853971--4/17/2006--STANDARD_MANAGEMENT

related topics

{regulation, government, change}

{stock, price, share}

{debt, indebtedness, cash}

{control, financial, internal}

{interest, director, officer}

{financial, litigation, operation}

{competitive, industry, competition}

{acquisition, growth, future}

Our pharmacy business has not been profitable and we expect it to continue to incur losses for at least the next year. Unless we receive a significant cash infusion or significantly increase cash flow from operations, we may not have sufficient cash to meet our cash requirements at some point during 2006. Our independent auditors have expressed substantial doubt regarding the Company s ability to continue as a going concern. We will require additional financing, which may be difficult to obtain. Any such financing in the form of debt will contain restrictive covenants and will require us to utilize cash to service it. Our management team has a limited history of operating a pharmacy business. We are subject to various risks relating to our acquisition strategy. We face uncertainties relating to ongoing litigation that, if decided adversely to us, would have a material adverse impact on our liquidity and financial position. Our profitability and ability to conduct business could be negatively impacted by a change in our relationships with our largest institutional clients. We are subject to significant governmental regulation, and changes in such regulation could have a substantial impact on our profitability. We are dependent on payment or reimbursement from government reimbursement programs, principally Medicare and Medicaid, and the constant changes in the government reimbursement programs pose substantial risk to our results of operations. If we or our client institutions fail to comply with Medicaid and Medicare reimbursement regulations, our revenue could be reduced, we could be subject to penalties and we could lose our eligibility to participate in these programs. If we fail to comply with licensure requirements, fraud and abuse laws, or other applicable laws, we may need to curtail operations, and we could be subject to significant penalties. Our failure to comply with federal or state health care privacy standards could subject us to civil and criminal liability. We are also subject to other state and federal laws that govern the distribution of pharmaceuticals, the enforcement of which could have a material and adverse effect on our profitability. We are also subject to cost controls imposed by non-government reimbursement program payors and pricing changes from our suppliers that could have a material and adverse effect on our profitability. There are few barriers to entry in the institutional pharmacy market, and we may experience unforeseen competition in our markets. Future sales of common stock could depress the price of our common stock. The market price of our common stock is volatile. We cannot guarantee that our securities will continue to meet the listing and maintenance criteria for the Nasdaq Stock Market.

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853971--4/17/2006--STANDARD_MANAGEMENT_CORP