of LifeStar network service facility has
been  designed  to  create  a  series  of  investable  options  and to  minimize
development  risk.  Each  development  milestone and its related funding creates
identifiable  value  which  forms  the  basis for  raising  additional  capital.
LifeStar  anticipates  raising  additional  funds  by  selling  debt  or  equity
securities,   by  entering  into  strategic   relationships   or  through  other
arrangements.  LifeStar  may be unable to raise  additional  amounts  on a basis
considered reasonable by management when they are needed.

                                       32
<PAGE>

If the  financing  plans  described  in this  Profile  and  Business  Plan are a
success,  LifeStar is expected to have sufficient capital to implement its plan.
If, however,  the funds raised are less than  anticipated,  LifeStar may have to
curtail some of its immediate  plans,  reschedule the planned roll out of one or
more of its service levels or obtain financing from other sources.  No assurance
can be given that  additional  financing  will be  available  at any time in the
future.

Competition
There  can  be  no   assurance  a  variety  of   national,   regional  or  local
telecommunication   enterprises   will  no   commence   emphasizing   healthcare
communication  services  with  offerings  similar  to those of the  Company  and
compete more directly with  LifeStar,  that new  competitors  will not enter the
market  or  that  other  businesses  will  not  themselves  introduce  competing
services.  There also can be no assurance that LifeStar"  potential  competitors
will not provide  services  comparable or superior to those provided by LifeStar
at lower  rates or adapt more  quickly  than  LifeStar  to  evolving  healthcare
industry  trends or changing  market  requirements.  Competition  would possibly
introduce price  reductions,  reduce gross margins and loss of market share, any
of which  could  materially  adversely  affect  LifeStar's  business,  financial
condition and results of operations.



                                       33
<PAGE>



Item 2.           DESCRIPTION OF PROPERTY

The  Company  presently  is  occupying  2,000 aq. ft. of space in Santa  Monica,
California for administrative purposes.

ITEM 3.  LEGAL PROCEEDINGS

The Company is not currently involved in any legal proceeding which,  Management
believes would have a material impact on its business.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

ITEM 5.           MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATERS

Market Information

There is no established public trading market for shares of the Company's Common
Stock.

Market Makers: None.

As of March 31,  1999,  49,033,829  shares  of the  Company's  Common  Stock ere
eligible  for sale under Rule 144,  subject to certain  limitations  included in
such rule.  In general,  under Rule 144, a person (or persons  whose  shares are
aggregated)  who  has  satisfied  a  two-year  holding  period,   under  certain
circumstances,  may sell within any three-month  period a number of shares which
does not exceed the greater of 1% of the Company's then outstanding Common Stock
or the  average  weekly  trading  volume of such  Common  stock  during the four
calendar  weeks  prior  to such  sale.  Rule  144 also  permits,  under  certain
circumstances,  the sale of shares  without any quantity  limitation by a person
who has satisfied a three-year holding period and who is no, and has no been for
the preceding three months, an "affiliate" of the Company.

There are not  presently  outstanding  any option,  warrants or other  rights to
purchase, or any securities  convertible into or exchangeable for, shares of the
Common Stock of the Company.

The Company has not granted any rights,  or  otherwise  agreed,  to register any
shares of the  Common  Stock of the  Company  under the  Securities  Act for any
security holder.

The Company has no present  intention  of  publicly  offering  any shares of its
Common Stock.

Holders.

As of March 31,  1999,  there were 197 record  holders of the  Company's  Common
Stock. See "Description of Securities."

                                       34
<PAGE>

Dividends

A.       Since inception, the Company has not paid any dividends on any of their
         respective shares of capital stock.

B.       The Company  does not foresee  that it will have the ability to pay any
         dividends on its capital  stock during the fiscal year ending March 31,
         1999,  nor  does  management  have  any  present  intention  to pay any
         dividends in the foreseeable  future.  It is management's  intention to
         retain any earning of the Company for future  expansion and development
         purposes.

ITEM 6.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION.

Plan of Operation

LifeStar  Corporation   ("LifeStar")  and  HealthCare  Express  Limited  ("HCX")
(jointly  referred to herein as "the  Company") are deploying the first advanced
telecommunication  system for delivery of healthcare to large  populations on an
international  basis.  The  Company's  planned  system is  designed to apply new
computer-telephony  technology to the prediction  prevention,  measurement,  and
management of disease for more rapid, frequent and lower-cost care. The advanced
network service planned by the Company will allow users to access and respond in
both voice using the  telephone or the  Internet in a national and  personalized
two-way  dialogue  with medical  providers and  researchers  using the Company's
end-to-end open system architecture.

The Company believes as a result of rapid competitive and technological  changes
in the international healthcare management, pharmaceutical and telecommunication
industries,   that  a  significant  opportunity  exists  for  a  highly  focused
enterprise to create a new  generation of medical care through  specializing  in
the delivery of new communication  technologies for the healthcare industry. The
Company believes the healthcare  industry,  because of its extreme dependence on
two-way  communication in patient-care,  is particularly  well suited to benefit
from greater use of enhanced  telecommunication  processes.  At the heart of the
Company's  system is an open  telecommunication  platform  for the  creation and
delivery  of  healthcare   communication.   The  Company's  system  architecture
describes an environment  which enables and manages a new generation of computer
telephony  interfaces,  application  development tools, medical call centers and
data warehouses.  The Company's planned network service will manage both inbound
and outbound  patient  communication.  The advanced service will answer provider
inbound  calls to patients and either allow the caller to leave the  appropriate
message and guidance or, if the patient has no elected none, will call and track
each individual to different  phone numbers and Internet  addresses in an effort
to locate that person.  The result is a totally  unique and patented  process of
managing  and   automating  a   significant   portion  of  personal   healthcare
communication. The goal of this planned telecommunication system is ease of use,
greater  convenience and both labor and time savings for patients and healthcare
consumers.

