NATURE OF BUSINESS

Corporate Organization and Business

BioScrip, Inc. and subsidiaries (the “Company” or “BioScrip”) is a national provider of infusion service that partners with physicians, hospital systems, skilled nursing facilities, healthcare payors and pharmaceutical manufacturers to provide patients access to post-acute care services. The Company operates with a commitment to bring customer-focused pharmacy and related healthcare infusion therapy services into the home or alternate-site setting. By collaborating with the full spectrum of healthcare professionals and the patient, the Company aims to provide cost-effective care that is driven by clinical excellence, customer service and values that promote positive outcomes and an enhanced quality of life for those whom we serve.

The Company’s platform provides nationwide service capabilities and the ability to deliver clinical management services that offer patients a high-touch, community-based and home-based care environment. The Company’s core services are provided in coordination with, and under the direction of, the patient’s physician. The Company's multidisciplinary team of clinicians, including pharmacists, nurses, dietitians and respiratory therapists, work with the physician to develop a plan of care suited to the patient’s specific needs. Whether in the home, physician office, ambulatory infusion center, skilled nursing facility or other alternate sites of care, the Company provides products, services and condition-specific clinical management programs tailored to improve the care of individuals with complex health conditions such as gastrointestinal abnormalities, infectious diseases, cancer, multiple sclerosis, organ and blood cell transplants, bleeding disorders, immune deficiencies and heart failure.

On August 27, 2015, the Company completed the sale of substantially all of the Company’s PBM Services segment (the “PBM Business”) to ProCare Pharmacy Benefit Manager Inc. (see Note 6 - Discontinued Operations). As a result of the sale of the PBM Business, the Company no longer has multiple operating segments. The change reflects how the Company's chief operating decision maker reviews the Company’s results in terms of allocating resources and assessing performance.

Basis of Presentation

The Company’s Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).

Reclassifications

With the sale of the PBM Business on August 27, 2015 and the Company’s Home Health Services segment (the “Home Health Business”) on March 31, 2014, all prior period financial statements have been reclassified to include the PBM Business and Home Health Business as discontinued operations.

During 2015, the Company reclassified the statement of operations to reflect the information that the Company believes to be most relevant to users of the financial statements. All of the prior period financial statements were reclassified to reflect the classification change. The reclassification of the statement of operations includes:


•	Product revenue and service revenue in the former statement of operations are now grouped to net revenue with the impact of the sale of PBM Business; Cost of product revenue and cost of service revenue in the former statement of operations are grouped to net cost of revenue (excluding depreciation expense).


•	Depreciation expense included separately in cost of product revenue and selling, general and administrative expenses in the former statement of operations is now grouped in line item: depreciation and amortization expense.


•	Selling, general and administrative expenses in the former statement of operations is split into two line items: other operating expenses, and general and administrative expenses; In connection with this reclassification, the Company no longer allocates general and administrative expenses to field office expenses.


•	Acquisition and integration expenses, restructuring and other expenses, and change in fair value of contingent consideration in the former statement of operations are grouped to one line item: Restructuring, integration expenses, and other expenses, net.


•	Interest expense and loss on extinguishment of debt in the former statement of operations are grouped to one line item: interest expense, net.