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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported): August 9, 2021 (August 6, 2021)
 
ModivCare Inc.
(Exact name of registrant as specified in its charter)
     
Delaware
001-34221
86-0845127
(State or other jurisdiction of
incorporation or organization)
(Commission File
Number)
(I.R.S. Employer
Identification No.)
 
6900 Layton Avenue,
12th Floor,
Denver,
Colorado
80237
(Address of principal executive offices)
     
(Zip Code)
303-728-7030
Registrant’s telephone number, including area code:
 
   
N/A
   
(Former name or former address, if changed since last report.)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of exchange on which registered
Common Stock, $0.001 par value per share
MODV
The NASDAQ Global Select Market
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company
☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
 
 
 
 
The information in this Current Report on Form 8-K under Item 7.01, Exhibit 99.1 and Exhibit 99.2 are furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information in this Current Report on Form 8-K shall not be incorporated by reference in any filing with the Securities and Exchange Commission (the “SEC”) made by ModivCare Inc. (“ModivCare”), whether made before or after the date hereof, regardless of any general incorporation language in such filing. ModivCare undertakes no obligation to update, supplement or amend the materials attached hereto as Exhibit 99.1 and Exhibit 99.2.
 
 
Item 1.01
Entry into a Material Definitive Agreement.
 
On August 6, 2021, ModivCare Inc. entered into the Consent Agreement (the “Consent Agreement”) to the Amended and Restated Credit and Guaranty Agreement (as amended, the “Credit Agreement”), by which the lenders under the Credit Agreement agreed that (a) the definition of “Escrow Issuer” in Section 1.01 of the Credit Agreement shall be deemed to include any subsidiary established for purposes of the issuance of the $400 million in aggregate principal amount of senior notes due 2029 (the “Notes”), the proceeds of which shall be placed in escrow pending the consummation of the acquisition of VRI Intermediate Holdings, LLC (the “VRI Acquisition”), (b) the definition of “Escrow Notes” in Section 1.01 of the Credit Agreement shall be deemed to include the Notes, and (c) the indebtedness under the Notes shall be deemed to be permitted junior debt notwithstanding the liens on escrow funds granted in favor of any escrow agent.
 
The foregoing description of the Consent Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Consent Agreement, which is attached as Exhibit 10.1 hereto and incorporated herein by reference.
 
Item 2.03.
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
 
The disclosure set forth above under Item 1.01 with respect to the Consent Agreement is incorporated by reference into this Item 2.03.
 
Item 7.01.
Regulation FD Disclosure.
 
On August 9, 2021, ModivCare posted an investor presentation to its website. The investor presentation includes a presentation of Adjusted EBITDA for the fiscal year ended December 31, 2020, the six months ended June 30, 2021 and the last twelve months ended June 30, 2021.  The calculation of ModivCare’s Adjusted EBITDA has been updated from its historical presentation to show the impact of adding back stock-based compensation and cash settled equity, which add-backs were first included in ModivCare’s earnings results for June 30, 2021. A copy of the investor presentation is being furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
 
On August 9, 2021, ModivCare issued a press release announcing the commencement of a private placement offering of the Notes. A copy of the press release is being furnished herewith as Exhibit 99.2 and is incorporated herein by reference.
 
ModivCare intends to use the proceeds from the Notes to (i) pay the consideration in connection with the VRI Acquisition, and (ii) pay fees and expenses incurred in connection with the VRI Acquisition.
 
The Notes and the Note guarantees will rank senior in right of payment to any of ModivCare’s and each of the guarantors’ existing and future indebtedness and obligations that are, by their terms, expressly subordinated to the Notes and the Note guarantees. The Notes and related Note guarantees will be effectively junior to all of ModivCare’s and the guarantors’ existing and future secured indebtedness, including indebtedness under ModivCare’s credit facility, to the extent of the value of the collateral securing such indebtedness. The Notes will also be structurally junior to all indebtedness of ModivCare’s subsidiaries that do not guarantee the Notes.
 
ModivCare expects to share the information contained in Exhibits 99.1 with potential investors in the Notes.
 
