In this Annual Report on Form 10-K, the words the “Company”, the “registrant”, “we”, “our”, “us”, “Providence”“ModivCare” and similar terms refer to The Providence Service CorporationModivCare Inc. and, except as otherwise specified herein, to ourits consolidated subsidiaries. When such terms are used in reference to the Company’s common stock, $0.001 par value per share, (theor our “Common Stock)Stock”, we are referring specifically and only to the Series A Convertible Preferred Stock, $0.001 par value per share (the “Preferred Stock”), they refer specifically to The Providence Service Corporation.capital stock of ModivCare Inc.

To fulfill the transportation needs of NETour end-users, we apply our proprietary technology platform to an extensive network of approximately 5,1005,700 transportation resources. This includes our in-network roster of fully contracted third-party transportation providers who operate sedans, wheelchair equipped vehicles, multi-passenger vans and ambulances. Our system also utilizes partnerships with on-demand transportation network companies, mass transit entities, mileage reimbursement programs, taxis and county-based emergency medical service providers. To promote safety, quality and compliance, our in-networkin‑network transportation providers undergo an in-depth credentialing and education process. Our proprietary technology platform is designed to connect with our external partners’ application program interfaces to improve on-time and on-demand performance, provide real time information and analytics (including live vehicle location data), minimize cancellations and better allow for the scale required to provide an effective, nationwide service.

Our transportation management services also include fraud, waste, and abuse prevention and identification through utilization review programs designed to monitor that our transportation services are provided in compliance with Medicaid and Medicare program rules and regulations as well as to remediate issues that are identified. Compliance controls include ongoing monitoring, auditing and remediation efforts, such as validating NET end-user eligibility for the requested date of service and employing a series of gatekeeping questions to checkverify that the treatment type is covered and the appropriate mode of transportation is assigned. We also conduct post-trip confirmations of attendance directly with the healthcare providers for certain repetitive trips, and we employ field monitors to inspect transportation provider vehicles and to observe some transports in real time. Our claims validation process generally limits payment to trips that are properly documented, have been authorized in advance, and are billed at the pre-trip estimated amount. Our claims process is increasingly digital, which provides more protection to member protected health information and reduces the impact on the environment. Transportation providers are able to submit their bills and supporting documentation directly to us through a secured web portal.

Contracts with state Medicaid agencies are typically for three to five years with multiple renewal options. Contracts with MCOs continue until terminated by either party upon reasonable notice (as determined in accordance with the contract),terms of the contract and allow for regular price adjustments based upon utilization and transportation cost. As of December 31, 2017, 30.8%2020, 22.0% of NET ServicesNEMT Segment revenue was generated under state Medicaid contracts that are subject to renewal within the next 12 months. In 2017, NET Services renewedWhile we typically expect to renew these contracts representing 29.5%on an annual basis, we did receive notice from three customers that they were terminating or not renewing their contracts that expired on September 30, November 30 and December 31, 2020, respectively. For the year ended December 31, 2020, we recorded revenue of $40.6 million for these contracts.

The NEMT Segment generated 86.2% of its revenue in such year, including its contract with the New Jersey Department of Human Services, Division of Medical Assistance and Health Services, to provide non-emergency medical transportation management services to Medicaid-eligible New Jersey residents.

Most of our personal care services are provided pursuant to agreements with state and local governmental aging services agencies, Medicaid waiver programs, and home and community based long-term living programs. These agreements generally have an initial term of one to two years and may be terminated with 60 days’ notice. They are typically renewed in 10 countries outsideour experience for one to five-year terms, provided that we have complied with licensing, certification and program standards, and other regulatory requirements.

Our NET Services and Matrix Investment segments (the “U.S. Healthcare Segments”) arebusiness is subject to numerous U.S. federal, state and local laws, regulations and agency guidance (collectively, “Laws”).guidance. These Lawslaws significantly affect the way in which these segmentswe operate various aspects of their businesses. Our U.S. Healthcare Segmentsour business. We must also comply with state and local licensing requirements, state and federal requirements for participation in Medicare and Medicaid, requirements for contracting with MA plans, and contractual requirements imposed upon themus by the federal, state and local agencies and third-party commercial customers to which theywe provide services. Failure to follow the rules and requirements of these programs can significantly affect our U.S. Healthcare Segments’ ability to be paid for the services theywe provide and be authorized to provide services on an ongoing basis.

The Medicare and Medicaid programs are governed by significant and complex Laws.laws. Both Medicare and Medicaid are financed, at least in part, with federal funds. Therefore, any direct or indirect recipients of those funds are subject to federal fraud, waste and abuse Laws.laws. In addition, there are federal privacy and data security Lawslaws that govern the healthcare industry. State Lawslaws primarily pertain to the licensure of certain categories of healthcare professionals and providers and the state’s interest in regulating the quality of healthcare in the state, regardless of the source of payment, but may also include state Lawslaws pertaining to fraud, waste and abuse, privacy and data security Laws,laws, and the state’s regulation of its Medicaid program. Federal and state regulatory laws that may affect our U.S. Healthcare Segments’ businesses,business, include, but are not limited to the following:

A violation of certain of these Lawslaws could result in civil and criminal damages and penalties, the refund of monies paid by government or private payers,payors, our U.S. Healthcare Segments’ exclusion from participation in federal healthcare payerpayor programs, or the loss of our segments’ license to conduct some or all of our business within a particular state’s boundaries. While we believe that our programs are in compliance with these laws, allegations that we failed to comply with these requirements could have a material adverse impact on our business.

Federal healthcare Lawslaws apply in any case in which our U.S. Healthcare Segments are providingwe provide an item or service that is reimbursable or provide information to such segments’our customers that results in reimbursement by a federal healthcare payerpayor program to such segments or to them.us. The principal federal Lawslaws that affect our U.S. Healthcare Segments’ businessesbusiness include those that prohibit the filing of false or improper claims or other data with federal healthcare payerpayor programs, and those thatrequire confidentiality of patient health information, prohibit unlawful inducements for the referral of business reimbursable under federal healthcare payer programs.payor programs and those that prohibit physicians from referring to certain entities if the physician has a financial relationship with that entity.

Under the federal False Claims Act (31 U.S.C. §§ 3729-3733) and similar state Laws,laws, the government may impose civil liability on our U.S. Healthcare Segmentsus if theywe knowingly submit a false claim to the government or cause another to submit a false claim to the government, or knowingly make a false record or statement intended to get a false claim paid by the government. The False Claims Act defines a claim as a demand for money or property made directly to the government or to a contractor, grantee, or other recipient if the money is to be spent on the government’s behalf or if the government will reimburse the contractor or grantee. Liability can be incurred for submitting (or causing another to submit) false claims with actual knowledge or for submitting false claims with reckless disregard or deliberate ignorance. Liability can also be incurred for knowingly making or using a false record or statement to receive payment from the federal government orgovernment; for knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the government.government; or for knowingly noncomplying with a law or regulation that is material to the government’s decision to pay Medicare or Medicaid claims. Consequently, a provider need not take an affirmative action to conceal or avoid an obligation to the government, but the mere retention of an overpayment from the government could lead to potential liability under the False Claims Act.

