OptiCare Health Systems Announces Sale of Its Distribution Division, Receives Additional Investment of $4.445 Million and Names

OptiCare Health Systems Announces Sale of Its Distribution
Division, Receives Additional Investment of $4.445 Million and Names New Chief
Executive Officer 


WATERBURY, Conn., Jan. 13  /PRNewswire-FirstCall/ -- OptiCare Health Systems,
Inc. (AMEX:OPT) today announced the sale of all of the assets and certain
liabilities of its Distribution Division to the Company's Chief Executive
Officer, Dean J. Yimoyines, M.D., who resigned contemporaneously with the
closing of the transaction.  The Distribution Division was sold for $4,150,000
less a working capital adjustment.  The Distribution Division consists of the
Company's contact lens distributor, Wise Optical and its Optical Buying Group
both located in Yonkers, New York.  The Company also announced that it received
a $4,445,000 equity investment, $4,000,000 from Palisade Concentrated Equity
Partnership, L.P., its majority stockholder, and $445,000 from Linda Yimoyines,
wife of Dean J. Yimoyines.  The investors received 280,618 shares of newly
created Series D Preferred Stock.  The per share purchase price of the Series D
preferred stock was  $15.84 and is convertible into 40 shares of common stock
at the option of the holder.  The price was based on the average closing market
price of the Company's common stock for the five days preceding the
transaction.  The sale of the Distribution Division coupled with the equity
investment from Palisade and Ms. Yimoyines will significantly reduce the
Company's senior debt and help to strengthen its balance sheet.  The Company
noted that since January of 2002 it has been able to reduce its senior debt
from approximately $30 million to approximately $4 million after giving effect
to this transaction.

In addition to his offices of President and General Counsel, Christopher J.
Walls was named Chief Executive Officer.  The Company stated Dr. Yimoyines but
will continue as a Director and in his role as President and Chief Executive
Officer of the Company's medical affiliate, OptiCare, P.C.  Dr. Yimoyines
stated that he is "very excited to begin this new venture and anticipates a
very positive outcome.  Further, this transaction will allow me to return to my
entrepreneurial roots while still providing guidance and counsel to OptiCare." 
Mr. Walls stated "I welcome the opportunity to lead the Company and believe
this transaction strengthens the Company's financial position and creates a
solid foundation for growth."  Mr. Walls further noted, "the Company has
divested itself of non-core underperforming assets and dramatically decreased
its debt over the past few years and can now focus on improving operating
efficiencies and growth in its core businesses."

The Company also announced that in relation to these transactions, it amended
its Second Amended and Restated Revolving Credit, Term Loan and Security
Agreement with its senior lender to reduce the tangible net worth covenant for
December 2004 and January 2005 from ($3,000,000) to ($6,500,000). Under the
terms of the Amended Credit Facility and Term Loan, the Company must maintain a
tangible net worth of at least ($3,000,000) after February 1, 2005. It also
received consent from its senior lender for the transactions and as a condition
to such consent, the Company agreed to use the proceeds from the transactions
to reduce Company debt.

About OptiCare Health Systems, Inc.

OptiCare Health Systems, Inc. is an integrated eye care services company
focused on vision benefits management and consumer vision services, including
medical, surgical and optometric services and optical retail.

This press release contains forward-looking statements made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995,
including statements regarding the expected benefits of the transactions and
statements regarding OptiCare's ability to continue to strengthen its financial
position and operations, grow its core business, and capitalize on strategic
growth opportunities. OptiCare's actual results could differ materially from
those expressed or indicated by any forward-looking statements. Factors that
could cause or contribute to such differences include, but are not limited to,
the risk that OptiCare may not retain and attract qualified employees, OptiCare
may not realize one or more of the expected benefits and efficiencies of the
transaction, the impact of current and future governmental regulations,
OptiCare's ability to successfully and profitably manage its operations and
growth of the operations, if any, the risks related to managed care
contracting, and the ability of OptiCare to successfully raise capital on
commercially reasonable terms, if at all. Investors are cautioned that all
forward-looking statements involve risks and uncertainties, including those
risks and uncertainties detailed in OptiCare's filings with the Securities and
Exchange Commission, including its Annual Report on Form 10-K for the fiscal
year ending December 31, 2003. Forward-looking statements speak only as of the
date they are made, and OptiCare undertakes no duty or obligation to update any
forward-looking statements in light of new information or future events. 

DATASOURCE: OptiCare Health Systems, Inc.



CONTACT:  William A. Blaskiewicz, Chief Financial Officer of OptiCare

Health Systems, [phone]

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