1056904--2/17/2006--RADIATION_THERAPY_SERVICES

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Risks Related to Our Business We depend on payments from government Medicare and Medicaid programs for a significant amount of our revenue and our business could be materially harmed by any changes that result in reimbursement reductions. If payments by managed care organizations and other commercial payors decrease, our revenue and profitability could be adversely affected. We have potential conflicts of interest relating to our related party transactions which could harm our business. In certain states we depend on administrative services agreements with professional corporations, including related party professional corporations, and if we are unable to continue to enter into them or they are terminated, we could be materially harmed. We depend on recruiting and retaining radiation oncologists and other qualified healthcare professionals for our success and our ability to enforce the non-competition covenants with radiation oncologists. We depend on our senior management and we may be materially harmed if we lose any member of our senior management. A significant number of our treatment centers are concentrated in certain states, particularly Florida, which makes us particularly sensitive to regulatory, economic and other conditions in those states. Our growth strategy depends in part on our ability to acquire and develop additional treatment centers on favorable terms. If we are unable to do so, our future growth could be limited and our operating results could be adversely affected. We may not be able to grow our business effectively or successfully implement our growth plans if we are unable to recruit additional management and other personnel. We may encounter numerous business risks in acquiring and developing additional treatment centers, and may have difficulty operating and integrating those treatment centers. We may be subject to actions for false claims if we do not comply with government coding and billing rules which could harm our business. State law limitations and prohibitions on the corporate practice of medicine may materially harm our business and limit how we can operate. If we fail to comply with the laws and regulations applicable to our treatment center operations, we could suffer penalties or be required to make significant changes to our operations. If we fail to comply with the federal anti-kickback statute, we could be subject to criminal and civil penalties, loss of licenses and exclusion from the Medicare and Medicaid programs, which could materially harm us. If we fail to comply with the provision of the Civil Monetary Penalties Law relating to inducements provided to patients, we could be subject to civil penalties and exclusion from the Medicare and Medicaid programs, which could materially harm us. Our business could be materially harmed by future interpretation or implementation of state laws regarding prohibitions on fee-splitting. If our operations in New York are found not to be in compliance with New York law, we may be unable to continue or expand our operations in New York. If a federal or state agency asserts a different position or enacts new laws or regulations regarding illegal payments under the Medicare, Medicaid or other governmental programs, we may be subject to civil and criminal penalties, experience a significant reduction in our revenue or be excluded from participation in the Medicare, Medicaid or other governmental programs. If we fail to comply with physician self-referral laws as they are currently interpreted or may be interpreted in the future, or if other legislative restrictions are issued, we could incur a significant loss of reimbursement revenue. Our costs and potential risks have increased as a result of the regulations relating to privacy and security of patient information. Efforts to regulate the construction, acquisition or expansion of healthcare treatment centers could prevent us from developing or acquiring additional treatment centers or other facilities or renovating our existing treatment centers. Our business may be harmed by technological and therapeutic changes. We maintain a significant amount of debt to further our business or growth strategies. We may need to raise additional capital, which may be difficult to obtain at attractive prices and which may cause us to engage in financing transactions that adversely affect our stock price. Our information systems are critical to our business and a failure of those systems could materially harm us. Our financial results could be adversely affected by the increasing costs of professional liability insurance and by successful malpractice claims. The radiation therapy market is highly competitive. Our financial results may suffer if we have to write-off goodwill or other intangible assets. Our failure to comply with laws related to hazardous materials could materially harm us. Because our principal shareholders and management own a large percentage of our common stock, they will collectively be able to determine the outcome of all matters submitted to shareholders for approval regardless of the preferences of our other shareholders. Our stock price may fluctuate and you may not be able to resell your shares of our common stock at or above the price you paid. Sales of substantial amounts of our common stock, by our senior management shareholders could adversely affect our stock price and limit our ability to raise capital. Florida law and certain anti-takeover provisions of our corporate documents and our executive employment agreements could entrench our management or delay or prevent a third party from acquiring us or a change in control even if it would benefit our shareholders. Other than S Corporation distributions and our special distribution, we have not paid dividends and do not expect to in the future, which means that the value of our shares cannot be realized except through sale. If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results which could subject us to regulatory sanctions, harm our business and operating results and cause the trading price of our stock to decline. We have treatment centers in Florida and other areas that could be disrupted or damaged by hurricanes.

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1056904--2/17/2006--RADIATION_THERAPY_SERVICES_INC