<PAGE>


                    U. S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

/x/  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the quarterly period ended December 31, 1999

/ /  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

     For the transition period from ______________ to _______________

                         Commission file number 0-19499

                                HEALTHSTAR CORP.

        (Exact name of small business issuer as specified in its charter)

            DELAWARE                                            91-1934592
      (State or other jurisdiction                           (I.R.S. employer
    of incorporation or organization)                      identification no.)

                      15720 N. GREENWAY HAYDEN LOOP SUITE 1
                            SCOTTSDALE, ARIZONA 85260
                    (Address of principal executive offices)

                                 (480) 451-8575
                           (Issuer's Telephone Number)

            8745 WEST HIGGINS ROAD, SUITE 300 CHICAGO, ILLINOIS 60631
              (Former name, former address and former fiscal year,
                          if changed since last report)

Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes /X/ No / /

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the last practicable date: Common stock, $0.001 par value,
4,145,872 shares outstanding as of February 11, 2000.


                                       1
<PAGE>

                        HEALTHSTAR CORP. AND SUBSIDIARIES

               FORM 10-QSB FOR THE QUARTER ENDED DECEMBER 31, 1999

                                TABLE OF CONTENTS

<TABLE>
<S>       <C>                                                                             <C>
PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements

          Consolidated Balance Sheet as of December 31, 1999                                3

          Consolidated Statements of Operations and Retained Earnings
          (Accumulated Deficit) for the Three and Nine Months Ended                         4
          December 31, 1999 and 1998

          Consolidated Statements of Cash Flows for the Nine Months Ended
          December 31, 1999 and 1998                                                        5

          Notes to Unaudited Consolidated Financial Statements                              6

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                                        11

PART II.  OTHER INFORMATION

Item 5.   Other Information                                                                18

Item 6.   Exhibits and Reports on Form 8-K                                                 18

Signatures                                                                                 19


</TABLE>


                                       2
<PAGE>

                          PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                        HEALTHSTAR CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                   (UNAUDITED)

<TABLE>
<CAPTION>


                                                                        DECEMBER 31,
                                                                            1999
                                                                       ----------------
 <S>                                                                 <C>
                                     Assets

 Current assets:
   Cash and cash equivalents                                         $          299,783
   Trade accounts receivable, less allowance for doubtful
     accounts of $140,393                                                     1,537,176
   Other current assets                                                         372,906
                                                                       ----------------
          Total current assets                                                2,209,865

 Property and equipment, net                                                  1,893,835
 Goodwill, net of accumulated amortization of $1,186,762                      7,674,809
 Other assets, at cost                                                          166,179
                                                                       ----------------
          Total assets                                               $       11,944,688
                                                                       ================

                Liabilities And Shareholders' Equity

 Current liabilities:
   Accounts payable                                                  $          509,064
   Accrued expenses                                                           1,203,783
   Current portion of long-term debt                                          1,525,000
                                                                       ----------------
           Total current liabilities                                          3,237,847
                                                                       ----------------
 Shareholders' equity:
    Common stock, $.001 par value 15,000,000 shares authorized,
      4,145,872 shares issued and outstanding                                     4,146
    Additional paid -in capital                                               8,727,428
    Accumulated deficit                                                        (24,733)
                                                                       ----------------
          Total shareholders' equity                                          8,706,841
                                                                       ----------------
          Total liabilities and shareholders' equity                 $       11,944,688
                                                                       ================


</TABLE>


See accompanying notes to unaudited consolidated financial statements.


                                       3
<PAGE>

                        HEALTHSTAR CORP. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
                             (ACCUMULATED DEFICIT)
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                                        THREE MONTHS ENDED               NINE MONTHS ENDED
                                                                           DECEMBER 31,                     DECEMBER 31,
                                                                    ---------------------------     -----------------------------
                                                                       1999            1998             1999            1998
                                                                    -----------     -----------     -------------    ------------
<S>                                                              <C>             <C>             <C>              <C>
Revenues:
   Capitated fees                                                $   2,035,116   $   2,338,476   $     6,201,906  $    7,354,196
   Repricing fees                                                    1,234,267       1,783,766         4,294,089       5,322,349
   Other fees                                                           43,115         121,718           222,138         460,017
                                                                    -----------     -----------     -------------    ------------
                                                                     3,312,498       4,243,960        10,718,133      13,136,562
Operating expenses:
   Cost of services                                                    405,060         589,578         1,401,696       1,871,352
   Salaries and wages                                                1,793,340       2,162,510         5,570,288       6,228,782
   General and administrative                                        1,069,775       1,150,493         3,091,327       3,647,601
   Depreciation and amortization                                       296,647         305,497           937,513         887,796
                                                                    -----------     -----------     -------------    ------------
                                                                     3,564,822       4,208,078        11,000,824      12,635,531
                                                                    -----------     -----------     -------------    ------------
Income (loss) from operations                                        (252,324)          35,882         (282,691)         501,031

Non-operating income (expense)
   Interest expense                                                   (89,310)        (83,901)         (230,600)       (333,193)
   Gain on disposition of assets                                     1,031,210              --         1,145,748              --
   Asset impairment charge                                           (150,000)              --         (650,000)              --
                                                                    -----------     -----------     -------------    ------------
Income (loss) before income taxes                                      539,576        (48,019)          (17,543)         167,838
Income tax expense (benefit)                                           243,577         (1,582)           223,893          68,418
                                                                    -----------     -----------     -------------    ------------
             Net income (loss)                                         295,999        (46,437)         (241,436)          99,420
Retained earnings (accumulated deficit) at beginning of period       (320,732)         538,230           216,703         392,373
                                                                    -----------     -----------     -------------    ------------
Retained earnings (accumulated deficit) at end of period         $    (24,733)   $     491,793   $      (24,733)  $      491,793
                                                                    ===========     ===========     =============    ============
Earnings (loss) per share-basic and diluted                      $        0.07   $      (0.01)   $        (0.06)  $         0.03
                                                                    ===========     ===========     =============    ============
Weighted average shares outstanding-basic and diluted                3,966,850       3,385,089         3,879,378       3,159,979
                                                                    ===========     ===========     =============    ============

</TABLE>

See accompanying notes to unaudited consolidated financial statements.


