1363851--3/5/2010--SXC_Health_Solutions

related topics

{regulation, government, change}

{system, service, information}

{customer, product, revenue}

{acquisition, growth, future}

{property, intellectual, protect}

{personnel, key, retain}

{loss, insurance, financial}

{competitive, industry, competition}

{stock, price, operating}

{product, liability, claim}

{regulation, change, law}

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 at the same service levels previously provided, or at all, or replace any lost customers, our future business and results of operation would be adversely affected. We are dependent on key customers. Our business strategy of expansion through acquisitions may result in unexpected integration costs and challenges, 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 and rebate processing service providers decline, our business, results of operations, financial condition or cash flows could be negatively impacted. 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 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. Due to complex calculations within our customer contracts, we may be required to issue significant credit memos to our customers that could adversely affect our business, profitability and growth prospects. Failure of our health plan customers to pay for prescription claims or a delay in payment of those claims could have a material adverse effect on our profitability. 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. 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 licenses for the use in our solutions, which could prevent us from offering the products and services which use 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. Due to the complex laws and regulations governing the Medicare program in which we participate, our recorded estimates may materially change in the future, and our failure to fully comply with such laws and regulations may adversely impact our business and financial results. Uncertainty regarding the impact of Medicare Part D may adversely impact our business and financial results. If our security is breached, outsiders could gain access to information we are required to keep confidential, and 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. Actual financial results may vary from our publicly disclosed forecasts.

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1363851--3/5/2010--SXC_Health_Solutions_Corp.