Exhibit 99.1
MAXICARE ANNOUNCES CHANGES TO
ITS RIGHTS OFFERING
LOS ANGELES - August 30, 2000 - Maxicare Health Plans, Inc., (NASDAQ-
NMS:MAXI) announced today that its letter of intent with MDB Capital Group
LLC to act as standby underwriter with respect to the Company's pending
rights offering has been terminated. In connection with the foregoing, the
Company has amended the rights offering so that, subject to the NOL
limitation described below, those shareholders who fully subscribe to the
rights available to them in the rights offering shall have over-
subscription rights to purchase additional shares from those shares which
have not been purchased by other shareholders in the rights offering (the
"Unsubscribed Shares") up to a maximum of 50% of the shares which are
available to the over-subscribing shareholder in the rights offering (the
"Over-Subscription Rights"). In the event the number of Unsubscribed
Shares are insufficient to meet the exercise of all of the Over-
Subscription Rights, over-subscription shares will be allocated on a pro-
rata basis, based upon the ratio that the number of shares owned by each
over-subscribing shareholder on the record date for the rights offering,
September 14, 2000 (the " Record Date") bears to the total number of
shares owned by all over-subscribing shareholders on the Record Date. In
order to preserve the Company's outstanding net operating loss
carryforwards ("NOL"), no shareholder may acquire 5% or more of the
outstanding shares of the Company's Common Stock through its exercise of
Over-Subscription Rights without the prior approval of the Company's Board
of Directors.
As previously announced, the Company has granted to its
shareholders of record as of the Record Date non-transferable rights to
purchase, for a fifteen day period, at $1.00 per share 1-1/2 shares of the
Company's common stock for each share of common stock owned by such
shareholders on the Record Date. With the exercise of Over-Subscription
Rights each shareholder may purchase up to 2-1/4 shares of the Company's
common stock for each share of common stock owned by such shareholder on
the Record Date. If fully subscribed, the Company anticipates raising
approximately $28 million in the rights offering.
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The effectiveness of the rights offering is subject to
shareholder approval of an amendment to the Company's certificate of
incorporation increasing the number of authorized shares of common stock
from 40 million to 80 million at the Company's upcoming annual meeting of
shareholders which is scheduled for September 14, 2000 and the
effectiveness of the Company's Form S-2 Registration Statement which it
has filed with the Securities and Exchange Commission. The Company
reserves the right to further amend the terms of or to withdraw the rights
offering at any time.
Maxicare Health Plans, Inc. is a managed health care company
with ongoing operations principally in California and Indiana. Its health
care plans currently have approximately 430,000 members. The Company also
offers various employee benefit packages through its subsidiaries Maxicare
Life and Health Insurance Company and HealthAmerica Corporation.
This press release is not an offer to sell or a solicitation of
an offer to buy any securities of the Company. Any such solicitation or
offer may only be made through a prospectus which has been declared
effective by the Securities and Exchange Commission.
Forward Looking Information
This news release contains forward looking information. The forward
looking statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward looking
statements are based on certain assumptions and current expectations that
involve a number of risks and uncertainties, many of which are beyond the
Company's control. These risks and uncertainties include limitations on
premium levels, greater than anticipated increase in health care expenses
including pharmaceutical costs, loss of contracts with providers,
insolvency of providers, benefit mandates, variances in anticipated
enrollment as a result of competition or other factors, litigation,
changes to the laws or funding of Medicare and Medicaid programs, and
increased regulatory requirements for dividending, minimum capital,
reserve and other financial solvency requirements. The effects of the
aforementioned risks and uncertainties could have a material adverse
impact on the liquidity and capital resources of the Company. These
statements are forward looking and actual results could differ materially
from those projected in the forward looking statements, which statements
involve risks and uncertainties. In addition, past financial performance
is not necessarily a reliable indicator of future performance and
investors should not use historical performance to anticipate results or
future period trends.
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