884064--3/16/2007--OPTION_CARE

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Changes in reimbursement rates from Medicare and Medicaid for the services we provide may cause our revenue and profitability to decline. Our actual financial results might vary from our publicly disclosed results and forecasts. Our gross profit could decrease if there are changes in the calculation of Average Wholesale Price ( AWP ) for the prescription drugs we sell, or if managed care organizations and other private payors replace AWP with a different reimbursement system. We are subject to pricing pressures and other risks involved with third party payors. If we do not adequately respond to competitive pressures, demand for our products and services could decrease. Some biotech pharmaceutical suppliers in the specialty pharmacy industry have chosen to limit the number of distributors of their products. If we are not selected as a preferred distributor of one or more of our core products, our business and results of operations could be seriously harmed. Any termination of, or adverse change in, our relationships with a single source product manufacturer or the loss of supply of a specific, single source specialty drug could have a material adverse effect on our operations. We have recently experienced rapid growth by acquisitions. If we fail to manage our growth effectively, our business could be disrupted and our operating results could suffer. If we are unable to acquire additional pharmacy facilities on favorable terms, we will be unable to execute our acquisition and development strategy. An impairment of goodwill on our financial statements could adversely affect our financial position and results of operations. Changes in state and federal government regulation could restrict our ability to conduct our business. We may become subject to federal and state investigations. We may be subject to liability for the services we offer and the products we sell. Labor strikes or similar work stoppages within the companies that provide our local and national distribution services could have a negative impact on our results of operations. Our image and reputation may be harmed by actions taken by our franchisees that are outside of our control. Our gross profit margins may decline if our franchise royalties are reduced. The loss of one or more of our key employees could harm our operations. The current or future shortage in licensed pharmacists, nurses and other clinicians could adversely affect our business. The market price of our common stock may experience substantial fluctuations for reasons over which we have little control. Increases in the per share market price of our common stock in future periods could result in dilution of our earnings per share. We may not have the ability to raise the funds to purchase our outstanding convertible senior notes on the purchase dates or upon a fundamental change or to pay the cash payment due upon conversion. Our leverage, primarily relating to our outstanding 2.25% convertible senior notes, may harm our financial condition and results of operations. Our certificate of incorporation, our bylaws, and Delaware law contain provisions that could discourage a change in control.

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884064--3/16/2007--OPTION_CARE_INC/DE