Proposal for Merger and Cash Distribution to MathStar Shareholders

PureChoice, Inc., a leading international developer and supplier of building performance software to the commercial building industry, announced that it has made a revised merger proposal to MathStar, Inc., which includes a $.75 per share cash distribution to the current MathStar shareholders.

The merger offer was outlined Friday in a letter to the MathStar Board of Directors from Bryan Reichel, President and Chief Executive Officer of PureChoice. The letter proposes that MathStar issue a majority of its then outstanding common stock in consideration for PureChoice, followed by a distribution of cash to the current MathStar shareholders who will retain a minority interest in the combined company. The proposed cash distribution to MathStar’s shareholders is 9 cents higher than the closing share price of MathStar’s common stock on November 19, 2008.

PureChoice has engaged an investment banking firm to provide valuation and related services in connection with the proposed transaction.

Operating in the Green/Sustainability market space, PureChoice develops and markets its proprietary PureTrac® Building Performance Software to the commercial building market. PureTrac empowers building stakeholders to identify energy conservation opportunities while ensuring comfortable, productive indoor environments. The PureTrac solution is in stark contrast to current energy conservation efforts that require significant capital improvement expenditures. The PureTrac Software Application is comprised of two components; the NOSE® Monitor, a multi-sensing computing platform running a customized operating system and a customized web-based software program.

PureChoice has a clearly defined market of 4.8 million buildings in the United States and 1.8 million buildings in the United Kingdom. This represents a potential market opportunity in excess of 55 million NOSE® Monitors or approximately $15.8 billion in equipment revenue. In addition, this market represents an annual software license revenue opportunity in excess of $5.9 billion.

PureChoice recognizes that the MathStar FPOA Technology has both immediate and long-term value. PureChoice intends to explore all of the options surrounding the FPOA technology, Including current FPOA product sales, implementation into new PureChoice product offerings, merger opportunities, licensing opportunities, and possible sale of the technology to a strategic buyer.

PureChoice believes its merger proposal meets all of MathStar’s strategic objectives as recently articulated by the MathStar Board. MathStar shareholders seeking liquidity will receive satisfaction via a cash distribution in excess of the current market price of MathStar’s common stock. MathStar shareholders focused on long-term growth in shareholder value can look forward to participating in the future success of the combined enterprise.