When completed, the Company's advanced network service will utilize the existing
public telecommunication and healthcare  infrastructure as its delivery platform
and  leverage  it in turn to  provide  mass  patient  connectivity  and a single
lifetime    point   of   contact   and   permanent    address   for   healthcare
telecommunications.  This specialized  telecommunication system will first be be
used by America's  healthcare  industry  and then in many other  nations for two
broad  functions:  (1) healthcare  delivery - the network is designed to deliver
more frequent and economical  medical care within each patient's daily life, and
(2) healthcare  informatics and state of the art medical  research - the network
is designed to more economically  access new forms of vital data which provide a
more complete and cumulative medical portrait of each individual  patient.  This
form of advanced  patient data has not been  previously  available and is useful
for  healthcare  decision  support and medical  investigation.  When  available,
healthcare data of this type allows medical providers to understand the totality
of an individual's  healthcare profile. In addition to healthcare delivery,  the
Company's  network  platform is designed to function as a real-world  laboratory
environment  for more  scientifically  developing,  testing,  and  analyzing new
products and the entire spectrum of medical treatment.  See HealthCare  Express,
Limited - "Medical Outcomes Data."

                                       35
<PAGE>

Progress to Date

The  Company  has  completed  the  initial  design   specifications,   prototype
development,  internal and external  testing of  components of its network based
telecommunication  system. The Company's system design specifications permit its
HealthCare  Express Data and  Communication  Center  (HEDCOM) when  completed to
scale up to simultaneously  handle hundreds of thousands of streams of voice and
data from patients on an international basis. Pursuant to a detailed request for
proposal  (RFP),  the Company has  solicited  final price bids on a  competitive
basis from information  technology (IT) services and computer system integration
organizations with  international  experience to act as prime vendor and general
contractor to LifeStar  Corporation.  As a result, the Company has substantially
narrowed the costs and development risks associated with its system construction
and planned roll-out. The Company believes its network specifications provide it
with the flexibility to implement new software, hardware and system developments
without  incurring  substantial  redesign  costs or  downtime.  Planned  network
roll-out  and  application  development  will be in three  phases.  (See Network
Roll-out  and  Implementation  Plan).  These phases when  completed  will form a
state-of-the-art  international  healthcare patient  communication  network. The
Company  believes that its HEDCOM  network  operation and  communication  center
model will differentiate its services from potential  competitors by eliminating
any   capital   investment   required   of   its   customers.    The   Company's
telecommunication  system  is being  designed  and  engineered  with a  scalable
architecture to  economically  allow multiple  upgrades of its initial  capacity
through the addition of computer  servers at its planned Data and  Communication
Center hub located in Bermuda.  System  architecture  utilizes  existing  proven
components,  which are presently in use, in a variety of commercial environments
and configures them to create a new method of healthcare communication.

LifeStar  Corporation  through  its  contractors  will  be  responsible  for the
system's  development in America which will consist of the following stages: (i)
software  development,  stateside  integration testing,  system testing,  stress
testing, acceptance testing by HealthCare Express Limited, operational readiness
testing and  construction  of a pilot facility in America which can be scaled to
eventually act as a standby for the planned  Bermuda  facility;  construction of
the Company's Data and Communication  Center in Bermuda,  and;  (ii)marketing to
healthcare  organizations in America;  (iii) development of disease and behavior
applications  in  conjunction  with the academic  medical  community  within the
United States.  HealthCare  Express,  Limited  through its  contractors  will be
responsible  for  the  international  deployment  of  its  HEDCOM  network-based
platform  which  will  consist  of  formation  of joint  marketing  ventures  by
HealthCare  Express  Limited  for  the  country  by  country  marketing  to  the
healthcare industry in Europe of the Company's planned  telecommunication system
to be based in Bermuda.

                                       36
<PAGE>

Markets and Offerings

The Company was formed to capitalize  on the need by  healthcare  organizations,
pharmaceutical  researchers  and  medical  providers  for  a  streamlined,  more
frequent means for communicating with patients and their members.  This need, in
part,  has been  influenced  by  increasing  costs of medical  treatment and the
related need to reduce the utilization of scarce medical resources.  It has been
driven by the  increasing  need for fast access to  patients  and members of the
organizations,  the rapid  growth of  medical  information  management,  and the
increasing  focus on  accountability  and improved  outcomes for chronic disease
issues in an aging  population.  The  existence  of clinical and quality of care
databases  will become  increasingly  important to healthcare  organizations  as
healthcare continues to become more patient-focused.  In response to the growing
need of healthcare organizations for low-cost access to patient populations, the
Company  adopted a  business  strategy  designed  to  establish  it as a leading
provider of advanced communication  solution for patient  communication.  In the
pharmaceutical   industry,   the  rapid  growth  of  new  product   development,
direct-to-consumer  marketing and increasing need for post-launch  follow-up for
differentiating  the long-term  effectiveness of a drug from others in its class
has  driven  the need for an  ongoing  telecommunication  link to large  patient
populations.

For  managed   care   organizations,   pharmaceutical   manufacturers,   medical
researchers,  medical providers and telecommunication carriers, a direct channel
to patients as planned by the Company is a means to more frequently  monitor and
gather new forms of  qualitative  patient  data  which have not been  previously
available from within each patient's daily life. The Company  believes the value
of such qualitative data to the healthcare industry will grow as it is used for:
(i) earlier  detection of the  effectiveness  of a  treatment;  (ii) the rate of
progression  or  alleviation  of illness;  (iii) the  severity  and  sequence of
symptoms;  and (iv) more accurately predicting risk and the course of an ailment
and its  treatment.  The need for a single point of contact and more  convenient
channel  to  patients  and  other   healthcare   beneficiaries  is  increasingly
attractive to  telecommunication  providers  for building and  marketing  higher
perceived value-added features, increasing brand alligence and utilizing network
capacity.