1
 
 
Forward-Looking Statements
 
Certain statements contained in this report constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are predictive in nature and are frequently identified by the use of terms such as “may,” “will,” “should,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” and similar words indicating possible future expectations, events or actions. Such forward-looking statements are based on current expectations, assumptions, estimates and projections about our business and our industry, and are not guarantees of our future performance. These statements are subject to a number of known and unknown risks, uncertainties and other factors, many of which are beyond our ability to control or predict, which may cause actual events to be materially different from those expressed or implied herein, including but not limited to: government or private insurance program funding reductions or limitations; alternative payment models or the transition of Medicaid and Medicare beneficiaries to Managed Care Organizations; our inability to control reimbursement rates received for our services; cost containment initiatives undertaken by private third-party payors; the effects of a public health emergency; inadequacies in, or security breaches of, our information technology systems, including the systems intended to protect our clients’ privacy and confidential information; any changes in the funding, financial viability or our relationships with our payors; pandemic infectious diseases, including the COVID-19 pandemic; disruptions to our contact center operations caused by health epidemics or pandemics like COVID-19; delays in collection, or non-collection, of our accounts receivable, particularly during any business integration; an impairment of our long-lived assets; any failure to maintain or to develop further reliable, efficient and secure information technology systems; an inability to attract and retain qualified employees; any acquisition or acquisition integration efforts; estimated income taxes being different from income taxes that we ultimately pay; our contracts not surviving until the end of their stated terms, or not being renewed or extended; our failure to compete effectively in the marketplace; our not being awarded contracts through the government’s requests for proposals process, or our awarded contracts not being profitable; any failure to satisfy our contractual obligations or to maintain existing pledged performance and payment bonds; a failure to estimate accurately the cost of performing our contracts; any misclassification of the drivers we engage as independent contractors rather than as employees; significant interruptions in our communication and data services; not successfully executing on our strategies in the face of our competition; any inability to maintain relationships with existing patient referral sources; certificates of need laws or other regulatory and licensure obligations that may adversely affect our personal care integration efforts and expansion into new markets; any failure to obtain the consent of the New York Department of Health to manage the day to day operations of our licensed in-home personal care services agency business that we acquired with our Personal Care Segment; acquired unknown liabilities in connection with the acquisition of our Personal Care Segment; changes in the case-mix of our personal care patients, or changes in payor mix or payment methodologies; our loss of existing favorable managed care contracts; our experiencing shortages in qualified employees and management; labor disputes or disruptions, in particular in New York; becoming subject to malpractice or other similar claims; our lack of sole decision-making authority with respect to our minority investment in Matrix (as defined herein); the cost of our compliance or non-compliance with existing laws; changes to the regulatory landscape applicable to our businesses; changes in budgetary priorities of the government entities or private insurance programs that fund our services; regulations relating to privacy and security of patient and service user information; actions for false claims or recoupment of funds; civil penalties or loss of business for failing to comply with bribery, corruption and other regulations governing business with public organizations; changes to, or violations of, licensing regulations, including regulations governing surveys and audits; our contracts being subject to audit and modification by the payors with whom we contract, at their sole discretion; our existing debt agreements containing restrictions that limit our flexibility in operating our business; our substantial indebtedness and lease obligations; any expiration of the credit agreement that governs our Credit Facility or loss of available financing alternatives; our ability to incur substantial additional indebtedness; future sales of shares of our common stock by existing stockholders; our stock price volatility; our dependence on our subsidiaries to fund our operations and expenses; securities analysts failing to publish research or publishing misleading or unfavorable research about us; anti-takeover provisions could discourage a change of control of our company and affect the trading price of our stock; and our reliance on our Matrix Investment segment’s financial condition.
 
ModivCare has provided additional information in its annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. ModivCare undertakes no obligation to update or revise any forward- looking statements contained in this release, whether as a result of new information, future events or otherwise, except as required by applicable law.
 
2
 
 
Item 9.01.
Financial Statements and Exhibits.
 
(d)         Exhibits
 
Exhibit No.
 
Description
10.1
 
99.1
 
99.2
 
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
MODIVCARE INC.
       
Date: August 9, 2021
By:
/s/ L. Heath Sampson
Name:    L. Heath Sampson
Title:      Chief Financial Officer
 
 
      
 

Exhibit 10.1

 

CONSENT AGREEMENT

 

THIS CONSENT AGREEMENT dated as of August 6, 2021 (this “Agreement”) is entered into among ModivCare Inc. (formerly known as The Providence Service Corporation), a Delaware corporation (the “Borrower”), the Guarantors, the Lenders party hereto and Bank of America, N.A., as Administrative Agent. All capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Credit Agreement (as defined below).

