10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 001-36804

Patriot National, Inc.

(Exact name of registrant as specified in its charter)

Delaware	46-4151376
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

401 East Las Olas Boulevard, Suite 1650

Fort Lauderdale, Florida 33301

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (954) 670-2900

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  x   No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes  x   No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  ¨   No  x

The number of shares of the registrant’s common stock outstanding on November 12, 2015 was 27,050,694.

PATRIOT NATIONAL, INC.

FORM 10-Q

TABLE OF CONTENTS

		Page No.
	PART I—Financial Information
Item 1.	Financial Statements.	1
	Consolidated Balance Sheets as of September 30, 2015 (Unaudited) and December 31, 2014	1
	Consolidated Statements of Operations (Unaudited) for the three months ended September 30, 2015 and September 30, 2014	2
	Consolidated Statements of Operations (Unaudited) for the nine months ended September 30, 2015 and September 30, 2014	3
	Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2015 and September 30, 2014	4
	Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited) for the nine months ended September 30, 2015	6
	Notes to Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38
	PART II — Other Information
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	40
SIGNATURES		42

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PATRIOT NATIONAL, INC.

Consolidated Balance Sheets

(In thousands) 

	September 30, 2015			December 31, 2014
	(Unaudited)
Assets
Current Assets
Cash	$	15,209		$	4,251
Equity and fixed income security investments		3,249			—
Total cash and investments		18,458			4,251
Restricted cash		16,289			6,923
Fee income receivable		13,372			1,942
Fee income receivable from related party		22,141			11,988
Net receivable from related parties		152			1,773
Deferred costs for initial public offering		—			2,682
Income taxes receivable		3,224			—
Other current assets		2,207			430
Total current assets		75,843			29,989
Fixed assets, net of depreciation		4,798			1,879
Deferred loan fees		2,343			5,911
Goodwill		119,408			61,493
Intangible assets		78,935			32,988
Other long term assets		11,557			9,842
Total Assets	$	292,884		$	142,102
Liabilities and Equity (Deficit)
Liabilities
Deferred claims administration services income	$	10,781		$	8,515
Net advanced claims reimbursements		7,040			6,803
Income taxes payable		—			11,548
Current earn-out payable		10,235			—
Accounts payable, accrued expenses and other liabilities		38,921			15,027
Deferred purchase consideration		16,831			—
Revolver borrowings outstanding		10,832			—
Current portion of notes payable		5,500			15,782
Current portion of capital lease obligation		2,409			2,332
Total current liabilities		102,549			60,007
Earn-out payable		1,827			—
Notes payable		102,375			95,039
Capital lease obligation		417			2,438
Warrant redemption liability		—			12,879
Total Liabilities		207,168			170,363
Equity (Deficit)
Preferred stock, $.001 par value; 100,000 shares authorized, no shares issued    and outstanding as of September 30, 2015 and December 31, 2014		—			—
Common stock, $.001 par value; 1,000,000 shares authorized, 27,051    and 18,075 shares issued and outstanding as of September 30, 2015 and    December 31, 2014, respectively		21			14
Additional paid in capital		113,867			—
Accumulated deficit		(27,938	)		(27,930	)
Total Patriot National, Inc. Stockholders' Equity (Deficit)		85,950			(27,916	)
Less Non-controlling interest		(234	)		(345	)
Total Equity (Deficit)		85,716			(28,261	)
Total Liabilities and Equity (Deficit)	$	292,884		$	142,102

See accompanying notes to consolidated financial statements.

1

PATRIOT NATIONAL, INC.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended September 30,
	2015			2014
Revenues
Fee income	$	34,759		$	15,630
Fee income from related party		23,773			15,803
Total fee income and fee income from related party		58,532			31,433
Net investment income		49			76
Net realized (losses) gains on investments		(58	)		13,960
Total Revenues		58,523			45,469
Expenses
Salaries and related expenses		21,549			9,726
Commission expense		8,173			5,891
Management fees to related party for administrative support services		—			861
Outsourced services		2,369			1,713
Allocation of marketing, underwriting and policy issuance costs from    related party		—			333
Other operating expenses		11,974			4,538
Acquisition costs		1,453			—
Interest expense		806			2,836
Depreciation and amortization		4,380			1,652
Amortization of loan discounts and loan costs		62			650
Stock compensation expense		2,586			—
Decrease in fair value of warrant redemption liability		—			(8,760	)
Gain on disposal of fixed assets		(7	)		—
Total Expenses		53,345			19,440
Net Income before income tax expense		5,178			26,029
Income tax expense		1,331			9,101
Net Income Including Non-Controlling Interest in Subsidiary		3,847			16,928
Net Income attributable to non-controlling interest in subsidiary		59			26
Net Income	$	3,788		$	16,902
Earnings Per Common Share
Basic	$	0.14		$	1.03
Diluted		0.14			0.46
Weighted Average Common Shares Outstanding
Basic		26,802			16,368
Diluted		27,940			17,551

See accompanying notes to consolidated financial statements.

2

PATRIOT NATIONAL, INC.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

	Nine Months Ended September 30,
	2015			2014
Revenues
Fee income	$	80,060		$	37,896
Fee income from related party		68,852			24,589
Total fee income and fee income from related party		148,912			62,485
Net investment income		85			496
Net realized (losses) gains on investments		(149	)		14,038
Total Revenues		148,848			77,019
Expenses
Salaries and related expenses		53,782			17,907
Commission expense		25,556			9,491
Management fees to related party for administrative support services		—			5,390
Outsourced services		7,623			3,118
Allocation of marketing, underwriting and policy issuance costs from    related party		—			1,872
Other operating expenses		25,259			7,801
Acquisition costs		4,372			—
Interest expense		2,525			5,427
Depreciation and amortization		10,075			3,699
Amortization of loan discounts and loan costs		206			1,295
Stock compensation expense		8,791			—
Costs from debt payoff (1)		13,681			—
Decrease in fair value of warrant redemption liability		(1,385	)		(2,257	)
Gain on disposal of fixed assets		(7	)		—
Total Expenses		150,478			53,743
Net (Loss) Income before income tax expense		(1,630	)		23,276
Income tax (benefit) expense		(1,733	)		10,401
Net Income Including Non-Controlling Interest in Subsidiary		103			12,875
Net Income attributable to non-controlling interest in subsidiary		111			68
Net (Loss) Income	$	(8	)	$	12,807
(Loss) Earnings Per Common Share
Basic	$	(0.00	)	$	0.85
Diluted		(0.00	)		0.65
Weighted Average Common Shares Outstanding
Basic		26,006			14,981
Diluted		26,006			16,183

(1) Costs from debt payoff include $4.3 million of early payment penalties and $9.3 million associated with the write-off of related deferred financing fees and original issue discounts.

See accompanying notes to consolidated financial statements.

3

PATRIOT NATIONAL, INC.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2015			2014
Operating Activities
Net Income	$	103		$	12,875
Adjustments to reconcile net (loss) income to net cash from operating activities:
Net (Income) attributable to business generated by GUI,    exclusive of depreciation expense		—			(2,252	)
Depreciation and amortization		10,075			3,699
Amortization of loan discounts and loan costs		206			1,295
Decrease in fair value of warrant redemption liability		(1,385	)		(2,257	)
Stock compensation expense		8,791			—
Write-off of deferred financing and original issue discounts		9,342			—
Net realized losses (gains) on investments		149			(14,038	)
Deferred income taxes		—			(482	)
Provision for uncollectible fee income		351			100
Changes in certain assets and liabilities:
Decrease (increase) in:
Fee income receivable		(8,212	)		(719	)
Fee income receivable from related party		(10,153	)		(4,849	)
Other current assets		(1,715	)		(85	)
Increase (decrease) in:
Net payable to related parties		781			3,618
Deferred claims administration services income		539			569
Net advanced claims reimbursements		237			629
Income taxes payable		(14,081	)		8,833
Accounts payable and accrued expenses		11,963			8,593
Net Cash Provided by Operating Activities		6,991			15,529
Investment Activities:
Net increase in restricted cash		(4,528	)		(672	)
Net increase in note receivable from related party		—			(492	)
Purchase of equity securities		(3,662	)		(3,914	)
Proceeds from sale of equity securities		264			4,037
Purchase of fixed assets and other long-term assets		(4,565	)		(437	)
Acquisitions, net of $4,069 and $912 cash acquired in 2015 and 2014, respectively		(74,014	)		(52,744	)
Net Cash Used in Investment Activities		(86,505	)		(54,222	)
Financing Activities:
Proceeds from initial public offering, net		98,275			—
Proceeds from senior secured term loans, net of fees		107,497			—
Proceeds from notes payable, net of detachable common stock warrants and loan fees		—			55,290
Repayment of senior secured term loans		(2,125	)		—
Payment of loan fees		—			(3,388	)
Payment of costs for initial public offering		(2,479	)		—
Revolver facility borrowings		51,900			—
Revolver facility repayments		(41,068	)		—
Repayment of note payable		(119,573	)		(6,656	)
Repayment of capital lease obligation		(1,955	)		(188	)
Net Cash Provided by Financing Activities		90,472			45,058
Increase in cash		10,958			6,365
Cash, beginning of period		4,251			1,661
Cash, end of period	$	15,209		$	8,026

See accompanying notes to consolidated financial statements.

4

PATRIOT NATIONAL, INC.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2015			2014
Supplemental Cash Flow Data
Net Loss Attributable to Business Generated by GUI, Exclusive of Depreciation Expense
GUI total net loss	$	—		$	45
Depreciation expense		—			(2,297	)
	$	—		$	(2,252	)
Non-Cash Capital Contribution Associated with Assets and Liabilities of GUI
Fixed assets and other long term assets acquired from GUI	$	—		$	334
Elimination of balances payable to GUI		—			3,168
Change in capital lease obligation assumed from GUI		—			1,304
Note receivable transferred to GUI		—			(492	)
Note payable associated with acquisition of assets and liabilities of GUI		—			(30,000	)
	$	—		$	(25,686	)
Interest Paid	$	2,504		$	4,877
Income Taxes Paid	$	11,062		$	533
Non-Cash Stock Consideration Issued for the Acquisition of Global HR Research LLC	$	6,503		$	—
Non-Cash Financing Activities
Deemed dividend attributable to acquisition of MPCS assets	$	(750	)	$	—
Deemed dividend attributable to acquisition of GUI's contracts and certain    other assets and assumption of certain liabilities		—			(49,150	)
Deemed dividend attributable to merger of SPV2 with and into Patriot Care, Inc.		—			(6,750	)

See accompanying notes to consolidated financial statements.

5

PATRIOT NATIONAL, INC.

Consolidated Statements of Stockholders’ Equity (Deficit)

(In thousands)

(Unaudited)

	Patriot National, Inc. Stockholders' Equity
	Common Stock				Additional Paid In			Accumulated			Non-Controlling			Total Equity
	Shares		Amount		Capital			Deficit			Interest			(Deficit)
Balance, January 1, 2015		18,075	$	14	$	—		$	(27,930	)	$	(345	)	$	(28,261	)
Issuance of common stock		7,350		7		97,824			—			—			97,831
Exercise of detachable common stock    warrants		965		—		—			—			—			—
Stock consideration issued for acquisitions		350		—		6,503			—			—			6,503
Restricted stock awards exercised		311		—		—			—			—			—
Stock compensation		—		—		8,791			—			—			8,791
Deemed dividend attributable to acquisition    of MPCS assets		—		—		(750	)		—			—			(750	)
Contribution of warrant redemption liability		—		—		1,499			—			—			1,499
Balance before Net Loss		27,051		21		113,867			(27,930	)		(345	)		85,613
Net (Loss) Income		—		—		—			(8	)		111			103
Balance, September 30, 2015		27,051	$	21	$	113,867		$	(27,938	)	$	(234	)	$	85,716

See accompanying notes to consolidated financial statements.

6

PATRIOT NATIONAL, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business and Basis of Presentation

Description of Business

Patriot National, Inc. (“Patriot National” or the “Company”) is an independent national provider of comprehensive technology-enabled outsourcing solutions that help insurance carriers, employers and other clients mitigate risk, comply with complex regulations, and save time and money. We offer a full suite of end-to-end insurance related and specialty services that allow our clients to improve efficiencies and reduce expenses through our value-added processes. The core of our value proposition includes the benefit of a “one-stop” solution with our broad array of offered services, scalable state-of-the-art technology, and solutions to complex business and regulatory processes. Our goal is to be the preferred provider of mandatory employer services such as risk management services, health and welfare services, employee onboarding and compliance services.

The Company offers two types of services: front-end services, such as brokerage, underwriting and policyholder services, and back-end services, such as claims adjudication and administration. We provide our services either on an individual basis, as bundles of two or more services tailored to a client’s specific needs or on a turnkey basis where we provide a comprehensive set of front-end and back-end services to a client. We also offer specialty services currently including technology outsourcing and other IT services, as well as employment pre-screening and background checks. As a service company, we do not assume any underwriting or insurance risk.

Our revenue is primarily fee-based, most of which is contractually committed or highly recurring. Unlike our insurance and reinsurance carrier clients, we do not generate underwriting income or assume underwriting risk on workers’ compensation plans. Patriot National is headquartered in Ft. Lauderdale, Florida.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements have been omitted pursuant to such rules and regulations. Included for comparative purposes are our combined financial statements for the three and nine month periods ended September 30, 2014, which combined the financial activity of Patriot National with the results of an acquisition under common control.  This acquisition was completed on August 6, 2014.  The combined financial statements presented for the periods ended September 30, 2014 are the Statement of Operations and the Statement of Cash Flows.  This acquisition is discussed fully in our annual report for the year ended December 31, 2014.

The unaudited consolidated financial statements included herein are, in the opinion of management, prepared on a basis consistent with our audited combined financial statements for the year ended December 31, 2014 and include all normal recurring adjustments necessary for a fair presentation of the information set forth. The quarterly results of operations are not necessarily indicative of the results of operations to be reported for subsequent quarters or the full year. These unaudited consolidated financial statements should be read in conjunction with the audited combined financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014. In the preparation of our unaudited consolidated financial statements as of September 30, 2015, management evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued for potential recognition or disclosure therein.

For Contego Services Group, LLC (“Contego Services Group”), the Company’s combined subsidiary that is 97% owned, and for DecisionUR, LLC (“DecisionUR”), the Company’s combined subsidiary that is 98.8% owned, the third party holdings of equity interests are referred to as non-controlling interest. The portion of the third party members’ equity (deficit) of Contego Services Group and DecisionUR are presented as non-controlling interest in the accompanying consolidated balance sheets as of September 30, 2015 and combined balance sheet as of December 31, 2014. The Company discloses the following three measures of net income (loss): (i) net income (loss), including non-controlling interest in subsidiary, (ii) net income (loss) attributable to non-controlling interest in subsidiary, and (iii) net income (loss).

2. Effect of Recently Issued Financial Accounting Standards

In September 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments”, an update to Accounting Standard Codification (“ASC”)Topic 805, Business Combinations.  This update requires that an acquirer recognize adjustments to the provisional amounts that are identified during the measurement period in the reporting period in which the adjusting amounts are determined. The amendment requires that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation,

7

amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments in this update require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The amendments are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The update should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this update with earlier application permitted for financial statements that have not been issued.  We will evaluate this guidance as potential adjustments arise.  

In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs”. The update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. The update requires retrospective application. ASU 2015-03 is effective for fiscal years, and interim reporting periods within those years, beginning after December 15, 2015. Early adoption is permitted but we do not anticipate electing early adoption.  We are currently evaluating the financial impact of this standard.

In August 2014, the FASB issued ASU 2014-15 regarding ASC Topic 205, Presentation of Financial Statements – Going Concern. The updated guidance related to determining whether substantial doubt exists about an entity's ability to continue as a going concern. The amendment provides guidance for determining whether conditions or events give rise to substantial doubt that an entity has the ability to continue as a going concern within one year following issuance of the financial statements and requires specific disclosures regarding the conditions or events leading to substantial doubt. The updated guidance is effective for annual reporting periods and interim periods within those annual periods beginning after December 15, 2016. Earlier adoption is permitted, but we do not anticipate electing early adoption. We do not expect the adoption of this guidance to have a material impact on our combined financial statements.

In May 2014, the FASB issued ASU 2014-09 regarding ASC Topic 606, Revenue from Contracts with Customers. The standard provides principles for recognizing revenue for the transfer of promised goods or services to customers with the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued a deferral of effective date for this standard.  For public companies this standard applies to annual reporting period beginning after December 15, 2017, including interim reporting periods within that reporting period, and early adoption is not permitted. We are currently evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption.

In April 2014, the FASB issued ASU 2014-08, “Reporting Discontinued Operations”, regarding ASC Topic 205, Presentation of Financial Statements, and ASC Topic 360, Property, Plant and Equipment. The updated guidance related to reporting discontinued operations and disclosures of disposals of components of an entity. Under the amendment, only those disposals of components of an entity that represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements. Additionally, the elimination of the component's operations, cash flows and significant continuing involvement conditions have been removed. Further, an equity method investment could be reported as discontinued operations. The updated guidance is effective prospectively for all disposals or classifications as held for sale that occur within annual periods beginning after December 15, 2014. The adoption of this guidance has not had a material impact on our combined financial statements.

8

3. Business Combinations

The Company completed seventeen acquisitions during the nine-month period ended September 30, 2015. We acquired substantially all of the net assets of the following companies in cash and stock transactions. These acquisitions have been accounted for using the acquisition method for recording business combinations, except for DecisionUR, as further discussed below.

Name and Effective Date of Acquisition (In thousands):	Cash Paid		Stock Issued		Accrued Liability		Deferred Purchase Consideration		Recorded Earnout Payable		Maximum Potential Earnout Payable		Total Recorded Purchase Price
Phoenix Risk Management, Inc (January 31, 2015)	$	1,099	$	—	$	—	$	—	$	2,790	$	3,000	$	3,889
DecisionUR, LLC (February 5, 2015)		2,240		—		23		—		—		—		2,240
Capital & Guaranty, LLC (February 9, 2015)		175		—		—		—		175		175		350
TriGen Holding Group, Inc (March 31, 2015)		3,340		—		3,364		4,911		1,433		1,500		9,684
Hospitality Supportive Systems, LLC (April 1, 2015)		9,650		—		—		—		—		—		9,650
Selective Risk Management, LLC (April 1, 2015)		3,846		—		—		—		—		—		3,846
Vikaran Solutions, LLC (April 17, 2015)		8,500		—		152		—		—		—		8,500
Corporate Claims Management, Inc (April 24, 2015)		7,900		—		4,434		—		825		1,000		8,725
Candid Investigation Services, LLC (May 8, 2015)		1,033		—		—		—		367		450		1,400
Brandywine Insurance Advisors, LLC   (May 22, 2015)		3,000		—		—		—		220		1,205		3,220
Infinity Insurance Solutions, LLC (June 1, 2015)		1,750		—		100		—		552		650		2,302
InsureLinx, Inc (June 12, 2015)		6,300		—		1,840		—		—		—		6,300
The Carman Corporation (June 15, 2015)		2,000		—		—		—		—		—		2,000
CWI Benefits, Inc (July 9, 2015)		2,750		—		2,061		—		3,400		4,675		6,150
Restaurant Coverage Associates, Inc (August 14, 2015)		750		—		—		—		1,725		1,825		2,475
Risk Control Associates, Inc (August 14, 2015)		250		—		650		—		575		675		825
Global HR Research LLC (August 21, 2015)		23,500		6,503		2,457		11,920		—		—		41,923
Total	$	78,083	$	6,503	$	15,081	$	16,831	$	12,062	$	15,155	$	113,479

The Company acquired DecisionUR from Six Points Investment Partners, LLC, a company under common control.  However, results of operations for DecisionUR are included from acquisition date, as its operations are immaterial with respect to the financial statements taken as a whole for all periods presented.

The “maximum potential earnout payables” disclosed in the foregoing table represent the maximum amount of additional consideration that could be paid pursuant to the terms of the purchase agreement for the applicable acquisition. The “recorded earnout payables” disclosed in the foregoing table are primarily based upon the estimated future operating results of the acquired entities over a one- to three-year period subsequent to the acquisition date. The recorded earnout payables are measured at fair value as of the acquisition date and are included on that basis in the total recorded purchase price in the foregoing table. We will record subsequent changes in these estimated earnout obligations, including the accretion of discount, in our statement of operations when incurred.

The fair value of these earnout obligations is based on the present value of the expected future payments to be made to the sellers of the acquired entities in accordance with the provisions outlined in the respective purchase agreements, which is a Level 3 fair value measurement, as discussed further in Note 11, Fair Value of Financial Assets and Liabilities. In determining fair value, we estimated the acquired entity’s future performance using financial projections developed by management for the acquired entity and market participant assumptions that were derived for revenue growth and/or profitability.  We estimated future payments using the earnout formula and performance targets specified in each purchase agreement and these financial projections. We then discounted these payments to present value using a risk-adjusted rate that takes into consideration market-based rates of return that reflect the ability of the acquired entity to achieve the targets. Changes in financial projections, market participant assumptions for revenue growth and/or profitability, or the risk-adjusted discount rate, would result in a change in the fair value of recorded earnout obligations.

The aggregate amount of maximum earnout obligations related to acquisitions made in 2015, as of September 30, 2015 was $15.2 million, of which $12.1 million was recorded in our consolidated balance sheet as of September 30, 2015, based on the aggregate estimated fair value of the expected future payments to be made.

   The purchase price for the Global HR Acquisition consists of (a) $24 million in cash, of which, $0.5 million is held in escrow, (b) 444,096 shares of our common stock (the “Stock Consideration”) of which 349,645 were issued and 94,451 are held in escrow, plus (c) certain deferred consideration payable, at our sole discretion, in either 618,478 shares of our common stock or $10,477,017 in cash (the “Deferred Consideration”). The Deferred Consideration is payable solely to In Touch Holdings LLC, one of the former principal stockholders of Global HR, on the earlier of (x) November 20, 2015, (y) the 21st day after the date we mail an information statement to the shareholders in connection with the Global HR Acquisition or (z) we file a registration statement with the SEC that is declared effective. As of the filing date, no decision has been made on the settlement of Deferred Consideration in cash or stock. If the revenues for Global HR for its fiscal year 2016 are less than $12.8 million, then In Touch Holdings LLC will forfeit and return 10% of its Stock Consideration and Deferred Stock Consideration to us.

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The deferred purchase consideration disclosed in the foregoing table represents non-contingent purchase consideration payable to sellers.  These include $5.0 million payable to a seller of TriGen Holding Group, Inc. on the first anniversary of the effective date, and deferred stock consideration of $11.4 million and cash escrow amounts of $0.5 million to sellers of Global HR Research LLC payable on November 20, 2015, all recorded at fair value.

The following is a summary of the aggregate estimated fair values of the net assets acquired at the date of each of the acquisitions made in the nine months ended September 30, 2015:

In thousands	Total
Assets Acquired:
Cash	$	4,069
Restricted cash		4,838
Accounts receivable		5,069
Fixed assets		2,002
Other assets		2,272
Goodwill		57,915
Intangible assets:
Customer & carrier relationships		31,039
Service contracts		320
Non-compete agreements		4,739
Developed technology		13,268
Trade name portfolio		3,029
Total intangible assets		52,395
Total assets acquired		128,560
Liabilities assumed		15,081
Total net assets acquired	$	113,479

The net assets acquired are preliminary and subject to measurement period adjustments.