Business Strategy Summary

The Company's mission is to create an international  telecommunication  facility
which more conveniently links patients,  members of healthcare organizations and
employees  of  corporations  which  purchase  healthcare  to  the  managers  and
providers  who are  responsible  for their  health and well  being.  In order to
accomplish this objective,  LifeStar  Corporation and HealthCare Express Limited
have jointly adopted a business strategy which includes:

         LifeStar  Corporation,  marketing  the  United  States  segment  of the
         telecommunication   system  as  the  new  standard   for   conveniently
         communicating with patients and members of managed care  organizations.
         LifeStar  Corporation  will  deploy the system by  providing a range of
         patented access interfaces;

         HealthCare    Express,    Limited    acting    as   an    international
         telecommunication  company and wholesale service provider confining its
         focus to specializing in the healthcare  industry.  HealthCare  Express
         Limited will own the telecommunication  system in a manner to minimized
         cost and risk;

         LifeStar  Corporation  will  charge  customers  based on the value they
         receive;  and,  select  applications  as  solutions  based  upon  their
         recognized value to each segment of the healthcare  industry in America
         utilizing existing access modes already in patients lives;

         HealthCare  Express,  Limited will rapidly  build-out and test its Data
         and  Communication   Center  using  scalable   components  and  modular
         architecture   permitting   lower   initial   costs  of   fixed   plant
         infrastructure;

                                       37
<PAGE>

         Both  companies will leverage the HEDCOM  Center's  capacity over other
         industry  segments and markets.  LifeStar  Corporation  will market the
         System's  service to  secondary  markets  such as the home  healthcare,
         psychotherapy,  physical  rehabilitation and pediatric care. HealthCare
         Express,  Limited will market the system to the healthcare  industry in
         Europe through joint-ventures with local partners; and

         Both  Companies will utilize a  state-of-the-art  technology and design
         architecture   that  provides  future  cost  advantages  over  existing
         alternatives.

In addition,  HealthCare  Express,  Limited  believes it can develop a favorable
position as a low-cost  provider  of  specialized  healthcare  telecommunication
services to the entire  healthcare  industry  on an  international  basis.  This
low-cost  position of these  services  in  relation  to other  telecommunication
organizations,  can be sustained as a result of its: (i) early entrance into the
Distance  Medicine  and  patient  communication  niche of the  telecommunication
market  permitting  it to engage  in  targeted  marketing  in  conjunction  with
LifeStar  Corporation in America to large industry  accounts with relatively low
sales,  marketing,  general and administrative expense and to form relationships
with a diverse  range of  healthcare  organizations;  (ii)  freedom  from legacy
infrastructure;  (iii) pricing based on  incremental  cost savings to healthcare
organizations and providers as related to disease and research specific enhanced
or  value-added  telecommunication  applications;  (iv)  economies of scale with
respect  to  equipment   utilization   derived  from  its  unique  software  and
reconfiguration of  state-of-the-art  computer  telephony  equipment and related
fault  tolerant  data-base   communication  servers;  (v)  scalar  economies  of
leveraging  its  Data and  Communication  Center  Bermuda  hub  facility  to the
European  healthcare  marketplace  following initial  penetration of the managed
care and pharmaceutical markets in America. This leveraging of its network based
platform across  healthcare  market segments will be accomplished  first, by the
marketing  by LifeStar  Corporation  of the  facilities  services to  additional
segments of the healthcare industry, such as; home healthcare, chain pharmacies,
psychotherapy,  physical rehabilitation,  weight management,  smoking cessation,
alcohol and drug abuse,  long-term  prevention and disease management  programs,
city and county social workers; and (vi) subsequently,  additional economies are
planed to be derived by HealthCare  Express,  Limited from the leveraging of the
Data and  Communication  Center through marketing its services into the European
healthcare  market;  lastly,  (vii) HealthCare Express Limited presently favored
taxation  status with  respect to earnings,  if any, as compared to  traditional
telecommunication service providers. See "Tax Considerations."


Planned New Product and Scientific Research Facility

The Company has entered into a Joint Scientific  Collaboration  with Dr. Herbert
Benson of Harvard  Medical  School to oversee  the  creation  of new  healthcare
treatment  products  through  development of disease  management,  self care and
utilization   management   solutions  using  new  network  based   communication
technologies.  Dr. Benson is widely recognized as a leading pioneer in the field
of behavioral medicine.  His research has emphasized patient  self-regulation as
the  foundation  for  all  self-care  and  disease  management   programs.   His
investigation  into medical treatment through patient  self-regulation  has been
peer  reviewed  and  published  in such  journals as the Journal of the American
Medical Association (JAMA), New England Journal of Medicine,  Lancet, Nature and
the Annual Review of Medicine, and his various books on self-care have sold over
4,000,000  copies.  He has served as  President  of the  Society  of  Behavioral
Medicine and is the founder and president of the Mind/Body  Institute at Harvard
Medical School.

                                       38
<PAGE>

The HEDCOM Data and Communication  Center in Bermuda will be owned by HealthCare
Express,  Limited. The network segment to be delivered into the United States as
a planned  component  of the  LifeStar  System  will be  developed  by  LifeStar
Corporation for HealthCare  Express,  Limited,  of which LifeStar presently owns
33% of its common stock. HealthCare Express, Limited was founded by the National
Medical Research  Council,  a nonprofit  medical research  corporation,  and Dr.
Benson to create a specialized healthcare telecommunication facility which could
deliver  a  variety  of  American   discoveries  in  medical  treatment  to  the
international  market  place.  The Company and Dr.  Benson  believed that such a
specialized  telecommunication facility could improve medical treatment and also
act as a real  world  medical  research  environment,  in  similar  fashion to a
laboratory, using advanced telecommunications for assessing, developing, testing
and delivering new  healthcare  products and services to patients.  (See Certain
Transactions.)   HealthCare   Express,   Limited  has  applied  to  the  Federal
Communications  Commission for an international  carrier license with respect to
service delivery within the United States. The telecommunication network segment
in the United  States of the LifeStar  System will utilize the world's  fastest,
highest  capacity,   coast-to-coast   communication  facility,  the  16,000-mile
fiber-optic cable system under development by Qwest Communications International
Inc.  ("Qwest").  The Company  believes that the Qwest  infrastructure  backbone
within the United States presently affords significant advantages for the higher
security and data integrity requirements of healthcare service delivery.


