EMBARGOED UNTIL MONDAY MORNING - 10/9/00

               TESSERACT AND SUNRISE ANNOUNCE CHAPTER 11 FILINGS;
                    SCHOOLS REMAIN OPEN AND FULLY OPERATIONAL

Contact: Dr. Lucian Spataro
        (480) 940-6409

     Phoenix, Arizona, October 6, 2000 - THE TESSERACT GROUP, INC. ("TesseracT")
(OTCBB:  TSST)  reported today that it, along with its  wholly-owned  subsidiary
SUNRISE EDUCATIONAL SERVICES, INC. ("Sunrise"),  filed voluntary petitions under
Chapter 11 of the  Bankruptcy  Code on October 6, 2000.  TesseracT is a national
leader in the  operation  of quality  education  programs  through  private  and
charter  schools,  and Sunrise owns  preschools in Arizona which are part of the
overall operations of TesseracT.

     Dr. Lucian  Spataro,  TesseracT's  president and chief  executive  officer,
stated "TesseracT and Sunrise have filed for Chapter 11 protection as part of an
ongoing effort to work out our financial  problems with creditors  while working
in the best  interests  of students,  employees  and other  interested  parties.
TesseracT's and Sunrise's school facilities remain open and fully  operational."
Dr. Spataro further stated:  "Chapter 11  reorganization  is designed to allow a
business that is experiencing financial difficulties to restructure its business
affairs."  The  companies  believe  that  their  normal  operations  will not be
interrupted by the Chapter 11 filings.

     Prior to the Chapter 11  filings,  TesseracT  and  Sunrise  received a loan
commitment  of up to $1.2 million from TAI, LLC, for a line of credit to finance
post-petition  operations  in the  event  cash  flow  of the  companies  are not
sufficient to fund operations.  This post-petition financing is subject to Court
approval.

     STATEMENTS MADE IN THIS PRESS RELEASE THAT ARE NOT HISTORICAL  FACTS MAY BE
DEEMED  FORWARD-LOOKING  STATEMENTS,  AND, AS SUCH, ARE SUBJECT TO CERTAIN RISKS
AND  UNCERTAINTIES.  ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE ANTICIPATED
AS A RESULT OF THESE CERTAIN RISKS AND UNCERTAINTIES, INCLUDING, BUT NOT LIMITED
TO, (I) THE ABILITY OF THE COMPANY TO NEGOTIATE SATISFACTORY TERMS WITH LENDERS,
VENDORS AND CREDITORS;  (II) THE ABILITY OF THE COMPANY TO OBTAIN COURT APPROVAL
OF  POST-PETITION   FINANCING  OR  THE  AHWATUKEE  SCHOOL  SALE;  (III)  FURTHER
DETERIORATION OF THE COMPANY'S  FINANCIAL  PERFORMANCE;  (IV) DECLINE IN STUDENT
ENROLLMENT;  (IV) ADVERSE CHANGE IN THE COMPANY'S  BUSINESS  RELATIONSHIPS  WITH
VENDORS AND  SUPPLIERS;  (V) LOSS OF KEY  PERSONNEL;  AND (VI) ADVERSE  ECONOMIC
CONDITIONS.  FURTHER  INFORMATION  CONCERNING  FACTORS  THAT COULD CAUSE  ACTUAL
RESULTS TO DIFFER  MATERIALLY FROM THOSE IN THE  FORWARD-LOOKING  STATEMENTS ARE
CONTAINED FROM TIME TO TIME IN THE COMPANY'S SEC FILINGS.