Many states also have similar false claims statutes. In addition, healthcare fraud is a priority of the U.S. Department of Justice, the U.S. Department of Health and Human Services, (“DHHS”),or DHHS, its program integrity contractors and its Office of Inspector General, the Federal Bureau of Investigation and state Attorneys General. These agencies have devoted a significant amount of resources to investigating healthcare fraud.

If our U.S. Healthcare Segmentswe are ever found to have violated the False Claims Act, theywe could be required to make significant payments to the government (including damages and penalties in addition to the return of reimbursements previously collected) and could be excluded from participating in federal healthcare programs or providing services to entities which contract with those programs. Although our U.S. Healthcare Segmentswe monitor theirour billing practices for compliance with applicable laws, such laws are very complex, and theywe might not be able to detect all errors or interpret such laws in a manner consistent with a court or an agency’s interpretation. While the criminal statutes generally are reserved for instances evidencing fraudulent intent, the civil and administrative penalty statutes are being applied by the federal government in an increasingly broad range of circumstances. Examples of the types of activities giving rise to liability for filing false claims include billing for services not rendered, misrepresenting services rendered (i.e., miscoding), applications for duplicate reimbursement and providing false information that results in reimbursement or impacts reimbursement amounts. Additionally, the federal government takes the position that a pattern of claiming reimbursement for unnecessary services violates these statutes if the claimant should have known that the services were unnecessary. The federal government also takes the position that claiming reimbursement for services that are substandard is a violation of these statutes if the claimant should have known that the care was substandard. Criminal penalties also are available even in the case of claims filed with private insurers if the federal government shows that the claims constitute mail fraud or wire fraud or violate any of the federal criminal healthcare fraud statutes.

State Medicaid agencies and state Attorneys General also have authority to seek criminal or civil sanctions for fraud and abuse violations. In addition, private insurers may bring actions under state false claim laws. In certain circumstances, federal and state laws authorize private whistleblowers to bring false claim or “qui tam” suits on behalf of the government against providers and reward the whistleblower with a portion of any final recovery. In addition, the federal government has engaged a number of private audit organizations to assist it in tracking and recovering claims for healthcare services that may have been improperly submitted.

Governmental investigations and whistleblower “qui tam”qui tam suits against healthcare companies have increased significantly in recent years, and have resulted in substantial penalties and fines and exclusions of persons and entities from participating in government healthcare programs. For more information on the risks related to a failureWhile we believe that our programs are in compliance with these laws, allegations that we failed to comply with applicable government coding and billing rules, see “Risk Factors—Regulatory Risks—Our segments could be subject to actions for false claims or recoupment of funds pursuant to certain audits if they do not comply with government coding and billing rules, whichthese requirements could have a material adverse impact on our segments’ operating results.”business.

Under HIPAA, DHHS issued rules to define and implement standards for the electronic transactions and code sets for the submission of transactions such as claims, and privacy and security of individually identifiable health information in whatever manner it is maintained.

The Final Rule on Enforcement of the HIPAA Administrative Simplification provisions, including the transaction standards, the security standards and the privacy rule, published by DHHS addresses, among other issues, DHHS’s policies for determining violations and calculating civil monetary penalties, how DHHS will address the statutory limitations on the imposition of civil monetary penalties, and various procedural issues. The rule extends enforcement provisions currently

The Health Information Technology for Economic and Clinical Health Act, (“HITECH”),or HITECH, enacted as part of the American Recovery and Reinvestment Act of 2009, extends certain of HIPAA’s obligations to parties providing services to healthcare entities covered by HIPAA known as “business associates,” imposes new notice of privacy breach reporting obligations, extends enforcement powers to state attorney generalsAttorneys General and amends the HIPAA privacy and security laws to strengthen the civil and criminal enforcement of HIPAA. HITECH establishes four categories of violations that reflect increasing levels of culpability, four corresponding tiers of penalty amounts that significantly increase the minimum penalty amount for each violation, and a maximum penalty amount of $1.5 million for all violations of an identical provision. With the additional HIPAA enforcement power under HITECH, the Office offor Civil Rights of the Department of Health and Human ServicesDHHS and states are increasing their investigations and enforcement of HIPAA compliance. Our U.S. Healthcare SegmentsWe have taken steps to ensure compliance with HIPAA and we are monitoring compliance on an ongoing basis.

Additionally, the HITECH Final Rule imposes various requirements on covered entities and business associates, and expands the definition of “business associates” to cover contractors of business associates. Even when our U.S. Healthcare Segmentswe are not operating as covered entities, they may be deemed to be “business associates” for HIPAA rule purposes of such covered entities. Our U.S. Healthcare SegmentsWe monitor their compliance obligations under HIPAA as modified by HITECH, and implement operational and systems changes, associate training and education, conduct risk assessments and allocate resources as needed. Any noncompliance with HIPPAHIPAA requirements could expose such segmentsus to the criminal and increased civil penalties provided under HITECH and require them to incur significant costs in order to seek to comply with its requirements or to remediate potential issues that may arise.

Federal law commonly known as the “Anti-Kickback Statute” prohibits the knowing and willful offer, solicitation, payment or receipt of anything of value (direct or indirect, overt or covert, in cash or in kind) which is intended to induce:

Interpretations of the Anti-Kickback Statute have been very broad and under current Law,law, courts and federal regulatory authorities have stated that the Anti-Kickback Statute is violated if even one purpose (as opposed to the sole or primary purpose) of the arrangement is to induce referrals. Even bona fide investment interests in a healthcare provider may be questioned under the Anti-Kickback Statute if the government concludes that the opportunity to invest was offered as an inducement for referrals.

This act is subject to numerous statutory and regulatory “safe harbors.” Compliance with the requirements of a safe harbor offers defenses against Anti-Kickback Statute allegations. Failure of an arrangement to satisfy all of the requirements of a particular safe harbor does not mean that the arrangement is unlawful. However, itIt may mean, however, that such an arrangement will be subject to scrutiny by the regulatory authorities.

Many states, including some where our U.S. Healthcare Segmentswe do business, have adopted anti-kickback laws that are similar to the federal Anti-Kickback Statute. Some of these state laws are very closely patterned on the federal Anti-Kickback Statute; others, however, are broader and reach reimbursement by private payers.payors. If our U.S. Healthcare Segments’ activities were deemed to be inconsistent with state anti-kickback or illegal remuneration laws, theywe could face civil and criminal penalties or be barred from such activities, any of which could harm such segments’ businesses.us.

If our U.S. Healthcare Segments’ arrangements are found to violate the Anti-Kickback Statute or applicable state laws, these segments,we, along with theirour clients, would be subject to civil and criminal penalties, and these segments’ arrangements wouldpenalties. In addition, implicated contracts may not be legally enforceable, which could materially and adversely affect theirour business. For more information on the risks related to failureWhile we believe that our programs are in compliance with these laws, allegations that we failed to comply with applicable anti-bribery and anti-corruption regulations, see “Risk Factors—Regulatory Risks—Our segments’ businessthese requirements could be subject to civil penalties and loss of business if we fail to comply with applicable bribery, corruption and other regulations governing business with governments.”have a material adverse impact on our business.