In accordance with FASB ASC 350, Intangibles—Goodwill and Other, intangible assets, which are comprised of the estimated fair value of the service contracts acquired, customer and carrier relationships, non-compete agreements, developed technology and trade names are being amortized over the respective estimated life, ranging from two to ten years, in a manner that, in management’s opinion, reflects the pattern in which the intangible asset’s future economic benefits are expected to be realized. Intangible assets are tested for impairment at least annually (more frequently if certain indicators are present). In the event that management determines that the value of the intangible asset has become impaired, the company will incur an accounting charge for the amount of impairment during the fiscal quarter in which the determination is made.

Provisional estimates of fair value and the allocation of the purchase price are established at the time of each acquisition and are subsequently reviewed within the first year of operations, the measurement period, following the acquisition date to determine the necessity for adjustments. The fair value of the tangible assets and liabilities for each applicable acquisition at the acquisition date approximated their carrying values. We estimate the fair value as the present value of the benefits anticipated from ownership of the subject customer list in excess of returns required on the investment in contributory assets necessary to realize those benefits. The rate used to discount the net benefits was based on a risk-adjusted rate that takes into consideration market-based rates of return and reflects the risk of the asset relative to the acquired business. These discount rates generally ranged from 17% to 30% for our 2015 acquisitions through September 30, 2015. The fair value of non-compete agreements was established using estimated financial projections for the acquired company based on market participant assumptions and various non-compete scenarios.

Customer and carrier relationships, non-compete agreements and trade names related to our acquisitions are amortized using the straight-line method over their estimated useful lives (ten years for customer and carrier relationships, one to two years for non-compete agreements and five to seven years for trade names), while goodwill is not subject to amortization. We use the straight-line method to amortize these intangible assets because the pattern of their economic benefits cannot be reasonably determined with any certainty. We review all of our intangible assets for impairment periodically (at least annually) and whenever events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. In reviewing intangible assets, if the fair value is less than the carrying amount of the respective (or underlying) asset, an indicator of impairment would exist, and further analysis would be required to determine whether or not a loss would need to be charged against current period earnings. Based on the results of impairment reviews during the nine-month periods ended September 30, 2015 and 2014, no impairments were required.

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Our consolidated financial statements for the nine months ended September 30, 2015 include the operations of the acquired entities from their respective acquisition dates, totaling $21.7 million of revenues and $2.1million of net income.

The following is a summary of the unaudited pro forma historical results, as if these entities and Patriot Care Management, Inc. (“Patriot Care Management”), which was acquired on August 6, 2014, had been acquired at January 1, 2014 (in thousands, except per share data):

	Nine Months Ended September 30,
In thousands (except per share data)	2015		2014
Total revenues		174,376		141,658
Net (loss) income		1,107		14,508
Basic net (loss) income per share	$	0.04	$	0.97
Diluted net (loss) income per share	$	0.04	$	0.76

This unaudited supplemental pro forma financial information includes the results of operations of acquired businesses presented as if they had been combined as of January 1, 2014. The unaudited supplemental pro forma financial information has been provided for illustrative purposes only. The unaudited supplemental pro forma financial information does not purport to be indicative of the actual results that would have been achieved by the combined companies for the periods presented, or of the results that may be achieved by the combined companies in the future. Future results may vary significantly from the results reflected in the following unaudited supplemental pro forma financial information because of future events and transactions, as well as other factors, many of which are beyond the Company’s control.

4. Equity and Fixed Income Security Investments

Equity and fixed income security investments are carried at fair value.  We classify these investments as a trading portfolio with changes to the fair value of investments marked-to-market value and reflected in the aggregate net income or loss for the period incurred.  The trading portfolio is utilized to generate investment income with available cash on hand.

As of September 30, 2015, our major classes of investments consisted of the following:

	September 30, 2015
In thousands	Cost Basis		Gains		Losses			Fair Value
	(Unaudited)
Equity and Fixed Income Security Investments
Common and preferred stocks	$	429	$	—	$	(41	)	$	388
Corporate notes and bonds		2,969		—		(108	)		2,861
Total	$	3,398	$	—	$	(149	)	$	3,249

There were no investments as of December 31, 2014.

5. Fixed Assets and Other Long Term Assets

Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation and amortization. Expenditures for computer equipment, software, and furniture and fixtures are capitalized and depreciated on a straight-line basis over a five, three, and seven year estimated useful lives, respectively. Expenditures for building are capitalized and depreciated on a straight-line basis over a thirty-nine year estimated useful life. Expenditures for leasehold improvements on office space and facilities are capitalized and amortized on a straight-line basis over the term of the lease.

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As of September 30, 2015 and December 31, 2014, our major classes of fixed assets consisted of the following:

In thousands	September 30, 2015			December 31, 2014
	(Unaudited)
Fixed Assets
Computer equipment, software and furniture and fixtures	$	7,640		$	5,722
Building		1,428			-
Leasehold improvements		3,534			2,545
Total fixed assets		12,602			8,267
Less accumulated depreciation and amortization		(7,804	)		(6,388	)
Fixed assets, net of accumulated depreciation and amortization	$	4,798		$	1,879

Other Long Term Assets

Other long term assets, which are solely comprised of capitalized policy and claims administration system development costs, are also stated at cost, net of accumulated depreciation. Expenditures for capitalized policy and claims administration system development costs are capitalized and depreciated on a straight line basis over a five-year estimated useful life.

As of September 30, 2015 and December 31, 2014, other long term assets consisted of the following:

In thousands	September 30, 2015			December 31, 2014
	(Unaudited)
Other long term assets
Capitalized policy and claims administration system development costs	$	17,016		$	13,093
Less accumulated depreciation		(5,459	)		(3,251	)
Other long term assets, net of accumulated depreciation	$	11,557		$	9,842

We periodically review all fixed assets and other long term assets that have finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Upon sale or retirement, the cost and related accumulated depreciation and amortization of assets disposed of are removed from the accounts, and any resulting gain or loss is reflected in earnings.

6. Goodwill and Other Intangible Assets

Goodwill

Goodwill represents the excess of consideration paid over the fair value of net assets acquired. Goodwill is not amortized but is tested at least annually for impairment (or more frequently if certain indicators are present or management otherwise believes it is appropriate to do so). In the event that management determines that the value of goodwill has become impaired, we will record a charge for the amount of impairment during the fiscal quarter in which the determination is made. We determined that there was no impairment as of September 30, 2015.

The Company acquired $57.9 million of goodwill during the nine-month period ended September 30, 2015 as a result of the seventeen acquisitions discussed in Note 3, Business Combinations. Changes in goodwill are summarized as follows:

In thousands
Balance as of December 31, 2014	$	61,493
Goodwill acquired		57,915
Balance as of September 30, 2015	$	119,408

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Intangible Assets

Intangible assets that have finite lives are amortized over their useful lives. The company acquired $52.4 million of intangible assets during the nine-month period ended September 30, 2015 as a result of the seventeen acquisitions discussed in Note 3, Business Combinations. The intangible assets, their original fair values, and their net book values are detailed below as of the dates presented:

	September 30, 2015							December 31, 2014
In thousands	Gross Asset		Accumulated Amortization			Net Asset		Gross Asset		Accumulated Amortization			Net Asset
	(Unaudited)
Intangible Assets
Service contracts	$	35,120	$	(5,105	)	$	30,015	$	34,800	$	(1,812	)	$	32,988
Customer and carrier relationships		31,039		(1,244	)		29,795		—		—			—
Non-compete agreements		4,739		(914	)		3,825		—		—			—
Developed technology		13,268		(894	)		12,374		—		—			—
Trade names		3,029		(103	)		2,926		—		—			—
Total	$	87,195	$	(8,260	)	$	78,935	$	34,800	$	(1,812	)	$	32,988

The table below reflects the estimated amortization expense for the Company’s intangible assets for each of the next five years and thereafter:

In thousands	September 30, 2015
Amortization expense	(Unaudited)
2015 (remaining three months)	$	3,286
2016		13,140
2017		11,625
2018		10,770
2019		10,770
Thereafter		29,344
Total	$	78,935

7. Notes Payable and Lines of Credit

As of September 30, 2015 and December 31, 2014, notes payable were comprised of the following:

In thousands	September 30, 2015			December 31, 2014
	(Unaudited)
BMO Senior Secured Term Loans	$	107,875		$	—
PennantPark Loan Agreement		—			63,285
UBS Credit Agreement		—			56,288
Gross Notes Payable and Current Portion of Notes Payable		107,875			119,573
Less original issue discount		—			(3,085	)
Less value attributable to stock warrants		—			(5,667	)
Notes Payable and Current Portion of Notes Payable		107,875			110,821
Less current portion of notes payable		(5,500	)		(15,782	)
Notes Payable	$	102,375		$	95,039

Senior Secured Credit Facility

On January 22, 2015, we entered into a Credit Agreement with BMO Harris Bank N.A., as administrative agent (the “Administrative Agent”), and the other lenders party thereto, which provides for a $40.0 million revolving credit facility and a $40.0 million term loan facility (the “Senior Secured Credit Facility”). The Senior Secured Credit Facility has a maturity of five years, and borrowings thereunder bear interest, at our option, at LIBOR plus a margin ranging from 250 basis points to 325 basis points or at

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base rate plus a margin ranging from 150 basis points to 225 basis points. Margins on all loans and fees will be increased by 2% per annum during the existence of an event of default. The revolving credit facility includes borrowing capacity available for letters of credit and borrowings on same-day notice, referred to as swing line loans. At any time prior to maturity, we have the right to increase the size of the revolving credit facility or the term loan facility by an aggregate amount of up to $20.0 million, but in minimum increments of $5.0 million. As of June 30, 2015, weincreased the term loan facility by $20.0 million through two $10.0 million incremental term loans. Additionally, on August 14, 2015, we entered into a second amendment to our Senior Secured Credit Facility (the “Second Amendment”) which provides for an additional $50.0 million of term loans plus the ability to increase the term loan by and additional $50.0 million under certain conditions.  The Second Amendment also added a requirement that until we deliver a certificate certifying that (a) our total leverage ratio is equal to or less than 2.25 to 1.00 and (b) our Adjusted EBITDA for the twelve-months then ended is at least $70.0 million, the outstanding revolving loans (plus any swing line loans and the aggregate stated amount of all letters of credit) shall not exceed $30.0 million.  All other material terms and conditions in the Senior Secured Credit Facility were unchanged by the Second Amendment.

As of September 30, 2015, the outstanding balance under our Senior Secured Credit Facility was $118.7 million (comprised of $107.9 million outstanding under the term loan facility and $10.8 million outstanding under the revolving credit facility). Accordingly, we had $29.2 million available to borrow under the revolving credit facility.

In addition to paying interest on outstanding principal under the Senior Secured Credit Facility, we are required to pay a commitment fee to the Administrative Agent for the ratable benefit of the lenders under the revolving credit facility in respect of the unutilized commitments thereunder, ranging from 35 basis points to 50 basis points, depending on specified leverage ratios. With respect to letters of credit, we are also required to pay a per annum participation fee equal to the applicable LIBOR margin on the face amount of each letter of credit as well as a fee equal to 0.125% on the face amount of each letter of credit issued (or the term of which is extended). This latter 0.125% fee is payable to the issuer of the letter of credit for its own account, along with any standard documentary and processing charges incurred in connection with any letter of credit.

The term loan facility amortizes quarterly beginning the first full quarter after the closing date at a rate of 5% per annum of the original principal amount during the first two years, 7.5% per annum of the original principal amount during the third and fourth years and 10% per annum of the original principal amount during the fifth year, with the remainder due at maturity. Principal amounts outstanding under the revolving credit facility are due and payable in full at maturity. In the event of any sale or other disposition by us or our subsidiaries guaranteeing the Senior Secured Credit Facility (as described below) of any assets with certain exceptions, we are required to prepay all proceeds received from such a sale towards the remaining scheduled payments of the term loan facility.

Additionally, all obligations under the Senior Secured Credit Facility (as described below) are guaranteed by all of our existing and future subsidiaries, other than foreign subsidiaries to the extent the assets of such foreign subsidiaries do not exceed 5% of our and our subsidiaries’ total assets on a consolidated basis, and secured by a first-priority perfected security interest in substantially all of our and our guaranteeing subsidiaries’ tangible and intangible assets, whether now owned or hereafter acquired, including a pledge of 100% of the stock of each guarantor.

The Senior Secured Credit Facility contains certain covenants that, among other things and subject to significant exceptions, limit our ability and the ability of our restricted subsidiaries to engage in certain business and financing activities and that require us to maintain certain financial covenants, including requirements to maintain (i) a maximum total leverage ratio of total outstanding debt to adjusted EBITDA for the most recently-ended four fiscal quarters of no more than 300% and (ii) a minimum fixed charge coverage ratio of adjusted EBITDA to the sum of cash interest expense (which amount shall be calculated on an annualized basis for the three-, six-, and nine-month periods ended March 31, 2015, June 30, 2015 and September 30, 2015) plus income tax expense (or less any income tax benefits) plus capital expenditures plus dividends, share repurchases and other restricted payments plus regularly scheduled principal payments of debt for the same period of a least 150% for the most recently ended four quarters. The Senior Secured Credit Facility allows us to pay dividends in an amount up to 50% of our net income if certain other financial conditions are met.

The Senior Secured Credit Facility contains other restrictive covenants, including those regarding: indebtedness (including capital leases) and guarantees; liens; operating leases; investments and acquisitions; loans and advances; mergers, consolidations and other fundamental changes; sales of assets; transactions with affiliates; no material changes in nature of business; dividends and distributions, stock repurchases, and other restricted payments; change in name, jurisdiction of organization or fiscal year; burdensome agreements; and capital expenditures.

The Senior Secured Credit Facility also has events of default that may result in acceleration of the borrowings thereunder, including: (i) nonpayment of principal, interest, fees or other amounts (subject to customary grace periods for items other than principal); (ii) failure to perform or observe covenants set forth in the loan documentation (subject to customary grace periods for certain affirmative covenants); (iii) any representation or warranty proving to have been incorrect in any material respect when made; (iv) cross-default to other indebtedness and contingent obligations in an aggregate amount in excess of an amount to be agreed upon; (v) bankruptcy and insolvency defaults (with grace period for involuntary proceedings); (vi) inability to pay debts; (vii) monetary judgment defaults in excess of an agreed upon amount; (viii) ERISA defaults; (ix) change of control; (x) actual invalidity or unenforceability of any loan document, any security interest on any material portion of the collateral or asserted (by any loan party) invalidity or unenforceability of any security interest on any collateral; (xi) actual or asserted (by any loan party) invalidity or

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unenforceability of any guaranty; (xii) material unpaid, final judgments that have not been vacated, discharged, stayed or bonded pending appeal within a specified number of days after the entry thereof; and (xiii) any other event of default agreed to by us and the Administrative Agent.

As of September 30, 2015, we were in compliance with the financial and other restrictive covenants under our outstanding material debt obligations, including our Senior Secured Credit Facility.

Repayment of UBS Credit Agreement

On August 6, 2014, in connection with the Patriot Care Management Acquisition, we and certain of our subsidiaries entered into a credit agreement with UBS Securities LLC (the “UBS Credit Agreement”), which provided for a five-year term loan facility in an aggregate principal amount of $57.0 million that would mature on August 6, 2019. The loan was secured by the common stock of Patriot Care Management and guaranteed by Guarantee Insurance Group and its wholly owned subsidiaries. Following our initial public offering (the “IPO”), on January 22, 2015 we prepaid all outstanding borrowings under the UBS Credit Agreement, including accrued interest and applicable prepayment premium. This instrument was repaid in full upon closing on the Senior Secured Credit Facility.

Repayment of PennantPark Loan Agreement

On August 6, 2014, in connection with the GUI Acquisition, we and certain of our subsidiaries, as borrowers, and certain of our other subsidiaries and certain affiliated entities, as guarantors, entered into a loan agreement with the PennantPark Entities as lenders (the “PennantPark Loan Agreement”). Following our IPO, we prepaid all outstanding borrowings under the PennantPark Loan Agreement, including accrued interest and applicable prepayment premium. This instrument was repaid in full on January 22, 2015 upon closing on the Senior Secured Credit Facility.

8. Capital Lease Obligations

Equipment subject to capital lease is comprised of capitalized policy and claims administration software development costs and related computer equipment. Monthly payments on the capital lease, which expires on December 3, 2016, were approximately $206,000 as of September 30, 2015. Payments may be adjusted in connection with a change in the interest rate swap rate quoted in the Bloomberg Swap Rate Report. The Company’s obligations for future payments on the capital lease as of September 30, 2015, based on the interest rate swap rate in effect on that date, are as follows:

In thousands	Principal		Interest		Total
Payments on Capital Lease
2015	$	397	$	17	$	414
2016		2,429		51		2,480
Total	$	2,826	$	68	$	2,894

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9. Earnings Per Share

Basic earnings per share is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include detachable common stock warrants and stock-based awards of restricted shares and stock options, and contingent shares attributable to deferred purchase consideration.

The components of basic and diluted EPS are as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
In thousands (except earnings per share)	2015		2014			2015			2014
Basic net earnings (loss) per share
Net income (loss) available to common shareholders	$	3,788	$	16,902		$	(8	)	$	12,807
Weighted average number of common shares outstanding		26,802		16,368			26,006			14,981
Basic net earnings (loss) per share	$	0.14	$	1.03		$	(0.00	)	$	0.85
Diluted net earnings (loss) per share
Net income (loss) available to common shareholders	$	3,788	$	16,902		$	(8	)	$	12,807
Adjustments to net income (loss) applicable to dilutive shares		-		(8,760	)		-			(2,257	)
Net earnings (loss) attributable to diluted shares	$	3,788	$	8,142		$	(8	)	$	10,550
Weighted average number of common shares outstanding		26,802		16,368			26,006			14,981
Dilutive effect of warrants, options, and restricted shares   using the treasury stock method		1,138		1,183			-			1,202
Weighted average number of common and common equivalent shares   outstanding		27,940		17,551			26,006			16,183
Diluted net earnings (loss) per share	$	0.14	$	0.46		$	(0.00	)	$	0.65

Due to the net loss of $8,000 reported for the nine months ended September 30, 2015, weighted average outstanding detachable common stock warrants of 160,295, contingent shares attributable to deferred purchase consideration of 107,070, and restricted shares and stock options of 114,634 were not dilutive.  As a result, basic and diluted earnings per share both reflect a net loss of $0.00 per share for the nine months then ended. Adjustments to net income (loss) attributable to dilutive shares for the three and nine months ended September 30, 2014 represent income generated from a decrease in the fair value of the warrants as reported on the statement of operations.

10. Stock-Based Compensation

Omnibus Incentive Plan

On January 15, 2015, the Board of Directors approved the Patriot National 2014 Omnibus Incentive Plan (the “Omnibus Incentive Plan”), subject to and with effect upon approval of such plan by the stockholders of the Company.

The Compensation Committee of our Board of Directors determines the participants under the Omnibus Incentive Plan. The Omnibus Incentive Plan provides for non-qualified and incentive stock options, restricted stock and restricted stock units, any or all of which may be made contingent upon the achievement of performance criteria. Subject to the Omnibus Incentive Plan limits, the compensation committee has the discretionary authority to determine the size of an award and on May 11, 2015 delegated the authority to Steven Mariano, our President, to award the grants without the consent of the Compensation Committee.

Shares of our common stock available for issuance under the Omnibus Incentive Plan include authorized and unissued shares of common stock or authorized and issued shares of common stock reacquired and held as treasury shares or otherwise, or a combination thereof. The number of available shares is reduced by the aggregate number of shares that become subject to outstanding awards granted under the Omnibus Incentive Plan. To the extent that shares subject to an outstanding award granted under either the Omnibus Incentive Plan are not issued or delivered by reason of the expiration, termination, cancellation or forfeiture of such award or by reason of the settlement of such award in cash, then such shares will again be available for grant under the Omnibus Incentive Plan. Shares withheld to satisfy tax withholding requirements upon the vesting of awards other than stock options will also be available for grant under the Omnibus Incentive Plan. Shares that are used to pay the exercise price of an option, shares delivered to or withheld by us to pay withholding taxes related to stock options, and shares that are purchased on the open market with the proceeds of an option exercise, may not again be made available for issuance.

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Stock Options

In the nine months ended September 30 30, 2015, we issued stock options as incentive compensation for officers and certain key employees. The exercise price of each stock option is the closing market price of our common stock on the date of grant. The options will vest in three equal annual installments on the first, second and third anniversaries of grant and expire 10 years after the grant date. The fair values of these stock options were estimated using the Black-Scholes valuation model with the following weighted-average assumptions:

	Nine Months Ended September 30,
In thousands	2015
Expected dividend yield		0	%
Risk-free interest rate (1)		0.49	%
Expected volatility (2)		33.02	%
Expected life in years (3)		3.0

(1) The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.

(2) The expected volatility is a measure of the amount by which a stock price has fluctuated or is expected to fluctuate based primarily on our and our peers' historical data.

(3) The expected life is the period of time, on average, that participants are expected to hold their options before exercise based primarily on our historical data.

For the nine months ended September 30, 2015, we awarded 1,366,791 options, of which 129,013 were forfeited, leaving 1,237,778 outstanding.  At September 30, 2015 the intrinsic value of these options was $1.9 million. Option activity for the nine months ended September 30, 2015 was as follows:

In thousands, except weighted-average price and remaining contractual term	Number of Shares			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
Options outstanding at December 31, 2014		—		$	—
Options granted		1,367		$	14.40
Options exercised		—		$	—
Options cancelled or forfeited		(129	)	$	14.33
Options outstanding at September 30, 2015		1,238		$	14.39		9.4	$	1,932
Options expected to vest at September 30, 2015		1,238		$	14.39		9.4	$	1,932
Options exercisable at September 30, 2015		—		$	—		—	$	—

As of September 30, 2015, we recognized $1.2 million of stock compensation expense associated with these options, and there was $2.9 million of total unrecognized stock compensation cost related to unvested stock options that is expected to be recognized over a period of 3 years.

Restricted Stock Awards

In the nine months ended September 30, 2015, we issued 906,362 restricted shares as incentive compensation for officers, directors, and certain key employees. Subsequent to issuance, 22,059 restricted shares were forfeited and 310,652 were settled leaving 573,651 remaining restricted shares outstanding as of September 30, 2015. The fair value of outstanding restricted shares at September 30, 2015 was $8.3 million. Grants of restricted shares for the nine months ended September 30, 2015 were as follows:

In thousands, except weighted-average fair value price	Number of Shares			Weighted-Average Grant-Date Fair Value
Unvested restricted shares outstanding at December 31, 2014		—		$	—
Restricted shares granted		906		$	14.32
Restricted shares vested		(310	)	$	14.00
Restricted shares forfeited		(22	)	$	14.00
Unvested restricted shares outstanding as of September 30, 2015		574		$	14.51

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As of September 30, 2015, we recognized $6.8 million of stock compensation expense associated with these restricted shares, and there was $5.9 million of total unrecognized stock compensation cost related to unvested restricted stock to be recognized over a  period of 3 years.

Restricted Stock Units

During the nine months ended September 30, 2015, we issued 193,290 restricted stock units.  Of those issued, 11,655 were subsequently forfeited, resulting in 181,635 restricted stock units outstanding as of September 30, 2015. The fair value of these awards at September 30, 2015 was $2.7 million.  During the nine months ended September 30, 2015, we recognized $0.8 million of stock compensation expense associated with these restricted stock units. Unrecognized stock compensation expense associated with RSUs is $2.0 million and will be recognized over the remaining contractual lives of these awards, 3 years.