The Company has thus far had no revenues from  operations and does not expect to
do so within the next 12 months.  The  opening of its  planned  centers  and the
provision of its services will be dependent upon it raising  significant amounts
of  additional  capital.  Initially,  the Company  estimates  that it requires a
minimum of $3,600,00 to commence the roll out of its planned center expansion.

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations

The Company had no operations  from inception  through  September  1993, when it
acquired a license agreement and a subsidiary from third parties in exchange for
the issuance of restricted stock.


Fiscal Years Ended December 31, 1998 and 1999.

The Company has no revenues from  operations in either fiscal 1998 or 1999.  All
revenues  received  in both  fiscal  years  come from  grant  wards for the U.S.
Department  of Health  and  Human  Services,  Public  Health  Service,  National
Institute of Health.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going  concern.  However,  the Company's  independent
auditor has included an  explanatory  paragraph  in his report on the  Company's
consolidated  balance sheet as at March 31, 1999,  and the related  consolidated
statement  of  operation,  stockholder  equity  and cash flows for the year then
ended which states that the Company's  continuing  losses from operations raises
substantial doubt about the ability to continue as a going concern.

                                       39
<PAGE>

Management  recognizes  the  need to raise  additional  cash in  fiscal  1999 to
continue  the  commercial   development  of  its  technologies.   Management  is
diligently  pursuing  various sources of financing and is focusing its immediate
efforts on securing  additional equity  financing,  licensing its technology and
forming  strategic  alliances to financially  assist with the development of its
technology.  The Company will be  dependent  upon the proceeds to be raised from
these  sources to continue  it  business  operations.  Management  is  presently
involved in  discussions  with both  potential  private  investors and strategic
partners to secure additional  financing and anticipates  completing one or more
of such  transactions.  However,  Management  can give not  assurances as to its
ability to raise the funds  necessary to enable it to conduct its  business.  If
the  Company  is unable to obtain the  necessary  cash,  other more  substantial
restructuring options may become necessary.

Since  September  of 1993,  through  March 31,  1999,  the Company has  incurred
operating  expenses,  which were  incurred  and  deferred  by the Council in the
amount of  $1,096,686.  This amount is now  evidenced by a five-year  promissory
note dated March 31, 1999 bearing interest at the rate of 7% per annum, which is
payable  interest  only on an annual  basis.  Prior to the  Company  raising the
capital  required for its operating  needs,  it is estimated  that it will incur
additional expenses for which it presently lacks sufficient operating resources.
See "Plan of Operation."

ITEM 7.           FINANCIAL STATEMENTS

Financial Statements

See page F-1 through F-9  attached  here to for copies of the Company's  audited
financial statement from inception through March 31, 1999.

Unaudited Quarterly Financial Statements:

Quarter ended December 31, 1999.
                                       40

<PAGE>

                          INDEPENDENT AUDITOR'S REPORT
                          ----------------------------

To the Shareholders and Board of Directors
LifeStar Corporation (A Development Stage Company)

I  have  audited  the  accompanying   consolidated  balance  sheet  of  LifeStar
Corporation (A  Development  Stage Company) as of March 31, 1999 and the related
consolidated  statements of operations,  stockholders' equity (deficit) and cash
flows,  for each of the two years in the period ended March 31, 1999 and for the
period from  inception on  September  17, 1985  through  March 31,  1999.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  My  responsibility  is to express  an  opinion  on these  financial
statements based on my audits.

I conducted my audits in accordance with generally accepted auditing  standards.
Those standards  require that I plan and perform the audit to obtain  reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
I believe that my audits provide a reasonable basis for my opinion.

In my opinion,  the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
LifeStar Corporation (A Development Stage Company) as of March 31, 1999, and the
results  of its  operations  and its cash flows for each of the two years in the
period ended March 31, 1999 and for the period from  inception on September  17,
1985 through March 31, 1999, in conformity  with generally  accepted  accounting
principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated  financial  statements,  the Company has incurred  recurring losses
from operations that raises substantial doubt about its ability to continue as a
going concern.  Management's plans in regard to these matters are also described
in Note 2. The consolidated  financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

Beverly Hills, California
/s/Jaack Olesk
--------------
Jaack Olesk
April 16, 1999

                                       F-1
<PAGE>


                              LifeStar Corporation
                          (A Development Stage Company)
                           Consolidated Balance Sheet
                                 March 31, 1999

                                     ASSETS

Current Assets

 Cash                                       $      --
                                            -----------
Total current assets                               --

Other Assets

 License Agreement (Note 5)                   2,500,000
 (Less) valuation allowance                  (2,500,000)
                                            -----------
Total other assets                                 --

                                            $         0
                                            ===========


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities

 Accrued expenses                           $     6,000
 Note payable (Note 6)                        1,096,686
                                            -----------
Total current liabilities                     1,102,686

Stockholders' equity (deficit)

 Preferred Stock, $.01 par
 value 1,000 shares
 authorized, issued and
 outstanding                                         10

 Common stock, no par value,
 900,000,000 shares authorized;
 49,033,829 shares issued and
 outstanding                                    222,763
 Additional Paid-in Capital                   1,605,088
 (Deficit) accumulated during
    the development stage                    (2,930,547)
                                            -----------
Total stockholders' equity (deficit)         (1,102,686)
                                            -----------
                                            $         0
                                            ===========

          See accompanying notes to consolidated financial statements.


