SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: January 20, 2000
(Date of earliest event reported)
SUNSTAR HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-14382 59-3361076
(State or other jurisdiction (Commission File Number) (IRS Employer
incorporation or organization) Identification No.)
300 International Parkway, Suite 230
Heathrow, Florida 32746
(Address of principal executive offices, zip code)
(407) 304-1066
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS
See Exhibits 99.1, 99.2, and 99.3 filed herewith.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits. The following exhibits are provided in accordance with the
provisions of Item 601 of Regulation S-K and are filed herewith.
99.1 Press Release dated January 20, 2000.
99.2 Press Release dated February 2, 2000.
99.3 Press Release dated February 2, 2000.
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EXHIBIT 99.1
Thursday January 20, 1:56 pm Eastern Time
Company Press Release
SOURCE: SunStar Healthcare, Inc.
SunStar Healthcare, Inc. Announces Restatement of September 30, 1999 Financial
Statements; Status of Florida Department of Insurance Lawsuit; Need to Achieve
Compliance with Statutory Capital Requirements; In Negotiations for Additional
Capital
HEATHROW, Fla., Jan. 20 /PRNewswire/ -- SunStar Healthcare, Inc. (Nasdaq: SUNS -
news) today announced its intention to restate its previously filed financial
statements for the nine month period ended September 30, 1999. Results from the
nine month period, as and when restated, will reflect losses aggregating
approximately $8 to 10 million. Adjustments of previously stated amounts
resulted primarily from the payment by its subsidiary, SunStar Health Plan, an
HMO, of the higher than expected backlog of claims and overpayments of claims
that developed under its previous third party administrator (which are currently
subject to litigation and may be recoverable) and higher administrative costs
incurred in the transition of third party administrators, and resulting premium
deficiencies. The restatement reflects the preliminary results of a statutory
audit of its capital as of September 30, 1999 currently being prepared by KPMG,
LLP. Restatements of the Company's financial statements for periods ending on or
before September 30, 1999 may be required upon completion of the audit.
As previously announced, regulatory scrutiny by the Florida Department of
Insurance (DOI) of the Company, including a Florida circuit court litigation,
arises in part from allegations of significant deficiencies in statutory capital
of SunStar Health Plan.
The Company is currently negotiating with an investor to provide the needed
statutory capital. The Department of Insurance has agreed to meet with Sunstar
Health Plan representatives, KPMG, and a representative of the investor early
next week to review the audit results, become acquainted with the investor and
its qualifications, and to discuss an investment plan to cure the deficiency. If
a plan is agreed upon, SunStar Health Plan will seek a resolution or delay of
the lawsuit in order to allow time to proceed with the plan; however, there is
no assurance that such resolution or delay will be available. There is no
assurance that the Company can raise such capital on favorable terms or at all.
Accordingly, SunStar Health Plan will be subject to the potential entry of an
order imposing receivership.
In addition, the continuing regulatory scrutiny of SunStar Health Plan and the
filing of the Department of Insurance's lawsuit, together with the continuing
costs related to higher than expected claims backlog and the switch in third
party administrators, have adversely affected the Company's results of
operations in the quarter ended December 31, 1999 and in the current quarter, as
well as its marketing to customers and providers. As a consequence of these
adverse effects, SunStar Health Plan has suffered erosion in its provider
network and membership base and expects to apply to the Department of Insurance
for an increase in premiums for small groups, but there is no assurance it will
be able to obtain such an increase.
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SunStar Healthcare, Inc., through SunStar Health Plan, its wholly owned
subsidiary, currently offers comprehensive HMO products for individuals,
families, and small and large employer groups.
Statements contained in this press release that are not based upon current or
historical fact are forward-looking in nature. Such forward-looking statements
are subject to risks and uncertainties that could cause actual results to differ
materially from estimated results. Such risks and uncertainties are detailed in
the Company's filings with the Securities and Exchange Commission.
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EXHIBIT 99.2
Wednesday February 2, 11:25 am Eastern Time
Company Press Release
SOURCE: SunStar Healthcare, Inc.
SunStar Healthcare, Inc. Announces Imposition of Receivership of HMO Subsidiary
HEATHROW, Fla., Feb. 2 /PRNewswire/ -- SunStar Healthcare, Inc. (Nasdaq: SUNS -
news) today announced that the Florida Department of Insurance, after action by
a Florida circuit court, has taken over the Company's principal subsidiary,
SunStar Health Plan, as a receiver as a result of significant deficiencies in
statutory capital, and will proceed immediately to liquidate SunStar Health
Plan.
The Company had sought in court a delay of the liquidation for two weeks to
enable an investor, who had presented a letter of intent to provide $15 million
of new capital, to complete its due diligence and close the investment, thus
curing the capital deficiency. However, the Florida Department of Insurance was
unwilling to grant the delay, and the court was unable to cause the delay.
Accordingly, the liquidation is now underway. SunStar Health Plan, since its
inception,
provided individual coverage, and it will be difficult for the Department of
Insurance as receiver to replace such coverage. SunStar was one of the few
remaining carriers to offer low-cost comprehensive coverage to individuals.
The Company will seek to recapitalize itself and continue in healthcare
management businesses, but will suffer significant losses as a consequence of
the loss of SunStar Health Plan, which was its sole operating business.
Statements contained in this press release that are not based upon current or
historical fact are forward-looking in nature. Such forward-looking statements
are subject to risks and uncertainties that could cause actual results to differ
materially from estimated results. Such risks and uncertainties are detailed in
the Company's filing with the Securities and Exchange Commission.
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EXHIBIT 99.3
Wednesday February 2, 1:30 pm Eastern Time
Company Press Release
SOURCE: The Nasdaq Stock Market, Inc.
Nasdaq Changes Status of Trading
Halt in SunStar Healthcare, Inc., And Requests Additional
Information from Company
WASHINGTON, Feb. 2 /PRNewswire/ -- The Nasdaq Stock Market(SM) announced today
that the trading halt status in SunStar Healthcare, Inc. (Nasdaq: SUNS - news)
was changed to "additional information requested"' from the company. Trading in
the company had been halted on February 2, 2000 at 9:03 a.m. EST for news
pending at a last sale price of 3 7/16. Trading will remain halted until the
company has fully satisfied Nasdaq's request for additional information.
For news and additional information about the company, please contact the
company directly, or check under the company's symbol using InfoQuotes(SM) on
the Nasdaq(R) Web site.
For more information about The Nasdaq Stock Market, visit the Nasdaq Web site at
http://www.nasdaq.com or the Nasdaq Newsroom(SM) at http://www.nasdaqnews.com.
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