 

RECITALS

 

WHEREAS, the Borrower, the Guarantors, the Lenders and Bank of America, N.A., as Administrative Agent, entered into that certain Amended and Restated Credit and Guaranty Agreement dated as of August 2, 2013 (as amended by that certain First Amendment and Consent dated as of May 28, 2014, by that certain Second Amendment and Consent dated October 23, 2014, by that certain Third Amendment and Consent dated September 3, 2015, by that certain Fourth Amendment and Consent dated August 28, 2016, by that certain Fifth Amendment dated as of June 7, 2018, by that certain Sixth Amendment dated as of July 12, 2019, by that certain Seventh Amendment dated as of May 6, 2020, and by that certain Eighth Amendment dated as of October 16, 2020, the “Credit Agreement”);

 

WHEREAS, the Borrower has informed the Administrative Agent and the Lenders that it intends to acquire the Equity Interests of VRI Intermediate Holdings, LLC, a Delaware limited liability company (the “Target”), pursuant to the terms of that certain securities purchase agreement with the Target, VRI Ultimate Holdings, LLC, a Delaware limited liability company and Victory Health Holdings, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Borrower (the “Anticipated Acquisition”); and

 

WHEREAS, in connection with the Anticipated Acquisition, the Borrower or one of its Subsidiaries will issue senior unsecured notes (the “2021 Notes”), the proceeds of which shall be placed in escrow pending the consummation of the Anticipated Acquisition;

 

WHEREAS, the Borrower has requested that the Lenders provide the consent set forth below.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.         Consent. The Required Lenders hereby agree that (a) the definition of “Escrow Issuer” in Section 1.01 of the Credit Agreement shall be deemed to include any Subsidiary established for purposes of the issuance of the 2021 Notes, (b) the definition of “Escrow Notes” in Section 1.01 of the Credit Agreement shall be deemed to include the 2021 Notes, and (c) the Indebtedness under the 2021 Notes shall be deemed to be Permitted Junior Debt notwithstanding the Liens on Escrow Funds granted in favor of any Escrow Agent. The above consent shall not modify or affect the Loan Parties' obligations to comply fully with the terms of the Credit Agreement or any other duty, term, condition or covenant contained in the Credit Agreement or any other Loan Document in the future. The consent is limited solely to the specific consent identified above and nothing contained in this Agreement shall be deemed to constitute a future waiver of any other rights or remedies the Administrative Agent or any Lender may have under the Credit Agreement or any other Loan Document or under applicable law.

 

2.         Conditions Precedent. This Agreement shall be effective upon execution and delivery of counterparts hereof by the Borrower, the Guarantors, the Required Lenders and the Administrative Agent.

 

 
 

 

3.          Agreement on Escrow Funds. Notwithstanding anything else to the contrary in the Credit Agreement or any other Loan Document, the parties hereto agree that any assets subject to a Lien described in Section 8.01(aa) of the Credit Agreement, for so long as such assets shall be subject to such Lien, shall not constitute Collateral under the Credit Agreement or any Loan Document, and the Administrative Agent and the Secured Parties (as defined in the Security and Pledge Agreement) shall not be entitled to, and shall not have, a Lien thereon securing the Obligations.

 

4.          Miscellaneous.

 

(a) The Credit Agreement, Security Agreement and Pledge Agreement and the obligations of the Loan Parties thereunder and under the other Loan Documents are hereby ratified and confirmed and shall remain in full force and effect according to their terms. This Agreement is a Loan Document.

 

(b) Each Guarantor (i) acknowledges and consents to all of the terms and conditions of this Agreement, (ii) affirms all of its obligations under the Loan Documents, and (iii) agrees that this Agreement and all documents executed in connection herewith do not operate to reduce or discharge its obligations under the Credit Agreement or the other Loan Documents.

 

(c) The Borrower and the Guarantors hereby represent and warrant as follows:

 

(i) Each Loan Party has taken all necessary action to authorize the execution, delivery and performance of this Agreement.

 

(ii) This Agreement has been duly executed and delivered by the Loan Parties and constitutes each of the Loan Parties’ legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws and by general principles of equity and principles of good faith and fair dealing.

 

(iii) No approval, consent, exemption, authorization or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement other than (A) those approvals, consents, exemptions, authorizations or other actions, notices or filings, that have already been obtained, taken, given or made and are in full force and effect, (B) filings and recordings necessary to perfect and continue certain Liens on the Collateral created by the Collateral Documents and (C) recording of the transfer of registrations and applications for IP Rights upon foreclosure.