In thousands, except weighted-average fair value price	Number of Shares			Weighted-Average Grant-Date Fair Value
Unvested restricted stock units outstanding at December 31, 2014		—		$	—
Restricted stock units granted		193		$	15.02
Restricted stock units vested		—		$	—
Restricted stock units forfeited		(11	)	$	14.20
Unvested restricted stock units outstanding as of September 30, 2015		182		$	15.06

11. Fair Value Measurement of Financial Assets and Liabilities

With respect to the Company’s financial assets and liabilities, which include short term investments, notes payable, capital lease obligation, earnout obligations of acquisitions and warrant redemption liability, the Company has adopted current accounting guidance which establishes the authoritative definition of fair value, establishes a framework for measuring fair value, creates a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. This guidance defines fair value as the price that would be paid to transfer the warrant redemption liability in an orderly transaction between market participants at the measurement date.  As required under current accounting guidance, the Company has identified and disclosed its financial assets and liabilities in a fair value hierarchy, which consists of the following three levels:

		Definition
Level 1	Observable unadjusted quoted prices in active markets for identical securities.
Level 2	Observable inputs other than quoted prices in active markets for identical securities, including:
	(i)	quoted prices in active markets for similar securities.
	(ii)	quoted prices for identical or similar securities in markets that are not active.
	(iii)	inputs other than quoted prices that are observable for the security (e.g., interest rates, yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, credit risks and default rates).
	(iv)	inputs derived from or corroborated by observable market data by correlation or other means.
Level 3	Unobservable inputs, including the reporting entity’s own data, as long as there is no contrary data indicating market participants would use different assumptions.

The Company’s equity and fixed income security investments for which carrying values were equal to fair values, classified by level within the fair value hierarchy, were as follows as of September 30, 2015:

	Fair Value Measurement, Using
September 30, 2015 (in thousands)	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Common and preferred stocks	$	388	$	—	$	—	$	388
Corporate notes and bonds		2,861		—		—		2,861
Total	$	3,249	$	—	$	—	$	3,249

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There were no equity and fixed income security investments as of December 31, 2014.

The Company’s notes payable, capital lease obligation, earnout obligations of acquisitions and warrant redemption liability, for which carrying values were equal to fair values, classified by level within the fair value hierarchy, were as follows as of September 30, 2015 and December 31, 2014:

	Fair Value Measurement, Using
September 30, 2015 (in thousands)	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Earnout payable on acquisitions	$	—	$	—	$	12,062	$	12,062
Deferred purchase consideration		—		—		16,831		16,831
Warrant redemption liability		—		—		—		—
Total	$	—	$	—	$	28,893	$	28,893
	Fair Value Measurement, Using
December 31, 2014 (in thousands)	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Earnout payable on acquisitions	$	—	$	—	$	—	$	—
Deferred purchase consideration		—		—		—		—
Warrant redemption liability		—		—		12,879		12,879
Total	$	—	$	—	$	12,879	$	12,879

The following is a reconciliation of the fair value of the Company’s financial liabilities that were measured using significant unobservable (Level 3) inputs:

Nine Months Ended September 30, 2015 (in thousands)	Earnout Payable			Deferred Purchase Consideration		Warrant Redemption Liability			Total
Fair value, January 1, 2015	$	—		$	—	$	12,879		$	12,879
Record present value earnout payable    on acquisitions		19,163			—		—			19,163
Earnout payments made		(7,101	)		—		—			(7,101	)
Record deferred purchase consideration    on acquisitions		—			16,831		—			16,831
Exercise of warrants		—			—		(9,995	)		(9,995	)
Decrease in fair value of common stock and    warrant redemption liability		—			—		(1,385	)		(1,385	)
Contribute remaining liability balance    due to equity warrants		—			—		(1,499	)		(1,499	)
Fair Value, September 30, 2015	$	12,062		$	16,831	$	—		$	28,893

12. Related Party Transactions

Fee income from related party represents fee income earned from Guarantee Insurance Company (“Guarantee Insurance”), a related party. Fee income from Guarantee Insurance for claims administration services is based on the net portion of claims expense retained by Guarantee Insurance pursuant to quota share reinsurance agreements between Guarantee Insurance, the third party insurance company customers of Patriot Underwriters, Inc. and the segregated portfolio cell reinsurers that assume business written by Guarantee Insurance. Certain fee income from third-party segregated portfolio cell reinsurers is remitted to the Company by Guarantee Insurance on behalf of the segregated portfolio cell reinsurers. Fee income from Guarantee Insurance for brokerage, underwriting and policyholder services represents fees for soliciting applications for workers’ compensation insurance for Guarantee Insurance, based on a percentage of premiums written or other amounts negotiated by the parties.

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Our prices by customer for our brokerage and policyholder services and claims administration services were unchanged for the nine-month period ended September 30, 2015 relative to the nine-month period ended September 30, 2014, and, accordingly, the net increase in fee income was solely related to changes in the volume of business we managed.

Because fee income from related party for claims administration services is based on the net portion of claims expense retained by Guarantee Insurance, as described in Note 13, Concentration, the Company’s revenues attributable to contracts with Guarantee Insurance do not necessarily represent fee income from related party.

Fee income from related party for the three months ended September 30, 2015 was $23.8 million compared to $15.8 million for the three months ended September 30, 2014. For the nine months ended September 30, 2015, fee income from related party was $68.9 million compared to $24.6 million for the nine months ended September 30, 2014.  

Fee income receivable from related party was $22.1 million as of September 30, 2015, and$12.0 million at December 31, 2014.   

During the nine months ended September 30, 2014, the allocation of marketing, underwriting and policy issuance costs from related party in the accompanying combined statements of operations represents costs reimbursed to Guarantee Insurance Group for salaries and other costs incurred by Guarantee Insurance Group to provide its policyholder services. Management fees paid to related party for administrative support services in the accompanying combined statements of operations represent amounts paid to Guarantee Insurance Group for management oversight, legal, accounting, human resources and technology support services. Effective August 6, 2014, the management services agreement pursuant to which these fees were payable was terminated, and all costs associated with our operations began to be incurred directly by us. Accordingly, beginning August 6, 2014, such expenses, rather than being reflected in this item, are recorded in the line items to which they relate, which are primarily “salaries and salary related expenses,” “outsourced services” and “other operating expenses.”

As of September 30, 2015, we had a net receivable from related parties of $0.2 million due to entities controlled by Mr. Mariano, our founder, Chairman, President and Chief Executive Officer.

On April 17, 2015, the Company acquired Vikaran Solutions, LLC (“Vikaran”).  Prior to acquisition, Mr. Mariano held a non-controlling, 45% interest in Vikaran.  Upon closing, Mr. Mariano received proceeds of $3.8 million from the sale of Vikaran to Patriot National.

On July 20, 2015, the Company entered into a membership interest purchase agreement with Global HR Research LLC, a Florida limited liability company (“Global HR”), In Touch Holdings LLC, a Florida limited liability company (“ITH”), the members of Global HR, and Brandon G. Phillips as the sellers’ representative, pursuant to which, subject to the satisfaction or waiver of certain conditions, the Company will acquire all of the outstanding membership interest of Global HR.  The Global HR transaction closed on Augustst 21, 2015.  One of the Company’s independent directors, Austin J. Shanfelter, indirectly controlled Global HR.  Mr. Shanfelter owned 84% of the equity interests in ITH, which owned 75.5% of the equity interests of Global HR.

On July 31, 2015, we entered into a Purchase Agreement by and among Patriot Technology Solutions, Inc. and PN India Holdings (a wholly owned subsidiary of Patriot Technology Solutions, Inc. and Mehta and Pazol Consulting Services Private Limited (“MPCS”).  MPCS is an Indian company of computer programmers, solely focused on the development of Patriot’s WCE technology platform. Under the terms of the purchase agreement, PN India Holdings will acquire 100% of the capital stock of MPCS for the total purchase amount of $1.5 million.  The three sellers of MPCS include Sandeep Mehta, a 49.99% holder, Steven J. Pazol, a 49.99% holder, and Satyapal Mehta a 0.02% holder. Steven J. Pazol’s interest is beneficially owned by Steve M. Mariano who previously purchased it in a prior transaction, making this a related party transaction.  During the three months ended September 30, 2015, PN India Holdings executed the purchase of the interests held by Satyapal Mehta and Steven Mariano. Amounts paid to Steven Mariano totaled $0.7 million granting PN India Holdings a 51.1% ownership interest of MPCS, Ltd.  The purchase of Steven Mariano’s interest in MPCS was recorded as a deemed dividend of a common control transaction, rather than a business combination. Although, MPCS was acquired from a party under common control, the results of operations for MPCS are included from acquisition date, as its operations are immaterial with respect to the financial statements taken as a whole for all periods presented. The remaining $0.7 million portion of the transaction is pending approval from the government of India.  Upon approval, Patriot will acquire the remaining 49.9% interest in MPCS from Sandeep Mehta.

13. Concentration

For the three months ended September 30, 2015, approximately 66% of total combined fee income and fee income from related party was attributable to contracts with Guarantee Insurance, the Company’s largest customer and a related party, and approximately 6% was attributable to contracts with the Company’s second largest customer. For the three months ended September 30, 2014, approximately 76% of total combined fee income and fee income from related revenues was attributable to contracts with Guarantee Insurance, and approximately 10% and 7% were attributable to contracts with the Company’s second and third largest customers, respectively.

For the nine months ended September 30, 2015, approximately 72% of total combined fee income and fee income from related party was attributable to contracts with Guarantee Insurance and approximately 8% was attributable to contracts with the Company’s second largest customer. For the nine months ended September 30, 2014, approximately 66% of total combined fee income and fee

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income from related revenues was attributable to contracts with Guarantee Insurance, and approximately 22% was attributable to contracts with the Company’s second largest customer.

As of September 30, 2015, approximately 62% of combined fee income receivable and fee income receivable from related party was attributable to contracts with Guarantee Insurance and approximately 2% and 1% of combined fee income receivable and fee income receivable from related party were attributable to contracts with the Company’s second and third largest customers, respectively. As of December 31, 2014, approximately 86% of combined fee income receivable and fee income receivable from related party was attributable to contracts with Guarantee Insurance and approximately 8% and 2% of combined fee income receivable and fee income receivable from related party were attributable to contracts with the Company’s second and third largest customers, respectively.

Because fee income from related party for claims administration services is based on the net portion of claims expense retained by Guarantee Insurance, the Company’s revenues attributable to contracts with Guarantee Insurance do not necessarily represent fee income from related party.

14. Commitments and Contingencies

Contractual Obligations and Commitments

In connection with the Senior Secured Credit Facility as described in Note 7, Notes Payable and Lines of Credit, the common stock of the Company and the common stock or units of each of the Company’s wholly and majority owned subsidiaries were pledged as collateral.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

The Company has employment agreements with certain executives and other employees, which provide for compensation and certain other benefits and for severance payments under certain circumstances. The employment agreements contain clauses that become effective upon a change of control of the Company. Upon the occurrence of any of the defined events in the employment agreements, the Company would be obligated to pay certain amounts to the relevant employees.

The Company maintains cash at various financial institutions, and, at times, balances may exceed federally insured limits. Management does not believe this results in any material effect on the Company’s financial position or results of operations.

In the normal course of business, the Company may be party to various legal actions that management believes will not result in any material effect on the Company’s financial position or results of operations.

15. Warrant Redemption Liability

There was no warrant redemption liability as of September 30, 2015.  Concurrent with our IPO and repayment of the PennantPark Loan Agreement on January 22, 2015, the PennantPark Entities exercised 965,700 of their 1,110,555 detachable common stock warrants for common stock at an exercise price of $2.67 per share. The PennantPark Entities waived their put right on the remaining 144,855 detachable common stock warrants.  By eliminating the put right, the PennantPark Entities cannot require the Company to redeem the remaining detachable common stock warrants for cash, thereby eliminating the warrant redemption liability previously required. The remaining 144,855 detachable common stock warrants can be used to purchase shares of the Company’s common stock at an exercise price of $2.67 per share and expire on November 27, 2023.

On November 27, 2013, the Company issued 626,295 detachable common stock warrants to new lenders to purchase shares of the Company’s common stock at an exercise price of $2.67 per share. The warrants expire on November 27, 2023. Prior to the exercise and removal of the put right, at the fifth anniversary date of the warrants and any time after the eighth anniversary date of the warrants, the warrant holders could have required the Company to redeem the warrants for cash, in an amount equal to the estimated fair value of the warrants, as determined by an independent appraisal, less the total exercise price of the redeemed warrants. The value of the warrants was recorded as a discount on the loan and a warrant liability on November 27, 2013. The discount on the loan was amortized as interest expense over the term of the loan. The Company attributed a value to these warrants of approximately $7.3 million as of December 31, 2014.

On August 6, 2014, in connection with the additional tranche described in Note 7, Notes Payable and Lines of Credit, the Company issued 484,260 detachable common stock warrants to the PennantPark Entities to purchase shares of the Company’s common stock at an exercise price of $2.67 per share. The warrants expire on November 27, 2023. Prior to the exercise and removal of the put right, at

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the fifth anniversary date of the warrants and any time after the eighth anniversary date of the warrants, the warrant holders could have required the Company to redeem the warrants for cash, in an amount equal to the estimated fair value of the warrants, as determined by an independent appraisal, less the total exercise price of the redeemed warrants. The value of the warrants was recorded as a discount on the loan and a warrant liability on August 6, 2014. The discount on the loan was amortized as interest expense over the term of the loan. The Company attributed a value to these warrants of approximately $5.6 million as of December 31, 2014.

16. Income Taxes

The Company uses an estimated annual effective tax rate method of computing its interim tax provision. Certain items, including those deemed to be unusual, infrequent or that cannot be reliably estimated, are excluded from the estimated annual effective tax rates. In these cases, the actual tax expense or benefit applicable to that item is treated discretely and is reported in the same period as the related item. For the nine-month period ended September 30, 2015, the tax effects of warrants were treated as a discrete item.

The effective tax rate is based on forecasted annual pre-tax income, permanent differences and statutory tax rates. For the nine months ended September 30, 2015, the effective income tax rate was 44%. The main drivers of the difference in the effective tax rate from the statutory rate are warrants, success based fees, and meals and entertainment.

The Company and its subsidiaries are subject to U.S. federal income tax, as well as income tax in multiple states with heavy concentration in Florida, California, and Pennsylvania. The net deferred tax asset as of September 30, 2015 was $10.9 million before valuation allowance. A valuation allowance related to deferred tax assets is required when it is considered more likely than not that all or part of the benefit related to such assets will not be realized. In assessing the need for a valuation allowance, the Company considered both positive and negative evidence in concluding that a full valuation allowance was necessary against its net deferred tax assets at September 30, 2015.

At September 30, 2015 and December 31, 2014, the Company had no unrecognized tax benefits and no amounts recorded for uncertain tax positions.

17.Subsequent Events

On October 5, 2015 the Company publicly filed a registration statement on Form S-1 with the SEC relating to a proposed public offering by the Company and certain selling stockholders of $80.0 million of common stock. In response to market conditions, on October 20, 2015, the Company filed a Form RW with the SEC withdrawing the registration statement.

On October 29, 2015, TriGen Insurance Solutions, Inc. (“TriGen”) entered into a Facilitation Agreement with The Carman Corporation, a Pennsylvania corporation (“Carman”), pursuant to which Carman will provide Trigen with certain market-finding and consulting activities for an upfront payment of $2.0 million. In conjunction with the Facilitation Agreement, TriGen also entered into a Managing Producer Agreement with AmTrust International Underwriters Limited (“AmTrust”) as of October 15, 2015 pursuant to which TriGen will provide a hospitality-focused insurance program for AmTrust.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Combined Financial Statements and related Notes included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2014, and with the information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2014.

Disclosure Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) relating to our operations, results of operations and other matters that are based on our current expectations, estimates, assumptions and projections. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “positioned,” “outlook” and similar expressions are used to identify these forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecast in these forward-looking statements. Risks, uncertainties and other factors that might cause such differences, some of which could be material, include, but are not limited to the following:

· Because we have a limited operating history as a stand-alone, combined company and business, our historical financial condition and results of operations are not necessarily representative of the results we would have achieved as a stand-alone, combined, publicly-traded company and may not be a reliable indicator of our future results.

· Our business may be materially adversely impacted by general economic and labor market conditions.

· The workers’ compensation insurance industry is cyclical in nature, which may affect our overall financial performance.

· We may be more vulnerable to negative developments in the workers’ compensation insurance industry than companies that also provide outsourced services for other lines of insurance.

· If workers’ compensation claims decline, in frequency or severity, our results of operations and financial condition may be adversely affected.

· Our total fee income and fee income from related party are currently substantially dependent on our relationships with Guarantee Insurance and a small number of other insurance carrier clients.

· Our relationship with Guarantee Insurance may create conflicts of interest, and we cannot be certain that all our transactions with Guarantee Insurance will be conducted on the same terms as those available from unaffiliated third parties.

· If we cannot sustain our relationships with independent retail agencies, we may be unable to operate profitably.

· Our geographic concentration ties our performance to business, economic and regulatory conditions in certain states, and unfavorable conditions in these states could have a significant adverse impact on our business, financial condition and results of operations.

· We are subject to extensive regulation and supervision, and our failure to comply with such regulation or adapt to new regulatory and legislative initiatives may adversely impact our business.

· Changes in the healthcare industry could adversely impact our performance.

· If we are unable to adapt to healthcare market changes with our existing services or by developing and providing new services, our business would be adversely affected.

· We have limited experience in acquiring other companies and businesses, and we may have difficulty integrating the operations of companies or businesses that we may acquire and may incur substantial costs in connection therewith.

· Our goodwill and intangible assets could become impaired, which could lead to material non-cash charges against earnings.

· We operate in a highly competitive industry, and others may have greater financial resources to compete effectively.

· We compete on the basis of the quality of our outcome-driven service model, and our failure to continue to perform at high levels could adversely affect our business.

· Our business is dependent on the efforts of our senior management and other key employees who leverage their industry expertise, knowledge of our markets and services and relationships with independent retail agencies that sell the insurance products of our carrier partners.

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· We are reliant on our information processing systems, and any failure or inadequate performance of these systems could have a material adverse effect on our business, financial condition and results of operations.

· Cyber-attacks or other security breaches involving our computer systems or the systems of one or more of our clients, independent retail agencies or vendors could materially and adversely affect our business.

· If we infringe on the proprietary rights of others, our business operations may be disrupted, and any related litigation could be time consuming and costly.

· We are, and may become, party to lawsuits or other claims that could adversely impact our business.

· Our substantial indebtedness could adversely affect our financial condition, our ability to raise additional capital to fund our operations, our ability to operate our business, our ability to react to changes in the economy or our industry and our ability to pay our debts and could expose us to interest rate risk to the extent of our variable debt and divert our cash flow from operations to make debt payments.

· Servicing our indebtedness will require a significant amount of cash. Our ability to generate sufficient cash depends on many factors, some of which are not within our control.

· Despite our current level of indebtedness, we may be able to incur substantially more debt and enter into other transactions, which could further exacerbate the risks to our financial condition described above.

· Our founder, Chairman, President and Chief Executive Officer owns a significant percentage of our outstanding capital stock and will be able to influence stockholder and management decisions, which may conflict with your interests as a stockholder.

· Future sales, or the perception of future sales, by us or our affiliates could cause the market price for our common stock to decline.

· Because we have no plans to pay cash dividends on our common stock for the foreseeable future, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.

· Our ability to raise capital in the future may be limited, which could make us unable to fund our capital requirements.

· If securities analysts do not publish research or reports about our business or if they downgrade or provide negative outlook on our stock or our sector, our stock price and trading volume could decline.

· We are an “emerging growth company”, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

· We have incurred, and will continue to incur, increased costs, and are subject to additional regulations and requirements as a result of being a public company, which could lower our profits or make it more difficult to run our business.

· Our internal controls over financial reporting may not be effective, and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and material adverse effect on our business, financial condition, results of operations or prospects.

· Anti-takeover provisions in our organizational documents could delay or prevent a change of control.

· We have acquired a number of insurance services firms in a short period of time, and there are risks associated with such acquisitions, which could adversely affect our growth and results of operations.

For a more detailed discussion of these factors, see the information under the heading “Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2014. Our forward-looking statements speak only as of the date of this report or as of the date they are made, and we undertake no obligation to update any forward-looking statements.

Terms Used in this Quarterly Report on Form 10-Q

Unless otherwise specified or the context requires otherwise, the following terms used in this Quarterly Report on Form 10-Q have the meanings ascribed to them below:

· references to “Guarantee Insurance” refer to Guarantee Insurance Company and references to “Guarantee Insurance Group” refer to Guarantee Insurance Group, Inc. (f/k/a Patriot National Insurance Group, Inc.), the parent company of Guarantee Insurance, entities that are both controlled by Steven M. Mariano, our founder, Chairman, President and Chief Executive Officer;

· references to the “GUI Acquisition” refer to our acquisition, effective August 6, 2014, of contracts to provide marketing, underwriting and policyholder services and related assets and liabilities from a subsidiary of Guarantee Insurance Group;

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· references to the “Patriot Care Management Acquisition” refer to our acquisition, effective August 6, 2014, of a business that provides nurse case management and bill review services (the “Patriot Care Management Business”);

· references to “Patriot National,” “the Company,” “we,” “us” or “our” refer to Patriot National, Inc. and its direct and indirect subsidiaries;

· references to the “PennantPark Entities” or the “selling stockholders” refer to PennantPark Investment Corporation, PennantPark Floating Rate Capital Ltd., PennantPark SBIC II LP and PennantPark Credit Opportunities Fund LP;

· references to the “PennantPark Debt” refer to debt pursuant to the PennantPark Loan Agreement;

· references to the “UBS Debt” refer to debt pursuant to the UBS Credit Agreement;

· references to “reference premiums written” refer to the aggregate premiums, grossed up for large deductible credits, written by or for our insurance carrier partners in respect of the policies we produce and service on their behalf;

· references to “reinsurance captives” or “reinsurance captive entities” refer to segregated portfolio cell captive entities that assume underwriting risk written initially by an insurance carrier client;

· references to “Zurich” refer to Zurich American Insurance Company, Zurich American Insurance Company of Illinois, American Guarantee and Liability Insurance Company, American Zurich Insurance Company, Steadfast Insurance Company, Empire Fire & Marine Insurance Company, Empire Indemnity Insurance Company, Maryland Casualty Company, Assurance Company of America, Maryland Insurance Company, Northern Insurance Company of New York, The Fidelity and Deposit Company of Maryland, Colonial American Casualty and Surety Company, Universal Underwriters Insurance Company, Universal Underwriters Life Insurance Company, Universal Underwriters of Texas Insurance Company, Zurich Insurance Company Canadian Branchcollectively; and

· references to “AIG” refer to AIG Property Casualty Company, American Home Assurance Company, AIG Assurance Company, AIU Insurance Company, Commerce and Industry Insurance Company, Granite State Insurance Company, Illinois National Insurance Co., National Union Fire Insurance Company of Pittsburgh, PA., New Hampshire Insurance Company, and The Insurance Company of the State of Pennsylvania, collectively.

Overview

Business

We are an independent national provider of comprehensive technology-enabled outsourcing solutions that help insurance carriers, employers and other clients mitigate risk, comply with complex regulations and save time and money. We offer a full suite of end-to-end insurance related and specialty services that allow our clients to improve efficiencies and reduce expenses through our value-added processes. The core of our value proposition includes the benefit of a “one-stop” solution with our broad array of offered services, scalable, state-of-the-art technology and solutions to complex business and regulatory processes. Our goal is to be the preferred provider of mandatory employer services such as risk management services, health and welfare services, employee onboarding and compliance services.