Our U.S. Healthcare SegmentsWe may be subject to federal and state statutes banning payments for referrals of patients and referrals by physicians to healthcare providers with whom the physicians have a financial relationship. Section 1877 of the Social Security Act, also known as the “Stark Law”, prohibits physicians from making a “referral” for “designated health services” for

A financial relationship can take the form of a direct or indirect ownership, investment or compensation arrangement. A referral includes the request by a physician for, or ordering of, or the certifying or recertifying the need for, any designated health services.

Certain services that our U.S. Healthcare Segmentswe provide may be identified as “designated health services” for purposes of the Stark Law. Such segments cannot provide assurance that future regulatory changes will not result in other services they provide becoming subject to the Stark Law’s ownership, investment or compensation prohibitions in the future.

Many states, including some states where our U.S. Healthcare Segmentswe do business, have adopted similar or broader prohibitions against payments that are intended to induce referrals of clients. Moreover, many states where such segments operate have laws similar to the Stark Law prohibiting physician self-referrals. While our U.S. Healthcare Segmentswe believe that theyour programs are operating in compliance with the Stark Law, there can be no guaranteethese laws, allegations that violations will not occur. we failed to comply with these requirements could have a material adverse impact on our business.

Our U.S. Healthcare Segments’ programs arebusiness is subject to periodic surveys by government authorities or their contractors and our payors to ensure compliance with various requirements. Regulators conducting periodic surveys often provide reports containing statements of deficiencies for alleged failures to comply with various regulatory requirements. In most cases, if a deficiency finding is made by a reviewing agency, our segmentswe will work with the reviewing agency to agree upon the steps to be taken to bring our program into compliance with applicable regulatory requirements. In some cases, however, an agency may take a number of adverse actions against a program, including:

Agencies and other third-party commercial payerspayors periodically conduct pre-payment or post-payment medical reviews or other audits of our U.S. Healthcare Segments’ claims or other audits in conjunction with their obligations to comply with the requirements of Medicare or Medicaid. In order to conduct these reviews, payerspayors request documentation from our U.S. Healthcare Segmentsus and then review that documentation to determine compliance with applicable rules and regulations, including the eligibility of clients to receive benefits, the appropriateness of the care provided to those clients, and the documentation of that care. Any determination that such segments have not complied with applicable rules and regulations could result in adjustment of payments or the incurrence of fines and penalties, or in situations of significant compliance failures review or non-renewal of related contracts.

Many of our U.S. Healthcare Segments’Matrix’s employees are subject to federal and state laws and regulations governing the ethics and practice of their professions. For example, our mid-level practitioners (e.g., NPs)Nurse Practitioners) are subject to state laws requiring physician supervision and state laws governing mid-level scope of practice. As thephysicians’ use of mid-level practitioners by physicians increases, state governing boards are implementing more robust regulations governing mid-levels and their scope of practice under physician supervision. Our U.S. Healthcare Segments’The ability of Matrix to provide mid-level practitioner services may be restricted by the enactment of new state laws governing mid-level scope of practice and by state agency interpretations and enforcement of such existing laws. In addition, services rendered by mid-level practitioners may not be reimbursed by payors at the same rates as payors may reimburse physicians for the same services. Lastly, professionals who are eligible to participate in Medicare and Medicaid as individual providers must not have been excluded from participation in government programs at any time. Our U.S. Healthcare Segments’The ability of Matrix to provide services depends upon the ability of their personnel to meet individual licensure and other requirements and maintain such licensure in good standing.

On January 30, 2020, the Secretary of the Department of Health and Human Services

These emergency, public health and regulations.executive orders have waived numerous legal requirements while also imposing new legal restrictions. Many public health and executive orders are issued, rescinded or modified with little advance notice. These lawsemergency, public health and regulations significantly affectexecutive orders have created significant uncertainty in the waylegal and operational duties of

On June 23, 2016,The CARES Act established the UK heldProvider Relief Fund that made relief payments to certain health care providers. The purpose of the Provider Relief Fund was to provide funding to health care providers so they could prevent, prepare for, and respond to the coronavirus. Providers who received relief payments are subject to eligibility criteria and specific terms and conditions on the use of relief payments. To receive relief payments, many providers were required to attest to numerous statements regarding accuracy of their application and their compliance with the eligibility criteria and the terms and conditions. Providers’ use of relief payments is limited to health care related expenses or lost revenues that are attributable to coronavirus. Providers are required to have documentation that relief payments were used for those purposes. There is limited guidance concerning what the government might consider a referendumhealth care related expense or lost revenue that was attributable to coronavirus or what type of documentation is adequate.

The Company’s website at www.prscholdings.com provides access to its periodic reports, certain corporate governance documents, press releases, interim shareholder reports and links to its subsidiaries’ websites. The Company makes available to the public on its website at www.modivcare.com its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after it electronically files such material with, or furnishes such material to, the SEC. Copies are also available, without charge, upon request to The Providence Service Corporation, 700 CanalModivCare Inc., 4700 South Syracuse Street, Third Floor, Stamford, CT 06902, (203) 307-2800,Suite 440, Denver, Colorado 80237, (303) 728-7043, Attention: Corporate Secretary. The information contained on our website is not part of, and is not incorporated by reference in, this Annual Report on Form 10-K or any other report or document we file with or furnish to the SEC.

You should consider and read carefully all of the risks and uncertainties described below, as well as the other information included in this Annual Report on Form 10-K, including our consolidated financial statements and related notes. The risks described below have been organized under headings that are provided for convenience and intended to organize the risks and uncertainties into related categories to improve readability for investors; no inference should be drawn, however, that the placement of a risk factor under a particular category means that it is not applicable to another category of risks or that it may be more or less material than another risk factor. Regardless, they are also not the only onesrisks and uncertainties facing us. The occurrence of any of the following risks or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial could materially and adversely affect our business, financial condition and results of operations. This Annual Report on Form 10-K also contains forward-looking statements and estimates that involve risks and uncertainties.uncertainties, as discussed above in this Part I under the caption “Disclosure Regarding Forward-Looking Statements”. Our actual results could differ materially from those anticipated in any forward-lookingforward‑looking statements as a result of specificmany factors, including the risksrisk factors and uncertainties described below.

Our NET Services contracts, and certain WD Services contracts, are subject to frequent renewal.We generate a significant amount of our revenue from a limited number of payors under a relatively small number of contracts. For example, many of the state Medicaid contracts held by NET Services, which represented 55.9% of NET Services revenue for the year ended December 31, 2017, have terms ranging from three to five years and are typically subject to a competitive bidding process near the end of the term. NET Services also contracts with MCOs, which represented 44.1% of NET Services revenue for the year ended December 31, 2017. MCO contracts typically continue until terminated by either party upon reasonable notice (as determined in accordance with the contract). We cannot anticipate if, when or to what extent we will be successful in renewing our state government contracts or retaining our MCO contracts. During 2017, we experienced a decline in operating income as a percentage of revenue due to the nonrenewal of certain state contracts. In addition, with respect to many2020, approximately 31.1% of our contracts, the payer may terminate the contract without cause, at willNEMT Segment revenue was derived from only five payors, and without penaltyone of which, a single state Medicaid agency, contributed 9.5% to the payer, either immediatelyour aggregate NEMT Segment revenue during that period. The loss of, reduction in amounts generated by, or upon the expiration of a short notice periodchanges in the event that, among other reasons, government appropriations supporting the programs serviced by the contract are reducedmethods or eliminated or the payer deemsregulations governing payments for our performance under the contract to be unsatisfactory.