                                       4
<PAGE>

                        HEALTHSTAR CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                           NINE MONTHS ENDED
                                                                              DECEMBER 31,
                                                                      --------------------------------
                                                                          1999               1998
                                                                      --------------       -----------

<S>                                                                <C>               <C>
Operating activities:
  Net income (loss)                                                $     (241,436)   $          99,420
  Adjustments to reconcile net income (loss) to
  net cash used in operating activities:
    Depreciation and amortization                                          937,513             887,796
    Gain on the disposition of assets                                  (1,145,748)                  --
    Asset impairment charge                                                650,000                  --
    Bad debt expense                                                       287,654             442,542
    Stock-based compensation                                                27,500              15,000
    Interest expense on debentures                                             --               29,578
  Increase (decrease) in cash resulting from changes in
    operating assets and liabilities:
    Trade accounts receivable                                             (63,727)           (361,639)
    Other current assets                                                    20,647            (32,830)
    Accounts payable                                                     (519,822)           (222,118)
    Accrued expenses                                                     (385,252)           (820,139)
                                                                      -------------     --------------
      Net cash provided by (used in) operating activities                (432,671)              37,610
                                                                      -------------     --------------
Investing activities:
   Purchases of equipment                                                (181,726)           (371,915)
   Proceeds from the sale of equipment                                          --               5,113
   Proceeds from the disposition of assets                               1,625,000                  --
                                                                      -------------     --------------
      Net cash provided by (used in) investing activities                1,443,274           (366,802)
                                                                      -------------     --------------
Financing activities:
   Decrease (increase) in other assets                                      68,119            (96,399)
   Net proceeds from line of credit                                             --           (300,000)
   Payments on term loan, net                                          (1,400,000)             550,000
   Proceeds from issuance of common stock                                  549,125                  --
                                                                      -------------     --------------
      Net cash provided by (used in) by financing activities             (782,756)             153,601
                                                                      -------------     --------------
Net increase (decrease) in cash and cash equivalents                       227,847           (175,591)
Cash and cash equivalents at beginning of year                              71,936             199,466
                                                                      -------------     --------------
Cash and cash equivalents at end of period                          $       299,783   $         23,875
                                                                      =============     ==============


</TABLE>

See accompanying notes to unaudited consolidated financial statements


                                       5
<PAGE>



                        HEALTHSTAR CORP. AND SUBSIDIARIES

              Notes To Unaudited Consolidated Financial Statements

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     DESCRIPTION OF BUSINESS

     HealthStar Corp. (the "Company") is a healthcare management company
     dedicated to controlling the costs, improving the quality and enhancing the
     delivery of healthcare services. The Company markets and provides programs
     and services to a variety of payers of medical claims such as insurance
     companies, self-insured businesses and third parties that administer
     employee medical plans. These programs and services assist the Company's
     customers in reducing healthcare costs for group health plans, workers'
     compensation coverage and automobile accident injury claims. The Company
     operates its business through its wholly owned subsidiary, HealthStar, Inc.
     ("HSI").

     BASIS OF PRESENTATION

     The accompanying unaudited consolidated financial statements of HealthStar
     Corp. and Subsidiaries have been prepared in accordance with generally
     accepted accounting principles for interim financial information and
     pursuant to rules and regulations of the Securities and Exchange
     Commission. Accordingly, they do not include all of the information and
     footnotes required by generally accepted accounting principles for complete
     financial statement presentation. In the opinion of management, such
     unaudited interim information reflects all adjustments, consisting only of
     normal recurring adjustments, necessary to present the Company's financial
     position and results of operations for the periods presented. The results
     of operations for interim periods are not necessarily indicative of the
     results to be expected for a full fiscal year. It is suggested that these
     consolidated financial statements be read in conjunction with the Company's
     audited consolidated financial statements included in the Company's Annual
     Report Form 10-KSB, for the year ended March 31, 1999.

     USE OF ESTIMATES

     Management of the Company has made a number of estimates and assumptions
     relating to the reporting of assets and liabilities and the disclosure of
     contingent assets and liabilities to prepare these financial statements in
     conformity with generally accepted accounting principles.

     PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the financial statements of
     the Company and its two wholly owned subsidiaries. All significant
     intercompany balances and transactions have been eliminated in
     consolidation.

     CASH EQUIVALENTS

     The Company considers all highly liquid instruments with original
     maturities of three months or less to be cash equivalents.


                                       6
<PAGE>

     EARNINGS (LOSS) PER SHARE

     The Company adopted Statement of Accounting Standards No. 128 "Earnings per
     Share" (SFAS 128) during 1997. In accordance with SFAS 128, basic EPS is
     computed by dividing net income, after deducting preferred stock dividend
     requirements (if any), by the weighted average number of shares of common
     stock outstanding.

     Diluted EPS reflects the maximum dilution that would result after giving
     effect to dilutive stock options and warrants and to the assumed conversion
     of all dilutive convertible securities and stock. If shares are considered
     anti-dilutive, they are not presented in loss per share calculations.

     FAIR VALUE OF FINANCIAL INSTRUMENTS

     The fair value of a financial instrument is the amount at which the
     instrument could be exchanged in a current transaction between willing
     parties. Management believes that the recorded amounts of current assets
     and current liabilities approximate fair value because of the short
     maturity of these instruments. The recorded balance of long-term debt
     approximates fair value, as the terms of the debt are similar to rates
     currently offered to the Company for similar debt instruments.