 

(d) The Loan Parties represent and warrant to the Lenders that (i) the representations and warranties of the Loan Parties set forth in Article VI of the Credit Agreement and in each other Loan Document are (i) with respect to representations and warranties that contain a materiality qualification, true and correct on and as of the date hereof and (ii) with respect to representations and warranties that do not contain a materiality qualification, true and correct in all material respects as of the date hereof with the same effect as if made on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date in which case they shall be true and correct or true and correct in all material respects, as applicable, as of such earlier date and (ii) no event has occurred and is continuing which constitutes a Default or an Event of Default.

 

 
 

 

(e) This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original but all of which when taken together shall constitute a single contract. This Agreement and any other Loan Document may be executed and delivered by electronic means (including electronic image, facsimile, “.pdf”, “.tif” and “.jpeg”), and thereupon such agreement, certificate or instrument shall be treated in each case and in all manner and respects and for all purposes as an original agreement, certificate or instrument and shall be considered to have the same binding legal effect as if it were an original manually-signed counterpart thereof delivered in person. No party to this Agreement or any other Loan Document shall assert the fact that electronic means were used to make or deliver a signature, or the fact that any signature, agreement, certificate or instrument was created, transmitted or communicated through the use of electronic means, as a defense to the formation, effectiveness, validity or enforceability of any such agreement, certificate or instrument.

 

(f) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

(g) EACH PARTY HERETO AGREES AS SET FORTH IN SECTION 11.15 OF THE CREDIT AGREEMENT AS IF SUCH SECTION WERE SET FORTH IN FULL HEREIN.

 

[SIGNATURE PAGES FOLLOW]

 

 
 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

GUARANTORS: MODIVCARE SOLUTIONS, LLC  
  (formerly known as Logisticare Solutions, LLC)  
       
  By: /s/ L. Heath Sampson  
  Name: L. Heath Sampson  
  Title: Chief Financial Officer  
       
 

HEALTH TRANS, INC.

RED TOP TRANSPORTATION, INC.

RIDE PLUS, LLC

PROVADO TECHNOLOGIES, LLC

CIRCULATION, INC.

NATIONAL MEDTRANS, LLC

CALIFORNIA MEDTRANS NETWORK MSO LLC

CALIFORNIA MEDTRANS NETWORK IPA LLC

FLORIDA MEDTRANS NETWORK MSO LLC

FLORIDA MEDTRANS NETWORK LLC

METROPOLITAN MEDICAL TRANSPORTATION IPA, LLC

TRIMED, LLC

CIRCULATION, INC.

OEP AM, INC.

SOCRATES HEALTH HOLDINGS, LLC

(formerly known as Socrates LLC)

 
       
  By: /s/ L. Heath Sampson  
  Name: L. Heath Sampson  
  Title: Treasurer  
       
  AM INTERMEDIATE HOLDCO, INC.  
  AM HOLDCO, INC.  
       
  By: /s/ David Middleton  
  Name: David Middleton  
  Title: President, Chief Executive Officer and Secretary  

 

 

 

[Signature Page to Consent Agreement] 

 

 

 
 

 

 

ALL METRO HEALTH CARE SERVICES, INC.

ALL METRO HOME CARE SERVICES, INC.

ALL METRO MANAGEMENT AND PAYROLL SERVICES CORPORATION

ALL METRO HOME CARE SERVICES OF NEW YORK, INC.

CGA HOLDCO, INC.

 
       
  By: /s/ David Middleton  
  Name: David Middleton  
  Title: President and Chief Executive Officer  
       
 

CAREGIVERS AMERICA, LLC

MULTICULTURAL HOME CARE, INC.

ARSENS HOME CARE, INC.

HELPING HAND HOME

HEALTH CARE AGENCY, INC.

A&B HOMECARE SOLUTIONS, LLC

 
       
       
  By: /s/ David Middleton  
  Name: David Middleton  
  Title: Chief Executive Officer  

 

 

 

[Signature Page to Consent Agreement] 

 

 

 
 

 

ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.,  
  as Administrative Agent  
       
  By: /s/ Linda E. C. Alto  
  Name: Linda E. C. Alto  
  Title: Senior Vice President  

 

 

 

[Signature Page to Consent Agreement] 

 

 

 
 

 

LENDERS: BANK OF AMERICA, N.A.,  
  as a Lender, Swing Line Lender and L/C Issuer  
       
  By: /s/ Linda E. C. Alto  
  Name: Linda E. C. Alto  
  Title: Senior Vice President  

 

 

 

[Signature Page to Consent Agreement] 

 

 

 
 

 