We principally offer two types of services: front-end services, such as brokerage, underwriting and policyholder services, and back-end services, such as claims adjudication and administration. We provide our services either on an individual basis, as bundles of two or more services tailored to a client’s specific needs or on a turnkey basis where we provide a comprehensive set of front-end and back-end services to a client. We also offer specialty services currently including technology outsourcing and other IT services, as well as employment pre-screening and background checks.

We generate fee revenue for our services from our clients based on (1) a percentage of premiums for the policies we service, (2) the cost savings we achieve for our clients or (3) a fixed fee for a particular service. Unlike our insurance and reinsurance carrier clients, we do not generate underwriting income or assume underwriting risk on workers’ compensation plans.

Recent Events

On July 9, 2015, Patriot Risk Services, Inc. (“PRS”), a wholly owned subsidiary of Patriot National, entered into a stock purchase agreement with CWIBenefits, Inc., a Delaware corporation (“CWI”), and the shareholders of CWI, pursuant to which PRS acquired all of the outstanding equity of CWI for a maximum of $7.4 million. Pursuant to the purchase agreement, PRS paid CWI $2.8 million in cash at closing. CWI will also be entitled to an earn-out payment of up to $4.7 million approximately six months after closing, subject to reduction on a pro-rata basis if EBITDA does not meet certain targets. Neither Patriot National nor the Company assumed any material liabilities under the Purchase Agreement.

On July 20, 2015 the Company entered into a membership interest purchase agreement with Global HR Research LLC, a Florida limited liability company (“Global HR”), In Touch Holdings LLC, a Florida limited liability company (“ITH”), the members of Global HR, and Brandon G. Phillips as the sellers’ representative, pursuant to which, subject to the satisfaction or waiver of certain

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conditions, the Company will acquire all of the outstanding membership interests of Global HR. The Global HR transaction closed on August 21, 2015. One of the Company’s independent directors, Austin J. Shanfelter, indirectly controlled Global HR. Mr. Shanfelter owned 84% of the equity interests in ITH, which owned 75.5% of the equity interests of Global HR. The purchase price for the transaction was (i) $24.0 million in cash, of which, $0.5 million is held in escrow, (ii) 444,096 shares of common stock (“the stock consideration”), of which 349,645 were issued and 94,451 are held in escrow, plus (iii) certain deferred consideration payable, at our sole discretion, in either 618.478 shares of our commons stock or $10,477,017 in cash (“the Deferred Consideration”).  The Deferred Consideration is payable solely to In Touch Holdings, LLC, one of the former principal stockholders of Global HR on the earlier of  (a)November 20, 2015, (b)the 21st day after the date we mail an information statement to the shareholders in connection with the Global HR acquisition or  (c) we file a registration statement with the SEC that is declared effective, including in connection with this offering. The number of shares of common stock of the Company to be issued was determined by dividing $18.0 million by the closing stock price of the Company’s common stock on July 20, 2015, the signing date. As of the filing date, a decision has not been made whether the deferred consideration will be paid in cash or stock. If the revenues for Global HR for its fiscal year 2016 are less than $12.8 million, then ITH will forfeit and return 10% of its stock consideration to the Company.

On August 14, 2015, TriGen Insurance Solutions, Inc. (“TriGen”), a wholly-owned subsidiary of Patriot National, Inc. (the “Company”), entered into an asset purchase agreement (the “Restaurant Coverage Purchase Agreement”) with Restaurant Coverage Associates, Inc., a New Jersey corporation (“Restaurant Coverage Associates”), and the equity holders of Restaurant Coverage Associates, pursuant to which TriGen acquired substantially all of the assets of Restaurant Coverage Associates.

On August 14, 2015, PRS entered into an asset purchase agreement (the “Risk Control Purchase Agreement” and together with the Restaurant Coverage Purchase Agreement, the “Purchase Agreements”) with an affiliate of Restaurant Coverage Associates, Risk Control Associates, Inc., a New Jersey corporation (“Risk Control Associates” and together with Restaurant Coverage Associates, the “RCA Entities”), and the equity holders of Risk Control Associates, pursuant to which PRS acquired substantially all of the assets of Risk Control Associates.

Pursuant to the Purchase Agreements, the RCA Entities will be entitled to a combined total purchase price of up to $3,500,000, which includes a payment by TriGen to Restaurant Coverage Associates of $750,000 in cash at closing and a payment by PRS to Risk Control Associates of $250,000 in cash at closing. In addition, the RCA Entities will be entitled to a combined earn-out payment of up to $2,500,000 approximately one year after closing, subject to reduction on a pro-rata basis if combined EBITDA within a twelve-month measurement period does not meet certain targets.

Key Performance Measures

We use certain key performance measures in evaluating our business and results of operations, and we may refer to one or more of these key performance measures in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These key performance measures include:

· Gross reference premium written: gross reference premium written refers to the aggregate premium, grossed up for large deductible credits, written by or for our insurance carrier partners in respect of the policies we produce and service on their behalf.

· Reference premium written: reference premium written refers to the earned aggregate premium, grossed up for large deductible credits, written by or for our insurance carrier partners in respect of the policies we produce and service on their behalf. For Guarantee Insurance, which records written premium on the effective date of the policy based on the estimated total premium for the term of the policy, reference written premium is equal to written premium based on the estimated total premium for the term of the policy, earned as of the effective date of the policy, grossed up for large deductible credits. Subsequent adjustments to the estimated total premium for the term of the policy are reflected as adjustments to reference written premium when the adjustments become known. For our third party insurance carrier clients, for whom record written premium as premium is collected, reference written premium is equal to collected premium, grossed up for large deductible credits. We evaluate our business (in respect of revenue both from brokerage and policyholder services and from claims administrative services) both in respect of the overall revenue generated by reference premium written, and the margin on such revenue. With respect to our brokerage and policyholder services, changes in reference premium written generally correspond to changes in total revenues.

The policies we write for our insurance and reinsurance carrier clients generally have a term of one year, and reference premium written is earned by our insurance and reinsurance carrier clients on a pro rata basis over the terms of the underlying policies. Likewise, the claims associated with these policies are generally incurred on a pro rata basis over the terms of the underlying policies. Generally, we perform our claims administration services on a claim from the date it is incurred through the date it is closed. We refer to claims that have been incurred, but not yet closed, for a particular period as “managed claims exposures.” With respect to our claims administration services, changes in managed claims exposures generally correspond to changes in total revenues.

· Adjusted EBITDA: We define Adjusted EBITDA as net income (loss) adjusted for income tax expense (benefit), interest expense, depreciation and amortization expense, and certain non-cash and/or non-recurring transactions as shown in the Reconciliation from Net Income(Loss) to Adjusted EBITDA .

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· Adjusted EBITDA Margins: we define Adjusted EBITDA Margins as Adjusted EBITDA divided by the sum of fee income and fee income from related party.

· Operating Cash Flow: we define Operating Cash Flow as Adjusted EBITDA less income tax expense, interest expense, and capital expenditures.

· Adjusted Earnings: we define Adjusted Earnings or Loss and Adjusted Earnings or Loss per share as net income (loss) adjusted for cost for debt payoff, non-cash stock compensation costs,  net realized gains (losses) on investments, increase/(decrease) in fair value of warrant redemption liability, acquisition costs and loss on exchange of units and warrants.

We present Adjusted EBITDA, Adjusted EBITDA Margins, Operating Cash Flow and Adjusted Earnings in this report because they are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short and long-term operational plans.  In particular, we believe that the exclusion of the amounts eliminated in calculating Adjusted EBITDA, Operating Cash Flow and Adjusted Earnings can provide useful measures for period-to-period comparisons of our core business.  Accordingly, we believe that Adjusted EBITDA, Operating Cash Flow and Adjusted Earnings provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

Adjusted EBITDA, Adjusted EBITDA Margins, Operating Cash Flow and Adjusted Earnings have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of our financial results under GAAP.  Some of these limitations are as follows:

· Although depreciations and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future;

· Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs or tax payments that may represent a reduction in cash available to us; and

· Other companies, including companies in our industry, may calculate Adjusted EBITDA, Operating Cash Flow and Adjusted Earnings or similarly titled measured differently, which reduce their usefulness as a comparative measure.

Reference Premium Written

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2015		2014		2015		2014
Gross Reference Premium Written	$	126,038	$	89,283	$	347,660	$	257,819
Reference Premium Written	$	126,958	$	95,845	$	333,008	$	277,941

Gross reference premium written for the three months ended September 30, 2015 was $126.0 million compared to $89.3 million for the three months ended September 30, 2014, an increase of $36.8 million. The increase was attributable to a $4.2 million increase in Guarantee Insurance gross reference premium written and the inception of new contracts with Scottsdale Insurance Company (“Scottsdale”), AIG and certain other insurance carrier clients, which generated $35.6 million for the three months of gross reference premium written. This increase was partially offset by a $3.1 million decrease in gross reference premium written on behalf of Zurich as a result of Zurich reducing its volumes in California, where business covered by our initial program with Zurich was solely written. In September 2014, we entered into a second program with Zurich that further expands coverage in multiple other states.

Gross reference premium written for the nine months ended September 30, 2015 was $347.7 million compared to $257.8 million for the nine months ended September 30, 2014, an increase of $89.8 million.  This increase was attributable to a $11.4 million increase in Guarantee Insurance gross premium written and the inception of new contracts with Scottsdale, AIG and certain other carrier clients, which generated $90.7 million of gross reference premium written. This increase was partially offset by a $12.3 million decrease in gross reference premium written on behalf of Zurich as a result of Zurich reducing its volumes in California, where business covered by our initial program with Zurich was solely written.

Reference premium written for the three months ended September 30, 2015 was $127.0 million compared to $95.8 million for the three months ended September 30, 2014, an increase of $31.1 million.  The increase was attributable to a $4.2 million increase in Guarantee Insurance reference premium written and the inception of new contracts with Scottsdale, AIG, and certain other insurance carrier clients, which generated $33.3 million of reference premium written. This increase was partially offset by a $6.4 million decrease in reference premium written on behalf of Zurich as a result of Zurich reducing its volumes in California, where business covered by our initial program with Zurich was solely written.

Reference premium for the nine months ended September 30, 2015 was $333.0 million compared with $277.9 million for the nine months ended September 30, 2014.  The increase of $55.1 million was attributable to $11.4 million in Guarantee Insurance reference premium written and the inception of new contracts with Scottsdale, AIG, and certain other insurance carrier clients, which generated $65.6 million of reference premium written. This increase was partially offset by a $22.0 million decrease in reference premium

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written on behalf of Zurich as a result of Zurich reducing its volumes in California, where business covered by our initial program with Zurich was solely written.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure and is not in accordance with, or an alternative to, the GAAP information provided in this Quarterly Report on Form 10-Q. For further information regarding our use of non-GAAP financial measures and a reconciliation of Adjusted EBITDA to Net income (loss), see “—Reconciliations to Non-GAAP Key Performance Measures”.

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2015		2014		2015			2014
Net income (loss)	$	3,788	$	16,902	$	(8	)	$	12,807
Adjusted EBITDA	$	14,629	$	8,421	$	36,838		$	17,334

Adjusted EBITDA for the three months ended September 30, 2015 was $14.6 million compared to $8.4 million for the three months ended September 30, 2014, an increase of $6.2 million. The increase was attributable to a $27.1 million increase in total fee income and fee income from related party, partially offset by a $20.9 million increase in total expenses (excluding depreciation and amortization, changes in fair value of warrant liabilities, non-cash stock compensation, interest expense and income tax expense which are added back to net income to arrive at Adjusted EBITDA), all of which are discussed more fully below.

Adjusted EBITDA for the nine months ended September 30, 2015 was $36.8 million compared to $17.3 million for the nine months ended September 30, 2014, an increase of $19.5 million. The increase was attributable to a $86.4 million increase in total fee income and fee income from related party, partially offset by a $66.6 million increase in total expenses (excluding depreciation and amortization, changes in fair value of warrant liabilities, non-cash stock compensation and costs incurred for the extinguishment of debt, income tax expense and interest expense which are added back to net income to arrive at Adjusted EBITDA), all of which are discussed more fully below.

Operating Cash Flow

Operating cash flow is a non-GAAP financial measure and is not in accordance with, or an alternative to, the GAAP information provided in this Quarterly Report on Form 10-Q. For further information regarding our use of non-GAAP financial measures and a reconciliation of Operating cash flow to Net income (loss), see “—Reconciliations to Non-GAAP Key Performance Measures”.

	Three Months Ended September 30,					Nine Months Ended September 30,
In thousands	2015		2014			2015			2014
Net income (loss)	$	3,788	$	16,902		$	(8	)	$	12,807
Net cash provided by operating activities	$	2,347	$	8,427		$	6,991		$	15,529
Operating cash flow	$	10,751	$	(3,688	)	$	29,748		$	1,069

Operating cash flow for the three months ended September 30, 2015 was $10.8 million compared to ($3.7) million for the three months ended September 30, 2014, an increase of $14.5 million.  The increase was primarily attributable to the increase in cash earnings as reflected in the $6.2 million increase in Adjusted EBITDA and a $7.8 million decrease in income taxes for the three months then ended.

For the nine months ended September 30, 2015, operating cash flow was $29.7 million compared to $1.1 million for the nine months ended September 30, 2014, an increase of $28.6 million. The increase was primarily attributable to the increase in cash earnings as reflected in the $19.5 million increase in Adjusted EBITDA and a $10.4 million decrease in income taxes for nine months then ended.

Adjusted Earnings

Adjusted Earnings is a non-GAAP financial measure and is not in accordance with, or an alternative to, the GAAP information provided in this Quarterly Report on Form 10-Q. For further information regarding our use of non-GAAP financial measures and a reconciliation of Operating cash flow to Net income (loss), see “—Reconciliations to Non-GAAP Key Performance Measures”.

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2015		2014		2015			2014
Net income (loss)	$	3,788	$	16,902	$	(8	)	$	12,807
Adjusted earnings	$	6,388	$	3,043	$	15,714		$	2,867

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 Adjusted Earnings for the three months ended September 30, 2015 were $6.4 million as compared to $3.0 million for the three months ended September 30, 2014, an increase of $3.4 million.  The increase was primarily attributable to a $6.2 million increase in cash earnings as reflected in Adjusted EBITDA, partially offset by the income tax effect related to reconciling items in computing Adjusted Earnings.

For the nine months ended September 30, 2015, Adjusted Earnings were $15.7 million compared to $2.9 million for the nine months ended September 30, 2014, an increase of $12.8 million. The increase was primarily attributable to the increase in Adjusted EBITDA of $19.5 million, partially offset by the income tax effect related to reconciling items in computing Adjusted Earnings.

Results of Operations

The following table sets forth certain combined statement of operations data derived from our unaudited combined financial statements included elsewhere in this Quarterly Report on Form 10-Q.

	Three Months Ended September 30,						Nine Months Ended September 30,
In thousands	2015			2014			2015			2014
Combined Statement of Operations Data
Revenues
Fee income	$	34,759		$	15,630		$	80,060		$	37,896
Fee income from related party		23,773			15,803			68,852			24,589
Total fee income and fee income from related party		58,532			31,433			148,912			62,485
Net investment income		49			76			85			496
Net realized (losses) gains on investments		(58	)		13,960			(149	)		14,038
Total Revenues		58,523			45,469			148,848			77,019
Expenses
Salaries and related expenses		21,549			9,726			53,782			17,907
Commission expense		8,173			5,891			25,556			9,491
Management fees to related party for administrative    support services		—			861			—			5,390
Outsourced services		2,369			1,713			7,623			3,118
Allocation of marketing, underwriting and policy    issuance costs from related party		—			333			—			1,872
Other operating expenses		11,974			4,538			25,259			7,801
Acquisition costs		1,453			—			4,372			—
Interest expense		806			2,836			2,525			5,427
Depreciation and amortization		4,380			1,652			10,075			3,699
Amortization of loan discounts and loan costs		62			650			206			1,295
Stock compensation expense		2,586			—			8,791			—
Costs from debt payoff		—			—			13,681			—
Decrease in fair value of warrant redemption liability		—			(8,760	)		(1,385	)		(2,257	)
Gain on disposal of fixed assets		(7	)		—			(7	)		—
Total Expenses		53,345			19,440			150,478			53,743
Net Income (Loss) before income tax (benefit) expense		5,178			26,029			(1,630	)		23,276
Income tax expense (benefit)		1,331			9,101			(1,733	)		10,401
Net Income (Loss) Including Non-Controlling Interest in    Subsidiary		3,847			16,928			103			12,875
Net Income attributable to Non-controlling interest    in subsidiary		59			26			111			68
Net Income (Loss)	$	3,788		$	16,902		$	(8	)	$	12,807

Three and Nine Months Ended September 30, 2015 Compared to Three and Nine Months Ended September 30, 2014

Revenues:

Total Fee Income and Fee Income from Related Party. Total fee income and fee income from related party for the three months ended September 30, 2015 was $58.5 million compared to $31.4 million for the three months ended September 30, 2014, an increase of $27.1 million or approximately 86%. The increase in fee income and fee income from related party was primarily related to increases in the volume of business we managed as a result of transactions that occurred in August of 2014 and from acquisitions completed in the first three quarters of 2015.

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Total fee income and fee income from related party for the nine months ended September 30, 2015 was $148.9 million compared with $62.5 million for the same period in 2014, an increase of $86.4 million or approximately 138%.  The increase in fee income and fee income from related party was primarily related to increases in the volume of business we managed as a result oftransactions that occurred in August of 2014 and from acquisitions completed in the first three quarters of 2015.

For the three and nine months ended September 30, 2015, approximately 66% and 72%, respectively, of our total fee income and fee income from related party was attributable to our contracts with Guarantee Insurance, a related party, and approximately 6% and 8% of our total fee income and fee income from related party was attributable to contracts with our second largest client for both the three and nine months ended September 30, 2015.

For the three and nine months ended September 30, 2014, approximately 76% and 66%, respectively, of our total fee income and fee income from related party was attributable to our contracts with Guarantee Insurance, and approximately 10% and 22%, respectively, of our total fee income and fee income from related party were attributable to our contracts with our second largest client.

Fee Income. Fee income, which represents fee income from non-related parties, for the three months ended September 30, 2015 was $34.8 million compared to $15.6 million for the three months ended September 30, 2014, an increase of $19.2 million.  For the nine months ended September 30, 2015, fee income was $80.1 million compared to $37.9 million for the nine months ended September 30, 2014, an increase of $42.2 million.

Our prices by customer for our brokerage and policyholder services and claims administration services were unchanged for the nine-month period ended September 30, 2015 relative to the nine-month period ended September 30, 2014, and, accordingly, the net increase in fee income was solely related to changes in the volume of business we managed.

Fee Income from Related Party. Fee income from related party for the three months ended September 30, 2015 was $23.8 million compared to $15.8 million for the three months ended September 30, 2014, an increase of $8.0 million. For the nine months ended September 30, 2015, fee income from related party was $68.9 million compared to $24.6 million for the nine months ended September 30, 2014, an increase of $44.3 million.

Our prices by customer for our brokerage and policyholder services and claims administration services were unchanged for the nine-month period ended September 30, 2015 relative to the nine-month period ended September 30, 2014, and, accordingly, the net increase in fee income was solely related to changes in the volume of business we managed.

“Fee income from related party” represents a portion of fee income earned from Guarantee Insurance, a related party as described in Note 12, Related Party Transactions. Fee income from Guarantee Insurance for claims administration services is based on the net portion of claims expense retained by Guarantee Insurance pursuant to quota share reinsurance agreements between Guarantee Insurance, PUI’s third party insurance company customers and the segregated portfolio cell reinsurers that assume business written by Guarantee Insurance. Certain fee income from third-party segregated portfolio cell reinsurers is remitted to the Company by Guarantee Insurance on behalf of the segregated portfolio cell reinsurers. Fee income from Guarantee Insurance for brokerage, underwriting and policyholder services represents fees for soliciting applications for workers’ compensation insurance for Guarantee Insurance, based on a percentage of premiums written or other amounts negotiated by the parties.

Because fee income from related party for claims administration services is based on the net portion of claims expense retained by Guarantee Insurance, as described in Note 13, Concentration, the Company’s revenues attributable to contracts with Guarantee Insurance do not necessarily represent fee income from related party.

Net Investment Income. Net investment income was $49,000 for the three months ended September 30, 2015 compared to $76,000 for the three months ended September 30, 2014.  For the nine months ended September 30, 2015, net investment income was $85,000 compared with $496,000 for the nine months ended September 30, 2014. Net investment income for the three- and nine-month periods ended September 30, 2014 was principally attributable to a surplus note from prior years.

Expenses:

Salaries and Related Expenses. Salaries and related expenses for the three months ended September 30, 2015 were $21.5 million compared to $9.7 million for the three months ended September 30, 2014, an increase of $11.8 million.

Salaries and related expenses for the nine months ended September 30, 2015 were $53.8 million compared to $17.9 million for the nine months ended September 30, 2014, an increase of $35.9 million.

This increase was principally due to additional salary and salary related costs, beginning August 6, 2014 (as discussed in this Quarterly Report on Form 10-Q), as a result of directly incurring salary and salary related costs associated with our brokerage and policyholder services and administrative support services, including executive management, information technology, accounting, human resources and legal services. Prior to August 6, 2014, we received an allocation for such brokerage and policyholder services costs from Guarantee Insurance Group as described below under “—Allocation of Marketing, Underwriting and Policy Issuance Costs from Related Party” below, and a portion of such administrative support services costs was incurred in the form of a management fee paid to Guarantee Insurance Group as described under “—Management Fees to Related Party for Administrative Support Services”

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below. Salary and salary related costs further increased in the period since August 6, 2014 as a result of the new agreement we entered into with Guarantee Insurance to provide all of our brokerage and policyholder services to Guarantee Insurance. In addition, the increase was in part due toan increase in the volume of business we manage.

Commission Expense. Commission expense for the three months ended September 30, 2015 was $8.2 million compared to $5.9 million for the three months ended September 30, 2014, an increase of $2.3 million. For the nine months ended September 30, 2015, commission expense was $25.6 million compared to $9.5 million for the nine months ended September 30, 2014, an increase of $16.1 million. This increase was a direct result of the increased fee income and fee income from related party recognized as a result of the increased volume in business we manage.

Management Fees to Related Party for Administrative Support Services. There were no management fees to related party for administrative support services for the three and nine months ended September 30, 2015 compared to $0.9 million and $5.4 million, respectively, for the three and nine months ended September 30, 2014. Effective August 6, 2014, these support services expenses became incurred directly by us, and from that date forward we no longer pay management fees to Guarantee Insurance Group. Accordingly, beginning August 6, 2014, such expenses, rather than being reflected in this item, are recorded in the line items to which they relate, which are primarily “salaries and related expenses,” “outsourced services” and “other operating expenses.”

Outsourced Services. Outsourced services for the three months ended September 30, 2015 were $2.4 million compared to $1.7 million for the three months ended September 30, 2014, an increase of $0.7 million or approximately 41%. For the nine months ended September 30, 2015 outsourced services were $7.6 million compared to $3.1 million for the nine months ended September 30, 2014, an increase of $4.5 million or approximately 145%. This increase was principally due to the acquisition of Patriot Care Management, effective August 6, 2014.

Allocation of Marketing, Underwriting and Policy Issuance Costs from Related Party. There was no allocation of marketing, underwriting and policy issuance costs from Guarantee Insurance Group, a related party, for the three and six months ended September 30, 2015 compared to $0.3 million and $1.9 million for the three and six months ended September 30, 2014, respectively. Effective August 6, 2014, such costs became incurred directly by us, and from that date forward, Guarantee Insurance Group is no longer allocating these costs to us. Accordingly, beginning August 6, 2014, such expenses, rather than being reflected in this item, are recorded in the line items to which they relate.