                                       F-2
<PAGE>

                              LifeStar Corporation
                          (A Development Stage Company)
                      Consolidated Statements of Operations

                                                                    (Inception)
                                      Year          Year              Sept. 7,
                                      Ended         Ended             1985 to
                                    March 31,      March 31           March 31,
                                      1999          1998                1999
                                  -----------     ----------          --------


Revenues                       $       --        $       --        $       --

Expenses:

General and

Administrative                       89,776            55,227           549,429

License Agreement

Valuation Allowance                    --                --           2,500,000
                                 ----------        ----------        ----------


Operating (Loss)                    (89,776)          (55,227)       (3,049,429)

Other Income:

Grant Revenue                        30,624            48,967           118,882


(Loss) before

 income taxes                       (59,152)           (6,260)       (2,930,547)

Provision for

income taxes                           --                --                --
                                 ----------        ----------        ----------

NET (LOSS)                     $    (59,152)     $     (6,260)     $ (2,930,547)
                                 ==========        ==========        ==========
Net (loss) per

 common share                  $       (.01)     $       (.01)     $       (.11)
                                 ==========        ==========        ==========
Weighted average

outstanding shares               42,858,829        30,508,829        27,588,667
                                 ==========        ==========        ==========


          See accompanying notes to consolidated financial statements.



                                       F-3
<PAGE>

<TABLE>
<CAPTION>
                              LifeStar Corporation
                          (A Development Stage Company)
  Statement of Changes in Consolidated Stockholders' Equity (Deficit) (1 of 2)

                                                                                            (Deficit)
                                                                                            Accumulated
                                                                                       Additional During the
                                      Common  Stock             Preferred Stock        Paid-In   Development
                                 Shares           Amount      Shares       Amount      Capital      Stage      Total
                                 ------           ------      ------       ------      -------      -----      -----

Balance at
Inception on
<S>                            <C>           <C>              <C>        <C>          <C>            <C>   <C>
Sept. 17,1985                       --      $       --          --       $     --     $       --     $--   $       --

Issuance of
shares to
officers,
directors and
others
on Sept. 24, 1985              2,400,000           2,400        --             --           12,600    --         15,000

Public Offering
at $.02 (Net of
Offering Costs)-
1986                           7,000,000           7,000        --             --          105,025    --        112,025

Issuance of
shares to
Officers,
Directors and
others for
services- 1988                40,600,000          40,600        --             --             --      --         40,600

8 for 1
reverse stock
split-1988                   (43,750,000)        (43,750)       --             --           43,750    --           --

Issuance of
shares to
officers,
directors and
others for
services-1989                 26,312,000          26,312        --             --             --      --         26,312

Issuance of
shares to
officers,
Directors
and others for
services-1992                    125,000             125        --             --             --      --            125

Business
combination-
1994                         282,000,000            --          --             --           10,000    --         10,000

License
Acquisition
1995                                --              --          --             --        1,403,314    --      1,403,314

1 for 30
reverse split-
May 31, 1995                (304,197,433)        (30,399)       --             --           30,399    --           --

         See accompanying notes to con solid ated financial statements.
</TABLE>

                                      F-4
<PAGE>

<TABLE>
<CAPTION>
                              LifeStar Corporation
                          (A Development Stage Company)
  Statement of Changes in Consolidated Stockholders' Equity (Deficit) (2 of 2)


                                                                                            (Deficit)
                                                                                            Accumulated
                                                                                       Additional During the
                                 Common  Stock             Preferred Stock        Paid-In   Development
                              Shares        Amount      Shares        Amount      Capital      Stage        Total
                              ------        ------      ------        ------      -------      -----        -----
<S>                           <C>          <C>            <C>             <C>                                <C>
Shares issued
for cash-
Jan. 1,1995-
March 31,
1997                          117,333      176,000        1,000           10         --           --         176,010

Shares issued
for services
Jan. 1, 1995-
March 31,
1997                       19,901,929       25,950         --           --           --           --          25,950

Net (loss)
for period
Sept. 7, 1985
(inception)-
March 31,
1997                             --           --           --           --           --     (2,865,135)   (2,865,135)

Balance,
March 31,
1997                       30,508,829      204,238        1,000           10    1,605,088   (2,865,135)   (1,055,799)

Net (loss)
for year
ended March
31, 1998                         --           --           --           --           --         (6,260)       (6,260)

Balance,
March 31, 1998             30,508,829      204,238        1,000           10    1,605,088   (2,871,395)   (1,062,059)

Shares issued
for services
during year
ended March 31,
1999                       18,525,000       18,525         --           --           --           --          18,525

Net (loss) for
year ended
March 31, 1999                   --           --           --           --           --        (59,152)      (59,152)

Balance,
March 31, 1999             49,033,829   $  222,763        1,000   $       10  $ 1,605,088  $(2,930,547)  $(1,102,686)
                           ==========   ==========        =====   ==========  ===========  ===========   ===========
</TABLE>



          See accompanying notes to consolidated financial statements.

                                      F-5
<PAGE>


                              LifeStar Corporation
                          (A Development Stage Company)
                            Statements of Cash Flows

                                                                    (Inception)
                                          Year           Year         Sept. 7,
                                         Ended          Ended        1985 to
                                       March 31,       March 31,     March 31,
                                         1999            1998           1999
                                      -----------    -----------    -----------

Operating Activities:
  Net (loss)                          $   (59,152)   $    (6,260)   $(2,930,547)
Adjustments to reconcile
 net (loss) to net cash
 (used by) operating
  activities:
Write off of subsidiary                      --             --           10,000
Common stock issued

 for services                              18,525           --          111,522
Valuation allowance                     2,500,000
Changes in operating assets
 and liabilities:
 Accrued expenses                           6,000           --            6,000
 Other                                     34,627          6,260           --
                                      -----------    -----------    -----------
Net Cash (used)
 by operating Activities                     --             --         (303,025)
Investing Activities:                        --             --             --
Cash flows from
Financing Activities
 Common stock issued

   for cash                                  --             --          303,025
                                      -----------    -----------    -----------
Net cash provided

 by Financing Activities                     --             --          303,025
Increase (Decrease)
 in Cash                                     --             --             --
Cash at beginning of period                  --             --             --
                                      -----------    -----------    -----------

Cash at end of period                 $      --      $      --      $      --
                                      -----------    -----------    -----------
Supplemental cash flows information:

Cash paid during the period for:

Interest                              $      --      $      --      $      --
                                      -----------    -----------    -----------
Income taxes                          $      --      $      --      $      --
                                      -----------    -----------    -----------

Non-cash financing transactions:

 Shares for services                  $    18,525    $      --      $   111,522
                                      -----------    -----------    -----------
 Acquisition of license
 agreement for stock

 and note                             $      --      $      --      $ 2,500,000
                                      -----------    -----------    -----------

          See accompanying notes to consolidated financial statements.