Furthermore, any failure to comply with our contractual obligationsappropriately respond, or the perception of an inadequate response, could cause reputational harm and/or subject us to claims and litigation, either of which could result in addition to providing grounds for immediate termination of the contract for cause, negatively impact our financial performance and damage our reputation, which, in turn, could have a

Since March 2020, we have observed a material reduction in trip volume in our NEMT Segment as a result of state imposed “stay at home” orders, many of which reduced medical services to maintain current contractslife-sustaining programs only (for example, dialysis and chemotherapy). This reduction in trip volume has had a negative financial impact on our transportation providers and we believe that some of our transportation providers may not survive this period of reduced volume. While there has been some increase in trip volume as states have lifted or obtainmodified these restrictions and allowed businesses to reopen, we have not seen trip volumes return to pre-pandemic levels. It is currently expected that trip volumes will remain depressed relative to pre-pandemic levels as states attempt to mitigate the resurgence of the virus or to tamp down the impact of new contracts. The terminationstrains of the virus that have been recently identified in the United States. If trip volumes remain depressed, we will continue to see pressure on our transportation providers and lower revenue. If, on the other hand, trip volumes increase as a result of state reopening measures, depending on the period of time over which this increase in volume occurs, we may face difficulty meeting volume demands due to the capacity constraints within our network of transportation providers. Additionally, there may be an increase in the required level of service for those utilizing NEMT services during the pandemic as a result of a contractsicker population or in an effort to reduce the potential transmission of COVID-19 or any of its variants. As trip volumes increase, we may face staffing difficulties in our contact centers as the recruitment of potential employees may be challenging amid health concerns and other factors related to the pandemic, which could negatively impact the customer and member experience while interfacing with our contact centers and materially adversely affect our reputation and results of operations.

Prompt billing and collection are important factors in our liquidity. Billing and collection of our accounts receivable are subject to the complex regulations that govern Medicare and Medicaid reimbursement and rules imposed by nongovernment payors. Our inability to bill and collect on a timely basis pursuant to these regulations and rules could subject us to liabilitiespayment delays that could have a material adverse effect on our business, financial position, results of operations and liquidity. It is possible that documentation support, system problems, Medicare, Medicaid or other payor issues, particularly in markets transitioning to managed care for excess costs incurred by a payerthe first time, or industry trends may extend our collection period, which may materially adversely affect our working capital, and our working capital management procedures may not successfully mitigate this risk.

The timing of payments made under the Medicare and Medicaid programs is subject to governmental budgetary constraints, resulting in obtaining similar services from another source.an increased period of time between submission of claims and subsequent payment under specific programs, most notably under the Medicaid and Medicaid managed programs, which typically pay claims approximately 30 to 60 days slower than the average hospital claim. In addition, our contracts require us to indemnify payers for ourwe may experience delays in reimbursement as a result of the failure to meet standardsreceive prompt approvals related to change of care, and someownership applications for acquired or other facilities or from delays caused by our or other third parties’ information system failures. We may also experience delayed payment of them contain liquidated damages provisionsreimbursement rate increases that are subject to the approval of the CMS and/or various state agencies before claims can be submitted or paid at the new rates. Any delays experienced for the foregoing or other reasons could have a material adverse effect on our business, results of operations and financial penalties that we must pay if we breach these contracts.condition.

In addition, goodwill may be impaired if the estimated fair value of probation services, including our subsidiary RRP, whichreporting units is in our WD Services segment. This information isless than the second data set that is utilized to determine performance payments undercarrying value of the various providers’ transforming rehabilitation contracts with the MOJ, as the actual rates of recidivism are compared to benchmark rates established by the MOJ. Performance payments and penalties are linked to two separate measures of recidivism - the binary measure and the frequency measure. The binary measure defines the percentage of offenders within a cohort, formed quarterly, who reoffend in the following 12 months. The frequency measure defines the average number of offenses committed by reoffenders within the same 12-month measurement period. The performance for the frequency measure for most providers has been below the benchmarks established by the MOJ.respective reporting unit. As a result RRPof our growth, in part through acquisitions, goodwill and other intangible assets represent a significant portion of our assets. For example, goodwill generated in relation to the acquisition of Simplura Health Group in 2020 was $309.7 million. We perform an analysis on our goodwill balances to test for impairment on an annual basis. Interim impairment tests may also be required in advance of our annual impairment test if events occur or circumstances change that would more likely than not reduce the fair value, including goodwill, of our reporting unit below the reporting unit’s carrying value. Such circumstances could include: (1) loss of significant contracts; (2) a significant adverse change in legal factors or in the climate of our business; (3) unanticipated competition; (4) an adverse action or assessment by a regulator; or (5) a significant decline in our stock price.

The performance of our business also depends on the talents and efforts of our highly skilled IT professionals. Our success depends on our ability to recruit, retain and motivate these individuals. Effective succession planning is also important to our future success. If we fail to ensure the effective transfer of senior management knowledge and smooth transitions involving senior management, our ability to execute short and long-term strategic, financial and operating goals, as well as our business, financial condition and results of operations generally, could be required to make payments to the MOJ and the amounts of such payments could be material. The amount of potential payments to the MOJ, if any, under RRP’s contracts with the MOJ cannot be estimated at this time, as the MOJ is reviewing the data to understand the underlying reasons for the increase in certain rates of recidivism and other factors that could impact the contractual measure.materially adversely affected.

We endeavor to ensureOur growth strategy involves the evaluation of potential entry into complementary markets and service lines through acquisition, particularly with opportunities that may leverage the advantages inherent in our acquisition strategylarge-scale technology-enabled operations and alignment of resources serves to enhance shareholder value, which could result in changes to our strategy or to the way in which we deploy resources across Providence.networks. We have made acquisitions and anticipate that we will continue to make, acquisitions. The Company typically incurs costs related to acquisitionsconsider and integrations, including third-party costs, whether or notpursue strategic acquisition opportunities, the acquisition or integration is completed, which can have a material adverse impact on our operating results. The success of an acquisitionwhich depends in part on our ability to integrate an acquired company into our business operations. Integration of any acquired companiescompany will place significant demands on our management, systems, internal controls and financial and physical resources. This could require us to incur significant expense for, among other things, hiring additional qualified personnel, retaining professionals to assist in developing the appropriate control systems and expanding our information technologyIT infrastructure. The nature of our business is such that qualified management personnel can be difficult to find. Our inability to manage growth effectively could have a material adverse effect on our financial results.

There can also be no assurance that the companies acquiredwe acquire, including our Personal Care Segment, will generate income or incur expenses at the historical or projected levels on which we based our acquisition decisions, that we will be able to maintain or renew the acquired companies’ contracts, that we will be able to realize operating and economic efficiencies upon integration of acquired companies or that the acquisitions will not adversely affect our results of operations or financial condition.

