PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
SAFE HARBOR COMPLIANCE STATEMENT
FOR FORWARD LOOKING STATEMENTS

In passing the Private Securities Litigation Reform Act of 1995 (the "Reform 
Act"), 15 U.S.C.A. Sections 77z 2 and 78u 5 (Supp. 1996), Congress encouraged 
public companies to make "forward looking statements" by creating a safe 
harbor to protect companies from securities law liability in connection with 
forward looking statements.   Acadia National Health Systems, Inc. ("Acadia" 
or the "Company") intends to qualify both its written and oral forward looking 
statements for protection under the Reform Act and any other similar safe 
harbor provisions. 

"Forward looking statements" are defined by the Reform Act. Generally, forward 
looking statements include expressed expectations of future events and the 
assumptions on which the expressed expectations are based.  All forward 
looking statements are inherently uncertain as they are based on various 
expectations and assumptions concerning future events and they are subject to 
numerous known and unknown risks and uncertainties which could cause actual 
events or results to differ materially from those projected. Due to those 
uncertainties and risks, the investment community is urged not to place undue 
reliance on written or oral forward looking statements of Acadia.   The 
Company undertakes no obligation to update or revise this Safe Harbor 
Compliance Statement for Forward Looking Statements (the "Safe Harbor 
Statement") to reflect future developments. In addition, Acadia undertakes no 
obligation to update or revise forward looking statements to reflect changed 
assumptions, the occurrence of unanticipated events or changes to future 
operating results over time.

Acadia provides the following risk factor disclosure in connection with its 
continuing effort to qualify its written and oral forward looking statements 
for the safe harbor protection of the Reform Act and any other similar safe 
harbor provisions. Important factors currently known to management that could 
cause actual results to differ materially from those in forward looking 
statements include the disclosures contained in the Quarterly Report on Form 
10 KSB to which this statement is appended as an exhibit and also include the 
following:

SUBSTANTIAL LEVERAGE; ABILITY TO SERVICE DEBT

The Company has substantial indebtedness and, as a result, significant debt 
service obligations. The Company's ability to make payments on its debt 
obligations will depend on its future operating performance, which will be 
affected by prevailing economic conditions and financial, business and other 
factors, certain of which are beyond the Company's control. If the Company is 
unable to service its indebtedness, it will be required to adopt alternative 
strategies, which may include actions such as reducing or delaying capital 
expenditures, selling assets, restructuring or refinancing its indebtedness or 
seeking additional equity capital. There can be no assurance that any of these 
strategies could be effected on satisfactory terms.

The degree to which the Company is leveraged could have important 
consequences, including: (i) the Company's ability to obtain additional 
financing in the future for working capital, capital expenditures, 
acquisitions or other general corporate purposes may be impaired; (ii) a 
substantial portion of the Company's cash flow from operations may be 
dedicated to the payment of principal and interest on its indebtedness, 
thereby reducing the funds available to the Company for its operations; (iii) 
the Company's existing indebtedness contains, and future financings are 
expected to contain, financial and other restrictive covenants, including 
without limitation those restricting the incurrence of additional 
indebtedness, the creation of liens, the payment of dividends, sales of 
assets, capital expenditures, and prepayment of indebtedness and those 
requiring maintenance of minimum net worth, minimum EBITDA and minimum 
interest coverage and limiting leverage; (iv) certain of the Company's 
borrowings are and will continue to be at variable rates of interest which 
expose the Company to the risk of increases in interest rates; and (v) the 
Company may be more leveraged than certain of its competitors, which may place 
the Company at a relative competitive disadvantage and make the Company more 
vulnerable to changes in its industry and changing economic conditions. As a 
result of the Company's level of indebtedness, its financial capacity to 
respond to market conditions, extraordinary capital needs and other factors 
may be limited.

LIQUIDITY

The Company expects to consummate the sale of equity in connection with a 
planned secondary offering prior to September 30, 1999 and to use a portion of 
the net proceeds from the sale to pay off indebtedness. There can be no 
assurance that the sale will close by such date or at all. 

LITIGATION AND GOVERNMENT INVESTIGATIONS

Numerous federal and state civil and criminal laws govern medical billing 
activities. In general, these laws provide for various fines, penalties, 
multiple damages, assessments and sanctions for violations, including possible 
exclusion from Medicare, Medicaid and certain other federal 
and state healthcare programs.

The Company and its clients from time to time anticipate that they will 
receive in the future, official inquiries (including subpoenas, search 
warrants, as well as informal requests) concerning particular billing 
practices related to the Company and its many clients.

EVOLVING INDUSTRY STANDARDS; RAPID TECHNOLOGICAL CHANGES

Acadia's success in its business will depend in part upon its continued 
ability to enhance its existing products and services, to introduce new 
products and services quickly and cost effectively to meet evolving customer 
needs, to achieve market acceptance for new product and service offerings and 
to respond to emerging industry standards and other technological changes. 
There can be no assurance that Acadia will be able to respond effectively to 
technological changes or new industry standards.  Moreover, there can be no 
assurance that competitors of Acadia will not develop competitive products, or 
that any such competitive products will not have an adverse effect upon 
Acadia's operating results.