     REVENUE RECOGNITION

     The Company provides it customers with access to a network of healthcare
     providers which includes physicians, acute care hospitals and ancillary
     providers such as outpatient surgery centers and home healthcare agencies.
     These providers have contractually agreed with the Company to provide
     healthcare services to the Company's customers at a discount from billed
     charges. The Company generates revenue from its customer base by charging
     network access fees. The Company enters into contracts with its customers
     and charges network access fees using either of two methods. Customers may
     choose to pay a capitated fee, which is a fixed, monthly fee per eligible
     subscriber. Initial enrollment figures are based on estimates provided by
     the customer. Actual enrollment figures are subsequently provided by the
     customer and are updated periodically at intervals ranging from monthly to
     semi-annually. Capitated revenue is recognized on a monthly basis when
     customers are billed using the most current enrollment figures available.
     Adjustments are made when the customer submits new enrollment figures. The
     other method under which customers may elect to pay the Company for network
     access is called a repricing fee. Under this method, the Company receives a
     percentage of the dollar amount of the discount granted by the healthcare
     provider for services rendered to an enrolled subscriber. The Company's
     percentage of the dollar amount of the discount is determined by contract
     and varies from customer to customer. Repricing fees are recognized as
     revenue when the Company processes the medical claim, calculates the
     discount and notifies the customer of the amount due.

     COST OF SERVICES

     The major components of cost of services are the cost of outsourcing the
     medical case management and utilization review functions, external
     marketing commissions, printing of provider directories and costs
     associated with the electronic transmission of healthcare claims.

     PROPERTY AND EQUIPMENT

     Property and equipment are stated at cost. Depreciation is calculated using
     the straight-line method over the estimated useful lives of the assets,
     which approximates three years for equipment to seven years for furniture
     and fixtures. Computer software is amortized over three to five years.


                                       7
<PAGE>

     GOODWILL

     Goodwill, which represents the excess of purchase price over the fair value
     of net tangible assets acquired, is amortized on a straight-line basis over
     the expected periods to be benefited, ranging from 10 to 20 years with a
     weighted average period of 20 years.

     INCOME TAXES

     The Company accounts for income taxes under the asset and liability method.
     Deferred tax assets and liabilities are recognized for the future tax
     consequences attributable to differences between the financial statement
     carrying amounts of existing assets and liabilities and their respective
     tax bases and operating loss and tax credit carryforwards. Deferred tax
     assets and liabilities are measured using enacted tax rates expected to
     apply to taxable income in the years in which those temporary differences
     are expected to be recovered or settled. The effect on deferred tax assets
     and liabilities of a change in tax rates is recognized in income in the
     period that includes the enactment date.

     A valuation allowance must be established to reduce deferred income tax
     benefits if it is more likely than not that a portion of the deferred
     income tax benefits will not be realized. It is management's opinion that
     the entire deferred tax benefit may not be recognized in future years.
     Therefore, a valuation allowance equal to the deferred tax benefit has been
     established for the capital loss carryforward and a portion of the net
     operating loss carryforward that may not be recognized in future years.

     IMPAIRMENT OF LONG-LIVED ASSETS

     Management reviews the possible impairment of long-lived assets and certain
     identifiable intangible assets whenever events or changes in circumstances
     indicate that the carrying amount of an asset may not be recoverable.
     Recoverability of assets to be held and used is measured by a comparison of
     the carrying amount of an asset to future undiscounted net cash flows
     expected to be generated by the asset. If such assets are considered to be
     impaired, the impairment to be recognized is measured by the amount by
     which the carrying amount of the assets exceed the fair value of the assets
     measured using quoted market prices when available or the present value
     of the estimated expected future cash flows using a discount rate
     commensurate with the risks involved. In measuring impairment, assets will
     be grouped at the lowest level for which there are identifiable cash flows
     that are largely independent of the cash flows of other groups of assets.

     STOCK BASED COMPENSATION

     The Company applies SFAS No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION,
     which permits entities to recognize as expense over the vesting period the
     fair value of all stock-based awards on the date of grant. Alternatively,
     SFAS No. 123 also allows entities to continue to apply the provisions of
     APB Opinion No. 25 and provide pro forma net earnings and pro forma
     earnings per share disclosures for employee stock option grants made in
     1995 and future years as if the fair-value-based method defined in SFAS No.
     123 had been applied. The Company has elected to continue to apply the
     provisions of APB Opinion No. 25 and provide the pro forma disclosure
     provisions of SFAS No. 123. In accordance with APB Opinion No. 25,
     compensation expense is recorded on the date an option is granted only if
     the current market price of the underlying stock exceeds the exercise
     price.


                                       8
<PAGE>

     OTHER FEES

     Other fees consists of revenue generated from the Company's pharmacy
     management and case management programs, as well as from the sale of
     provider directories that are generated for use by enrollees of the
     Company's clients. Other fees are recognized when realized, which is
     generally when users are billed.

     COMPREHENSIVE INCOME

     In June 1997, the Financial Accounting Standards Board issued Statement of
     Financial Accounting Standards No. 130, REPORTING COMPREHENSIVE INCOME
     (SFAS 130) which established standards for reporting and displaying
     comprehensive income and its components in a full set of general-purpose
     financial statements. Adoption of this standard required no additional
     disclosures for the Company. Comprehensive income (loss) was the same as
     net income (loss) for all periods presented.

     RECLASSIFICATIONS

     Certain reclassifications have been made to the prior period financial
     statements to conform to the current period presentation.

(2)  ASSET IMPAIRMENT CHARGE

     The Company's acquisition of HSI in fiscal 1998 resulted in allocating a
     substantial portion of the purchase price to goodwill. Pursuant to SFAS No.
     121 "Accounting for the Impairment of Long-Lived Assets and for Long Lived
     Assets to be Disposed Of", management evaluated the recoverability of the
     long-lived assets, including goodwill. While management originally believed
     that revenues and profits could grow after HSI's operations were fully
     integrated into the Company, management also explored strategic mergers and
     acquisitions that would complement HSI's operations. In May 1999,
     management received an offer to sell HSI to Beyond Benefits, Inc. a
     privately held managed healthcare company. The original offer was for
     $15,500,000 in cash. However, in subsequent negotiations, that offer was
     reduced to $10,000,000 in cash, 5% of the common equity of Beyond Benefits,
     Inc. and an earn-out provision for up to an additional $1,250,000. The
     offer was accepted and approved by the Board of Directors on August 19,
     1999, subject to shareholder approval.