We continually review opportunities to acquire other businesses that would complement our current services,In addition, as we expand our markets or otherwise offertake advantage of prospects for growth. Ingrowth, in connection with our acquisition strategy, we could issue stock that wouldcould dilute existing stockholders’ percentage ownership, or we could incur or assume substantial debt or contingent liabilities. Acquisitions involve numerous risks, including, but not limited to, the following:

We may be unableare subject to realizeincome taxation in both the benefitsUnited States and, due to our ownership of any strategic initiativesinternational entities prior to the sale of our workforce development services segment, ten foreign countries, including specific states or provinces where we operated that segment. Our total income tax provision is a function of applicable local tax rates and the geographic mix of our income from continuing and discontinued operations before taxes, which is itself impacted by currency movements. Consequently, the isolated or combined effects of unfavorable movements in tax rates, geographic mix, or foreign exchange rates could reduce our after-tax income and negatively impact our financial results.

Our total income tax provision is based on our taxable income and the tax laws in the various jurisdictions in which we operate or operated. Significant judgment and estimation is required in determining our annual income tax expense and in evaluating our tax positions and related matters. In the ordinary course of our business, there are adoptedmany transactions and calculations for which the ultimate tax determinations are uncertain or otherwise subject to interpretation. In addition, we make or were required to make judgments regarding the applicability of tax treaties and the appropriate application of transfer pricing regulations with respect to the operations of our former workforce development services segment. In the event one taxing jurisdiction disagrees with another taxing jurisdiction with respect to the amount or applicability of a particular type of tax, or the amount or availability of a particular type of tax refund or credit, we could experience temporary or permanent double taxation and increased professional fees to resolve such taxation matters.

Our determination of our income tax liability is always subject to review by applicable tax authorities, and we have been audited by various jurisdictions in prior years. We are currently under examination by the Company.

We generateOur NEMT Segment contracts are subject to frequent renewal and, from time to time, requests for renegotiation during a significant amount of the revenues in our segments from a few payers under a small number of contracts.contract term. For example, many of our state Medicaid contracts, which represented 49.3% of our NEMT Segment revenue for the yearsyear ended December 31, 2017, 20162020, have terms ranging from three to five years and 2015, we generated 46.7%, 47.9% and 54.6%, respectively,are typically subject to a competitive procurement process near the end of the term. We also contract with MCOs, which represented 50.7% of our consolidated revenue from ten payers. Additionally, five payers related to NET Services represented, in the aggregate, 36.1%, 35.6% and 39.2%, respectively, of NET ServicesNEMT Segment revenue for the yearsyear ended December 31, 2017, 20162020. Our MCO contracts for NEMT Segment services typically continue until terminated by either party upon reasonable notice in accordance with the terms of the contract, and 2015. A single payer relatedsometimes a contractual counterparty will seek to WD Services represented 27.1%, 28.9%renegotiate the pricing and 40.0%other terms of a contract to our WD Services revenue fordetriment prior to the yearsstated termination date of a contract. We cannot anticipate if, when or to what extent we will be successful in renewing our state Medicaid contracts or retaining our MCO contracts through their contractual duration on terms originally negotiated or at all. For the

In addition, with respect to many of our state contracts, the remainder generated through FFSpayor may terminate the contract without cause, or for convenience, at will and flat fee contracts. WD Services also provides services under FFS and flat fee contracts. Under most of NET Services’ capitated contracts, we assumewithout penalty to the responsibility of managingpayor, either immediately or upon the needsexpiration of a specific geographic population by contracting out transportation services to local transportation companies on a per ride or per mile basis. We use “pricing models” to determine applicable contract rates, which take into account factors such as estimated utilization, state specific data, previous experienceshort notice period in the state or with similar services,event that, among other reasons, government appropriations supporting the medically covered programs outlined inserviced by the contract identified populationsare reduced or eliminated. We cannot anticipate if, when or to be serviced, estimated volume, estimated transportation provider rates and availability of mass transit. The amount of the fixed per-member, monthly fee is determined in the bidding process, but is predicated on actual historical transportation data for the subject geographic region as provided by the payer, actuarial work performed in-house as well as by third party actuarial firms and actuarial analysis provided by the payer. If the utilization of our services is more than we estimated, thewhat extent a payor might terminate a contract may be less profitable than anticipated,with us prior to its expiration, or may not be profitable at all. Under our FFS contracts, we receive fees based on our interactions with government-sponsored clients. To earn a profit on these contracts, we must accurately estimate costs incurred in providing services. Our risk relating to these contracts is that our client population is not large enough to cover our fixed costs, such as rent and overhead. Our FFS contracts are not reimbursed on a cost basis and therefore, if we fail to estimate our costs accurately,renew or extend a contract with us. If we may experience reduced margins or losses on these contracts. Revenue under certain contracts may be adjusted prospectively if client volumes are below expectations. If the Company is unable to adjust its costs accordingly,retain or renew our profitability may be negatively impacted. In addition, certain contracts, with state Medicaid agencies are renewable at the state’s option without an adjustment to pricing terms. If such renewedor replace lost contracts, require us to incur higher costs, including inflation or regulatory changes, than originally anticipated, our results of operations and financial condition may be adversely affected.

We compete for clients and for contracts with a variety of organizations that offer similar services. Many organizations of varying sizes compete with us, including local not-for-profit organizations and community-based organizations, larger companies, organizations that currently provide or may begin to provide similar NET managementNEMT services (including transportation network companies likesuch as Uber and Lyft), and large multi-national corporations that currently provide or may begin to provide workforce development services and CHA providers. Some of these companies may have greater financial, technical, political, marketing, name recognition and other resources and a larger number of clients or payerspayors than we do. In addition, some of these companies offer more services than we do. To remain competitive, we must provide superior services and performance on a cost-effective basis to our customers.

We have experienced, and expect to continue to experience, competition from new entrants into the markets in which we operate. Increased competition may result in pricing pressures, loss of or failure to gain market share or loss of or failure to gain clients or payers,payors, any of which could have a material adverse effect on our operating results. Our business may also be adversely affected by the consolidation of competitors, which may result in increased pricing pressure or negotiating leverage with payers,payors, or by the provision of our services by payerspayors or clients directly, including through the acquisition of competitors.

We obtain, and will continue to seek to obtain, a significant portion of our business from state government entities, which generally entails responding to a government request for proposal, or RFP. To propose effectively, we must accurately estimate our cost structure for servicing a proposed contract, the time required to establish operations and submit the most attractive proposal with respect to both technical and price specifications. We must also assemble and submit a large volume of information within rigid and often short timetables. Our ability to respond successfully to an RFP will greatly affect our business. If we misinterpret bid requirements as to performance criteria or do not accurately estimate performance costs in a binding bid for an RFP, there can be no assurance that we will be able to modify the proposed contract and we may be required to perform under a contract that is not profitable, which could materially adversely impacted by inadequacies in,affect our results of operations.