The Company intends further to refine, enhance and develop certain of the 
Company's existing software and billing systems and to change all of the 
Company's billing and accounts receivable management services operations over 
to the Company's most proven software systems and technology to reduce the 
number of systems and technologies that must be maintained and supported.   
Moreover, management intends to continue to implement "best practices" and 
other established process improvements in its operations going forward. There 
can be no assurance that the Company will be successful in refining, enhancing 
and developing its software and billing systems going forward, that the costs 
associated with refining, enhancing and developing such software and systems 
will not increase significantly in future periods, that the Company will be 
able successfully to migrate the Company's billing and accounts receivable 
management services operations to the Company's most proven software systems !
and technology or that the Company's existing software and technology will not 
become obsolete as a result of ongoing technological developments in the 
marketplace.

YEAR 2000

It is possible that the Company's currently installed computer systems, 
software products or other business systems, or those of the Company's 
customers, vendors or resellers, working either alone or in conjunction with 
other software or systems, will not accept input of, store, manipulate and 
output dates for the year 2000 or thereafter without error or interruption 
(commonly known as the "Year 2000" problem). The Company has conducted a 
review of its business systems, including its computer systems, and is 
querying its customers, vendors and resellers as to their progress in 
identifying and addressing problems that their computer systems may face in 
correctly interrelating and processing date information as the year 2000 
approaches and is reached. Through its review, the Company has identified a 
number of older legacy systems that will be abandoned in favor of a limited 
number of more efficient processing systems, rather than make all the systems 
Year 2000 compatible.  Customers, vendors and resellers have been identified 
and requests for information distributed regarding the Year 2000 readiness of 
such parties. 

Responses are expected through the first quarter of 1999. The Company will 
develop contingency plans during the first quarter of 1999 through the second 
quarter of 1999 in response to assessments of the Year 2000 readiness of 
customers, vendors and resellers. The estimated cost of the Company's Year 2000 
efforts is $25,000 to $30,000  over 1998 and 1999, the majority of which 
represents redirection of internal resources. However, there can be no assurance
that the Company will identify all such Year 2000 problems in its computer 
systems or those of its customers, vendors or resellers in advance of their 
occurrence or that the Company will be able to successfully remedy any problems 
that are discovered. The expenses of the Company's efforts to identify and 
address such problems, or the expenses or liabilities to which the Company may 
become subject as a result of such problems, could have a material adverse 
effect on the Company's business, financial condition and results of operations.
The revenue stream and financial stability of existing customers may be 
adversely impacted by Year 2000 problems, which could cause fluctuations in the 
Company's revenue. In addition, failure of the Company to identify and remedy 
Year 2000 problems could put the Company at a competitive disadvantage 
relative to companies that have corrected such problems.

COMPETITION; INDUSTRY AND MARKET CHANGES

The business of providing billing and management services to physicians and 
hospitals is highly competitive.  Acadia competes with certain national and 
regional physician and hospital reimbursement organizations and billing 
businesses (including local independent operating  companies), certain 
national information and data processing organizations and certain physician 
groups and hospitals that provide their own business management services. 
Potential industry and market changes that could adversely affect the billing 
aspects of Acadia's business include (i) a significant increase in managed 
care providers relative to conventional fee for service providers, potentially 
resulting in substantial changes in the medical reimbursement process, or the 
Company's failure to respond to such changes and (ii) new alliances between 
healthcare providers and third party payors in which healthcare providers are 
employed by such third party payors.   The business of providing application 
software, information technology and consulting services is also highly 
competitive and Acadia faces competition from certain national and regional 
companies in connection with its technology operations. Certain of Acadia's 
competitors have longer operating histories and greater financial, technical 
and marketing resources than Acadia.  There can be no assurance that 
competition from current or future competitors will not have a material 
adverse effect upon Acadia.

The Company's business is affected by, among other things, trends in the U.S. 
healthcare industry.  As healthcare expenditures have grown as a percentage of 
the U.S. Gross National Product, public and private healthcare cost 
containment measures have applied pressure to the margins of healthcare 
providers.

Historically, some healthcare payors have paid the prices established by 
providers while other healthcare payors, notably government agencies and 
managed care companies, have paid less than established prices (in many cases 
less than the average cost of providing the services). As a consequence, 
prices charged to healthcare payors willing to pay established prices have 
increased in order to recover the cost of services purchased by government 
agencies and others but not paid for by them (i.e., "cost shifting"). The 
increasing complexity in the reimbursement system and assumption of greater 
payment responsibility by individuals have caused healthcare providers to 
experience increase accounts receivable and bad debt levels and higher 
business office costs. Healthcare providers historically have addressed these 
pressures on profitability by increasing their prices, by relying on 
demographic changes to support increases in the volume and intensity of 
medical procedures and by cost shifting. Notwithstanding the providers' 
responses to these pressures, management believes that the revenue growth 
rate experienced by certain of the Company's clients continues to be adversely 
affected by increased managed care and other industry factors affecting 
healthcare providers in the United States. At the same time, the process of 
submitting healthcare claims for reimbursement to third party payors in 
accordance with applicable industry and regulatory standards continues to 
grow in complexity and to become more costly.  Management believes that 
these trends have adversely affected and could continue to adversely affect 
the revenues and profit margins of the Company's operations.