                                      F-6
<PAGE>

                              LifeStar Corporation
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                 March 31, 1999

Note 1 - Summary of Significant Accounting Policies

Basis of Presentation

         LifeStar   Corporation  (the  "Company"),   a  Utah  corporation,   was
incorporated on September 17, 1985. The Company has been formerly known as Zohoz
Funding,  Inc., U.S. Care Industries,  Inc. and Rand Industrial  Group, Inc. The
Company, a development stage enterprise,  is attempting to develop operations as
a supplier of health care services through  telecommunications.  The Company has
had no revenues from these operations.

         The consolidated  financial statements include the accounts of LifeStar
Corporation  and  its  wholly-owned  subsidiary,  LifeStar  Advanced  Behavioral
Technologies. All intercompany accounts and transactions have been eliminated.

Cash Equivalents

     For purposes of the  Statements  of Cash Flows,  the Company  considers all
highly  liquid debt  instruments  purchased  with an original  maturity of three
months or less to be cash equivalents.

Loss per Share

     The  computation of loss per share of common stock is based on the weighted
average number of shares outstanding during the periods presented.

Use of Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the amounts  reported in the financial  statements  and
accompanying notes. Actual results could differ from those estimates.

Shares for services

         Valuation  of shares for  services is based on the fair market value of
services.

Grant Revenue

         Grant revenue  consists of monies received by the Company pursuant to a
grant by a United States government  agency.  The Company is the recipient of an
award from the U.S.  Department  of Health  and Human  Services,  Public  Health
Service, National Institutes of Health.

                                      F-7

<PAGE>

                              LifeStar Corporation
                          (A Development Stage Company)
             Notes to Consolidated Financial Statements (Continued)
                                 March 31, 1999

Note 1 - Summary of Significant Accounting Policies (continued)

Research and Development Costs

         Research and development costs are expensed as incurred.

Reclassifications

     Certain  prior year  amounts  have been  reclassified  to conform with 1999
classifications.

Income Taxes

         The  Company  records  its  income tax  provision  in  accordance  with
Statement of Financial  Accounting  Standards  No. 109,  "Accounting  for Income
Taxes". (See Note 4). Note 2 - Basis of presentation and considerations  related
to continued existence (going concern)

     The Company's  consolidated financial statements have been presented on the
basis that it is a going concern,  which  contemplates the realization of assets
and the  satisfaction  of  liabilities  in the normal  course of  business.  The
Company  incurred  net losses of $59,152 and $6,260 for the year ended March 31,
1999  and  for  the  year  ended  March  31,  1998,  respectively.  This  raises
substantial doubt about its ability to continue as a going concern.

     The Company's  management  intends to raise additional  operating funds for
the  building  of  its  planned  network  service  through  equity  and/or  debt
offerings.  However,  there can be no assurance management will be successful in
this endeavor.

Note 3 - Development Stage Company

         A Development Stage Company is one for which principal  operations have
not commenced or principal  operations have generated an insignificant amount of
revenue. A development stage company's management devotes most of its activities
to  establishing  a new business.  However,  there can be no assurance  that the
Company's management will be successful in establishing an operating business.

                                      F-8
<PAGE>

                              LifeStar Corporation
                          (A Development Stage Company)
             Notes to Consolidated Financial Statements (Continued)
                                 March 31, 1999

Note 4 - Income Taxes

         The  Company  records  its  income tax  provision  in  accordance  with
Statement of Financial  Accounting  Standards  No. 109,  "Accounting  for Income
Taxes" which requires the use of the liability method of accounting for deferred
income taxes.

         Since the Company has not generated taxable income since inception,  no
provision for income taxes has been provided. At March 31, 1999, the Company did
not have any  significant  tax net operating  loss  carryforwards  (tax benefits
resulting  from  losses for tax  purposes  have been fully  reserved  due to the
uncertainty of a going concern). At March 31, 1999, the Company did not have any
significant deferred tax liabilities or deferred tax assets.

         The Company is delinquent on income tax return filings. The Company has
not filed required federal and state tax returns for approximately the last four
years.

Note 5 - License Agreement and Related Valuation Allowance

         The Company  possesses a license  agreement  from a non-profit  medical
research entity (see also Note 6) assigning the Company  exclusive rights in the
United  States  for  commercial  application  of  licensed  software,  hardware,
programs,  patent rights,  trademarks  and copyrights  relating to the fields of
medicine and health promotion.

         Due to  uncertainty  of recovery  the Company has  recorded a valuation
allowance for the full amount of this intangible asset.

Note 6 - Note Payable

         The  $1,096,686  note payable is due to a non-profit  medical  research
entity  (the  same  entity  mentioned  in Note 5)  This  note is a  non-interest
bearing, unsecured, demand note.

                                      F-9
<PAGE>




ITEM 8.           CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
                  FINANCIAL DISCLOSURE

         None.

ITEM 9.           DIRECTORS,  EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
                  COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

<TABLE>
<CAPTION>
Name                       Age                       Position
----                       ---                       --------

<S>                        <C>
Carson E. Beadle           64       Chairman of the Board and Senior Vice President - Marketing
Lyle Breaux                60       President, CEO, Treasurer, Director
Robert Chan                58       Executive Vice President - Chief, Healthcare Markets and Director
Brian Alman, Ph.D          46       Senior Vice-President - Behavioral Research
Kimberly Heart             46       Vice-President - Communications
Ram Prayaga                28       Director of Technology
Harold A. Abeles           75       Secretary
</TABLE>

The  Directors  serve as such  until  the next  annual  meeting  or until  their
successors  are elected  and  qualified.  See pages 23 to 26 for the  employment
history of each of the officers and directors.

