1363851--3/17/2008--SXC_Health_Solutions

related topics

{acquisition, growth, future}

{regulation, government, change}

{system, service, information}

{tax, income, asset}

{customer, product, revenue}

{personnel, key, retain}

{property, intellectual, protect}

{loss, insurance, financial}

{cost, operation, labor}

{product, candidate, development}

{stock, price, operating}

{stock, price, share}

{capital, credit, financial}

{competitive, industry, competition}

{regulation, change, law}

Future changes in laws or regulations in the healthcare industry could adversely affect our business. Demands by our customers for enhanced service levels or possible loss or unfavorable modification of contracts with our customers could negatively affect our profitability. Due to the term of our contracts with customers, if we are unable to renew those contracts or replace any lost customers, our future business and results of operation would be adversely affected. Our business strategy of expansion through acquisitions may result in unexpected integration costs, loss of acquired business and/or dilution to existing shareholders. Our future success depends upon the ability to grow, and if we are unable to manage our growth effectively, we may incur unexpected expenses and be unable to meet our customers requirements. Changes in the industry pricing benchmarks could adversely affect our financial performance. If we lose relationships with one or more key pharmaceutical manufacturers or if rebate payments we receive from pharmaceutical manufacturers decline, our business, results of operations, financial condition or cash flows could suffer. Government efforts to reduce health care costs and alter health care financing practices could lead to a decreased demand for our services or to reduced rebates from manufacturers. If we are unable to compete successfully, our business, financial condition and results of operations will be adversely affected. Our software products are susceptible to undetected errors or similar problems, which may cause our systems to fail to perform properly. We have limited experience with our informedRx expanded service offering, which could constrain our profitability. We may be liable for the consequences of the use of incorrect or incomplete data that we provide. It is difficult to predict the length of the sales cycle for our healthcare software solutions. If we become subject to liability claims that are not covered by our insurance policies, we may be liable for damages and other expenses that could have a material adverse effect on our business, results of operations, financial condition or cash flows. Our operations are vulnerable to interruption by damage from a variety of sources, many of which are not within our control. We are dependent on key customers. Our business depends on our intellectual property rights, and if we are unable to protect them, our competitive position may suffer. We may become subject to claims that we infringe the intellectual property rights of others, which, even if not successful, could have a material adverse impact on our business. We may be unable to obtain, retain the right to use or successfully integrate third-party licensed technologies necessary for the use of our technology, which could prevent us from offering the products and services which depend upon those technologies. We are subject to a number of existing laws, regulations, and industry initiatives, non-compliance with which could adversely affect our business, financial condition and results of operations. If our security is breached, outsiders could gain access to information we are required to keep confidential, we could be subject to liability and customers could be deterred from using our services. We are highly dependent on senior management and key employees. Competition for our employees is intense, and we may not be able to attract and retain the highly skilled employees that we need to support our business. Our actual financial results may vary from our publicly disclosed forecasts. We may experience fluctuations in our financial results because of timing issues associated with our revenue recognition policy. We may not have sufficient liquidity to fund our future capital requirements, and we may not be able to access additional capital. If we are required to write off goodwill or other intangible assets, our financial position and results of operations would be adversely affected. Our tax filings are subject to possible review, audit and/or reassessment and we may be liable for additional taxes, interest or penalties if the final tax outcome is different from those provided for in our filings. If we are characterized as a passive foreign investment company ( PFIC ), our shareholders may be subject to adverse US federal income tax consequences. We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses to the Company. RISKS RELATED TO THE NMHC ACQUISITION Our business may be adversely affected by the NMHC Acquisition and/or the failure to consummate the acquisition. The consummation of the NMHC Acquisition is subject to a number of conditions; if these conditions are not satisfied or waived, we will not be able to consummate the transactions contemplated by the Merger Agreement. The NMHC Acquisition is the largest acquisition we have proposed to date. We will face challenges integrating NMHC s operations and technology and may not realize anticipated benefits. If we experience a high turnover rate of NMHC employees after the acquisition, we may not be able to effectively integrate their operations and technology. We may fail to attract new customers or lose current customers as a result of the NMHC Acquisition. The market price of our common shares may decline following the transaction. The consummation of the NMHC Acquisition and future acquisitions may result in potentially dilutive issuances of our common stock. If the NMHC Acquisition is completed we will assume all of NMHC s liabilities, including contingent liabilities. If these liabilities are greater than expected, or if there are unknown NMHC obligations, our business, financial condition and results of operations could be adversely affected. Failure to obtain the approval of governmental authorities or consent of third parties under contracts of NMHC could have an adverse effect on our business following completion of the Merger. Indebtedness incurred in connection with the NMHC Acquisition could have an adverse effect on our operations and financial condition.

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1363851--3/17/2008--SXC_Health_Solutions_Corp.