Our information technology systems are critically importantfailure to comply with our operationscontractual obligations could, in addition to providing grounds for immediate termination of the contract for cause, negatively impact our financial performance and we must implement anddamage our reputation, which, in turn, could have a material adverse effect on our ability to maintain appropriate and sufficient infrastructure and systemscurrent contracts or obtain new contracts. The termination of a contract for cause could, for instance, subject us to support growth and business processes. We provideliabilities for excess costs incurred by a payor in obtaining similar services to individuals, including services that

During 2020, 2019 and 2018, 86.2%, 84.6% and 79.2% of our NEMT Segment revenue, respectively, was generated under capitated contracts with the remainder generated through FFS and flat fee contracts. Under most of our capitated contracts, we assume the responsibility of managing the needs of a specific geographic population by contracting out transportation services to local transportation companies on a per ride or per mile basis. We use “pricing models” to determine applicable contract rates, which take into account factors such as estimated utilization, state specific data, previous experience in the state or with similar services, the medically covered programs outlined in the contract, identified populations to be serviced, estimated volume, estimated transportation provider rates and availability of mass transit. The amount of the fixed per-member, monthly fee is determined in the bidding process, but is predicated on actual historical transportation data for the subject geographic region as provided by the payor, actuarial work performed in-house as well as by third parties) to manageparty actuarial firms and actuarial analysis provided by the data, communications and business processes for all other functions, including our marketing, sales, logistics, customer service, accounting and administrative functions. Further, our systems include interfaces to third-party stakeholders, often connected viapayor. If the Internet. In addition, certainutilization of our services or information related to our services are carried out or hosted within our customers’ IT systems, and any failure or weaknesses in their IT systemsis more than we estimated, the contract may negatively impact our ability to deliver the services, for which webe less profitable than anticipated, or may not be profitable at all. Under our FFS contracts, we receive relief from contractual performance obligations or compensation for services provided. Asfees based on our interactions with government-sponsored clients. To earn a result ofprofit on these contracts, we must accurately estimate costs incurred in providing services. If the data we maintainclient population relating to these contracts is not large enough to cover our fixed costs, such as rent and third-party access, we are subject to increasing cybersecurity risks. The nature ofoverhead, our business, where services are often performed outside a secured location, adds additional risk.

Our contact centers are significantly dependent on telephone, internet and data service provided by various communication companies. Any disruption of these services could adversely affect our business. We have taken steps to mitigate our exposure to service disruptions by investing in complex and multi-layered redundancies, and we may suffer other negative consequences such as reputational damage, litigation, remediation costs,can transition services among our different call centers. Despite these efforts, there can be no assurance that the redundancies we have in place would be sufficient to maintain the call centers' operations without disruption. Any disruption could harm our customer relationships and have a requirementmaterial adverse effect on our results of operations.

Some of our current and potential competitors have or may obtain significantly greater marketing and financial resources to promote their programs than we have or may obtain. We compete based on the availability of personnel, the quality of services, the expertise of staff and, in some instances, the price of the services. Relatively few barriers to entry exist in our local markets. Accordingly, other companies, including hospitals and other healthcare organizations that are not currently providing in-home personal care services, may expand their services to include those services or similar services. We may encounter increased competition in the future that could negatively impact patient referrals to us, and limit our ability to maintain or increase our market position, the effect of any of which could detrimentally affecthave a material adverse effect on our business, financial position, results of operations and liquidity.

Our operation of our licensed in-home personal care services agency business in the State of New York is subject to a “no control” affidavit process. We submitted our relevant information associated with this process concurrently with the closing of the Simplura acquisition, but while we wait for necessary approvals, we will be limited in our ability to exercise control over the personal care business there for operational matters until such time that our ownership of that business is approved by the New York Department of Health. We can provide no assurance regarding the timing of the approval of this change of ownership by the New York Department of Health, or that such approval will be obtained at all. During this time, we cannot exercise day to day management of these entities, and the former management of Simplura will continue to operate the business. There is no prohibition on these entities making cash distributions to us during this interim period, but there can be no assurance that we will obtain the necessary authorization from the New York Department of Health to remove the “no control” affidavit and operate this business ourselves. If we are not able to ultimately take over control of these operations, or if we are only able to do so on a more limited basis than anticipated, we may not achieve the synergies and operational benefits expected from the Simplura acquisition as contemplated and our business and results of operations could be materially adversely affected.

FailureOur Personal Care Segment may have been acquired with liabilities that we failed, or were unable, to protectdiscover in the course of performing our client’s privacydue diligence investigations associated with the transaction. We cannot assure you that the indemnification available to us under the purchase agreement associated with the acquisition will be sufficient in amount, scope or duration to fully offset the possible liabilities associated with the acquisition. We may learn additional information about this business that materially adversely affects us, such as unknown or contingent liabilities and confidential informationliabilities related to compliance with applicable laws. Any such liabilities, individually or in the aggregate, could lead to legal liability, adversely affect our reputation and have a material adverse effect on our business, financial condition and results of operations.

The sources and amounts of our patient revenues are determined by a number of factors, including the mix of patients and the rates of reimbursement among payors. Changes in the case-mix of the patients as well as payor mix among private pay, Medicare and Medicaid, as well as specialty programs, including waiver programs within Medicaid, may significantly affect our profitability. In particular, any significant increase in our computer systems,Medicaid population or decrease in Medicaid payments could

Our personal care services compete with other healthcare providers for both professional and management level employees. Our ability to attract and retain qualified personnel depends on several factors, including our ability to provide these personnel with attractive assignments for the desired number of hours per week and competitive compensation and benefits. We cannot be assured we will succeed in any of these areas. As the demand for personal information aboutcare services continues to exceed the supply of available and qualified personnel, our competitors may be forced to offer more attractive wage and benefit packages to these professionals. Furthermore, the competitive market for this labor force has created turnover as many seek to take advantage of the supply of available positions, each offering new and more attractive wage and benefit packages. In addition to the wage pressures inherent in this environment, including any changes to minimum wage, the cost of training new employees amid the turnover rates may cause added pressure on our operating results and harm our business.

Approximately 1,400 of our hourly caregivers are unionized in regions of New York. Certain collective bargaining agreements with the 1199 SEIU United Healthcare Workers East are currently being negotiated, and others will require renegotiation upon expiration. We may not be able to negotiate terms that are satisfactory to the labor unions, and ultimate agreement may be on terms unfavorable to us. In addition, a unionized work force poses the risk of work stoppages, which if initiated could materially harm our results of operations as well as our commercial relationships with our customers if we are unable to perform under our contracts with them during any such as names, addresses, phone numbers, email addresses, identification numbersstoppage.

If additional regions in which we operate become unionized, or if we expand our personal care operations into geographic areas where healthcare workers historically have been unionized, being subject to additional collective bargaining agreements may have a negative impact on our ability to timely and payment account information. Malicious cyber attackssuccessfully recruit qualified personnel and may increase our operating costs. Generally, if we are unable to gain access to personal information affect many companies across various industries, including ours. Pursuant to federalattract and state laws, various government agencies have established rules protectingretain qualified personnel, the privacy and security of personal information. In addition, most states have enacted laws, which vary significantly from jurisdiction to jurisdiction, to safeguard the privacy and security of personal information. An increasing number of states require that customers be notified if a security breach results in the inappropriate disclosure of personally identifiable customer information. Any compromise of the securityquality of our systems that results in the disclosure of personally identifiable customer or employee information or inadvertent disclosure of any clients’ personal informationservices may decline and we could damage our reputation, deter people from using our services, expose us to litigation, increase regulatory scrutinylose patients and require us to incur significant technical, legal and other expenses. In addition, data breaches impacting other companies, such as our vendors, may allow cybercriminals to obtain personally identifiable information about our customers. Cybercriminals may then use this information to, among other things, attempt to gain unauthorized access to our customers’ accounts,referral sources, which could have a material adverse effect on our reputation, business and consolidated financial condition, results of operations and cash flows.