GOVERNMENTAL INVESTIGATORY RESOURCES AND HEALTHCARE REFORM

The federal government in recent years has placed increased scrutiny on the 
billing practices of healthcare providers and related entities, and 
particularly on possibly fraudulent billing practices. This heightened 
scrutiny has resulted in a number of high profile civil and criminal 
investigations, lawsuits and settlements.

In 1996, Congress enacted the Health Insurance Portability and Accounting Act 
of 1996, Pub. L. No. 104 191, 1996 U.S.C.C.A.N. (110 Sat. 1936) (codified in 
scattered sections of the United States Code, including 18, 26, 29 and 42 
U.S.C.), which includes an expansion of provisions relating to fraud and 
abuse, creates additional criminal offenses relating to healthcare benefit 
programs, provides for forfeitures and asset freezing orders in connection 
with such healthcare offenses and contains provisions for instituting greater 
coordination of federal, state and local enforcement agency resources and 
actions.

In recent years, the focus of healthcare legislation has been on budgetary and 
related funding mechanism issues. Both the Congress and the Clinton 
Administration have made proposals to reduce the rate of increase in projected 
Medicare and Medicaid expenditures and to change funding mechanisms and other 
aspects of both programs. In late 1995, Congress passed legislation that would 
substantially reduce projected expenditure increases and would make 
significant changes in the Medicare and Medicaid programs.  Acadia cannot 
predict the effect of pending legislation, if adopted, on its operations.

A number of states in which Acadia has operations either have adopted or are 
considering the adoption of healthcare reform proposals at the state level.  
Acadia cannot predict the effect of proposed state healthcare reform laws on 
its operations. Additionally, certain reforms are occurring in the healthcare 
market, including certain employer initiatives such as creating purchasing 
cooperatives and contracting for healthcare services for employees through 
managed care companies (including health maintenance organizations), and 
certain provider initiatives such as risk sharing among healthcare providers 
and managed care companies through capitated contracts and integration among 
hospitals and physicians into comprehensive delivery systems. Consolidation of 
management and billing services through integrated delivery systems may result 
in a decrease in demand for Acadia billing services for particular physician 
practices.

EXISTING GOVERNMENT REGULATION

Existing government regulation can adversely affect Acadia's business through, 
among other things, its potential to reduce the amount of reimbursement 
received by Acadia's clients for healthcare services.  Acadia's medical 
billing activities are also governed by numerous federal and state civil and 
criminal laws. In general, these laws provide for various fines, penalties, 
multiple damages, assessments and sanctions for violations, including possible 
exclusion from Medicare, Medicaid and certain other federal and state 
healthcare programs. Submission of claims for services or procedures that are 
not provided as claimed, or which otherwise violate the regulations, may lead 
to civil monetary penalties, criminal fines, imprisonment and/or exclusion 
from participation in Medicare, Medicaid and other federally funded healthcare 
programs. Specifically, the Federal False Claims Act allows a private person 
to bring suit alleging false or fraudulent Medicare or Medicaid claims or other
violations of the statute and for such person to share in any amounts paid to 
the government in damages and civil penalties. Successful plaintiffs can 
receive up to 25 30% of the total recovery from the defendant. Such qui tam 
actions or "whistle blower" lawsuits have increased significantly in recent 
years and have increased the risk that a company engaged in the healthcare 
industry, such as Acadia and many of its customers, may become the subject of 
a federal or state investigation, may ultimately be required to defend a false 
claims action, may be subjected to government investigation and possible 
criminal fines, may be sued by private payors and may be excluded from 
Medicare, Medicaid and/or other federally funded healthcare programs as a 
result of such an action. Some state laws also provide for false claims 
actions, including actions initiated by a qui tam plaintiff.  Any such 
proceeding or investigation could have a material adverse effect upon the 
Company.

The ownership and operation of hospitals is subject to comprehensive 
regulation by federal and state governments which may adversely affect 
hospital reimbursement. Such regulation could have an adverse effect on the 
operations of hospitals in general, and consequently reduce the amount of the 
Company's revenue related to potential hospital clients.

There can be no assurance that current or future government regulations or 
healthcare reform measures will not have a material adverse effect upon 
Acadia's business.

VOLATILITY OF STOCK PRICE 

Acadia believes factors such as the Company's liquidity and financial 
resources, healthcare reform measures and quarter to quarter and year to year 
variations in financial results could cause the market price of Acadia Common 
Stock to fluctuate substantially. Any adverse announcement with respect to 
such matters or any shortfall in revenue or earnings from levels expected by 
Management could have an immediate and material adverse effect on the trading 
price of Acadia Common Stock in any given period.  As a result, the market for 
Acadia Common Stock may experience material adverse price and volume 
fluctuations and an investment in the Company's Common Stock is not suitable 
for any investor who is unwilling to assume the risk associated with any such 
price and volume fluctuations.