  TRUIST BANK,  
  as a Lender  
       
  By: /s/ James Ford  
    Name: James Ford  
    Title: Managing Director  

 

 

 

[Signature Page to Consent Agreement] 

 

 

 
 

 

  JPMORGAN CHASE BANK, N.A.,  
  as a Lender  
       
  By: /s/ Erik Barragan  
  Name: Erik Barragan  
  Title: Authorized Officer  

 

 

 

 

[Signature Page to Consent Agreement] 

 

 

 

 

 
 

 

  BMO HARRIS BANK, N.A.  
  as a Lender  
       
  By: /s/ Patrick Epum  
  Name: Patrick Epum  
  Title: Director & Team Leader  

 

 

 

[Signature Page to Consent Agreement] 

 

 

 
 

 

  REGIONS BANK,  
  as a Lender  
       
  By: /s/ Ned Spitzer  
  Name: Ned Spitzer  
  Title: Managing Director  

 

 

 

[Signature Page to Consent Agreement] 

 

 

 
 

 

  DEUTSCHE BANK AG NEW YORK BRANCH,  
  as a Lender  
       
  By: /s/ Yumi Okabe  
  Name: Yumi Okabe  
  Title: Vice President  
       
       
       
  By: /s/ Michael Strobel  
  Name: Michael Strobel  
  Title: Vice President  

 

 

 

[Signature Page to Consent Agreement] 

 

 

 

Exhibit 99.1

 

 

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Exhibit 99.2

 

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ModivCare Announces $400 Million Private Offering of Senior Notes

 

ATLANTA, GA – August 9, 2021 – ModivCare Inc. (“ModivCare”) (Nasdaq: MODV), today announced a private placement offering of $400 million in aggregate principal amount of newly issued senior notes maturing in 2029 (the “notes”), issued by ModivCare Escrow Issuer, Inc. (the “Escrow Issuer”), a Delaware corporation established to issue the notes. Completion of the offering is subject to, among other things, pricing and standard closing and market conditions.

 

ModivCare intends to use the proceeds from the notes to (i) pay the consideration in connection with the acquisition of VRI Intermediate Holdings, LLC (the “VRI Acquisition”), and (ii) pay fees and expenses incurred in connection with the VRI Acquisition.

 

The gross proceeds of the offering will be deposited into a segregated escrow account until the date that certain escrow release conditions are satisfied. The escrow conditions include the consummation of the VRI Acquisition and the merger of the Escrow Issuer into ModivCare, among other conditions precedent. Prior to the consummation of the VRI Acquisition and satisfaction of the escrow release conditions and pending the release of the escrowed property (if applicable), the notes will be secured by a first priority security interest in the escrow account and escrowed property. From and after the consummation of the VRI Acquisition and satisfaction of the escrow release conditions and following the release of the escrowed property (if applicable), the notes and the note guarantees will not be secured, and will be ModivCare’s and each of its then current and future wholly owned domestic subsidiaries’ (the “Guarantors”) senior obligations and will rank equal in right of payment with any of ModivCare’s and the Guarantors’ existing and future senior indebtedness, including indebtedness under ModivCare’s credit facility.

 

The notes and the note guarantees will rank senior in right of payment to any of ModivCare’s and the Guarantors’ existing and future indebtedness and obligations that are, by their terms, expressly subordinated to the notes and the note guarantees. The notes and related note guarantees will be effectively junior to all of ModivCare’s and the Guarantors’ existing and future secured indebtedness, including indebtedness under the credit facility, to the extent of the value of the collateral securing such indebtedness. The notes will also be structurally junior to all indebtedness of ModivCare’s subsidiaries that do not guarantee the notes.

 

The notes to be offered will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any other state securities laws. As a result, they may not be offered or sold in the United States or to any U.S. persons, except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Accordingly, the notes will be offered only to persons reasonably believed to be “qualified institutional buyers” under Rule 144A of the Securities Act or, outside the United States, to persons other than “U.S. persons” in compliance with Regulation S under the Securities Act. A confidential offering memorandum for the notes will be made available to such eligible persons. The offering will be conducted in accordance with the terms and subject to the conditions set forth in such offering memorandum.