We hold a non-controlling interest in Matrix, which, as of December 31, 2020, constituted 9.6% of our consolidated assets. We do not have unilateral power to direct the activities that most significantly impact Matrix’s economic performance. The arrangement with Matrix involves risks not present with respect to our wholly-owned subsidiaries and that may negatively impact our financial condition and results of operations will continueor make the arrangement less successful than anticipated. Factors that may negatively impact the success of our Matrix investment include the following:

The U.S.United States healthcare industry is subject to extensive federal and state Lawsoversight relating to, among other things:

Both federal and state government agencies have increased coordinated civil and criminal enforcement efforts related to the healthcare industry. Regulations related to the healthcare industry are extremely complex and, in many instances, the industry does not have the benefit of significant regulatory or judicial interpretation of those laws. The Patient Protection and Affordable Care Act, as well as the anticipated attempts to repealinvalidate all or portions of those laws by the President and Congress,in ongoing legislation, has also introduced somea degree of regulatory uncertainty, as the industry does not know how the changes it introduced or changes to it will affect many aspects of the industry.

Medicare and Medicaid anti-fraud and abuse laws prohibit certain business practices and relationships related to items and services reimbursable under Medicare, Medicaid and other governmental healthcare programs, including the payment or receipt of remuneration to induce or arrange for referral of patients or recommendation for the provision of items or services covered by Medicare or Medicaid or any other federal or state healthcare program.program, often referred to as the Anti-Kickback Statute. Federal and state Lawslaws also prohibit the submission of false or fraudulent claims, including claims to obtain reimbursement under Medicare and Medicaid. Our U.S. Healthcare SegmentsMedicaid, under what is commonly referred to as the False Claims Act. We have implemented compliance policies to help assure theirour compliance with these regulations as they become effective; however,effective, but interpretations different from our interpretations or enforcement of these laws and regulations in the future could subject our practices to allegations of impropriety, or illegality, or could require such segments to make changes in their facilities, equipment, personnel, services or the manner in which they conduct our business.

With respect to our Matrix Investment Segment, the CHA services industry is primarily regulated by federal and state healthcare Lawslaws and the requirements of participation and reimbursement of the MA Programprogram established by CMS. From time to time, CMS considers changes to regulatory guidelines with respect to prospective CHAs or the risk adjusted payment system

Our U.S. Healthcare Segments may bePayments for our services are largely derived from contracts that are directly or indirectly paid by government agencies with public funds and private insurance companies. All of these contracts are subject to federallegislative appropriations and state statutesand/or national budget approval, as well as changes to potential eligibility for services. The availability of funding under our contracts with state governments is dependent in part upon federal funding to states. Changes in Medicaid provider reimbursement and federal matching funds methodologies may further reduce the availability of federal funds to states in which we provide services.

Consequently, a significant decline in government or private insurance company expenditures or the number of program beneficiaries, a shift of expenditures or funding away from programs that call for the types of services that we provide, or change in government contracting or funding policies could cause payors to terminate their contracts with us or reduce their expenditures or reimbursement rates under those contracts, either of which could have a negative impact on our U.S. Healthcare Segments’ operations, may result in prohibitionfinancial position and operating results.

We invest considerable time and resources in ensuring compliance with state and federal privacy laws and regulations, incurring substantial costs as a result. These costs and investments could negatively impact our financial position and results of operations. Further, the HIPAA regulations and state privacy laws expose us to increased regulatory risk, as the penalties discussed above.associated with a failure to comply or with information security breaches, even if unintentional, could be substantial and have a material adverse effect on our financial position and results of operations.

If we fail to comply with federal and state documentation, coding and billing rules, we could be subject to criminal or civil penalties, loss of licenses and exclusion from the Medicare and Medicaid programs, which could have a material adverse impact on our financial position and operating results. In billing for our services to third-party clients, we must follow complex documentation, coding and billing rules. These rules are based on federal and state laws, rules and regulations, various government pronouncements, including guidance and notices, and industry practice. Failure to follow these rules could result in potential criminal or civil liability under the federal False Claims Act, under which extensive financial penalties can be imposed, or under various state statutes which prohibit the submission of false claims for services covered. Compliance failure could further result in criminal liability under various federal and state criminal or civil statutes. We may be subject to audits conducted by our clients or their proxies, including the Office of Inspector General, or OIG, for the Department of Health and Human Services, or DHHS, state Medicaid regulatory agencies, state Medicaid fraud enforcement agencies, health departments, CMS, the Unified Program Integrity Contractors and regional federal program integrity contractors for the Medicare and Medicaid programs that may result in recoupment of funds. In addition, our segmentsclients may be subject to certain audits that may result in recoupment of funds from our clients that may, in turn, implicate us. We could be adversely affected in the event such an audit results in negative findings and recoupment from or penalties to our customers.

Our contracts are subject to an increased riskstringent claims and invoice processing regimes which vary depending on the customer and nature of litigationthe payment mechanism. Government entities may take the position that if a transport cannot be matched to a medically necessary healthcare event, or is conducted inconsistently with contractual, regulatory or even policy requirements, payment for such transport may be recouped by such customer. Likewise, a government surveyor may determine that a personal care visit was not sufficiently supported by a time and attendance record and/or that the aide was not qualified on a particular date of service and seek a refund as a result.

As government contractors, our segmentsWe are subject to an increased riskthe federal Anti-Kickback Statute, which prohibits the offer, payment, solicitation or receipt of investigation,any form of remuneration in return for referring, ordering, leasing, purchasing or arranging for or recommending the ordering,

In many of the locations where our segmentswe operate, theywe are required by local laws (both U.S. and foreign) to obtain and maintain licenses. The applicable state and local licensing requirements govern the services our segmentswe provide, the credentials of staff, record keeping, treatment planning, client monitoring and supervision of staff. The failure to maintain these licenses or the loss of a license could have a material adverse impact on our segments’ businessesus and could prevent themus from providing services to clients in a given jurisdiction. Our segments’ contracts are subject to surveys or audit by their payersour payors or their clients. Our segmentsWe are also subject to regulations that restrict theirour ability to contract directly with a government agency in certain situations. Such restrictions could affect our segments’ ability to contract with certain payerspayors and clients, and could have a material adverse impact on our segments’financial condition and results of operations.

Our segments’ businesses depend on theirour ability to perform successfully perform under various government funded contracts. Under the terms of these contracts, payers,payors, government agencies or their proxy contractors can review our segments’ compliance or performance, as well as our segments’ records and general business practices, at any time, and may in their discretion:

Any increase in the number or scope of audits could increase our segments’ expenses, and the audit process may disrupt the day-to-day operations of our segments’ businessesbusiness and distract their management. If payerspayors have significant audit findings, or if they make material modifications to our segments’ contracts, it could have a material adverse impact on our segments’ results of operations.

