799231--2/25/2010--ALMOST_FAMILY

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{loss, insurance, financial}

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Described below and elsewhere in this report are risks, uncertainties and other factors that can adversely affect our business, results of operations, cash flow, liquidity or financial condition. Investing in our common stock involves a degree of risk. You should consider carefully the following risks, as well as other information in this filing and the incorporated documents before investing in our common stock. Risks Related to Our Industry Health Care Reform Efforts Currently Underway in Congress The current crisis in world-wide economies and credit and financial markets may adversely affect our future results of operations and financial condition, as well as our ability to access credit and capital. Our profitability depends principally on the level of government-mandated payment rates. Reductions in rates, or rate increases that do not cover cost increases, may adversely affect our business. If any of our agencies fail to comply with the conditions of participation in the Medicare program, that agency could be terminated from the Medicare program, which would adversely affect our net patient service revenue and profitability. We are subject to extensive government regulation, audits and investigations. Any changes to the laws and regulations governing our business, or the interpretation and enforcement of those laws or regulations, could cause us to modify our operations and could negatively impact our operating results. If we are unable to maintain relationships with existing patient referral sources or to establish new referral sources, our growth and profitability could be adversely affected. We are subject to federal and state laws that govern our financial relationships with physicians and other healthcare providers, including potential or current referral sources. We may be subject to substantial malpractice or other similar claims. Delays in reimbursement may cause liquidity problems. Our industry is highly competitive. A shortage of qualified registered nursing staff, physical therapists, occupational therapists and other caregivers could adversely affect our ability to attract, train and retain qualified personnel and could increase operating costs. Risks Related to Our Business We depend on Medicare for the largest portion of our revenues. We have a significant dependence on state Medicaid reimbursement programs Migration of our Medicare beneficiary patients to Medicare managed care providers could negatively impact our operating results. Our growth strategy depends on our ability to manage growing and changing operations. Our growth strategy depends on our ability to develop and to acquire additional agencies on favorable terms and to integrate and operate these agencies effectively. If we are unable to do so, our future growth and operating results could be negatively impacted. We may require additional capital to pursue our acquisition strategy. Our business depends on our information systems. Our inability to effectively integrate, manage, and keep secure our information systems could disrupt our operations. Our clinical software system has been developed in-house. Failure of, or problems with, our system could harm our business and operating results. We depend on outside software providers. Our insurance liability coverage may not be sufficient for our business needs. We have established reserves for Medicare and Medicaid liabilities that may be payable by us in the future. These liabilities may be subject to audit or further review, and we may owe additional amounts beyond what we expect and have reserved. We depend on the services of our executive officers and other key employees. Our operations could be affected by natural disasters. Risks Related to Ownership of Our Common Stock The price of our common stock may be volatile and this may adversely affect our stockholders. Sales of substantial amounts of our common stock, or the availability of those shares for future sale, could adversely affect our stock price and limit our ability to raise capital. We do not anticipate paying dividends on our common stock in the foreseeable future, and you should not expect to receive dividends on shares of our common stock. Our Board of Directors may use anti-takeover provisions or issue stock to discourage control contests.

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799231--2/25/2010--ALMOST_FAMILY_INC