     On December 16, 1999, the Company and Beyond Benefits entered into an
     amendment to the Stock Purchase Agreement to provide that the cash
     portion of the purchase price be increased to $10,850,000 from
     $10,000,000 and to remove from the purchase price 303,943 shares of
     Beyond Benefits' non-voting common stock which was to have represented
     5% of the common equity of Beyond Benefits. Accordingly, the Company has
     adjusted the carrying value of HSI's goodwill to an estimated fair value
     of approximately $7,674,809, resulting in a non-cash impairment charge
     of $150,000 ($0.04 loss per basic and diluted share) in the current
     quarter and $650,000 ($0.17 loss per basic and diluted share) for the
     nine months ended December 31, 1999. The fair value was estimated based
     on a sales price of $10,850,000 less direct and incremental costs to
     dispose of approximately $300,000.

                                       9
<PAGE>

(3)  BUSINESS SEGMENTS AND MAJOR CUSTOMERS

     The Company's operations are in one operating business segment, the
     marketing and provision of programs and services to insurance companies,
     self-insured businesses, health and welfare funds and third parties that
     administer employee medical plans.

     The Company operates in a very competitive market. The Company's success is
     dependent upon the ability of its sales and marketing group to identify and
     contract with businesses and organizations nationwide, and to administer
     its networks. Changes in the insurance and healthcare industries, including
     the regulation thereof by federal and state agencies, may significantly
     affect management's estimates of the Company's performance.

(4)  DEBT

     Debt consists of the following at December 31, 1999:

    Note payable to Harris Trust and Savings Bank, due
    February 29, 2000 secured by substantially all the
    Assets of the Company                                         $1,325,000

    Unsecured note payable to the seller of HSI, interest
    payable monthly at 8.0%, currently due                           200,000
                                                                     -------
                                                                  $1,525,000
                                                                  ==========


     The Company had anticipated using a portion of the cash proceeds from the
     sale of HSI to Beyond Benefits, Inc. to repay the remaining term loan
     balance of $1,325,000, however, this transaction will not be consummated
     prior to the maturity date of the loan. The Company and Harris Bank are
     currently negotiating an amendment to the credit agreement, which would
     provide for an extension of the maturity date of the term loan to March 31,
     2000. If the Company is not successful in extending the maturity date, the
     Company would need to raise additional capital from outside sources in
     order to meet its obligation to the bank. There can be no assurances that
     the Company will be able to secure the necessary funding required to repay
     the term loan.

(5)  RELATED PARTY TRANSACTIONS

     On June 7, 1999, the Company sold its vision program for cash consideration
     of $125,000 to an immediate family member of a former officer of the
     Company. The Company recognized a gain on the sale of approximately
     $114,000.

(6)  SALE OF NHBC

     On December 30, 1999, the Company sold all of the assets of its wholly
     owned subsidiary National Health Benefits and Casualty Corp. ("NHBC") to
     Carlmont Capital Group, Inc., a California based company. The Company
     received $1,500,000 in cash at closing and an earnout agreement that may
     provide up to an additional $300,000 in cash, based on the actual cash
     flows of NHBC over the next 18 months. The Company used $1,350,000 of the
     cash proceeds to pay down indebtedness owed to Harris Bank.


                                       10

<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:

     This document includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. All statements other than
statements of historical fact included in this document, including, without
limitation, the statements under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Liquidity and Sources of
Capital" regarding the Company's strategies, plans, objectives,
expectations, and future operating results are forward-looking statements.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable at this time, it can give no
assurance that such expectations will prove to have been correct. Actual
results could differ materially based upon a number of factors including, but
not limited to, history of losses, leverage and debt service, competition, no
dividends, limited public market and liquidity, shares eligible for future
sale, and other risks detailed in the Company's Securities and Exchange
Commission filings.

     Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with the financial statements and
footnotes for the quarter ended December 31, 1999 contained herein and for the
year ended March 31, 1999 contained in the Company's Form 10-KSB filed with the
Securities and Exchange Commission on June 29, 1999.

OVERVIEW

     HealthStar Corp. (the "Company") is a healthcare management company
dedicated to controlling the costs, improving the quality and enhancing the
delivery of healthcare services. The Company markets and provides programs and
services to a variety of payers of medical claims such as insurance companies,
self-insured businesses and third parties that administer employee medical
plans. These programs and services assist the Company's customers in reducing
healthcare costs for group health plans, workers' compensation coverage and
automobile accident injury claims.

     Through its wholly owned subsidiary, HealthStar, Inc. ("HSI"), the Company
provides its customers with access to a nationwide network of healthcare
providers. The Company owns and operates the HealthStar Preferred Provider
Organization (the "PPO"). At December 31, 1999, the HealthStar PPO network
consisted of direct contracts with over 2,000 acute care hospitals,
approximately 125,000 physicians and approximately 5,000 ancillary healthcare
providers such as outpatient surgery facilities and home healthcare agencies.
The Company also provides access to medical cost containment services such as
implementing and coordinating case management procedures, managing and reviewing
the utilization of healthcare services and comprehensive medical bill review.

RECENT DEVELOPMENTS

     On September 23, 1999, the Company and HSI entered into a Stock Purchase
Agreement with Beyond Benefits, Inc., a privately held managed healthcare
Company, pursuant to which the Company proposes to sell all of the capital stock
of HSI to Beyond Benefits. Under the terms of the agreement, the Company would
receive $10,000,000 in cash at closing and 303,943 shares of Beyond Benefits'
non-voting series B common stock, which represents 5% of the issued and
outstanding common stock of Beyond Benefits. Further, the Company may receive up
to an additional $1,250,000 in cash pursuant to an earn-out provision if
predetermined HSI revenue figures are realized during the 18 month period
following the closing.

     The proposed transaction constitutes the sale of substantially all of the
Company's assets for the purpose of Delaware law applicable to the Company. The
Company is required to obtain the affirmative vote of a majority of the
outstanding shares of its common stock prior to consummating the proposed
transaction. On August 19, 1999, the Board of Directors of the Company
unanimously approved the proposed transaction subject to the approval by the
shareholders. The vote will take place in conjunction with the Company's Annual
Shareholders' Meeting, which is expected to be held in March 2000.