Our agreements covering our outstanding indebtedness, including the Credit Agreement mayand the indenture governing our Notes, contain various covenants that limit our current and future operations, particularlyor will limit our ability to respond to changesengage in our business or to pursue our business strategies.

A breach of theany of these covenants or restrictions could result in a default under the applicable agreements that govern our indebtedness. Suchindebtedness, including as a result of cross default may preclude us from drawing from our senior secured credit facility (the “Credit Facility”) or allow the creditors to accelerate the related debtprovisions, and, may result in the accelerationcase of anyour Credit Facility, permit the lenders to cease making loans to us. Upon the occurrence of an event of default under our Credit Facility, the lenders could elect to declare all amounts outstanding under our Credit Facility to be immediately due and payable and terminate all commitments to extend further credit. Such actions by those lenders could cause cross defaults under our other debt that we may incur to which a cross acceleration or cross-default provision applies.indebtedness. In the event of acceleration of our lenders accelerateoutstanding indebtedness, we cannot assure you that we would be able to repay the repaymentdebt or obtain new financing to refinance the debt. Even if new financing is made available to us, it may not be on terms acceptable to us. If we were unable to repay these amounts, certain debt holders could proceed against the collateral granted to them to secure the indebtedness, including the equity of subsidiary guarantors that we have pledged as collateral, pursuant to our Credit Agreement. If any of the foregoing were to occur, our business and results of operations could be materially adversely affected and the value of our equity could be materially diminished.

Our ability to make scheduled payments on and to refinance our indebtedness depends on and is subject to our financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors, all of which are beyond our control, including the availability of financing in the international banking and capital markets and the effects of the COVID-19 pandemic. We cannot assure you that weour business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to service our debt, to refinance our debt or to fund our other liquidity needs. Any refinancing or restructuring of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants that could further restrict our subsidiaries would have sufficient assetsbusiness operations. Further, in the event of a default, the holders of our indebtedness could elect to repaydeclare such indebtedness.indebtedness be due and payable, which could materially adversely affect our results of operations and financial condition.

At December 31, 2017,The indebtedness subject to our available creditCredit Agreement matures in August 2023 and there can be no assurance that we will be able to extend our indebtedness under theour Credit Facility was $188.9 million. The Credit Facility maturesAgreement or enter into a new one on August 2, 2018.terms that are acceptable to us, or at all. If our cash on hand is insufficient, or we are unable to generate sufficient cash flows in the future to cover our cash flow and liquidity needs and service our debt, we may be required to seek additional sources of funds, including extending or replacing our indebtedness under our Credit Agreement, refinancing all or a portion of our existing or future debt,indebtedness, incurring

We may incur substantial additional indebtedness in the future to fund our activities, including but not limited to fund share repurchases, acquisitions, cash dividends and business expansion. While our Credit Agreement contains restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions, and under certain circumstances, the amount of indebtedness that could be incurred in compliance with these restrictions could be substantial. Any existing and futureadditional indebtedness increaseswould increase the risk that we may be unable to generate cash sufficient to pay amounts due in respect of such indebtedness.indebtedness, and the risks that we already face as a result of our leverage would intensify. Future substantial indebtedness could also have other important consequences on our business. For example, it could:

Our ability to satisfy and manage our debt obligations depends on our ability to generate cash flow and on overall financial market conditions. To some extent, this is subject to prevailing economic and competitive conditions and to certain financial, business and other factors, many of which are beyond our control. Our business may not generate sufficient cash flow from operations to permit us to pay principal, premium, if any, or interest on our debt obligations. If we are unable to generate sufficient cash flow from operations to service our debt obligations and meet our other cash needs, we may be forced to reduce or delay capital expenditures, sell or curtail assets or operations, seek additional capital, or seek to restructure or refinance our indebtedness. If we must sell or curtail our assets or operations, it may negatively affect our ability to generate revenue.

Our annual operating results and the market price for our Common Stockcommon stock may fluctuate significantly in response to a number of factors, many of which we cannot control, including:

In addition, the stock markets, and in particular the NASDAQ, Global Select Market, have experienced considerable price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we become involved in securities litigation, we could incur substantial costs, and our resources and the attention of management could be diverted from our business.

Our operations are conducted entirely through our subsidiaries and oursubsidiaries. Our ability to generate cash to fund all of our operations and expenses, to pay dividends or complete stock repurchase programs, or to meet any debt service obligations is highly dependent on theour subsidiaries’ earnings and the receipt of funds from our subsidiaries viaby way of dividends or intercompany loans. We dohave not currently expect to declare or paypaid any cash dividends on our Common Stock forcommon stock and do not expect to pay any dividends on our common stock in the foreseeable future; however,future. We currently intend to invest our and our subsidiaries’ future earnings, if any, to fund our growth, to develop our business, invest in our technology, for working capital needs and for general corporate purposes. To the extent that we determine in the future to pay dividends on our Common Stock,common stock, however, none of our subsidiaries will be obligated to make funds available to us for the payment of dividends. Similarly, our subsidiaries are not obligated to make funds available to us to fund stock repurchases. Further, the agreement governing our Credit Agreement significantly restricts the ability of our subsidiaries to pay dividends, make loans or otherwise transfer assets to us. In addition, Delaware law may impose requirements that may restrictimposes solvency restrictions on our ability to pay dividends to holders of our Common Stock.common stock. Therefore, you are not likely to receive any dividends on our common stock for the foreseeable future and the success of an investment in shares of our common stock will depend upon any future appreciation in their value. There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which stockholders have purchased their shares. Furthermore, if the subsidiaries are unable or unwilling to fund our cash needs when needed or desired, our results of operations and business and financial condition could be materially adversely affected.

The trading market for our Common Stock will dependcommon stock depends in part on the research and reports that securities or industry analysts publish about us or our business. If one or more analysts downgrade our stock or publish misleading or unfavorable

Our second amended and restated certificate of incorporation and amended and restated bylaws include a number of provisions that may be deemed to have anti-takeover effects, which includeincluding provisions governing when and by whom special meetings of our stockholders may be called, and provisions that may discourage, delay or prevent a change in our management or control over us that stockholders may consider favorable. SuchAs a result of these provisions, holders of our common stock may prevent our stockholders from receivingnot receive the full benefit fromof any premium to the market price of our Common Stockcommon stock offered by a bidder in a takeover context.

Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our Common Stockcommon stock if the provisions are viewed as discouraging takeover attempts in the future. Our second amended and restated certificate of incorporation and amended and restated by-lawsbylaws may also make it difficult for stockholders to replace or remove our management.management, including provisions providing for staggered terms for our Board, no cumulative voting for the election of directors, and provisions governing director vacancies, which are filled only by remaining directors (including vacancies resulting from removal or other cause). These provisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the best interests of our stockholders.

Our principal executive office isoffices are located in Stamford, Connecticut,Denver, Colorado, where we have leased approximately 12,000 square feet of corporate office and operations space. This lease terminates on August 8, 2021, with no early termination option, however we plan to move into our new principal executive offices in the second quarter of 2021, also located in Denver, Colorado, at which time our new 11½ year operating lease, covering approximately 73,000 square feet of corporate office and operations space, will commence.