Other Operating Expenses. Other operating expenses for the three months ended September 30, 2015 were $12.0 million compared to $4.5 million for the three months ended September 30, 2014, an increase of $7.5 million or approximately 166%.  For the nine months ended September 30, 2015, other operating expenses were $25.3 million compared with $7.8 million for the nine months ended September 30, 2014. The increase of other operating expense corresponds to the direct costs incurred as a result of eliminating management fees and expense allocations from Guarantee Insurance and from increased volume in business we manage.

Acquisition Costs. For the three and nine months ended September 30, 2015, we incurred $1.5 million and $4.4 million of acquisition costs, respectively. These costs were predominantly comprised of salary and related expenses, professional costs and other fees associated with acquisition activities.

Interest Expense. Interest expense for the three months ended September 30, 2015 was $0.8 million compared to $2.8 million for the three months ended September 30, 2014, a decrease of $2.0 million. Interest expense for the nine months ended September 30, 2015, was $2.5 million compared to $5.4 million for the nine months ended September 30, 2014, a decrease of $2.9 million.  The interest expense for the nine months ended September 30, 2015 was comprised of $0.9 million of interest accrued for the PennantPark Debt and the UBS Debt prior to repayment on January 22, 2015 and $1.6 million on the Senior Secured Credit Facility from January 22, 2015 until September 30, 2015. Interest expense for the nine months ended September 30, 2014 was comprised of interest on the PennantPark Debt and UBS Debt then outstanding. The decrease in interest expense was the result of lower outstanding debt balances and more favorable interest rates from refinancing of our debt with more favorable terms.

Depreciation and Amortization. Depreciation and amortization for the three months ended September 30, 2015 was $4.4 million compared to $1.7 million for the three months ended September 30, 2014, an increase of $2.7 million. For the nine months ended September 30, 2015 and 2014, depreciation and amortization was $10.1 million and $3.7 million, respectively, representing a period over period increase of $6.4 million. The increase was attributable mainly to the increased intangible asset amortization associated with our acquisitions.

Amortization of Loan Discounts and Loan Costs. Amortization of loan discounts and loan costs was $0.1 million for the three months ended September 30, 2015, compared to $0.7 million for the three months ended September 30, 2014, a decrease of $0.6 million. For the nine-month periods ended September 30, 2015 and 2014, amortization of loan discounts and loan costs was $0.2 million and $1.3 million, respectively, a decrease of $1.1 million. The decrease was attributable to the write-off of loan discounts and deferred loan costs upon repayment of the PennantPark Debt and UBS Debt on January 22, 2015.

Stock Compensation Expense. The Company recognized $2.6 million of stock compensation expense during the three months ended September 30, 2015 and $8.8 million of stock compensation expense for the nine months ended September 30, 2015.  Stock compensation expense is related to restricted stock and stock option awards. See Note 10, Stock-Based Compensation, for further detail related to these awards and the recognized expense.

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Decrease (Increase) in Fair Value of Warrant Redemption Liability. The decrease in fair value of warrant redemption liability was $1.4 million for the nine months ended September 30, 2015 which reflects the change in fair value from estimated valuation on December 31, 2014 to the exercise of the detachable common stock warrants on January 22, 2015. The decrease tothe fair value of the warrant redemption liability for the nine months ended September 30, 2014 was $2.3 million. Additionally, there was no remaining warrant redemption liability as of September 30, 2015, and no future fair value adjustments are required.

Cost from Debt Payoff. The Company recognized expenses for “make-whole” payments upon repayment of the PennantPark Debt and UBS Debt on January 22, 2015. These expenses were comprised of $3.8 million to the PennantPark Entities and $0.6 million to UBS.  Additionally, the Company recognized expenses for the write-off of existing deferred financing of $6.3 million and original issue discounts of $3.1 million associated with the PennantPark Debt and UBS Debt upon repayment on January 22, 2015.  Due to the non-recurring nature of these expenses, they are presented separately from interest expense and amortization expense, respectively, in our combined results for the nine months ended September 30, 2015. Total cost from debt payoff was $13.7 million for the nine months ended September 30, 2015.

Income Tax Expense. Income tax expense was $1.3 million for the three months ended September 30, 2015 compared to income tax expense of $9.1 million for the three months ended September 30, 2014, a decrease in income tax expense of $7.8 million. For the nine months ended September 30, 2015 we had an income tax benefit of $1.7 million compared to a $10.4 million income tax expense for the nine months ended September 30, 2014. For the nine months ended September 30, 2015, the effective income tax rates were approximately 43.9%.  The effective tax rate is based on forecasted annual pre-tax income, permanent differences and statutory tax rates.  The main difference in the effective tax rate from the statutory rate is warrants, success based fees, and meals and entertainment.

Net Income:

As a result of the factors described above, net income decreased by $13.1 million to $3.8 million for the three months ended September 30, 2015 as compared to a net income of $16.9 million for the three months ended September 30, 2014.  For the nine months ended September 30, 2015, there was a $0.0 million net loss compared to a $12.8 million net income for the nine months ended September 30, 2014, a decrease of $12.8 million.

Seasonality

Although our revenue and operating results associated with our claims administration services are generally not subject to seasonality, our revenue and operating results associated with our brokerage and policyholder services are generally subject to seasonal variations as a result of the distribution of renewal dates of existing policies throughout the year, with slightly more renewals occurring in the first and third calendar quarter based on the current distribution of such dates.

Impact of Inflation

Although we cannot accurately anticipate the effect of inflation on our operations, we believe that inflation has not had a material impact on our results of operations during the last two fiscal years, nor do we believe it is likely to have such a material impact in the foreseeable future.

Liquidity and Capital Resources

Sources and Uses of Funds

Our principal needs for liquidity have been, and for the foreseeable future will continue to be, working capital, capital expenditures and funding potential acquisitions, potential redemption of detachable common stock warrants, as well as servicing our Senior Secured Credit Facility. Our primary sources of liquidity include cash flows from operations and available cash and cash equivalents.

We believe that our cash flow from operations and available cash and cash equivalents will be sufficient to meet our liquidity needs for the foreseeable future. As of September 30, 2015, our unrestricted cash and cash equivalents were $15.2 million. In addition, as of September 30, 2015, we had $3.2 million of equity and fixed income security investments and $16.3 million of restricted cash, which are funds we receive from our insurance carrier clients and are earmarked exclusively for payments of claims on behalf of such clients. We cannot use restricted cash for other purposes.

To the extent we require additional liquidity, we anticipate that it will be funded through the incurrence of other indebtedness (which may include capital markets indebtedness, our Senior Secured Credit Facility or indebtedness under other credit facilities), equity financings or a combination thereof. Although we have no specific current plans to do so, if we decide to pursue one or more significant acquisitions, we may incur additional debt or sell additional equity to finance such acquisitions.

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Cash Flows

The following table summarizes our cash flow activities for the three months ended September 30, 2015 and 2014.

	Three Months Ended September 30,						Nine Months Ended September 30,
In thousands	2015			2014			2015			2014
Cash flow activities:
Net Cash Provided by Operating Activities	$	2,347		$	8,427		$	6,991		$	15,529
Net Cash Used in Investment Activities		(28,828	)		(53,150	)		(86,505	)		(54,222	)
Net Cash Provided by (Used in) Financing Activities		31,797			49,379			90,472			45,058

  Operating Activities

Net cash provided by operating activities for the nine months ended September 30, 2015 was $7.0 million compared to $15.5 million for the nine months ended September 30, 2014, a decrease of $8.5 million. The decrease was largely attributable to a $14.1 million reduction in income taxes payable as a result of payments made in 2015 related to the 2014 tax year.  This decrease was partially offset by an increase in cash earnings as reflected in the earlier discussion of Adjusted EBITDA, net of working capital fluctuations.

Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2015 was $86.5 million compared to $54.2 million for the nine months ended September 30, 2014, an increase of $32.3 million. This increase was attributable to funding of acquisitions of $74.0 million in 2015 from $52.7 million in 2014, an increase of $21.3 million, the purchase of fixed assets and other long-term assets of $4.6 million in 2015 from $0.4 million in 2014, an increase of $4.2 million, and an increase in restricted cash of $4.5 million in 2015 from $0.7 million in 2014, an increase of $3.8 million.

Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2015 was $90.5 million compared to $45.1 million for the nine months ended September 30, 2014, an increase of $45.4 million. This increase was attributable to the proceeds from the IPO and our new debt structure less the repayment of previous debt and capital lease payments.

Capital Expenditures

For the nine months ended September 30, 2015, we made capital expenditures of $4.6 million attributable to $2.2 million of fixed assets and $2.3 million of capitalized software development. For the nine months ended September 30, 2014, we made capital expenditures of $0.4 million.

Indebtedness

As of September 30, 2015, we had a total of $107.9 million of term loan debt outstanding under our Senior Secured Credit Facility, $10.8 million outstanding under our revolving credit facility, and $2.8 million of capital leases outstanding.

Senior Secured Credit Facility

On January 22, 2015, we entered into a credit agreement which provides for a $40.0 million revolving credit facility and a $40.0 million term loan facility (the “Senior Secured Credit Facility”). The Senior Secured Credit Facility has a maturity of five years, and borrowings thereunder bear interest, at our option, at LIBOR plus a margin ranging from 250 basis points to 325 basis points or at base rate plus a margin ranging from 150 basis points to 225 basis points. Margins on all loans and fees will be increased by 2% per annum during the existence of an event of default. The revolving credit facility includes borrowing capacity available for letters of credit and borrowings on same-day notice, referred to as swing line loans. At any time prior to maturity, we have the right to increase the size of the revolving credit facility or the term loan facility by an aggregate amount of up to $20.0 million, but in minimum increments of $5.0 million.

As of June 30, 2015, we increased the term loan facility by $20.0 million through two $10.0 million incremental term loans. On August 14, 2015, we entered into a second amendment to the Senior Secured Credit Facility (the “Second Amendment”) which provides for an additional $50.0 million of term loans plus the ability to increase the term loan by an additional $50.0 million under certain conditions. The Second Amendment also added a requirement that until the we deliver a certificate certifying that (a) our total leverage ratio is equal to or less than 2.25 to 1.00 and (b) our Adjusted EBITDA for the twelve-months then ended is at least $70.0 million, the outstanding revolving loans (plus any swing line loans and the aggregate stated amount of all letters of credit) shall not

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exceed $30.0 million. All other material terms and conditions in the Senior Secured Credit Facility were unchanged by the Second Amendment.

As of September 30, 2015, the outstanding balance under our Senior Secured Credit Facility was $118.7 million (comprised of $107.9 million outstanding under the term loan facility and $10.8 million outstanding under the revolving credit facility), and we had $29.2 million available to borrow under the revolving credit .

In addition to paying interest on outstanding principal under the Senior Secured Credit Facility, we are required to pay a commitment fee to the Administrative Agent for the ratable benefit of the lenders under the revolving credit facility in respect of the unutilized commitments thereunder, ranging from 35 basis points to 50 basis points, depending on specified leverage ratios. With respect to letters of credit, we are also required to pay a per annum participation fee equal to the applicable LIBOR margin on the face amount of each letter of credit as well as a fee equal to 0.125% on the face amount of each letter of credit issued (or the term of which is extended). This latter 0.125% fee is payable to the issuer of the letter of credit for its own account, along with any standard documentary and processing charges incurred in connection with any letter of credit.

The term loan facility amortizes quarterly beginning the first full quarter after the closing date at a rate of 5% per annum of the original principal amount during the first two years, 7.5% per annum of the original principal amount during the third and fourth years and 10% per annum of the original principal amount during the fifth year, with the remainder due at maturity. Principal amounts outstanding under the revolving credit facility are due and payable in full at maturity. In the event of any sale or other disposition by us or our subsidiaries guaranteeing the Senior Secured Credit Facility of any assets with certain exceptions, we are required to prepay all proceeds received from such a sale towards the remaining scheduled payments of the term loan facility.

In addition, all obligations under the Senior Secured Credit Facility are guaranteed by all of our existing and future subsidiaries, other than foreign subsidiaries to the extent the assets of such foreign subsidiaries do not exceed 5% of our and our subsidiaries’ total assets on a combined basis, and secured by a first-priority perfected security interest in substantially all of our and our guaranteeing subsidiaries’ tangible and intangible assets, whether now owned or hereafter acquired, including a pledge of 100% of the stock of each guarantor.

The Senior Secured Credit Facility contains certain covenants that, among other things and subject to significant exceptions, limit our ability and the ability of our restricted subsidiaries to engage in certain business and financing activities and that require us to maintain certain financial covenants, including requirements to maintain (i) a maximum total leverage ratio of total outstanding debt to adjusted EBITDA for the most recently ended four fiscal quarters of no more than 300% and (ii) a minimum fixed charge coverage ratio of adjusted EBITDA to the sum of cash interest expense (which amount shall be calculated on an annualized basis for the three-, six- and nine-month periods ended March 31, 2015, June 30, 2015 and September 30, 2015) plus income tax expense (or less any income tax benefits) plus capital expenditures plus dividends, share repurchases and other restricted payments plus regularly scheduled principal payments of debt for the same period of a least 150% for the most recently-ended four quarters. The Senior Secured Credit Facility allows us to pay dividends in an amount up to 50% of our net income if certain other financial conditions are met.

The Senior Secured Credit Facility contains other restrictive covenants, including those regarding: indebtedness (including capital leases) and guarantees; liens; operating leases; investments and acquisitions; loans and advances; mergers, consolidations and other fundamental changes; sales of assets; transactions with affiliates; no material changes in nature of business; dividends and distributions, stock repurchases, and other restricted payments; change in name, jurisdiction of organization or fiscal year; burdensome agreements; and capital expenditures.

The Senior Secured Credit Facility also has events of default that may result in acceleration of the borrowings thereunder, including: (i) nonpayment of principal, interest, fees or other amounts (subject to customary grace periods for items other than principal); (ii) failure to perform or observe covenants set forth in the loan documentation (subject to customary grace periods for certain affirmative covenants); (iii) any representation or warranty proving to have been incorrect in any material respect when made; (iv) cross-default to other indebtedness and contingent obligations in an aggregate amount in excess of an amount to be agreed upon; (v) bankruptcy and insolvency defaults (with grace period for involuntary proceedings); (vi) inability to pay debts; (vii) monetary judgment defaults in excess of an agreed upon amount; (viii) ERISA defaults; (ix) change of control; (x) actual invalidity or unenforceability of any loan document, any security interest on any material portion of the collateral or asserted (by any loan party) invalidity or unenforceability of any security interest on any collateral; (xi) actual or asserted (by any loan party) invalidity or unenforceability of any guaranty; (xii) material unpaid, final judgments that have not been vacated, discharged, stayed or bonded pending appeal within a specified number of days after the entry thereof; and (xiii) any other event of default agreed to by us and the Administrative Agent.

As of September 30, 2015, we were in compliance with the financial and other restrictive covenants under our outstanding material debt obligations, including our Senior Secured Credit Facility.

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Repayment of UBS Credit Agreement

On August 6, 2014, in connection with the Patriot Care Management Acquisition, we and certain of our subsidiaries entered into the UBS Credit Agreement, which provided for a five-year term loan facility in an aggregate principal amount of $57.0 million that would mature on August 6, 2019. The loan was secured by the common stock of Patriot Care Management, Inc. and guaranteed by Guarantee Insurance Group and its wholly owned subsidiaries. Following our initial public offering, on January 22, 2015 we prepaid all outstanding borrowings under the UBS Credit Agreement, including accrued interest and applicable prepayment premium.

Repayment of PennantPark Loan Agreement

On August 6, 2014, in connection with the GUI Acquisition, we and certain of our subsidiaries, as borrowers, and certain of our other subsidiaries and certain affiliated entities, as guarantors, entered into the PennantPark Loan Agreement with the PennantPark Entities, as lenders. Following our initial public offering, on January 22, 2015 we prepaid all outstanding borrowings under the PennantPark Loan Agreement, including accrued interest and applicable prepayment premium.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

The Company has employment agreements with certain executives and other employees, which provide for compensation and certain other benefits and for severance payments under certain circumstances.  The employment agreements contain clauses that become effective upon a change of control of the Company.  Upon the occurrence of any of the defined events in the employment agreements, the Company would be obligated to pay certain amounts to the relevant employees.

The Company maintains cash at various financial institutions, and, at times, balances may exceed federal insured limits.  Management does not believe this results in any material effect on the Company’s financial position or results of operations.  In the normal course of business, the Company may be party to various legal actions that management believes will not result in any material effect on the Company’s financial position or results of operations.

Effect of Recently Issued Financial Accounting Standards

In September 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments”, an update to Accounting Standard Codification (“ASC”)Topic 805, Business Combinations.  This update requires that an acquirer recognize adjustments to the provisional amounts that are identified during the measurement period in the reporting period in which the adjusting amounts are determined. The amendment requires that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments in this update require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The amendments are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The update should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this update with earlier application permitted for financial statements that have not been issued.  We will evaluate this guidance as potential adjustments arise.  

In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs”. The update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. The update requires retrospective application. ASU 2015-03 is effective for fiscal years, and interim reporting periods within those years, beginning after December 15, 2015. Early adoption is permitted but we do not anticipate electing early adoption.  We are currently evaluating the financial impact of this standard.

In August 2014, the FASB issued ASU 2014-15 regarding ASC Topic 205, Presentation of Financial Statements – Going Concern. The updated guidance related to determining whether substantial doubt exists about an entity's ability to continue as a going concern. The amendment provides guidance for determining whether conditions or events give rise to substantial doubt that an entity has the ability to continue as a going concern within one year following issuance of the financial statements and requires specific disclosures regarding the conditions or events leading to substantial doubt. The updated guidance is effective for annual reporting periods and interim periods within those annual periods beginning after December 15, 2016. Earlier adoption is permitted, but we do not anticipate electing early adoption. We do not expect the adoption of this guidance to have a material impact on our combined financial statements.

In May 2014, the FASB issued ASU 2014-09 regarding ASC Topic 606, Revenue from Contracts with Customers. The standard provides principles for recognizing revenue for the transfer of promised goods or services to customers with the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued a deferral of

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effective date for this standard.  For public companies this standard applies to annual reporting period beginning after December 15, 2017, including interim reporting periods within that reporting period, and early adoption is not permitted. We are currently evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption.

In April 2014, the FASB issued ASU 2014-08, “Reporting Discontinued Operations”, regarding ASC Topic 205, Presentation of Financial Statements, and ASC Topic 360, Property, Plant and Equipment. The updated guidance related to reporting discontinued operations and disclosures of disposals of components of an entity. Under the amendment, only those disposals of components of an entity that represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements. Additionally, the elimination of the component's operations, cash flows and significant continuing involvement conditions have been removed. Further, an equity method investment could be reported as discontinued operations. The updated guidance is effective prospectively for all disposals or classifications as held for sale that occur within annual periods beginning after December 15, 2014. The adoption of this guidance has not had a material impact on our combined financial statements.

JOBS Act

The JOBS Act contains provisions that, among other things, allow an emerging growth company to take advantage of specified reduced reporting requirements. In particular, the JOBS Act provides that an emerging growth company can utilize the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. We have elected to take advantage of such extended transition period, and, as a result, we will not be required to comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for companies that are not emerging growth companies.

Reconciliations to Non-GAAP Key Performance Measures

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In thousands)						(In thousands)
Reconciliation from Net Income (Loss) to Adjusted EBITDA:
Net Income (Loss)	$	3,788		$	16,902		$	(8	)	$	12,807
Income tax expense (benefit)		1,331			9,101			(1,733	)		10,401
Interest expense		806			2,836			2,525			5,427
Depreciation and amortization		4,442			2,302			10,281			4,994
EBITDA		10,367			31,141			11,065			33,629
Net realized losses (gains) on investments		58			(13,960	)		149			(14,038	)
Costs from debt payoff		—			—			13,681			—
Decrease in fair value of warrant redemption liability		—			(8,760	)		(1,385	)		(2,257	)
Stock compensation expense		2,586			—			8,791			—
Acquisition costs		1,453			—			4,372			—
Severance expense		172			—			172			—
Gain on disposal of fixed assets		(7	)		—			(7	)		—
Adjusted EBITDA	$	14,629		$	8,421		$	36,838		$	17,334
Calculation of Adjusted EBITDA margins:
Total Fee Income	$	58,532		$	31,433		$	148,912		$	62,485
Adjusted EBITDA		14,629			8,421			36,838			17,334
Adjusted EBITDA margins		25.0	%		26.8	%		24.7	%		27.7	%

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	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In thousands)						(In thousands)
Reconciliation to Operating Cash Flow:
Adjusted EBITDA (calculated above)	$	14,629		$	8,421		$	36,838		$	17,334
Less: Income tax expense		(1,331	)		(9,101	)		—			(10,401	)
Less: Interest expense		(806	)		(2,836	)		(2,525	)		(5,427	)
Less: Purchase of fixed assets and other long-term assets		(1,741	)		(172	)		(4,565	)		(437	)
Operating cash flow	$	10,751		$	(3,688	)	$	29,748		$	1,069

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In thousands)						(In thousands)
Reconciliation from Net Cash Provided by Operating Activities to    Operating Cash Flow:
Net Cash Provided by Operating Activities	$	2,347		$	8,427		$	6,991		$	15,529
Changes in certain assets and liabilities:
Increase (decrease) in:
Fee income receivable		3,196			346			8,212			719
Fee income receivable from related party		5,538			4,334			10,153			4,849
Other current assets		543			32			1,715			85
Decrease (increase) in:
Net payable to related parties		922			(1,054	)		(781	)		(3,618	)
Deferred claims administration services income		(686	)		(200	)		(539	)		(569	)
Net advanced claims reimbursements		3,353			(196	)		(237	)		(629	)
Income taxes payable, net of income tax benefit of   $1.7 million for the nine months ended september 30, 2015   and $0 in 2014, respectively		(944	)		(8,052	)		12,348			(8,833	)
Accounts payable and accrued expenses		(3,286	)		(7,538	)		(11,963	)		(8,593	)
Net income or (loss) attributable to business generated by GUI,    exclusive of depreciation expense		—			39			—			2,252
Net (income) loss attributable to non-controlling interest in subsidiary		(59	)		(26	)		(111	)		(68	)
Deferred income taxes		—			472			—			482
Early payment penalties on repayment of debt		—			—			4,339			—
Acquisition costs		1,453			—			4,372			—
Severance expense		172			—			172			—
Gain on disposal of fixed assets		(7	)		—			(7	)		—
Provision for uncollectible fee income, not related to Ullico		(50	)		(100	)		(351	)		(100	)
Purchase of fixed assets and other long-term assets		(1,741	)		(172	)		(4,565	)		(437	)
Operating cash flow	$	10,751		$	(3,688	)	$	29,748		$	1,069

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	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In thousands)						(In thousands)
Reconciliation from Net (Loss) Income to Adjusted Earnings:
Net Income (Loss)	$	3,788		$	16,902		$	(8	)	$	12,807
Net realized losses (gains) on investments		58			(13,960	)		149			(14,038	)
Costs from debt payoff		—			—			13,681			—
Decrease in fair value of warrant redemption liability		—			(8,760	)		(1,385	)		(2,257	)
Stock compensation expense		2,586			—			8,791			—
Acquisition costs		1,453			—			4,372			—
Severance expense		172			—			172			—
Gain on disposal of fixed assets		(7	)		—			(7	)		—
Income tax effect related to reconciling items		(1,662	)		8,861			(10,051	)		6,355
Adjusted Earnings	$	6,388		$	3,043		$	15,714		$	2,867
Calculation of Adjusted Earnings Per Common Share
Basic	$	0.24		$	0.19		$	0.60		$	0.19
Diluted		0.23			0.17			0.60			0.18
Weighted Average Common Shares Outstanding
Basic		26,802			16,368			26,006			14,981
Diluted		27,940			17,551			26,388			16,183

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of September 30, 2015, we were not subject to any material interest rate risk or credit risk, and we had no exposure to foreign currency risk.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There was no change in the Company’s internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not a party to any pending legal proceedings that we believe are material to us. We may, from time to time, be party to litigation and subject to claims incident to the ordinary course of our business. In the normal course of the workers’ compensation insurance services business, we have been named as a defendant in suits related to decisions by us or our clients with respect to the settlement of claims or other matters arising out of the services we provide. In the opinion of management, adequate reserves have been provided for such matters. However, we cannot provide any assurances that the result of any such actions, claims or proceedings, now known or occurring in the future, individually or in the aggregate, will not result in a material adverse effect on our business, financial condition or results of operations.

