1009379--3/6/2008--METROPOLITAN_HEALTH_NETWORKS

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{system, service, information}

{cost, contract, operation}

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{competitive, industry, competition}

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Our Operations are Dependent on Humana, Inc. There Can be No Assurance that We Will be Successful in Our Operation of the HMO. Because Most of Our Revenue Is Established by Contract and Cannot Be Modified During the Contract Terms, Our Operating Margins Could be Negatively Impacted if We Are Unable to Manage Our Medical Expenses Effectively. If Our HMO Contracts Are Not Renewed or Are Terminated, the HMO s Business Would Be Negatively Impacted. A Failure to Estimate Incurred But Not Reported Medical Benefits Expense Accurately Could Affect Our Profitability. Reductions in Government Funding for Medicare Programs Could Adversely Affect Our Results of Operations The MMA Materially Impacted Our Operations and Could Reduce Our Profitability and Increase Competition for Customers. CMS s Risk Adjustment Payment System and Budget Neutrality Payment Adjustments Make Our Revenue and Profitability Difficult to Predict and Could Result In Material Retroactive Adjustments to Our Results of Operations. A Disruption in Our Healthcare Provider Networks Could Have an Adverse Effect on Our Operations and Profitability. A Disruption in Humana s Healthcare Provider Networks Could Have an Adverse Effect on Our Operations and Profitability. We Depend on Third Parties to Provide Us with Crucial Information and Data. Competition For Physician Practice Group Acquisition and Other Factors May Impede Our Ability to Acquire Other Physician Practices and May Inhibit Our Growth. Claims Relating to Medical Malpractice and Other Litigation Could Cause Us to Incur Significant Expenses. Our Industry is Already Very Competitive; Increased Competition Could Adversely Affec t Our Revenue; the PSN Competes with Other Service Providers for Humana s Business. We are Dependent upon Certain Executive Officers and Key Management Personnel for Our Future Success. Our Business Activities Are Highly Regulated and New and Proposed Government Regulation or Legislative Reforms Could Increase Our Cost of Doing Business, and Reduce Our Customer Base, Profitability, and Liquidity. The Health Care Industry is Highly Regulated. Our or Humana s Failure to Comply with Laws or Regulations, or a Determination that in the Past We Had Failed to Comply with Laws or Regulations, Could Have an Adverse Effect on Our Business, Financial Condition and Results of Operations If the HMO Is Required to Maintain Higher Statutory Capital Levels for Our Existing Operations or if We Are Subject to Additional Capital Reserve Requirements as We Pursue New Business Opportunities, Our Liquidity May Be Adversely Affected. We Are Required to Comply With Laws Governing the Transmission, Security and Privacy of Health Information That Require Significant Compliance Costs, and Any Failure to Comply With These Laws Could Result in Material Criminal and Civil Penalties. ent Challenges Faced by CMS Related to Implementation of Part D May Temporarily Disrupt or Adversely Affect the PSN s and the HMO s Relationships with their We May Be Unsuccessful in Implementing Our Growth Strategy If We Are Unable to Expand into New Service Areas in a Timely Manner in Accordance with Our Strategic Plans. We have Anti-Takeover Provisions Which May Make it Difficult to Acquire Us or Replace or Remove Current Management. Our Quarterly Results Will Likely Fluctuate, Which Could Cause the Value of Our Common Stock to Decline. The Market Price of Our Common Stock Could Fall as a Result of Sales of Shares of Common Stock in the Market or the Price Could Remain Lower because of the Perception that Such Sales May Occur. Delisting of Our Common Stock from AMEX Would Adversely Affect Us and Our Shareholders. Our Common Stock May Not be Excepted from Penny Stock Rules, Which May Adversely Affect the Market Liquidity of Our Common Stock.

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1009379--3/6/2008--METROPOLITAN_HEALTH_NETWORKS_INC