     On December 16, 1999, the Company and Beyond Benefits entered into an
amendment to the Stock Purchase Agreement to provide that the cash portion of
the purchase price be increased to $10,850,000 from $10,000,000 and to remove
from the purchase price 303,943 shares of Beyond Benefits' non-voting common
stock which was to have represented 5% of the common equity of Beyond
Benefits. The amended agreement expires on February 20, 2000. The Company and
Beyond Benefits are currently negotiating an extension to the agreement.If
the Company is unable to consummate this sale, management intends to
concentrate its efforts on the profitable operation of HSI.

                                       11
<PAGE>

     On December 30, 1999, the Company sold all of the assets of its wholly
owned subsidiary National Health Benefits and Casualty Corp. ("NHBC") to
Carlmont Capital Group, Inc., a California based company. The Company received
$1,500,000 in cash at closing and an earnout agreement that may provide up to an
additional $300,000 in cash, based on the actual cash flows of NHBC over the
next 18 months. The Company used $1,350,000 of the cash proceeds to pay down
indebtedness owed to Harris Trust and Savings Bank, which has now been reduced
to $1,325,000.

RESULTS OF OPERATIONS

Three Months Ended December 31, 1999 Compared to Three Months Ended December 31,
1998

     The Company derives the majority of its revenue from fees paid by its
customers for access to the Company's PPO network of contracted healthcare
providers. These providers have contractually agreed with the Company to provide
healthcare services to the Company's customers at a discount from billed
charges. The Company's customer base consists of a variety of payers of medical
claims such as insurance companies, third-party administrators and self-insured
employers. The Company enters into contracts with its customers and charges
network access fees using either of two methods. Customers may choose to pay a
capitated fee, which is a fixed, monthly fee per eligible subscriber. The other
method that customers may elect to choose to pay the Company for network access
is called a repricing fee. Under this method, the Company receives a percentage
of the dollar amount of the discount granted by the healthcare provider for
services rendered to an enrolled subscriber. The Company's percentage of the
dollar amount of the discount is determined by contract and varies from customer
to customer

     Total revenue decreased $932,000 or 22% to $3,312,000 in 1999 compared to
$4,244,000 in 1998. Revenue for HSI decreased $754,000 to $2,792,000 in 1999
from $3,546,000 in 1998, a decrease of 21%. The majority of the decrease was
attributable to the loss of four significant customers that were active during
the comparable period in 1998. Revenue for NHBC decreased $177,000 or 25% from
$698,000 in 1998 to $521,000 in 1999. Overall, capitated fees declined 13% and
repricing fees declined approximately 31% from the year ago period.

     Other fees include charges to customers for medical case management,
utilization review and revenue generated from the sale of provider directories.
Other fees decreased $79,000 or 65% from $122,000 in 1998 to $43,000 in 1999.
Approximately $27,000 of the decrease is due to the termination of a Company
administered pharmacy benefit program in June 1999. Revenue from case management
decreased approximately $25,000 from the prior year period.

     Cost of services includes the cost of outsourcing the medical case
management and utilization review functions, commissions paid to outside
brokers, fees paid to other PPO networks for access to providers not contracted
directly with the Company, the cost of electronic claims processing and the cost
of printing provider directories. Included in the prior year period are costs
associated with administering the Company's pharmacy benefit program. Cost of
services decreased $185,000 or 31% to $405,000 in 1999 from $590,000 in the
comparable period in 1998. Approximately $26,000 of the decrease is due to the
termination of the pharmacy benefit program. The remaining reduction is due
primarily to a decrease in access fees paid to other PPO networks and lower
commissions paid to outside brokers as a result of the overall decrease in
revenue. As a percentage of total revenue, cost of services decreased from 13.9%
at December 31, 1998 to 12.2% at December 31, 1999.


                                       12
<PAGE>

     Salaries and wages include all employee compensation, payroll taxes, health
insurance and other employee benefits. Also included in this category are the
commissions paid to in-house sales and marketing personnel. For the three months
ended December 31, 1999, salaries and wages were $1,793,000 compared to
$2,163,000 for the three months ended December 31, 1998, a decrease of $370,000
or 17%. The decrease is attributable to a reduction in staffing levels as a
result of departmental reorganizations that were recently implemented. In
addition, sales commissions have decreased as a result of the decline in
revenue.

     General and administrative expenses include all other operating expenses
such as, telecommunications, office supplies, postage, travel and entertainment,
professional fees, bad debt expense, insurance, rent and utilities. For the
three months ended December 31, 1999, general and administrative expenses were
$1,070,000 compared to $1,150,000 for the comparable period in 1998, a decrease
of $80,000 or 7%. Bad debt expense for the quarter was $90,000 compared to
$106,000 in the comparable period in 1998, a decrease of approximately $16,000
or 15%. The decrease is a result of the lower revenue in the current year period
and better collection efforts. The decrease in bad debt expense accounted for
approximately 20% of the overall decrease in general and administrative
expenses. The remainder of the decrease is due to tighter cost controls
throughout the various operating expense categories and the effect of the
closing of a regional office in Dallas, Texas in June 1999.

     Depreciation and amortization decreased $8,000 or 3%, to $297,000 in 1999
from $305,000 in 1998. The decrease is due to lower amortization expense as a
result of the impairment charge of $500,000 that was taken on September 30,
1999. At December 31, 1999, gross property and equipment was $3,365,474.

     Interest expense for the quarter was $89,000 compared to $84,000 for the
comparable period in 1998, an increase of $5,000 or 6%. The increase in interest
expense is due to higher interest rates during the current year period.

     On December 30, 1999, the Company sold all of the assets of its wholly
owned subsidiary National Health Benefits and Casualty Corp. ("NHBC") to
Carlmont Capital Group, Inc., a California based company. The Company received
$1,500,000 in cash at closing and an earnout agreement that may provide up to an
additional $300,000 in cash, based on the actual cash flows of NHBC over the
next 18 months. This transaction resulted in a pretax gain of approximately
$1,031,000.