ITEM 1A. RISK FACTORS

For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014. Other than as described below, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014.

We have acquired a number of insurance services firms in a short period of time, and there are risks associated with such acquisitions, which could adversely affect our growth and results of operations.

     We have recently acquired a number of insurance services firms in a short period of time. We believe that similar acquisition activity will be important to maintaining comparable growth in the future. Failure to successfully identify and complete acquisitions likely would likely result in slower growth. Even if we are able to identify appropriate acquisition targets, we may not be able to execute transactions on favorable terms or integrate targets in a manner that allows us to fully realize the anticipated benefits from these acquisitions. Our ability to finance and integrate acquisitions may also suffer if we expand the number or size of our acquisitions.

     Post-acquisition risks include those relating to retention of personnel, retention of clients, entry into unfamiliar markets or lines of business, contingencies or liabilities, such as violations of sanctions laws or anti-corruption laws, risks relating to ensuring compliance with licensing and regulatory requirements, tax and accounting issues, distractions to  management and personnel from our existing business and integration difficulties relating to accounting, information technology, human resources, or organizational culture and fit, some or all of which could have an adverse effect on our results of operations and growth. Post-acquisition deterioration of targets could also result in lower or negative earnings contribution and/or goodwill impairment charges.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

(a) None.

(b) None.

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ITEM 6. EXHIBITS

Exhibit Number	Exhibit Description
2.1	Agreement and Plan of Merger dated as of April 17, 2015, by and among Patriot National, Inc., Vikaran Technology Solutions, Inc., Vikaran Solutions, LLC and certain members of Vikaran Solutions, LLC (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on April 20, 2015 (File No. 001-36804))
2.2	Stock Purchase Agreement dated as of July 9, 2015, by and between Patriot Risk Services, Inc. and CWIBenefits, Inc. (incorporated by reference to Exhibit 2.15 to the Registrant’s Quarterly Report on Form 10-Q filed on August 14, 2015 (File no. 001-36804))
2.3	Membership Interest Purchase Agreement dated as of July 20, 2015, by and between Patriot National, Inc. and Global HR Research LLC, In Touch Holdings LLC, the members of Global HR Research LLC, and Brandon G. Phillips (the “Global HR Membership Interest Purchase Agreement”) (incorporated by reference to Exhibit 2.16 to the Registrant’s Quarterly Report on Form 10-Q filed on August 14, 2015 (File no. 001-36804))
2.4	Amendment No. 1 to the Global HR Membership Interest Purchase Agreement, dated as of August 21, 2015, by and between Patriot National, Inc. and Global HR Research LLC, In Touch Holdings LLC, the members of Global HR Research LLC, and Brandon G. Phillips
2.5	Asset Purchase Agreement dated as of August 14, 2015, by and between TriGen Insurance Solutions, Inc. and Restaurant Coverage Associates, Inc.
2.6	Asset Purchase Agreement dated as of August 14, 2015, by and between Patriot Risk Services, Inc. and Risk Control Associates, Inc.
2.7	Facilitation Agreement dated as of October 29, 2015, by and between TriGen Insurance Solutions, Inc. and The Carman Corporation
3.1	Amended and Restated Certificate of Incorporation of Patriot National, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on January 22, 2015 (File no. 001-36804))
3.2	Amended and Restated By-Laws of Patriot National, Inc. (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on January 22, 2015 (File no. 001-36804))
10.1	Second Amendment to the Credit Agreement, dated as of August 14, 2015, by and among Patriot National, Inc., the lenders party thereto and BMO Harris Bank N.A., as administrative agent
10.2*	Patriot National, Inc. Acquisition Incentive Plan Under the Patriot National, Inc. 2014 Omnibus Incentive Plan
31.1	Certificate of Steven M. Mariano, President and Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certificate of Thomas C. Shields, Executive Vice President, Chief Financial Officer and Treasurer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certificate of Steven M. Mariano, President and Chief Executive Officer, pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
32.2	Certificate of Thomas C. Shields, Executive Vice President, Chief Financial Officer and Treasurer, pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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* This document has been identified as a management contract or compensatory plan or arrangement.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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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, thereunto duly authorized.

	PATRIOT NATIONAL, INC.
Date: November 12, 2015	By:	/s/ Thomas C. Shields
		Executive Vice President, Chief Financial Officer
		& Treasurer, Authorized Signatory

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EX-2.4

Exhibit 2.4

AMENDMENT NO. 1 TO MEMBERSHIP INTEREST PURCHASE AGREEMENT

This Amendment No. 1 to the Membership Interest Purchase Agreement (this “Amendment No. 1”) is made as of August 21, 2015 by and between Global HR Research, LLC, a Florida limited liability company, In Touch Holdings LLC, a Florida limited liability company, Brandon G. Phillips, James E. Parker and Ivette Ruiz Babylon, each an individual, as sellers, Brandon G. Phillips as the Sellers’ Representative, and Patriot National, Inc., a Delaware corporation, as buyer, in order to amend that certain Membership Interest Purchase Agreement, dated as of July 20, 2015, by and between the Buyer and the Sellers (the “Purchase Agreement”). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.

Pursuant to Section 2.1 and Section 12.8 of the Purchase Agreement, in consideration of the mutual promises and provisions hereof and intending to be legally bound hereby, the Parties hereby agree as follows:

1.Agreement on Closing Date. The Parties agree and acknowledge that the Closing shall occur on the date hereof but immediately following execution and delivery by the Parties named herein of this Amendment No. 1.

2.Agreement on Effective Date. The Parties agree and acknowledge that the Effective Date of this Amendment No. 1 shall be August 1, 2015.

3.Purchase Price; Closing Payments. Section 1.2(a) of the Purchase Agreement is amended and restated in its entirety as follows:

“(a)General. The aggregate consideration to be paid (or to be provided in the case of the Buyer Common Stock hereafter defined) by the Buyer to or for the account of the Sellers in consideration for the purchase of the Membership Interests shall be the sum of the following (the “Initial Purchase Price”): (i) Twenty Four Million Dollars ($24,000,000) (the “Initial Cash Consideration”); plus (ii) 444,096 shares (the “Initial Stock Consideration”) of the common stock of the Buyer, par value $0.001 per share (the “Buyer Common Stock”); plus (iii) the Deferred Consideration (as defined below). The Initial Purchase Price is subject to adjustment pursuant to Section 1.2(e), and the Initial Purchase Price, as so adjusted, is referred to as the “Purchase Price.”

4.Simultaneous Closing and Acquired Companies. Section 1.2(c) of the Purchase Agreement is amended and restated in its entirety as follows:

“(c)Simultaneous Closing and Acquired Companies. On the Closing Date, the Buyer shall wire a portion of the Initial Cash Consideration to the Company in an amount sufficient to permit the Company to purchase, and the Company shall purchase, the outstanding Equity Interests not owned by the Company in the Acquired Companies, in the amounts and to the parties set forth on Schedule 1.2(c). Immediately upon confirmation of the closing of the

purchase of such Equity Interests the Buyer shall pay the remainder of the Initial Cash Consideration and the Initial Stock Consideration in accordance with this Section 1.2.”

5.Deferred Consideration. The following is added as Section 1.2(f) of the Purchase Agreement:

“(f)Deferred Consideration. As additional consideration for the purchase of the Membership Interests, Buyer shall pay to ITH either, at the Buyer’s discretion, 618,478 shares of the Buyer Common Stock (the “Deferred Stock Consideration”, and together with the Initial Stock Consideration, the “Stock Consideration”) or $10,477,017 in cash (together with the Initial Cash Consideration, the “Cash Consideration”) (the “Deferred Consideration”). The Deferred Consideration shall be paid to ITH on the date that is the first to occur of (i) November 20, 2015; (ii) the 21^st day after the date that the Buyer first mails the Information Statement to its stockholders; and (iii) the effectiveness of a registration statement filed with the SEC for the sale of Buyer Common Stock.”

6.Buyer Common Stock. Section 5.6 of the Purchase Agreement is amended and restated in its entirety as follows:

“Section 5.6Buyer Common Stock. The Buyer Common Stock will be, as of the Closing Date or upon the payment of the Deferred Stock Consideration, if applicable, duly authorized, validly issued, fully paid and non-assessable and no other Person has any preemptive, subscription or similar rights to participate in the issuance of the Buyer Common Stock pursuant to this Agreement. The consummation of the Contemplated Transactions will give the Sellers who are receiving Stock Consideration good title to the Buyer Common Stock, as of the Closing Date or upon the payment of the Deferred Stock Consideration, if applicable, free and clear of all Liens, except as set forth in this Agreement.”

7.Governmental Approvals and Consents; Information Statement. The first sentence of Section 6.6(c) of the Purchase Agreement is amended and restated in its entirety as follows:

“As promptly as reasonably practicable following completion of the GAAP audit with regard to the Base Financial Statements in accordance with Section 6.12 of the Purchase Agreement, the Buyer shall prepare and file with the SEC the Information Statement.”

8.Definitions. The following definitions shall be added to Article X of the Purchase Agreement:

“Deferred Consideration” has the meaning set forth in Section 1.2(f).”

“Deferred Stock Consideration” has the meaning set forth in Section 1.2(f).”

“Initial Cash Consideration” has the meaning set forth in Section 1.2(a).”

“Initial Stock Consideration” has the meaning set forth in Section 1.2(a).”

The definitions of Cash Consideration and Stock Consideration in Article X shall each be amended by replacing “Section 1.2(a)” with “Section 1.2(f)” in each definition.

9.Purchase Price Disbursement Schedule 1.2(b). Schedule 1.2(b) of the Purchase Agreement is replaced in its entirety by the revised Schedule 1.2(b) attached to this Amendment No. 1.

10.Acquired Company Payments Schedule 1.2(c). Schedule 1.2(c) of the Purchase Agreement is replaced in its entirety by the revised Schedule 1.2(c) attached to this Amendment No. 1.

11.References to Information Statement. Section 7.2(c) and Section 7.3(f) of the Purchase Agreement shall be deleted in their entirety.

12.Miscellaneous.

a.This Amendment No. 1 shall be effective and binding upon all parties to the Purchase Agreement upon execution and delivery by the parties hereto.  The Purchase Agreement, as amended by this Amendment No. 1, constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein and therein and all inducements to the making of this Amendment No. 1 relied upon by the Parties, and they supersede all other prior understandings and agreements, both written and oral, with respect to such subject matter.

b.Except as expressly amended hereby, the Purchase Agreement shall remain in full force and effect.  In the event that any of the terms or provisions of the Purchase Agreement are inconsistent with or contradict the terms hereof, the terms of this Agreement shall control.  After the date hereof, any reference to the Purchase Agreement shall mean the Purchase Agreement, as amended and modified hereby, and each reference in the Purchase Agreement to “this Agreement”, “herein”, “hereof”, “hereunder” or words of similar import shall mean and be a reference to the Purchase Agreement as amended and modified hereby.

c.Section 12.2, Section 12.4, Section 12.6, Section 12.9, Section 12.12, Section 12.13 and Section 12.14 of the Purchase Agreement shall be deemed incorporated by reference into this Amendment No. 1, mutatis mutandis.

[Signature page follows.]

IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 as of the date first written above.

BUYER:
PATRIOT NATIONAL, INC.
By:	/s/ Steven M. Mariano
Name:	Steven M. Mariano
Title:	President, CEO
COMPANY:
GLOBAL HR RESEARCH LLC
By:		/s/ Austin J. Shanfelter
Name:		Austin J. Shanfelter
Title:		Chairman
SELLERS’ REPRESENTATIVE:
By:		/s/ Brandon G. Phillips
Name:		Brandon G. Phillips

SELLERS:
IN TOUCH HOLDINGS LLC
By:	/s/ Austin J. Shanfelter
Name:	Austin J. Shanfelter
Title:	Manager
		/s/ Brandon G. Phillips
		Brandon G. Phillips
		/s/ James E. Parker
		James E. Parker
		/s/ Ivette Ruiz Babylon
		Ivette Ruiz Babylon

* All schedules and exhibits to this Exhibit 2.4 have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The schedules include payment allocation information. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.

EX-2.5

Exhibit 2.5

ASSETPURCHASEAGREEMENT

This ASSET PURCHASE AGREEMENT (this “Agreement”), effective as of August 14, 2015 (the “Effective Date”), by and among TriGen Insurance Solutions, Inc., a Delaware corporation (the “Buyer”), Restaurant Coverage Associates, Inc., a New Jersey corporation, and Restaurant Coverage Associates Insurance Agency of New England, Inc., a Massachusetts corporation (the “Seller”) and the shareholders of the Seller named on the signature page hereto (the “Equity Holders”). Each of the foregoing parties may be referred to herein as a “Party” and collectively as the “Parties.” Capitalized terms used and not otherwise defined herein shall have the meanings set forth in Article 7below.

RECITALS

WHEREAS, the Equity Holders own all of the Equity Interests of the Seller and the Seller is engaged in the business of providing property and casualty insurance for the restaurant and bar industries (the “Business”); and

WHEREAS, the Seller wishes to sell to the Buyer and the Buyer wishes to purchase from the Seller, the rights and obligations of the Seller to the Purchased Assets (as defined herein) subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE1

PURCHASEAND SALEOF THEPURCHASEDASSETS

1.1PurchasedAssets and ExcludedAssets.

1.1.1PurchasedAssets.OnthetermsandsubjecttotheconditionshereofandinconsiderationofthePurchasePricetobepaidtotheSellerbytheBuyer,theBuyerherebypurchasesandacquiresfromtheSeller,andtheSellerherebysell,convey,assign,transferanddelivertotheBuyer, alloftheSeller’sright,titleandinterestinandtothe followingassets,properties,rightsandinterests,whereverlocatedandbywhomeverpossessed,owned,licensedorleasedbytheSeller, all of which are listed on Schedule 1.1.1 (collectively,the“PurchasedAssets”),free andclearofallLiens:

(a)alloftheSeller’sContractsandbusinessarrangements,includingwithoutlimitation,salesandpurchaseorders,confidentiality,vendor, customerandserviceagreements,including renewal rights, allofwhicharelistedonSchedule 1.1.1 (collectively,the“Assigned Contracts”), provided however, that the Buyer assumes any/all obligations, arising out of the Assigned Contracts commencing with the effective date of this Agreement, but not prior thereto;

(b)allofthe Seller’s IntellectualProperty;

(c)allofthe Seller’s Licensesand Permits, tothe extenttransferable;

(d)Intentionally left blank;

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(e)Intentionally left blank; 

(f)all of the Seller’s fixed assets all of which are listed on Schedule 1.1.1(d);

(g)alloftheSeller’sadvertising,marketingandpromotionalmaterialsand allotherprinted orwrittenmaterials;

(h)alloftheSeller’slists,recordsandotherinformationpertainingtosuppliersandcustomers(including, but not limited to, customerlists,customermailinglistsandcustomersalesfiles);lists,recordsandotherinformationpertainingtoaccounts,referralsources;books,ledgers,files,documents,correspondenceandbusinessandaccountingrecordsofeverykind(including, but not limited to,allfinancial,businessand marketingplans); and

(i)allgoodwilloftheSellerasagoingconcernandallotherintangible propertyofthe Seller.

NothinginthisSection1.1.1shallobligatetheBuyertoassumeanyLiability,whetherrelatedto theBusiness,thePurchasedAssetsorotherwise,unlesstheBuyerexpresslyassumessuchLiabilitypursuanttotheterms and conditions ofSection1.2.1ofthis Agreement.

1.1.2ExcludedAssets. Notwithstanding Section 1.1.1, the following assets, properties, rights and interests of theSeller(collectively,the“ExcludedAssets”)areexpresslyexcludedfrom thepurchaseandsalecontemplatedherebyandassucharenotincludedinthePurchasedAssets:

(a)all additional Cash on Hand of the Seller as of the Closing Date;

(b)all of the Seller’s Accounts Receivable related to the Business services provided prior to the Closing Date;

(c)all of the Seller’s rights under or pursuant to this Agreement;

(d)all Real Property owned by the Seller or its affiliates;

(e)all tangible personal property of the Seller, whether used in the Business or otherwise;

(f)all prepaid tax balances;

(g)all other assets, properties, rights and interests of the Seller and the Equity Holders not relating to the Business or the Purchased Assets, including, without limitation, those set forth on Schedule 1.1.2; and

(h)all refunds from cancelled insurance policies and insurance coverage proceeds relating to events requiring payments prior to closing.

1.2Assumption and Exclusionof Liabilities.

1.2.1AssumedLiabilities.AsoftheClosingDate,subjecttothetermsandconditions hereof, and as additionalconsideration for thePurchasedAssets,theBuyershallassumeandpay,perform

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orotherwisedischarge,inaccordancewiththeirrespectivetermsandsubjecttotheirrespectiveconditions, the Liabilities of theSellerunderanyAssignedContracts relatingtothe Business and the Purchased Assets(butexcludinganyLiabilityarisingpriortotheClosingDateorarisingoutoforrelatedtoany breach, actoromission bythe Seller)and anyLiabilities ofthe Sellersetforth onSchedule 1.2.1, butonly totheextenttheexistenceofsuchLiabilitiesortheparticularfactsandcircumstancesthatgiveriseto suchLiabilitiesdonotorwouldnotconstituteabreachofanyoftheSeller’srepresentationsandwarrantieshereunderorotherwisegiverisetoaclaimforindemnificationbytheBuyerhereunder(collectively, the “Assumed Liabilities”). 

1.2.2ExcludedLiabilities.NotwithstandinganythingtothecontraryinthisAgreement,theSellershallretainandshallberesponsibleforpaying,performinganddischargingwhendue, andtheBuyershallnotassumeorhaveanyresponsibilityorliabilityfor,anyoftheSeller’sLiabilities, whetherornotrelatedtotheBusinessorthePurchasedAssets,ofwhateverkindandnature,primaryor secondary,directorindirect,absoluteorcontingent,knownorunknown,andwhetherornotaccrued,not specificallyidentifiedasAssumedLiabilitiespursuanttoSection1.2.1including,withoutlimitation,the followingLiabilities (collectively, the “Excluded Liabilities”):

(a)allLiabilities arisingoutoforrelatedtothe ExcludedAssets;

(b)the Seller’s obligations underthis Agreement;

(c)allLiabilitiesunderanyAssignedContract,totheextent(i)arisingin thefirst instancepriorto theClosing Date,or(ii)arising after theClosing Datebutrelating toa breachof an Assigned Contractbythe Sellerpriortothe ClosingDate;

(d)allLiabilitiesforaccountspayableoftheSeller,whetherrelatedtothe Business orotherwise;

(e)allLiabilitiesforTaxesimposedwithrespecttotheBusiness,thePurchasedAssetsoranyincomeorgainsderivedwithrespecttheretoforanyTaxperiod,orportionthereof, endingon orbefore the ClosingDate;

(f)allLiabilities relatedtoanyIndebtedness;

(g)allLiabilitiesrelatedtotheSeller’snon-compliancewithanyapplicable Laws;

(h)allLiabilitiesarisingoutoforrelatingtoanybreachofwarrantyorsimilarclaim with respect to theBusiness, to the extentsuchLiabilities relate to servicesprovided by theSellerprior tothe ClosingDate;

(i)allLiabilitiesrelatedtoanypendingorthreatenedlitigationagainstthe Seller, whetherrelated to the Businessorotherwise; and

(j)all other Liabilities of the Seller and the Equity Holders, including, without limitation, those set forth on Schedule 1.2.2.

1.3PurchasePrice.Inconsiderationofthesaleby the Sellerto the BuyerofthePurchasedAssets andtherepresentations,warrantiesandcovenantsmadeby the Sellerto the Buyer,andsubjecttothesatisfaction orwaiverofalloftheconditionscontainedherein,Buyer shall pay to the Seller (a) at Closing, [Seven Hundred Fifty Thousand Dollars ($750,000)] (the “Initial Purchase Price”) in

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cash, by wire transfer of immediately available funds in accordance with the wire transfer instructions set forth in Schedule 1.3; and (b) in accordance with the timing specified in Section 1.4.3, the Earn-Out Payment, if any. 

1.4Earn-Out.

1.4.1Payments. The Buyer shall pay to the Seller an earn-out payment (the “Earn-Out Payment”) based on Actual EBITDA for the Measurement Period as follows:

Earnout = (7 x Actual EBITDA) – Initial Purchase Price

Actual EBITDA for purposes of calculating the Earn-Out Payment shall be measured in combination as Actual EBITDA of the Seller plus Actual EBITDA of Risk Control Associates, Inc. and plus Actual EBITDA of Risk Coverage Associates of New England, Inc., an affiliate of Seller. Notwithstanding anything herein, the maximum total combined Earn-Out Payment for the Measurement Period is Two Million Five Hundred Thousand Dollars ($2,500,000). The Earn-Out shall be calculated in accordance with the limited adjustments set forth on Schedule 1.4.1.

1.4.2Procedures Applicable to Determination of the Earn-Out Payment.

(a)On or before the date which is thirty (30) days after the conclusion of the Measurement Period, which shall be construed as September 30, 2016, the Buyer shall prepare and deliver to the Seller a written statement setting forth in reasonable detail its calculation of the resulting Earn-Out Payment (the “Earn-Out Calculation Statement”).  A copy of the proposed Earn-Out Calculation Statement is annexed hereto as Schedule 1.4.2(a).

(b)The Seller shall have thirty (30) days after receipt of the Earn-Out Calculation Statement (the “Review Period”) to review the Earn-Out Calculation Statement. During the Review Period, the Seller and its accountants shall have the right to inspect the Buyer’s books and records during normal business hours at the Buyer’s offices, upon reasonable prior notice and solely for purposes reasonably related to the determinations of the Earn-Out Payment. Prior to the expiration of the Review Period, the Seller may object to the Earn-Out Calculation Statement by delivering a written notice of objection (the “Earn-Out Objection Notice”) to the Buyer. Any Earn-Out Objection Notice shall specify the items in the applicable Earn-Out Calculation Statement disputed by the Seller and shall describe in reasonable detail the basis for such objection, as well as the amount in dispute. If the Seller fails to deliver an Earn-Out Objection Notice to the Buyer prior to the expiration of the Review Period, then the Earn-Out Calculation Statement shall be final and binding on the parties hereto. If the Seller timely delivers an Earn-Out Objection Notice, the Buyer and the Seller shall negotiate in good faith to resolve the disputed items and agree upon the resulting amount of Actual EBITDA and the Earn-Out Payment. If the Buyer and the Seller are unable to reach agreement within thirty (30) days after such an Earn-Out Objection Notice has been given, all unresolved disputed items shall be promptly referred to an impartial nationally recognized firm of independent certified public accountants, other than the Seller’s accountants or the Buyer’s accountants, appointed by mutual agreement of the Buyer and the Seller (the “Independent Accountant”). The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable Earn-Out Calculation Statement as promptly as practicable, but in no event greater than thirty (30) days after such submission to the Independent Accountant, and to resolve only those unresolved disputed items set forth in the Earn-Out Objection Notice. If unresolved disputed items are submitted to the Independent Accountant, the Buyer and the Seller shall each furnish to the Independent Accountant such work papers, schedules and other documents and information relating to

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the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations by the Buyer and the Seller, and not by independent review. The resolution of the dispute and the calculation of Actual EBITDA that is the subject of the applicable Earn-Out Objection Notice by the Independent Accountant shall be final and binding on the parties hereto. The fees and expenses of the Independent Accountant shall be borne by the Seller and the Buyer in proportion to the amounts by which their respective calculations of Actual EBITDA differ from Actual EBITDA as finally determined by the Independent Accountant. 

