Form SC 13D/A - General Statement of Acquisition of Beneficial Ownership: [Amend]

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 2)

MODIVCARE INC.

(Name of Issuer)

Common Stock, $0.001 par value

(Title of Class of Securities)

60783X104

(CUSIP Number)

Nelson Holm 301 Commerce Street, Suite 3200 Fort Worth, Texas 76102 [phone]

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

December 11, 2024

(Date of Event which Requires Filing of this Statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ☐.

 

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

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SCHEDULE 13D

 

CUSIP No.

60783X104

1	NAMES OF REPORTING PERSONS
	Q GLOBAL CAPITAL MANAGEMENT, L.P. 26-4357778
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)	☐
				(b)	☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS)
	OO (1)
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)				☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER
			1,967,098 (2)
		8	SHARED VOTING POWER
			0
		9	SOLE DISPOSITIVE POWER
			1,967,098 (2)
		10	SHARED DISPOSITIVE POWER
			0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	1,967,098 (2)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)				☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	13.77% (2) (3)
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
	PN

(1)

See Item 3.

 

(2)

Q Global Capital Management, L.P., has sole voting and dispositive power over the shares reported herein as the investment manager of Q5-R5 Trading, Ltd.

 

(3)

Calculated based on 14,283,664 shares of the Common Stock, par value $0.001 per share, of ModivCare, Inc. outstanding as of November 1, 2024, as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 7, 2024.

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Pursuant to Rule 13d-2(a) under the Act, this Amendment No. 2 to the Schedule 13D (“Amendment No. 2”) amends certain items of the Schedule 13D filed by the Reporting Person with the Securities and Exchange Commission (the “Commission”) on November 8, 2024, as amended by Amendment No. 1 dated December 9, 2024 (collectively, the “Schedule 13D”), relating to the shares of Common Stock, par value $0.001 per share, of ModivCare, Inc. All capitalized terms contained herein but not otherwise defined shall have the meanings ascribed to such terms in the Schedule 13D. Except as specifically provided herein, this Amendment No. 2 does not modify any of the information previously reported in the Schedule 13D.

 

Item 4.

Purpose of Transaction

 

Item 4 is hereby amended by adding at the end thereof the following:

 

On December 11, 12 and 13, 2024, the Reporting Person communicated with members of the Issuer’s board and representatives regarding the Reporting Person’s concerns previously described herein, including the Reporting Person’s concerns regarding management turnover at the Issuer, the Issuer’s poor communication with the financial community, and the board’s level of engagement and track record.  In connection with those discussions, the Reporting Person offered its view in a letter that the following changes would be beneficial for the Issuer and would support the creation of long-term shareholder value:

•

the Issuer should replace Mr. Shackelton as Chairman,

•

the Issuer needs four new directors (out of the eight total) who can offer a fresh perspective,

•

the Issuer should evaluate its financial leadership team, and

 

•

the Issuer should shorten its timeline on reviewing strategic alternatives for its businesses.

 

These discussions were productive.  On December 13, 2024, the Issuer announced that Mr. Shackelton and Mr. Samant resigned from the Issuer’s board, effective as of December 13, 2024. 

 

The Reporting Person communicated to the Issuer that the Reporting Person was pleased with those resignations.  In response to those resignations, the Reporting Person delivered a letter to the Issuer on December 13, 2024.  In this letter, the Reporting Person communicated that 6 of the 8 directors (during whose tenure significant shareholder value was lost) remain on the board.  Accordingly, the Reporting Person intends to engage further with the Issuer to discuss the changes described above in light of the resignations, including potential additional changes to the Issuer’s board composition and governance.  The foregoing description of this letter does not purport to be complete and is qualified in its entirety by reference to the full text thereof, which is filed as Exhibit 99.1 and is incorporated herein by reference.

 

Item 7.

Material to Be Filed as Exhibits

 

Item 7 is hereby amended and restated in its entirety as follows:

Exhibit No.	Description
99.1	Letter to the Board of Directors, dated December 13, 2024

 

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Signature

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

December 13, 2024
Dated
Q GLOBAL CAPITAL MANAGEMENT, L.P.
By: Q Global Advisors, LLC, its general partner
/s/ Nelson Holm
By: Nelson Holm, Assistant Secretary

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Exhibit 99.1

301 Commerce Street, Suite 3200

Fort Worth, Texas  76102-4140

Tel  [phone]

Fax [phone]

December 13, 2024

 

Dear Members of the ModivCare Board:

 

Currently, affiliates of Q Investments, L.P. directly hold approximately 14% of the Company’s common shares outstanding, approximately 5% of the Company’s Term Loan Facility, and approximately 6% of the Company’s Senior Unsecured Notes due 2029. As both a shareholder and lender to ModivCare (the “Company”), we are writing to express our concerns regarding recent events related to the Company.

 

As you know, on December 11^th, we wrote to the Company regarding our views on changes required, including the following:

 

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replacing Mr. Shackelton as chairman,

 

•

the need for four new directors (out of eight total) who can offer a much-needed fresh perspective,

 

•

the evaluation of the financial leadership team, and

 

•

the need to shorten the timeline on the review of strategic alternatives

 

As a result of our letter and the resulting conversations between us, the Company announced on December 13^th that Mr. Shackelton and Mr. Samant had resigned from the board.  While we view this as a positive and constructive step toward making the requisite changes at the Company, and we thank you for starting to listen to shareholder concerns, we continue to believe that the remaining changes outlined above still need to be implemented.

 

While the resignation of two directors is progress, six of the eight directors remain the same.  It is our belief that two more directors need to be replaced in order for the tone and direction of this board and the Company to truly change.  This board has overseen the destruction of shareholder value with the 59% stock price decline this year, in addition to the stock being virtually unchanged over the past eleven years.  Please see the chart below.  The removal of two directors is simply a shuffling of the deck chairs if the majority of the board remains, particularly given most directors have been on the board for years.  Until at least half the directors are replaced and the board selects a permanent chair who is new to the board, shareholders and stakeholders will not be convinced that ModivCare has turned the page and that it is a new day.

 

We hope the Company is sincere when it expresses it is interested in continuing its discussions with us.  All stakeholders will need to be fully engaged to sustain a long-term path toward success.  We believe the changes outlined herein will accelerate and support delivering value to shareholders.

 

Regards,

 

Sohail Yousuf

 

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