     The acquisition of HSI in fiscal 1998 resulted in allocating a substantial
portion of the purchase price to goodwill. Pursuant to SFAS No. 121 "Accounting
for the Impairment of Long-Lived Assets and for Long Lived Assets to be Disposed
Of", management evaluated the recoverability of the long-lived assets, including
goodwill. In May 1999, management received an offer to sell HSI to Beyond
Benefits, Inc. a privately held managed healthcare company. The original offer
was $15,500,000 in cash. However, in subsequent negotiations, that offer was
reduced to $10,000,000 in cash, 5% of the common equity of Beyond Benefits, Inc.
and an earn-out provision for up to an additional $1,250,000. The Board of
Directors approved the offer on August 19, 1999, subject to shareholder
approval.

     On December 16, 1999, the Company and Beyond Benefits entered into an
amendment to the Stock Purchase Agreement to provide that the cash portion of
the purchase price be increased to $10,850,000 from $10,000,000 and to remove
from the purchase price 303,943 shares of Beyond Benefits' non-voting common
stock which was to have represented 5% of the common equity of Beyond
Benefits. Accordingly, the Company has adjusted the carrying value of HSI's
goodwill to an estimated fair value of approximately $7,674,809, resulting in
a non-cash impairment charge of $150,000 ($0.04 loss per basic and diluted
share) in the current quarter and $650,000 ($0.17 loss per basic and diluted
share) for the nine months ended December 31, 1999. The fair value was
estimated based on a sales price of $10,850,000 less direct and incremental
costs to dispose of approximately $300,000.

                                       13
<PAGE>

     Income tax expense (benefit) has been recognized at the Company's effective
income tax rate, which, subject to various credits and adjustments, generally
approximates 30%. Management believes that there will be no tax benefit related
to the asset impairment charge of $150,000.

Nine Months Ended December 31, 1999 Compared to Nine Months Ended December 31,
1998

     Total revenue decreased $2,419,000 or 18% to $10,718,000 in 1999 compared
to $13,137,000 in 1998. Revenue for HSI decreased $2,235,000 to $8,951,000 in
1999 from $11,186,000 in 1998, a decrease of 20%. A majority of the decrease was
attributable to the loss of four significant customers that were active during
the comparable period in 1998. Revenue for NHBC decreased $184,000 or 9% from
$1,951,000 in 1998 to $1,767,000 in 1999. Overall, capitated fees declined 16%
and repricing fees declined approximately 19% from the year ago period.

     Other fees include charges to customers for medical case management,
utilization review and revenue generated from the sale of provider directories.
Other fees decreased $238,000 or 52% from $460,000 in 1998 to $222,000 in 1999.
Approximately $180,000 of the decrease is due to the termination of a Company
administered pharmacy benefit program in June 1999.

     Cost of services includes the cost of outsourcing the medical case
management and utilization review functions, commissions paid to outside
brokers, fees paid to other PPO networks for access to providers not contracted
directly with the Company, the cost of electronic claims processing and the cost
of printing provider directories. Included in the prior year period are costs
associated with administering the Company's pharmacy benefit program. Cost of
services decreased $469,000 or 25% to $1,402,000 in 1999 from $1,871,000 in the
comparable period in 1998. Approximately $175,000 of the decrease is due to the
termination of the pharmacy benefit program. The remaining reduction is due
primarily to a decrease in access fees paid to other PPO networks and lower
commissions paid to outside brokers as a result of the overall decrease in
revenue. As a percentage of total revenue, cost of services decreased from 14.2%
at December 31, 1998 to 13.1% at December 31, 1999.

     Salaries and wages include all employee compensation, payroll taxes, health
insurance and other employee benefits. Also included in this category are the
commissions paid to in-house sales and marketing personnel. For the nine months
ended December 31, 1999, salaries and wages were $5,570,000 compared to
$6,229,000 for the nine months ended December 31, 1998, a decrease of $659,000
or 11%. The decrease is attributable to a reduction in staffing levels as a
result of departmental reorganizations that were recently implemented. In
addition, sales commissions have decreased as a result of the decline in
revenue.

     General and administrative expenses include all other operating expenses
such as, telecommunications, office supplies, postage, travel and entertainment,
professional fees, bad debt expense, insurance, rent and utilities. For the nine
months ended December 31, 1999, general and administrative expenses were
$3,091,000 compared to $3,648,000 for the comparable period in 1998, a decrease
of $556,000 or 15%. Bad debt expense for the nine months ended December 31, 1999
was $288,000 compared to $443,000 in the comparable period in 1998, a decrease
of approximately $155,000 or 35%. The decrease is a result of the lower revenue
in the period and better collection efforts. The decrease in bad debt expense
accounted for approximately 28% of the overall decrease in general and
administrative expenses. The remainder of the decrease in is due to tighter cost
controls throughout the various operating expense categories and the effect of
the closing of a regional office in Dallas, Texas in June 1999.

     Depreciation and amortization increased $50,000 or approximately 6% to
$938,000 in 1999 from $888,000 in 1998. The increase is due to higher
depreciation expense related to the purchase of new computer hardware and
software during the last nine months. At December 31, 1999, gross property
and equipment was $3,365,474.

                                       14
<PAGE>


     Interest expense decreased $102,000 or 31% to $231,000 in 1999 compared to
$333,000 in 1998. The decrease is attributable to lower levels of indebtedness
during 1999.

     On December 30, 1999, the Company sold all of the assets of its wholly
owned subsidiary National Health Benefits and Casualty Corp. ("NHBC") to
Carlmont Capital Group, Inc., a California based company. The Company received
$1,500,000 in cash at closing and an earnout agreement that may provide up to an
additional $300,000 in cash, based on the actual cash flows of NHBC over the
next 18 months. This transaction resulted in a pretax gain of approximately
$1,031,000.

     The acquisition of HSI in fiscal 1998 resulted in allocating a substantial
portion of the purchase price to goodwill. Pursuant to SFAS No. 121 "Accounting
for the Impairment of Long-Lived Assets and for Long Lived Assets to be Disposed
Of", management evaluated the recoverability of the long-lived assets, including
goodwill. In May 1999, management received an offer to sell HSI to Beyond
Benefits, Inc. a privately held managed healthcare company. The original offer
was $15,500,000 in cash. However, in subsequent negotiations, that offer was
reduced to $10,000,000 in cash, 5% of the common equity of Beyond Benefits, Inc.
and an earn-out provision for up to an additional $1,250,000. The Board of
Directors approved the offer on August 19, 1999, subject to shareholder
approval.