1.4.3Timing of Payment of Earn-Out Payment. Any Earn-Out Payment that is undisputed that the Buyer is required to pay pursuant to Section 1.4.1 hereof shall be paid in full no later than October 31, 2016, the disputed amount, if any, shall be paid in full no later than thirty (30) business days following the date upon which the determination of the Earn-Out Payment becomes final and binding upon the parties as provided in Section 1.4.2(b)(including any final resolution of any dispute raised by the Seller in the Earn-Out Objection Notice). The Buyer shall pay to the Seller the Earn-Out Payment, if any, in cash by wire transfer of immediately available funds to the bank account for the Seller set forth on Schedule 1.3.

1.4.4Post-Closing Operation of the Business. Subject to the terms of this Agreement, subsequent to the Closing, the Buyer shall have sole discretion with regard to all matters relating to the operation of the Business and shall operate the Business in good faith and in the ordinary course of business and reasonably consistent with past practices of the Seller prior to the Closing. The Buyer shall not, directly or indirectly, take any actions in bad faith that could unreasonably restrict the achievement of the Earn-Out Payment, or which could have the purpose of avoiding or reducing any of the Earn-Out Payment hereunder. Notwithstanding the foregoing, the Buyer has no obligation to operate the Business in order to maximize the amount of any Earn-Out Payment.

1.4.5Right of Set-off. The Buyer shall have the right to withhold and set off against any amount otherwise due to be paid pursuant to Section 1.4 the amount of any legitimate Losses to which any Buyer Indemnified Party may be entitled, provided Buyer provides Seller with notice regarding any Losses or costs. With regard to any Transition Expense, Buyer’s right of set-off pursuant to this Section 1.4.5 shall be subject to the provisions of Section 5.4.2.

1.4.6No Security Interest. The Parties hereto understand and agree that (a) the contingent rights to receive the Earn-Out Payment shall not be represented by any form of certificate or other instrument, are not transferable, except by operation of Law, (b) the Seller shall not have any rights as a security holder of the Buyer as a result of the Seller’s contingent right to receive the Earn-Out Payment hereunder, and (c) no interest is payable with respect to the Earn-Out Payment.

1.5Third Party Consents. To the extent that the Seller’s rights under any Contract, License or Permit constituting a Purchased Asset, or any other Purchased Asset, may not be assigned to the Buyer without the consent of another Person which has not been obtained, this Agreement shall not constitute an agreement to assign the same if an attempted assignment would constitute a breach thereof or be unlawful, and the Seller, at its expense, shall use its best efforts to obtain any such required consent(s) as promptly as possible. If any such consent shall not be obtained or if any attempted assignment would be ineffective or would impair the Buyer’s rights under the Purchased Asset in question so that the Buyer would not in effect acquire the benefit of all such rights, the Seller, to the maximum extent permitted by law and the Purchased Asset, shall act after the Closing as the Buyer’s agent in order to obtain for it the benefits thereunder and shall cooperate, to the maximum extent permitted by Law and the Purchased Asset, with the Buyer in any other reasonable arrangement designed to provide such benefits to the Buyer.

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Notwithstanding any provision in this Section 1.5 to the contrary, the Buyer shall not be deemed to have waived its rights under Section 4.2.3 hereof unless and until the Buyer provides written waivers thereof. 

1.6Closing.TheclosingofthepurchaseandsaleofthePurchasedAssets(the“Closing”) shalltakeplaceonthedatehereof(the“ClosingDate”)andshallbeeffectiveasof12:01a.m.Eastern Time on the ClosingDate.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller and the Equity Holders, other than James Henry, jointly and severally (Equity Holders liability hereunder shall be solely related to paragraphs 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.14, 2.15, 2.21 and 2.22), hereby represent andwarranttotheBuyerwithrespecttothemattersspecifiedin this Article 2as follows:

2.1OrganizationandQualification.The Sellerisacorporation,dulyorganized,validlyexisting and ingood standing undertheLaws of theState ofNew Jersey. TheSellerdonothaveany subsidiaries.The SellerhastherequisitecorporatepowerandauthoritytoconducttheBusinessasitisnowbeingconductedandto performallofitsobligations undereach Contractbywhich it isbound.

2.2Authorization;Enforceability.The Sellerhastherequisitecorporatepowerandauthority toexecuteanddeliverthisAgreement,toperformitsobligationsunderthisAgreement,andtoconsummatethetransactionscontemplatedbythisAgreement.ThisAgreementhasbeen duly authorized by the Equity Holders and dulyexecutedanddelivered by theSeller,and thisAgreementconstitutesthelegal, validandbinding obligationoftheSeller,enforceableinaccordancewithitstermsandconditions,exceptassuchenforceabilitymaybelimitedbythe GeneralEnforceabilityExceptions.

2.3OrganizationalDocuments.The SellerhasdeliveredtotheBuyercopiesoftheSeller’s OrganizationalDocuments,andallsuchcopiesarecompleteandcorrectasofthedatehereof.Thebooks ofaccountand otherrecords of the Sellerdeliveredto the Buyerhave been maintained in accordance with soundbusinesspractice,andapplicableLawandaccountingpolicies. TheSellerarenotindefaultunderor in violation ofanyprovision ofits OrganizationalDocuments.

2.4Capitalization.  The Equity Holders are the only record and beneficial holders of the Equity Interests of the Seller. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting Equity Interests of the Seller.

2.5NoViolation.ExceptassetforthonSchedule 2.5andsubjecttothereceiptoftheConsentsandtothefilingofnoticesascontemplated bySection2.6, neither theexecution and deliveryof this Agreement, nor the performance bythe Sellerof itsobligationshereunder,ortheconsummationofthetransactionscontemplatedherebywill(withor withoutthepassageoftimeorthegivingofnotice)(a)violate,conflictwithorconstituteadefaultunder theOrganizationalDocumentsoftheSeller,(b) violate,conflictwithorresultinabreachof,constitutea defaultunder, giverise to any rightof termination,cancellation oracceleration under, orcause any lossof benefitunder,anyoftheterms,conditionsorprovisionsofanyAssignedContractoranyContractor LeasetowhichtheSellerareapartyorbywhichthePurchasedAssetsarebound,orgivetoothersany rights(includingrightsoftermination,foreclosure,cancellationoracceleration)inorwithregardtothe Selleroranyofthe Purchased Assets,orresultin,requireorpermitthecreationorimpositionofanyLienofanynatureuponorwithregardtotheSelleroranyofitsassets,or(c) conflictwithorviolateinanymaterial

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respectanyLawsapplicabletotheSellerorbywhichanyofitsassetsareboundoranyoftheLicenses and Permits held bythe Seller. 

2.6Consents.

2.6.1ThirdPartyConsents.ExceptassetforthonSchedule 2.6.1, neithertheexecutionanddeliveryofthisAgreement,nor theperformancebytheSellerofitsobligationshereunderortheconsummationofthetransactionscontemplatedherebywill(withorwithoutthepassageoftimeorthegivingofnotice)requireanyConsent (collectively,the“ThirdPartyConsents”)underanyoftheterms,conditionsorprovisionsofanyAssignedContractoranyContracttowhichtheSeller isapartyorbywhichanyPurchasedAssetsare bound.

2.6.2GovernmentalConsents.ExceptassetforthonSchedule 2.6.2,no Consentof,permitorexemptionfrom,ordeclaration,filingorregistrationwith,anyPersonorGovernmentalAuthority(collectively,the“GovernmentalConsents”)isrequiredtobemadeorobtainedbythe Seller inconnectionwiththeexecution,delivery andperformanceby theSellerof thisAgreementandthe consummationofthetransactionscontemplatedhereby,which,ifnotmadeorobtained,wouldresultina violationofanyLaw,LicenseorPermit,orresultinanymaterialLiabilitytotheSeller,orwhichwould prohibit the consummationof the transactions contemplated hereby.

2.7Taxes.  The Seller has delivered to Buyer complete and correct copies of the Seller’s Tax Returns (or proof of extension of time to file) for the fiscal years ended December 31, 2012, December 31, 2013 and December 31, 2014. The Seller has filed, will timely file or will cause to be timely filed, or has timely filed for an extension of the time to file, all Tax Returns required by applicable Law to be filed by it prior to or as of the date hereof, and such Tax Returns are, or will be at the time of filing, true, correct and complete in all material respects. The Seller has paid and discharged or, where payment is not yet due, has established, or will establish or cause to be established, on or before the Closing Date, an adequate accrual for the payment of all Taxes due with respect to (a) any period ending prior to or on the Closing Date and (b) the portion through the Closing Date for any period that includes (but does not end on) the Closing Date. There are no Liens, claims or assessments pending against the Seller or its assets for any alleged deficiency in any Tax (other than for current Taxes not yet due and payable), and the Seller has not been notified of any proposed Tax claims, Liens or assessments against the Seller. The Seller is not, has not been, nor has been notified that it will be the subject of any examination by a Taxing Authority. The Seller has withheld from each payment made to any of its past or present employees, and any other Person, as appropriate, the amount of all Taxes and other deductions required to be withheld therefrom, and paid the same to the proper Taxing Authority within the time required by Law. No claim has ever been made by a Taxing Authority in a jurisdiction where the Seller do not file Tax Returns that the Seller is or may be subject to taxation by that jurisdiction. The Seller is not party to any Tax indemnity, allocation or sharing agreement.

2.8MaterialContracts.TheSeller hasdeliveredtotheBuyeracompleteandcorrectcopyof eachwrittenAssignedContract,togetherwithallamendments,exhibits,attachments,waiversorother changesthereto,andwrittendescriptionsofeachoralContract,ifany.EachAssignedContractthatisin any waymaterialtotheBusinessof theSeller(a“MaterialContract”)isvalid,binding,infullforceand effect,andenforceablebytheSelleragainstthepartiestheretoinaccordancewithitsterms,exceptas suchenforceabilitymaybelimitedbytheGeneralEnforceabilityExceptions,andisnotsubjecttoany claims,charges,setoffsordefenses.TheSeller isnotinbreachordefaultunderanyMaterialContract, norhasanyeventoccurredwhichwiththegivingofnoticeorthepassageoftime(orboth)wouldconstituteabreachordefaultbytheSellerthereunder.TheSeller hasnotwaivedanymaterialrightsunderany MaterialContractormodifiedanymaterialtermsthereof.TotheSeller’sKnowledge,no

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otherpartyto anyMaterialContractisinbreachordefaultinanyrespectthereunder,norhasanyeventoccurredoris expectedtooccur(includingwithoutlimitationthetransactionscontemplatedhereby),whichwiththe givingofnoticeorthepassageoftime(orboth)wouldconstituteabreachordefaultbysuchotherparty thereunder. 

2.9RealProperty.No interestin anyRealPropertyis included in the Purchased Assets.

2.10PersonalProperty.TheSeller hasgoodtitleto,avalidleaseholdinterestin,oravalidlicense touse, allassets ownedorused by the Seller, andallassetsused in ornecessary for the operationof theBusiness, free and clearofany Liens. Alltangible assets owned, leased or licensedby theSeller isin the possession of, andunder the controlof, the Seller.

2.11IntellectualProperty.Schedule 2.11setsforthacompleteandcorrectlistof allIntellectualPropertyownedbytheSellerorrelatedto,usedinornecessaryfortheoperationofthe Business(the“Seller’sIntellectualProperty”).ExceptassetforthonSchedule 2.11,(a)the Sellerownallright,titleandinterestin,orhasavalidlicensetouse,theSeller’sIntellectualPropertyin theBusiness,freeandclearofallLiens;(b)theuseoftheSeller’sIntellectualPropertyintheconductof theBusinessdoesnotinfringeupon,diluteormisappropriate (and in the past has not infringed upon, diluted or misappropriated)anyIntellectualPropertyrightsofanyPerson;(c)noclaims or allegations of infringement or unauthorized use involving any Seller’s Intellectual Property are pending against a third party;(d) therearenopendingclaimsorallegationsofinfringement orunauthorizeduseofanythirdpartyIntellectualPropertyortechnologyagainsttheSeller;and(e)no circumstancesexistthatwouldformthebasisforanymaterialclaimofinfringement,dilution,unauthorizeduse,orviolationofanySeller’sIntellectualProperty,orchallengetheownership,use,validityorenforceabilityofanySeller’sIntellectualProperty.

2.12InsurancePolicies.TheSeller hasdeliveredtotheBuyer,accurate andcompletecopiesofallpoliciesofinsuranceandpendingapplicationsforpoliciesofinsuranceunder which theSelleror theBusinessareorhave been coveredatany timeduring the lastthree (3)years.AllpoliciesofinsurancewhichprovidecoveragetotheSellerortheBusiness(a)arevalid,outstandingandenforceableonthedatehereof;(b)areissuedbyaninsurerthatisfinanciallysoundandreputable;(c)taken together,provideadequate insurancecoverageforthe Sellerandoperationsof the Businessforallrisksto whichtheSellerandtheBusinessarenormallyexposed;and(d)aresufficientforcompliancewithapplicable Laws and the Contracts of the Seller.The Seller has notreceived anyrefusalofcoverage, anynotice thata defense willbe afforded with reservation ofrights, oranynotice ofcancellation oranyotherindicationthatanypolicyofinsuranceisnolongerinfullforceoreffect,orthattheissuerofanypolicyofinsuranceisunwillingtoperformitsobligationsthereunder.TheSeller hascompliedwithallofitsobligations undereachsuchinsurance policy.

2.13Litigation.Therearenosuits,actions,proceedings,investigations,claimsororders(collectively,“LegalProceedings”)pendingor,totheSeller’sKnowledge,threatenedagainsttheSelleror anyofthecurrentorformerrepresentativesoftheSellerinitsrespectivecapacityasrepresentativesof theSeller,noraretheSeller,oranysuchrepresentative,subjecttoanyjudgment,orderordecreeofany court,judicialauthorityorGovernmentalAuthority(norhaveanyofthembeensubjecttosuchajudgment,orderordecreeinthepastfive(5)years).Schedule 2.13setsforthacompleteandcorrectlistanddescriptionofallLegalProceedingsmade,filedorotherwiseinitiatedinconnectionwiththe Sellerthatarependingorthathavebeenresolvedinthepasttwo(2)years,andtheresolutionthereof.The Seller hasadequateinsurance with respectto allLegalProceedings.

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2.14CompliancewithApplicableLaws.TheSeller hascompliedinallmaterialrespectswith allLawsapplicabletoitortotheoperationoftheBusinessandnofactsorcircumstancesexistwhich wouldreasonablybeexpectedtocausetheSellertoviolateorfailtocomplywithanysuchLawsinthe future.TheSeller hasnotreceivedanywrittennoticefromanycourt,judicialauthorityorGovernmental Authorityassertingafailure,orpossiblefailure,tocomplywithanysuchapplicableLaws,thesubjectof whichnoticehasnotbeenconclusively resolvedasrequiredthereby orotherwise tothesatisfactionofthe partysendingsuchnotice.TheSeller isnotunderinvestigationwithrespecttoviolationsofanysuch Laws. 

2.15RegulatoryCompliance.Schedule 2.15containsacompleteandcorrectlistof allLicensesandPermitsissuedtoormaintainedbytheSellerasofthedatehereofthatarenecessaryto theconductoftheBusiness astheBusinesshasbeenoperatedduring thepast twelve(12)months(collectively,the“MaterialLicensesandPermits”),along withthedateofissuanceandthecurrent termthereof.AllsuchMaterialLicensesandPermitsareinfullforceandeffect.TheSeller isincomplianceinall materialrespectswiththetermsandconditionsoftheMaterialLicensesandPermitsandhasreceivedno writtennoticesthatitisinviolationofanyofthetermsorconditionsofanyMaterialLicensesandPermitsorallegingthefailuretomaintainanyLicensesandPermits.TheSeller hasnotreceivedwrittennotice thatanyof theMaterialLicenses and Permits willnotberenewed. To the Seller’s Knowledge, there are no proceedings pendingtorevokeorwithdrawanysuchMaterialLicensesandPermits and the Seller has no reason to believe that any of the Material Licenses and Permits will be revoked, withdrawn or will not be renewed.ThefacilitiesusedintheBusinessare incompliancewithallapplicablebuildingcodes,ordinancesandregulations,andtheSeller hasnotreceived anynotice assertinga failure, orpossible failure, to complywith anysuch fire codes, ordinances or regulations.

2.16BooksandRecords.TheSeller hasmaintaineditsbooksandrecordsintheOrdinary CourseofBusiness,consistentwithprofessionalbusinessstandardsandpracticescustomaryfortheindustry.TheSellermakesandkeepsbooks,recordsandaccountswhich,inreasonabledetail,accurately and fairlyreflectthetransactions and dispositions of its assets.

2.17Brokers.Nobroker,finderoragentisentitledtoanybrokeragefees,finder’sfeesor commissionsinconnectionwiththetransactionscontemplatedbythisAgreementbaseduponarrangements made byoron behalfof the Seller.

2.18Customers.Schedule 2.18 setsfortha listofallcustomersof theSeller,showingthetotalsalesbytheSellertoeachcustomer for the years ended 2014 and 2015.AsoftheClosingDate,nocustomerlistedonSchedule 2.18hasterminateditsrelationshipwiththeSellerormateriallyreducedorchangedthepricingorothertermsofitsbusinesswiththeSeller,andnocustomerlistedonSchedule 2.18has notifiedtheSellerthatitintendstoterminateormateriallyreduceorchangethepricingorothertermsof itsbusiness with the Seller.

2.19Employees. Schedule 2.19 sets forth a list of all current employees of the Seller who are necessary to maintain the day-to-day operations of the Business (the “Necessary Employees”). All of the Necessary Employees are “at-will” employees. The Seller has provided Buyer a copy of any non-competition, non-solicitation, proprietary rights or confidentiality agreements currently in force with any of the Necessary Employees.

2.20ForeignPerson. No Seller isaforeignpersonwithinthemeaning ofSection1445of the Code.

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2.21Solvency. 

(a) Seller is not now and is not expected to be throughout the duration of the Earn-Out Period insolvent, and will not be rendered insolvent by any of the Contemplated Transactions. As used in this Section, “insolvent” means that the sum of the Seller’s debts and other probable Liabilities exceeds the present fair saleable value of Seller’s assets.

(b) Immediately after giving effect to the consummation of the Contemplated Transactions, (i) Seller will be able to pay its Liabilities as they become due in the usual course of its business, (ii) Seller will not have unreasonably small capital with which to conduct its present or proposed business, (iii) Seller will have assets (calculated at fair market value) that exceed its Liabilities and (iv) taking into account all pending and threatened litigation, final judgments against Seller in actions for money damages are not reasonably anticipated to be rendered at a time when, or in amounts such that, Seller will be unable to satisfy any such judgments promptly in accordance with their terms (taking into account the maximum probable amount of such judgments in any such actions and the earliest reasonable time at which such judgments might be rendered) as well as all other obligations of Seller. The cash available to Seller, after taking into account all other anticipated uses of the cash, will be sufficient to pay all such debts and judgments promptly in accordance with their terms.

2.22FullDisclosure.ThisAgreement,includingallschedulesandexhibits,deliveredbyor onbehalfoftheSellerhereunderarecompleteandcorrectinallmaterialrespects.Norepresentationor warrantyoftheSellercontainedinthisAgreementandnowrittenstatementmadebyoronbehalfofthe SellertotheBuyeroranyofitsAffiliatespursuanttothisAgreementcontainanuntruestatementofa materialfactoromitstostateamaterialfactnecessary tomakethestatementscontainedhereinortherein notmisleading.ThereisnofactknowntotheSellerwhichtheSeller hasnotdisclosedtotheBuyerin writingwhichreasonablycould be expectedto materiallyaffect the Business in anadverse manner.

2.23Financial Statements.  The Company’s financial statements (the “Financial Statements”) fairly present the financial condition and the results of operation, change in members’ equity, and cash flow of the Company as at the respective dates of and for the periods referred to in such Financial Statements of the Company and will be prepared in accordance with generally accepted accounting principles and practices consistently applied and consistent with the books and records of the Company.

ARTICLE3

REPRESENTATIONSANDWARRANTIESOFTHEBUYER

TheBuyerherebyrepresents and warrants tothe Selleras follows:

3.1OrganizationandAuthorityof the Buyer;Enforceability.TheBuyerisacorporationduly organized,validlyexistingandingoodstandingundertheLawsoftheStateofDelaware.TheBuyerhas therequisitecorporatepowerandauthoritytoexecuteanddeliverthisAgreement,toperformitsobligationsunderthisAgreement,andtoconsummatethetransactionscontemplatedhereby.ThisAgreement hasbeendulyandvalidlyexecutedanddeliveredbytheBuyerand,assumingthedueauthorization,executionanddeliverybytheotherpartieshereto,willconstitute,uponsuchexecutionanddeliveryineach casethereof,legal,validandbindingobligationsoftheBuyer,enforceableinaccordancewiththeirterms and conditions, exceptas such enforceability maybe limited bythe GeneralEnforceabilityExceptions.

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3.2NoConsents.NomaterialConsentof,permitorexemptionfrom,ordeclaration, filing or registration with,any GovernmentalAuthority is required tobemadeorobtained by theBuyer inconnection withthe execution,deliveryand performanceofthis Agreementbythe Buyer. 

3.3NoViolation.NeithertheexecutionanddeliveryofthisAgreementnortheperformance bytheBuyerofthetransactionscontemplatedherebywill(a)violateorconflictwiththeOrganizational Documentsof theBuyer,or(b)conflictwithorviolateany Lawsapplicableto theBuyerorby which any ofits properties is bound.

ARTICLE 4

CLOSING

4.1Time and Place.  The Closing shall occur simultaneously with the execution of this Agreement and shall be effective as of 12:01am Eastern Time on the Closing Date.