See  pages  23 to 26 for the  employment  history  of each  of the  above  named
individuals.

                                       41
<PAGE>

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Section 16(a) of the Exchange Act requires the Company's directors and executive
officers, and persons who own more than ten percent of a registered class of the
Company's equity securities  (collectively,  "Section 16 reporting persons"), to
file with the Securities an exchange  Commission  (the "SEC"( initial reports of
ownership  and reports of changes in  ownership of Common Stock and other equity
securities  of the  Company.  Section 16  reporting  persons are required by SEC
regulation  to furnish the Company  with copies of all Section  16(a) forms they
file.

To the Company's knowledge, based solely on review of the copies of such reports
furnished to the Company and written  representations that no other reports were
required,  during the fiscal year ended March 31, 1999, all Section 16(a) filing
requirement  applicable  to  the  Company's  Section16  reporting  persons  were
satisfied.

ITEM 10.          EXECUTIVE COMPENSATION

No  executive  officer of the Company  earned in excess of  $100,000  during the
fiscal year ended March 31, 1999.

All  executive  officers  as a group (4 persons)  received no cash  compensation
during the fiscal year ended March 31, 1999.

No executive officer receives a salary from the Company.

The Company  does not have any formal  bonus  plans,  stock  option plans or any
other similar compensation plans for its executive officers.

Directors  of the Company do not  receive any  compensation  for  attendance  at
meetings of the Board of Directors.

ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  following  table  sets forth  certain  information's  of May 1, 2000,  with
respect to the beneficial  ownership of the Company's Common Stock, no par value
per share,  by holders of more than 5% of the Company's  Common  Stock,  by each
Director of the Company and by all  Directors  and  Officers of the Company as a
group.
                                    Number of Shares                  Percent
Name of Beneficial Owner            Beneficially Owned (1)          of Class (2)
------------------------            ----------------------          ------------

W. Douglas Smith                     2,333,334                          5.1%

North Star Trust                     2,333,334                          5.1%

Eily Limited                         4,500,000                          9.1%

Taradata Investments Ltd.            4,500,000                          9.1%

Lakco Limited                       11,666,670                         23.7%

Rigo Limited                        11,670,670                         23.7%

All directors and officers
As a group (6 individuals)          2,333,334                           5.1%
                                                                       ------

----------------------

                                       42
<PAGE>

(1)      Unless otherwise indicated,  all shares are beneficially owned and sole
         voting and  investment  power is held by the person or entity  named in
         the table above.  The address for each  beneficial  holder is 122 Ocean
         Park blvd., Suite 411, Santa Monica, CA 90405

(2)      Based  upon  49,033,829  shares  of  Common  Stock   outstanding.   See
         "Description of Securities."


ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In May 1994,  four  nominees  of the  National  Medical  Research  Council  (the
"Council")  acquired an aggregate of 92,574 shares of the Company's common stock
(constituting  approximately  85% of the outstanding  shares),  from the holders
thereof  pursuant to a Stock  Purchase  Agreement  dated  September 3, 1993. The
aggregate  purchase  price was  $15,000.  The four  nominee  purchasers  are not
affiliated with the Company. Until March 1995, W. Douglas Smith, Chairman of the
Board of the Company, and Lyle Breaux, Vice Chairman of the Board, Treasurer and
director of the Company, were officers of the Council.

In May 1994, the Company entered into a license  agreement  ("License") with the
Council. This license and its related technology is at the core of the Company's
business plan. In connection with the License, the Company issued 473,333 shares
of its common  stock to the Council and issued a  promissory  note for  $500,000
("Original Note").

The Company was in default  under the terms of the Original  Note.  As a result,
the License Agreement was amended in March of 1995 to provide for a cash payment
of $250,000 and this issuance by the Company of a new $2,250,000 Promissory note
which is payable over three years.  The Original  Note has been canceled and the
473,333 shares were returned to the Company by the Council and were canceled.


In May 1994,  the Company  issued  473,333  shares of its common stock to Viking
Properties Corporation, in exchange for all of the issued and outstanding shares
of LifeStar Advanced  Behavioral  Technologies  ("LABT").  Lyle Breaux, the Vice
Chairman of the Board,  Treasurer  of the Company  was the  President  of Viking
Properties.  LABT was the recipient of the Grant Award from the U.S.  Department
of Health and Human Services Public Health Service.

In June 1994, the Company's Articles of Incorporation were amended to change its
name to LifeStar  Corporation  and to increase the  authorized  number of shares
from 50,000,000 to 900,000,000.

                                       43
<PAGE>

In March 1995, the Company's Articles of Incorporation were amended to authorize
the issuance of preferred stock. As amended, the Articles provide that the total
number of shares of stock which the Company shall have the authority to issue is
910,001,000  consisting  of  900,000,000  shares of Common  Stock,  no par value
("Common Stock"),  1,000 shares of Preferred Stock, have a par value of $.01 per
share (the "Original Preferred Stock") and 10,000,000 shares of Preferred stock,
have a par value of $.01 per share (the "Class A Preferred Stock").

Except as provided in (ii) below, each holder of Common Stock shall have one (1)
vote for each  share of Common  Stock  shall have one (1) vote for each share of
Common  Stock held by him or record on the books of the Company for the election
of directors  and on all matters  submitted to vote of the stock  holders of the
Company.

Until December 31, 2010,  with respect to the election of directors,  holders of
Common  Stock  shall be  entitled  to  elect  that  number  of  directors  which
constitutes  tow-fifths (2/5ths of the authorized number of members of the Board
of Directors and, if such two-fifths (2/5ths) is not a whole number of directors
that is closest to, but not in excess of, tow-fifths (2/5th) of such membership.