 

 
 

 

This news release is neither an offer to sell nor a solicitation of an offer to buy, nor shall there be any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

 

About ModivCare

 

ModivCare Inc. ("ModivCare") (Nasdaq: MODV) is a technology-enabled healthcare services company that provides a suite of integrated supportive care solutions for public and private payors and their patients. Our value-based solutions address the social determinants of health, enable greater access to care, reduce costs, and improve outcomes. We are a leading provider of non-emergency medical transportation, personal and home care, and nutritional meal delivery. ModivCare also holds a minority equity interest in CCHN Group Holdings, Inc. and its subsidiaries ("Matrix Medical Network"), which partners with leading health plans and providers nationally, delivering a broad array of assessment and care management services to individuals that improve health outcomes and health plan financial performance. For more information, please visit us at www.modivcare.com.

 

Forward-Looking Statements

 

Certain statements contained in this press release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are predictive in nature and are frequently identified by the use of terms such as “may,” “will,” “should,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” and similar words indicating possible future expectations, events or actions. Such forward-looking statements are based on current expectations, assumptions, estimates and projections about our business and our industry, and are not guarantees of our future performance. These statements are subject to a number of known and unknown risks, uncertainties and other factors, many of which are beyond our ability to control or predict, which may cause actual events to be materially different from those expressed or implied herein, including but not limited to: government or private insurance program funding reductions or limitations; alternative payment models or the transition of Medicaid and Medicare beneficiaries to Managed Care Organizations; our inability to control reimbursement rates received for our services; cost containment initiatives undertaken by private third-party payors; the effects of a public health emergency; inadequacies in, or security breaches of, our information technology systems, including the systems intended to protect our clients’ privacy and confidential information; any changes in the funding, financial viability or our relationships with our payors; pandemic infectious diseases, including the COVID-19 pandemic; disruptions to our contact center operations caused by health epidemics or pandemics like COVID-19; delays in collection, or non-collection, of our accounts receivable, particularly during any business integration; an impairment of our long-lived assets; any failure to maintain or to develop further reliable, efficient and secure information technology systems; an inability to attract and retain qualified employees; any acquisition or acquisition integration efforts; estimated income taxes being different from income taxes that we ultimately pay; our contracts not surviving until the end of their stated terms, or not being renewed or extended; our failure to compete effectively in the marketplace; our not being awarded contracts through the government’s requests for proposals process, or our awarded contracts not being profitable; any failure to satisfy our contractual obligations or to maintain existing pledged performance and payment bonds; a failure to estimate accurately the cost of performing our contracts; any misclassification of the drivers we engage as independent contractors rather than as employees; significant interruptions in our communication and data services; not successfully executing on our strategies in the face of our competition; any inability to maintain relationships with existing patient referral sources; certificates of need laws or other regulatory and licensure obligations that may adversely affect our personal care integration efforts and expansion into new markets; any failure to obtain the consent of the New York Department of Health to manage the day to day operations of our licensed in-home personal care services agency business that we acquired with our Personal Care Segment; acquired unknown liabilities in connection with the acquisition of our Personal Care Segment; changes in the case-mix of our personal care patients, or changes in payor mix or payment methodologies; our loss of existing favorable managed care contracts; our experiencing shortages in qualified employees and management; labor disputes or disruptions, in particular in New York; becoming subject to malpractice or other similar claims; our lack of sole decision-making authority with respect to our minority investment in Matrix; the cost of our compliance or non-compliance with existing laws; changes to the regulatory landscape applicable to our businesses; changes in budgetary priorities of the government entities or private insurance programs that fund our services; regulations relating to privacy and security of patient and service user information; actions for false claims or recoupment of funds; civil penalties or loss of business for failing to comply with bribery, corruption and other regulations governing business with public organizations; changes to, or violations of, licensing regulations, including regulations governing surveys and audits; our contracts being subject to audit and modification by the payors with whom we contract, at their sole discretion; our existing debt agreements containing restrictions that limit our flexibility in operating our business; our substantial indebtedness and lease obligations; any expiration of the credit agreement that governs our credit facility or loss of available financing alternatives; our ability to incur substantial additional indebtedness; future sales of shares of our common stock by existing stockholders; our stock price volatility; our dependence on our subsidiaries to fund our operations and expenses; securities analysts failing to publish research or publishing misleading or unfavorable research about us; anti-takeover provisions could discourage a change of control of our company and affect the trading price of our stock; and our reliance on our Matrix Investment segment’s financial condition.

 

ModivCare has provided additional information in our annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. ModivCare undertakes no obligation to update or revise any forward- looking statements contained in this release, whether as a result of new information, future events or otherwise, except as required by applicable law.

 

Investor Contact:

 

The Equity Group

Kalle Ahl, CFA

T: (212) 836-9614

kahl@equityny.com