     On December 16, 1999, the Company and Beyond Benefits entered into an
amendment to the Stock Purchase Agreement to provide that the cash portion of
the purchase price be increased to $10,850,000 from $10,000,000 and to remove
from the purchase price 303,943 shares of Beyond Benefits' non-voting common
stock which was to have represented 5% of the common equity of Beyond
Benefits. Accordingly, the Company has adjusted the carrying value of HSI's
goodwill to an estimated fair value of approximately $7,674,809, resulting in
a non-cash impairment charge of $150,000 ($0.04 loss per basic and diluted
share) in the current quarter and $650,000 ($0.17 loss per basic and diluted
share) for the nine months ended December 31, 1999. The fair value was
estimated based on a sales price of $10,850,000 less direct and incremental
costs to dispose of approximately $300,000.

     Income tax expense (benefit) has been recognized at the Company's effective
income tax rate, which, subject to various credits and adjustments, generally
approximates 30%. Management believes that there will be no tax benefit related
to the asset impairment charge of $150,000.

LIQUIDITY AND CAPITAL RESOURCES

     At December 31, 1999, the Company had approximately $300,000 in cash and
cash equivalents compared to $24,000 at December 31, 1998. The Company had a
working capital deficiency of $1,028,000 at December 31, 1999, compared to a
deficiency of $2,910,000 at March 31, 1999, an improvement of approximately
$1,882,005. The Company has historically funded its working capital requirements
from cash generated by operations supplemented by borrowings under a line of
credit facility.

     The Company's senior lender is Harris Trust and Savings Bank in Chicago. In
December 1997, Harris provided the debt financing for the Company's acquisition
of HealthStar, Inc. The debt consisted of a $2,500,000 term loan and a
$1,500,000 line of credit. Both credit facilities had a term of three years. The
term loan was set to amortize over the three year period with quarterly payments
of principal of $100,000 in year one, $125,000 in year two, $150,000 in year
three and a final balloon payment at maturity in December 2000. The amount
permitted to be outstanding on the line of credit is determined by a borrowing
base calculation that is submitted to the bank on a monthly basis. At the end of
each month, the total amount outstanding on both the term loan and line of
credit cannot exceed the sum of 80% of the eligible accounts receivable and 50%
of the gross fixed assets of the Company.


                                       15
<PAGE>

     Under the terms of the credit facility, the Company is required to be in
compliance with a series of financial covenants such as a minimum current ratio,
maximum leverage ratio and a minimum fixed charge coverage ratio. At March 31,
1999, the Company was not in compliance with two of the three covenants which
caused an event of default under the credit agreement. On June 8, 1999, the bank
agreed to a waiver and reset the covenant levels. As a condition to granting the
waiver, the bank amended the terms of the credit facility whereby it required
the Company to payoff all outstanding indebtedness no later than November 30,
1999. The interest rate on both the term loan and line of credit was increased
to prime plus 1.5% and a minimum earnings covenant was added.

     At September 30, 1999, the total amount owed to the bank was $2,975,000.
The debt consisted of $1,925,000 on the term loan and $1,050,000 outstanding on
the line of credit. On September 30, 1999, the Company was required to make a
$150,000 principal payment on the term loan, however, the Company did not have
the cash available to make the payment. On October 19, 1999, the Company
prepared its monthly borrowing base report for September and it indicated that
the Company was required to make a payment of $100,000 on the line of credit.
The Company did not have the cash available to make the payment and the bank was
notified. These events constituted a default under the credit facility and the
bank exercised its right to raise the interest rate on the term loan and line of
credit to prime plus 3.5%, which equated to 12.0% as of November 17, 1999.

     On November 19, 1999, the Company and the bank entered into an amendment to
the credit agreement as follows: (i) the Company made a payment of $100,000 on
the line of credit concurrent with entering into the agreement; (ii) on November
30, 1999, the Company made the $150,000 principal payment which was due on
September 30, 1999; (iii) the bank extended the maturity date of the term loan
and line of credit to January 31, 2000; (iv) the bank reset the interest rate on
the term loan and line of credit to prime plus 1.0% on November 30, 1999 and (v)
the Company could no longer make any borrowings under the line of credit.

     On November 24 1999, the Company raised $300,000 through the issuance of
240,000 shares of common stock in a Regulation D private placement offering. The
company used $250,000 of the proceeds to fund the payments to Harris Bank.

     At November 30, 1999, the total indebtedness owed to Harris Bank was
$2,725,000. The total amount outstanding on the line of credit was $950,000 and
the amount outstanding on the term loan was $1,775,000. On December 7, 1999, the
Company made an additional payment of $50,000 on the line of credit to remain in
compliance with the borrowing base.

     On December 30, 1999, the Company sold all of the assets of its wholly
owned subsidiary National Health Benefits and Casualty Corp. ("NHBC") to
Carlmont Capital Group, Inc., a California based company. The Company received
$1,500,000 in cash at closing and an earnout agreement that may provide up to an
additional $300,000 in cash, based on the actual cash flows of NHBC over the
next 18 months. The Company used $1,350,000 of the cash proceeds to payoff the
line of credit and paydown the term loan to $1,325,000. In connection with this
reduction in debt, Harris agreed to extend the maturity date of the term loan to
February 29, 2000.

     The Company had anticipated using a portion of the cash proceeds from
the sale of HSI to Beyond Benefits, Inc. to repay the remaining term loan
balance of $1,325,000, however, this transaction will not be consummated
prior to the maturity date of the loan. The agreement with Beyond Benefits
expires on February 20, 2000. The Company and Beyond Benefits are currently
negotiating an extension to the agreement. If the Company is unable to
consummate this sale, management intends to concentrate its efforts on the
profitable operation of HSI. The Company and Harris Bank are currently
negotiating an amendment to the credit agreement, which would provide for an
extension of the maturity date of the term loan to March 31, 2000. If the
Company is not successful in extending the maturity date, the Company would
need to raise additional capital from outside sources in order to meet its

                                       16
<PAGE>

obligation to the bank. There can be no assurances that the Company will be able
to secure the necessary funding required to repay the term loan.