If permitted  by the  By-Laws,  the Board of Directors my increase the number of
directors  and any  vacancy so  created my be filled by the Board of  directors,
provided,  that so long as the  holders of Common  Stock have the right to elect
only  tow-fifths  (2/5ths ) of the  directors,  the Board of Directors may be so
enlarged by the Board of Directors only to the extent that  tow-fifths  (2/5ths)
of the enlarged Board consists of Common Stock Directors.

The holder of Common Stock shall have  exclusive  voting power on all matters at
any time no Preferred Stock is issued and outstanding.

Excepts as provided below, the holders of Original  Preferred stock shall not be
entitled to vote except as to matters in respect of which they shall at the time
be  indefeasibly  vested by  statute  with  such  right.  A holder  of  Original
Preferred  Stock  shall have one (1) vote for each share of  Original  Preferred
stock held by him or record on the books of the Corporation on all matters as to
which he shall have the right to vote.

Until December 31, 2010,  with respect to the election of directors,  holders of
Original  Preferred  Stock shall be  entitled to elect that number of  directors
which constitutes  three-fifths  (3/4ths) of the authorized number of members of
the Board of Directors and, if such three-fifths (3/5ths) is not a whole number,
then the  holders of  Original  Preferred  stock  shall be entitled to elect the
nearest higher whole number of directors that is at lease three-fifths  (3/5ths)
of such membership.

If permitted by the By-Laws,  the Board of Directors  may increase the number of
directors  and any  vacancy so created  may be filled by the Board of  Directors
provided,  that, so long as the holders of the Original Preferred Stock have the
right to elect  three-fifths  (3/5ths) of the directors,  the Board of Directors
may  be so  enlarged  by  the  Board  of  Directors  only  to  the  extent  that
three-fifths (3/5ths) of the enlarged Board consists of Original Preferred Stock
Directors.  This right to elect  three-fifths  (3/5th) of the Board of Directors
shall expire on December 31, 2010.

                                       44
<PAGE>

The  holders of shares of  Original  Preferred  Stock  shall not be  entitled to
receive any dividends.

The  holder of record of shares of  Original  Preferred  Stock  shall,  at their
option,  be entitled to convert  each  shares or Original  Preferred  Stock into
10,000,000 shares of fully paid and non-accessible Common Stock.

In March 1995, the Company issued (I) 700,000,000  shares of its common stock to
Go Irish, Ltd., a Delaware corporation in exchange for $50,000 cash and $200,000
non-interest  bearing Promissory note which is due June 30, 19995 and (ii) 1,000
shares  of  Original  Preferred  Stock  in  exchange  for  $25,000  cash  and  a
non-interest  bearing  promissory  note which is due June 30, 1995.  No officer,
director or principal  shareholder  of the Company is affiliated  with Go Irish,
ltd.

In April,  1995,  the Company  issued  524,449 shares of its common stock to Dr.
Brian M Alman,  the Company's Senior Vice President - Behavioral  Research,  for
prior services  rendered in connection with research and development  activities
of the Company's subsidiary, LifeStar Advanced Behavioral Technologies.

On May 31, 1995, the Company affected a 30 to 1 reverse stock split.

From  October  1995  through  August  1999,  the Company  issued an aggregate of
19,675,667  shares of its  common  stock to various  persons  and  entities  for
services rendered to the Company.

                                       45
<PAGE>



ITEM 13.          EXHIBITS LIST AND REPORTS ON FORM 8-K

A.       Exhibits
         Ex. No.           Description of Document.
         ------------------------------------------

2.1      Stock  Purchase  Agreement,  dated  as of  September  3,  1993  between
         National Medical Research Council ("Council") and TXV Industries,  Inc.
         (1)

3.1      Articles of Incorporation of the Registrant, as amended. (1)

3.2      Bylaws of the Registrant, as amended. (1)

3.3      Articles of  Amendment  to  Registrant's  Articles of  Incorporation  -
         Creation of Preferred stock. (1)

10.1     Exclusive  License  Agreement,  dated may 10,  1994,  between  National
         medical Research Council and Registrant (1)

10.2     Notice of Grant - Department of Health and Human Services Public Health
         Service, dated September 30, 1993. (1)

10.3     Form of Amendment No. 1 to Exclusive License Agreement. (1)

10.4     Promissory Note, dated May 25, 1994 for $500,000, payable to Registrant
         to the Council. (2).

10.5     Promissory  Note,  dated  March  15,  1995 for  $2,250,000  payable  by
         Registrant to the Council. (2)

10.6     Stock  Acquisition  Agreement,  dated as of march 1,  1995,  between Go
         Irish, Ltd. ("GIL") and Registrant, as amended. (2)

10.7     Preferred  stock  Acquisition  Agreement,  dated as of  March 1,  1995,
         between GIL and Registrant, as amended. (2)

10.8     Promissory  Note  dated  March  31,  1995,  for  $292,514,  payable  by
         Registrant to the Council.(2)

------------------------------
(1)      Filed as an Exhibit to Registrant's Form 10 SB dated May 13, 1994.

(2)      Filed as an Exhibit  to  Registrant's  Form  10KSB for the fiscal  year
         ended December 31, 1994.

B.       Reports on Form 8-K

         None filed.

                                       46

<PAGE>


         SIGNATURES

          In accordance with Section 12 of the Securities  Exchange Act of 1934,
         the registrant caused this  registration  statement to be signed on its
         behalf by the undersigned, thereunto duly authorized.

         Dated: May 15, 2000

         By: \s\  Lyle Breaux
                  Lyle Breaux, President

         In accordance  with the  Securities  Exchange Act, this report has been
         signed below by the following  persons on behalf of the  registrant and
         in the capacities and on the dates indicated.

         Signature/                                           Date
         Title

        /s/ Lyle Breaux                                   May 15, 2000
        ---------------
            President, Chief Executive Officer
            (Principal Executive Officer) and Director

        /s/ Lyle Breaux                                   May 15, 2000
        ---------------
            Treasurer (Principal Financial Officer)
            And Director

        /s/ Carson E. Beadle                              May 15, 2000
        --------------------
            Director


        /s/ Robert Chan                                   May 15, 2000
        ----------------
            Director

                                       47