YEAR  2000

     Many computer programs and equipment with embedded chips or processors use
two rather than four digits to represent the year and may be unable to
accurately process dates after December 31, 1999. This, as well as certain other
date-related programming issues, may result in miscalculations or system
failures that can disrupt the businesses which rely on them. The term "Year 2000
Issue" is used to refer to all difficulties the turn of the century may bring to
computer users.

     The Company determined that many of its internal computer programs and some
items of its equipment were susceptible to potential Year 2000 system failures
or processing errors. The Company has modified and replaced the impacted
programs or equipment. Remediation efforts are underway using both internal and
external resources, with priority given to the systems whose failure might have
a material impact on the Company. To date all required changes have been
identified and made and testing of the changes is complete.

     The Company is also dependent on its contracted medical providers and payer
customers to successfully address their respective Year 2000 technology issues
in connection with their claims processing functions. An important part of the
Year 2000 program involves working with those third parties to determine the
extent to which the Company may be vulnerable to their failure to address their
own Year 2000 issues. The Company has communicated with those third parties to
ascertain whether their Year 2000 issues, which might impact the Company, are
being addressed. Where practical and appropriate, the Company has verified the
information or assurances they provide with testing, particularly with regard to
mission critical relationships. At present, the Company has not been advised by
any third party of any Year 2000 issue likely to materially interfere with the
Company's business. However, not all third parties have been responsive to the
Company's inquiries and there may be providers of significant services on which
the Company relies, such as utilities, which are unwilling or unable to provide
information concerning their Year 2000 readiness. To the extent that outside
vendors do not provide satisfactory responses, the Company will consider
changing to vendors who have demonstrated Year 2000 readiness. However, there
are no assurances that the Company will be able to do so.

     The Company began to develop contingency plans to minimize any Year 2000
disruptions in the event that an internal or third party mission critical system
did not function properly. The contingency plans called for isolation of the
failing component and taking the appropriate corrective action, which may
include modification or replacement of the faulty hardware, software or
non-information system, manual processing of transactions, use of alternative
service providers, relocation to temporary facilities, and other measures as
deemed necessary. These contingency plans will be continually refined as
additional information becomes available.

     The consequences of an uncorrected Year 2000 issue could include business
interruption, exposure to monetary claims by customers and others and loss of
business goodwill. The likelihood of these events and the possible financial
impact if they occur cannot be predicted.

     The Company has upgraded equipment to be Year 2000 compliant and total
expenditures relating to the upgrade for the year are approximately $45,000.

     The estimates and conclusions set forth above contain forward-looking
statements and are based on management's best estimate of future events.
Risks to completing the plan include the availability of resources, the
Company's ability to discover and correct material Year 2000 issues, and
other third parties on which the Company relies to bring their systems into
Year 2000 compliance.

                                       17
<PAGE>


                           PART II. OTHER INFORMATION

ITEM 5. OTHER INFORMATION

CHANGES TO THE BOARD OF DIRECTORS

     On July 27, 1999, Gerald E. Finnell, Gary L. Nielsen, Jon M. Donnell and
Thomas S. O'Brien, resigned as Directors of HealthStar Corp. and were replaced
by Edward M. Chism, Brian McWilliams, Dr. Luis A. Queral and Dr. Michael D.
Flax. Edward M. Chism was appointed Chairman of the Board. These four new
Directors joined Stephen J. Carder on the Board. The resignations were not
related to any disagreements between any Director and the Company regarding any
matter relating to the Company's operations, policies or practices.

     On August 19, 1999, Stephen J. Carder, Darren T. Horndasch and Denise E.
Nedza resigned as Health Star's CEO, COO and CFO respectively. Mr. Carder also
resigned as a Director, but remained President of HealthStar's subsidiaries,
HealthStar, Inc. and National Health Benefits and Casualty Corp. Mr. Horndash
and Ms. Nedza remained in their respective positions at HealthStar, Inc. Thomas
C. Ronk was named HealthStar Corp.'s new President and CEO and was elected to
the Company's Board of Directors. Steven A. Marcus was named Vice President and
Chief Financial Officer of HealthStar Corp. Also on August 19, 1999, Brian
McWilliams resigned from HealthStar's Board of Directors. Mr. McWilliams left
for personal reasons and was replaced by David J. Lewis. Also on August 19,
1999, Richard A. Yardley was named to the Board of Directors.

     On November 12, 1999, Thomas C. Ronk resigned as President, Chief Executive
Officer and Director of HealthStar Corp. On the same date, Richard A. Yardley
also resigned as a Director of HealthStar Corp. and was replaced by Isidor
Buholzler, Jr. Edward M. Chism, Chairman of the Board, was appointed President
and Chief Executive Officer of HealthStar Corp.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

    (a)  Exhibits

         10.4   Amendment  to Stock  Purchase  Agreement  between  the  Company
                and Beyond Benefits, Inc. dated December 16, 1999.

         27     Financial Data Schedule

    (b)  Reports on Form 8-K

     A report on Form 8-K (Item 5) was filed with the Securities and Exchange
Commission on November 22, 1999 relating to the termination of an agreement
whereby the Company was to have acquired a 49% interest in Physiciansite.com,
Inc.

     A report on Form 8-K (Item 5) was filed with the Securities and Exchange
Commission on January 13, 2000, relating to the Company entering into a
Definitive Agreement to sell the assets of its wholly owned subsidiary, NHBC to
Carlmont Capital Group, Inc.


                                       18
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report on Form 10-QSB to be signed on its behalf
by the undersigned thereunto duly authorized, this 14th day of February, 2000.

                             HEALTHSTAR CORP.

                             By: /s/ Steven A. Marcus

                             Steven A. Marcus
                             Vice President and Chief Financial Officer
                             (Principal Financial and Accounting
                             Officer)


                                       19