4.2DeliveriesbytheSeller.At or immediately prior totheClosing,theSellershalldeliverorcausetobedelivered to the Buyer:

4.1.1Corporate Documents. A copy of the Articles of Organization of the Seller certified bytheapplicableSecretaryofState,asofadatenotmorethanthirty(30)dayspriortothe ClosingDate;

4.2.1GoodStandingCertificate.Acertificateofgoodstandingwithrespecttothe Seller,issuedbytheapplicableSecretaryofState,asofadatenotmorethanthirty(30)dayspriortothe ClosingDate;

4.2.2Authorizing Resolutions. A copy of the resolutions from the Seller’s board of directors, certified by the respective Secretary of the Seller as having been duly and validly adopted and being in full force and effect, authorizing the execution and delivery of this Agreement and the performance by the Seller of its obligations hereunder;

4.2.3Consents.TheThirdPartyConsentsandGovernmentalConsentsidentifiedon Schedule 2.6.1 and Schedule 2.6.2;

4.2.4Licensesand Permits.AllLicensesand Permitsidentified on Schedule 2.15;

4.1.1Assignment and Assumption. An assignment and assumption agreement in the form of Exhibit A hereto (the “Assignment and Assumption Agreement”) and duly executed by the Seller, effecting the assignment to and assumption by the Buyer of the Purchased Assets and the Assumed Liabilities;

4.1.2Lease Assignment. A lease assignment for each leased office space identified on Schedule 1.2.1 (the “Lease Assignments”);

4.1.3Intellectual Property Assignment.  An intellectual property assignment in the form of Exhibit B hereto (the “Intellectual Property Assignment”) and duly executed by the Seller, effecting the assignment of all of the Seller’s Intellectual Property to the Buyer;

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4.1.4Employment Agreements. Executed copies of the employment agreements between Buyer and each of Kevin O’Connor, Michael Rosa and Thomas Hartmann (collectively, the “Employment Agreements”); and 

4.2.5OtherDocuments. SuchotherdocumentsandinstrumentsastheBuyermayreasonablyrequestto consummate thetransactionscontemplated hereby.

4.3Deliveriesbythe Buyer.The Buyerwilldeliverorcause to be deliveredtothe Seller:

4.3.1ThePurchase Price.Paymentof the Purchase Price asprovidedin Section1.3;

4.3.2GoodStandingCertificate. A certificateofgoodstandingwithrespecttotheBuyer,issuedbytheSecretaryofStateofDelaware,asofadatenotmorethanthirty(30)dayspriortothe ClosingDate;

4.1.1Countersigned Agreements. Copies of this Agreement, the Assignment and Assumption Agreement, the Lease Assignments, the Intellectual Property Assignment, and the Employment Agreements duly executed by the Buyer;

4.3.3OtherDocuments.SuchotherdocumentsandinstrumentsastheSellershall deemreasonablynecessaryto consummate the transactionscontemplatedhereby.

ARTICLE5

POST CLOSING COVENANTS

5.1TaxCovenants.

5.1.1The Parties understand that the Buyer, in consultation with its designated third-party valuation advisors, shall be performing a valuation of the Purchased Assets for the purpose, among other things, of valuing the covenants made by the Seller (“Purchase Price Allocation”).  Such allocation shall be mutually agreed upon by Seller, which shall not be unreasonably withheld. The Buyer and Seller each agree that such valuation shall be dispositive regarding the allocation of the respective Purchase Price; provided, however, the Buyer shall prepare and deliver to the Seller for approval the Purchase Price Allocation related to the non-compete. The Seller and the Buyer shall cooperate to prepare IRS Form 8594 and any required exhibits thereto. The Buyer and the Seller shall report the federal, state, local and other income and other tax consequences of the purchase and sale contemplated hereby in a manner consistent with the Purchase Price Allocation and shall not take any position inconsistent therewith.

5.1.2TheSellerandtheBuyerherebywaivecompliancewithany“bulksales”Laws (including any requirementtowithhold any amountfrompaymentof the PurchasePrice)applicable to the saletothe Buyerofthe Purchased Assetsbythe Seller.

5.2AccesstoBooksandRecords.FromandaftertheClosing,eachPartyshallprovidethe otherPartyanditsrepresentativeswithreasonableaccess(forthepurposeofexaminingandcopying), duringnormalbusinesshours,tothebooksandrecordsrelatingtotheBusinesswithrespecttoperiods, portionsthereoforoccurrencespriortotheClosingDateinconnectionwithlegitimatebusinesspurposes of the requestingParty(includingin connection withthe filingofanyTax Returns, the makingofanyTax elections,andthe defense ofanyTax claimauditorproceeding), expressedtotheotherPartyin writing.

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5.3Non-Competition;Non-Solicitation;Confidentiality. 

5.3.1Non-DisclosureofConfidentialInformation. The Equity Holders and the Seller shall not, directly or indirectly, disclose or use at any time any Confidential Information, except to the extent that such disclosure or use is directly related to and required bytheperformanceoftheSeller’sdutiestotheBuyerorasrequiredbyLaworasotherwiseprovidedhereunder.The Seller and the Equity Holders further agreestotakecommerciallyreasonablesteps,totheextentwithintheircontrol,tosafeguardsuchConfidentialInformationandtoprotect itagainstdisclosure,misuse,espionage,lossandtheft.In the event that the Seller or any Equity Holder isrequiredbyLawto discloseanyConfidentialInformation,suchPartyshallpromptlynotifytheBuyerinwriting,whichnotificationshallincludethenatureofthelegalrequirementandtheextentoftherequireddisclosure,and shallcooperatewiththeBuyer’sreasonablerequeststopreservetheconfidentialityofsuchConfidential Information consistentwithapplicableLaw.ForpurposesofthisAgreement, “ConfidentialInformation”meansallinformationofaconfidentialorproprietarynature(whetherornotspecificallylabeled or identified as “confidential”), in any formormedium,thatrelates to theBusiness orits distributors, customers,independentcontractorsorotherbusinessrelations.ConfidentialInformationincludesthefollowingastheyrelatetotheBusinessand,ineachcase,totheextenttheBusinessobtainsacommercialbenefitfromthesecretnatureofsuchinformation:internalbusinessinformation(includinginformationrelatingtostrategicplansandpractices,business,training,marketing,promotionalandsalesplansandpractices,cost,rateandpricingstructures,accountingandbusinessmethodsandpotentialacquisitioncandidates);identitiesof,individualrequirementsof,andspecificcontractualarrangementswith,theBusiness’sdistributors,customers,independentcontractorsorotherbusinessrelationsandtheirconfidential information;tradesecrets,know-how,compilationsofdataandanalyses,techniques,systems,formulae, research,records,reports,manuals,documentation,models,dataanddatabasesrelatingthereto;andinventions,innovations,improvements,developments,methods,designs,analyses,drawings,andreports. Notwithstandingtheforegoing,ConfidentialInformationdoesnotincludesuchinformationwhich:(a) at thetimeofdisclosureispubliclyavailableorthereafterbecomespubliclyavailablethroughnoactor omissionof the Seller or any Equity Holder;(b)isthereafterdisclosedorfurnishedtoof the Seller or any Equity Holderbyathirdpartywhoisnot knownbysuchparty tohaveacquiredtheinformationunderanobligationofconfidentiality;or(c)isdisclosedbythe Seller or any Equity Holder(subjecttocompliancewiththeapplicableprovisionsofthisSection5.3.1)under compulsion ofapplicable Law.

5.3.2Non-Competition.The Seller and the Equity Holders are familiarwiththetradesecretsrelatedtothe BusinessandwithotherConfidentialInformationconcerningtheBusiness,includingall(a)inventions, technologyandresearchanddevelopmentrelatedtotheBusiness,(b)customersandclientsandcustomer andclientlistsrelatedtotheBusiness,(c) products(includingproductsunderdevelopment)andservices related to the Business and related costs and pricing structures, (d)accountingand businessmethods and practicesrelated tothe Businessand(e)similarand relatedConfidentialInformationandtradesecretsrelatedtotheBusiness.The Seller and the Equity Holdersacknowledgesandagreesthat theBusinesswouldbeirreparablydamagedifsuchPartyweretodirectlyorindirectlyprovideservicesto anyPersoncompetingwiththeBusinessorengaginginasimilarbusinessandthatsuchdirectorindirect competitionbyanysuchPartywouldresultinasignificantlossofgoodwillbytheBusiness.Infurther considerationfortheBuyer’spaymentofthePurchasePriceunderthisAgreement(inrespectofwhich paymentthe Equity Holders and the Sellerexpresslyacknowledgesthatheoritderivesasubstantialanddirectbenefit),andin ordertoprotectthevalueoftheBusinessacquiredbytheBuyerhereunder(includingthegoodwillinherentintheBusinessasofthedatehereof),the Seller and the Equity Holders herebyagreesthatduringtheperiodcommencingon the Closing Date and ending onthe third (3rd)anniversary oftheClosing Date (the “Non-Competition Period”),suchPartyshallnotacquireorholdanyeconomicorfinancialinterestin,actasapartner, member,stockholder,orrepresentativeof,renderanyservicesto,orotherwiseoperateorholdaninterest in anyPerson (other than the Seller, Restaurant Coverage Associates, Inc., Risk Control Associates, Inc.

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and RCA of New England, Inc.)havinganylocation in anycountyin whichthe Business or the Buyer conductsoperations,whichentity,enterpriseorotherPersonprimarilyengagesin,directlyorindirectly, anybusinessthatcompeteswiththeBusinessoroperatesintheindustry;provided,however,thatnothing containedhereinshallbeconstruedtoprohibitanysuchPartyfrompurchasinguptoanaggregateoftwo percent(2%)ofanyclassoftheoutstandingvotingsecuritiesofanyotherPersonwhosesecuritiesare listedon a nationalsecurities exchange (butonlyifsuch investment is heldon apurelypassive basis). Notwithstanding the forgoing, no Equity Holder shall be required to divest their equity interest in any currently owned investment including but not limited to First Jersey Casualty Insurance Company, Borges, Hanlon, Henry & Garcia and/or other RCA related Affiliates. 

5.3.3Non-Solicitation;Non-Disparagement.Duringtheperiodcommencingonthe ClosingDate and ending on the third (3rd) anniversary of the Closing Date (the “Non-Solicitation Period”), (a) the Seller and Equity Holders shall not, directly or indirectly, either individually or acting in concert with another Person or Persons, request, induce or attempt to influence any distributor, supplier or customer of goods or services of the Business to curtail, cancel or refrain from maintaining or increasing the amount or type of business such distributor, supplier or customer of goods or services is currently transacting, or may be transacting during the Non-Solicitation Period, with the Business or modify its pricing or other terms of sale with the Business; or (b) make any negative,derogatoryordisparagingstatementsorcommunications regardingthe Buyer, the Business, orthe Affiliates orrepresentatives oftheBuyer.

5.3.4Severability.NotwithstandinganythingtothecontraryinthisAgreement,ifat anytime,inanyjudicialorarbitrationproceeding,anyoftherestrictionsstatedinthisSection5.3are foundbyafinalorderofacourtofcompetentjurisdictionorarbitratortobeunreasonableorotherwise unenforceableundercircumstancesthenexisting,thePartieseachagreethattheperiod,scopeorgeographicalarea,asthecasemaybe,shallbereducedtotheextentnecessarytoenablethecourttoenforce therestrictionstotheextentsuchprovisionsareallowableunderapplicableLaw,givingeffecttothe agreementandintentofthePartiesthattherestrictionscontainedhereinshallbeeffectivetothefullest extentpermissible.IntheeventofabreachorviolationbyanyPartyofanyoftheprovisionsofthisSection5.3,theNon-CompetitionPeriodorNon-SolicitationPeriod,asthecasemaybe,willbetolledforso longassuchPartywasinviolationofsuchprovision.The Seller and the Equity Holdersagreethattherestrictionscontainedin thisAgreementarereasonableinallrespectsandnecessarytoprotecttheBuyer’sinterestin,andthevalue of,the Business.

5.4Transition Items.

5.4.1TransitionCollections.TheSellershallpromptlyremittotheBuyeranyproceedsreceivedfromanyAccountsReceivablethatconstitutePurchasedAssets,regardlessofwhensuch proceedsarereceivedorwhethersuchproceedswereobtainedasaresultofthecollectionseffortsofthe Seller.

5.4.2Transition Expenses.  The Seller shall promptly reimburse the Buyer (within ten (10) business days after the Buyer provides the Seller with a bill for such reimbursement, with reasonable supporting detail) for any payments made by the Buyer with respect to pre-Closing accounts payable, pre-Closing vendor payments, or any other liabilities of the Business related to any period prior to the Closing Date and which are not paid by the Seller within ten (10) business days after receipt by the Seller of written notice of the Buyer’s intent to make any such payment.

5.4.3UseofName. TheSellerherebyacknowledgesandagreethatupontheconsummationof the transactionscontemplatedhereby andforaperiodofone (1)yearfollowing the

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Closing Date,theBuyershallhavethesolerighttotheuseofanyservicemarks,trademarks,tradenames,identifyingsymbols,logos,emblems,signsorinsigniarelatedtotheBusiness(includingthename“Restaurant Coverage Associates”)orcontainingorcomprisinganyof the foregoing, includinganyname ormark confusinglysimilarthereto(collectively,the“BusinessMarks”).TheSellershallnotuseanyofthe BusinessMarks,exceptinconnectionwiththefilingofTaxreturnsorthewindingupoftheSeller’s businessaffairsrelatedto the Business. 

5.5Post-Closing Matters.  Each of the Parties shall satisfy the requirements set forth on Schedule 5.5 on or before the date specified for such requirement or such later date to be mutually agreed to by the parties.

5.6FurtherAssurances.FromandaftertheClosing,theSellershallusereasonableeffortsto take,orcause tobe taken,allactions,andto do,orcausetobe done, all thingsnecessary,properoradvisableincompliancewithapplicableLawstoconsummateandmakeeffective,assoonasreasonablypracticable, the transactions contemplated hereby.

ARTICLE 6

INDEMNIFICATION

6.1SurvivaloftheSeller’sRepresentations,WarrantiesandCovenants;TimeLimitsonIndemnificationObligations.AllrepresentationsandwarrantiesoftheSellercontainedin,orarisingoutof, thisAgreementshallsurvivetheClosinghereunderforaperiodoftwo(2)yearsaftertheClosingDate; provided,however,thattheFundamentalandStatutoryRepresentationsshallsurviveuntiltheexpirationoftheapplicablestatuteoflimitations.AllPost-Closing CovenantsoftheSeller and the Equity Holders, other than James Henry,willsurvivetheClosinginaccordancewiththeirterms.IftheBuyerprovidesnoticeofaclaiminaccordancewiththetermsofthisAgreementpriortotheendoftheperiodofsurvival setforthinthisSection6.1,thentheLiabilityforsuchclaimwillcontinueuntiltheclaimisfullyresolved.

6.2SurvivaloftheBuyer’sRepresentations,WarrantiesandCovenants;TimeLimitsonIndemnification Obligations.Allrepresentations and warranties ofthe Buyercontained in, orarisingoutof, thisAgreementshallsurvivetheClosinghereunderforaperiodoftwo(2)yearsaftertheClosingDate; provided,however,thattherepresentationsandwarrantiesinSection3.1(OrganizationandAuthorityof Buyer;Enforceability)shallsurviveuntiltheexpirationoftheapplicablestatuteoflimitations.AllPost-ClosingCovenantsoftheBuyerwillsurvivetheClosinginaccordancewiththeirterms.IftheSellerprovidesnoticeofaclaiminaccordancewiththetermsofthisAgreementpriortotheendoftheapplicable periodofsurvivalsetforthinthisSection6.2,thentheLiabilityforsuchclaimwillcontinueuntilthe claimis fullyresolved.

6.3Indemnificationby the Seller.Subjecttothe terms,conditionsandlimitationssetforth in thisArticle6,theSeller shall indemnify,defend and holdharmless theBuyerand its representatives,successorsandpermittedassigns(each,a“BuyerIndemnifiedParty”),fromandagainst,andshallpromptly pay orreimburse eachBuyerIndemnifiedParty for, any andallLossessustainedorincurred (including anyLosses actuallysustainedorincurredaftertheendoftheapplicablesurvivalperiod,providedthataclaimis made priortotheend of theapplicablesurvivalperiodin accordance withtheterms ofthis Agreement)by anyBuyerIndemnifiedPartyresultingfrom:(a)anybreachofarepresentationorwarrantymadebytheSeller or Equity HoldersinthisAgreement;(b)anybreachofanyPost-ClosingCovenantmadebytheSeller or Equity Holders inthisAgreement;(c)anyclaimorassertionforobligationsinrespectofIndebtednessorbroker’sorseller’sfeesor expensesarisingoutofthetransactionscontemplatedbythisAgreementbyaPersonclaimingtohave beenengagedby

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anySelleroranyofitsAffiliates;(d)anyobligationofanySellerforanyTaxesthat arose, in the first instance,prior to the Closing Date;(e) the failure ofanySellertopay,dischargeandperformanyoftheExcludedLiabilities;or(f)theownershiporoperationoftheBusinessorthePurchased Assets priortothe ClosingDate. 

6.4Indemnification bythe Buyer. Subjectto the terms, conditions andlimitations setforth in thisArticle6,fromandaftertheClosing,theBuyershallindemnify,defendand holdharmlesstheSeller and each of theirrepresentatives,successorsandpermittedassigns(each,a“SellerIndemnifiedParty”)fromand againstanyandallLossessustainedorincurredbyanySellerIndemnifiedPartyresultingfrom:(a)any breachofarepresentationorwarrantymadebytheBuyerinthisAgreement;(b)anybreachofaPost-Closing CovenantmadebytheBuyer in this Agreement;(c) the failure of theBuyer topay,dischargeand performanyoftheAssumedLiabilities;or(d)theownershiporoperationoftheBusinessorthePurchased Assetson orafter the ClosingDate.

6.5Indemnification ProcedureforThird PartyClaims.

6.5.1IntheeventthatsubsequenttotheClosing,anyPersonthatisormaybeentitled to indemnification underthis Agreement(an “IndemnifiedParty”)receives notice of the assertion ofany claim,issuanceofanyorderorthecommencementofanyactionorproceedingbyanyPersonwhoisnot aPartyoranAffiliateofaParty,including,withoutlimitation,anydomesticorforeigncourtorGovernmentalAuthority(a“ThirdPartyClaim”),againstsuchIndemnifiedPartyandforwhichaPartyisor mayberequiredtoprovideindemnificationunderthisAgreement(an“IndemnifyingParty”),thensuch IndemnifiedParty shallgivewrittennoticethereof,togetherwitha statementofany available information regarding such ThirdParty ClaimtosuchIndemnifying Party withinsixty (60)daysafterlearning ofsuch ThirdPartyClaim;provided,however,thatfailuretogivesuchwrittennoticewithinanyparticulartime periodshallnotadverselyaffecttheIndemnifiedParty’srighttoindemnificationexcept,andtotheextent that,theIndemnifying Party canshowthat thefailure togivesuch notificationon atimely basis adversely affectedtheIndemnifyingParty’sabilitytodefendsuchThirdPartyClaim.TheIndemnifyingPartyshall havetherightuponwrittennoticetotheIndemnifiedParty(the“DefenseNotice”),withinthirty(30) daysafterreceiptfromtheIndemnifiedPartyofnoticeofsuchThirdPartyClaim,toconduct,atitsexpense,thedefenseagainst and settlement ofsuchThirdPartyClaiminitsownname,orifnecessaryinthenameoftheIndemnifiedParty.WithoutthepriorwrittenconsentoftheIndemnifiedParty (which consent shall not be unreasonably withheld, delayed or conditioned),theIndemnifyingPartywill notenterintoanysettlementofany ThirdPartyClaimorceasetodefendagainstsuch ThirdPartyClaim, ifpursuanttoorasaresultofsuchsettlementorcessation,(a)injunctiveorotherequitablereliefwould beimposedagainsttheIndemnifiedParty,or(b)eachclaimantorplaintiffinsuchThirdPartyClaimhas notgiventotheIndemnifiedPartyanunconditionalreleasefromallLiabilitywithrespecttosuchThird PartyClaim.

6.5.2NotwithstandinganythingcontainedinSection6.5.1tothecontrary,theIndemnifyingPartyshallnotbeentitledtocontrol,andtheIndemnifiedPartyshallbeentitledtohavesolecontrolover,thedefenseorsettlementofanyThirdPartyClaimifanyofthefollowingconditionsarenot satisfied:

(a)theIndemnifyingPartyshallacknowledgeinwritingthatitshallbefully responsibleforallLosses relatingtosuchproceeding;

(b)the IndemnifyingParty mustdiligentlydefendsuchproceeding;

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(c)theIndemnifying Partymustfurnish theIndemnified Party withevidence thatthefinancialresourcesoftheIndemnifyingParty(orthefundsavailableintheescrowaccountwith respecttoclaimsagainsttheescrowaccount),intheIndemnifiedParty’sreasonablejudgment,areand willbesufficient(whenconsidering Lossesinrespectofallotheroutstanding claims)tosatisfy any Losses relatingto such proceeding; 

(d)suchproceedingshallnotinvolvecriminalactionsorallegationsofcriminalconductbytheIndemnifyingParty,andshallnotinvolveclaimsforspecificperformanceorother equitablerelief;and

(e)theredoesnotexist,intheIndemnifiedParty’sgoodfaithjudgment, basedontheadviceofoutsidelegalcounsel,aconflictofinterestwhich,underapplicableprinciplesof legalethics,couldreasonablybeexpectedtoprohibitasinglelegalcounselfromrepresentingboththe Indemnified Partyandthe IndemnifyingPartyin suchproceeding.

6.6Tax TreatmentofIndemnification.AllindemnificationpaymentsmadeunderthisAgreement shallbetreated byallParties as an adjustment tothe Purchase Price for Tax purposes, unless otherwise required by Law.

ARTICLE 7

DEFINITIONS

Definitions.As usedin this Agreement,

“AccountsReceivable”ofanyPersonmeans(a)alltradeaccountsreceivableandotherrightsto paymentfromcustomersofsuchPersonandthefullbenefitofallsecurityforsuchaccountsorrightsto payment,includingalltradeaccountsreceivablerepresentingamountsreceivableinrespectofgood shipped,productssoldorservicesrenderedtocustomersofsuchPerson,(b)allotheraccountsornotes receivableofsuchPersonandthefullbenefitofallsecurity forsuchaccountsornotes,and(c)any claim, remedyorotherrightrelated to anyoftheforegoing.

“ActualEBITDA” means actual EBITDA for the Measurement Period attributable to the accounts purchased hereunder (and the accounts purchased pursuant to that certain Asset Purchase Agreement by and between Buyer and Buyer’s Affiliate, Patriot Risk Services, Inc., and Seller’s affiliate, Risk Control Associates, Inc.) and any new business added by Seller or Equity Holders during the Measurement Period.

“Affiliate”means,withrespecttoanyPerson,anyotherPersondirectlyorindirectlyControlling orControlledby,orunderdirectorindirectcommonControlwith,suchPerson.Forpurposesofthisdefinition,aPersonshallbedeemedtoControlanotherPersonifsuchPersonownsorControls,directlyor indirectly,morethantwenty-fivepercent(25%)ofthevotingEquityInterestsoftheotherPerson.“Control,”“Controlled”or“Controlling”meanstheabilityofaPerson(collectivelyorwithitsAffiliates) directlyorindirectlytodirectthe use of, dispositionofand access tothepropertyofanotherPerson.

“CashonHand”meansallcashandcashequivalents,calculatedasof12:01a.m.,EasternTime on thedate ofcalculation, determined inaccordance with GAAP.

“Code” means the U.S. InternalRevenue Code of1986, as amended.

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“Consent” means anyapproval, consent,ratification,waiver, orotherauthorization.

“Contract”meansanywrittenororalagreement,note,mortgage,indenture,lease,deedoftrust, license, plan,instrumentorothercontractorlegallybindingarrangementorcommitment.

“EquityInterests”means(a)anypartnershipinterests,(b)anymembershipinterestsorunits,(c) anysharesofcapitalstock,(d)anyotherinterestorparticipationthatconfersonaPersontherighttoreceiveashareoftheprofitsandlossesof,ordistributionofassetsof,theissuingentity,(e)anysubscriptions,calls,warrants,options,orcommitmentsofany kindorcharacterrelating to,orentitling any Person orentitytopurchaseorotherwiseacquiremembershipinterestsorunits,capitalstock,oranyotherequity securities,(f)anysecuritiesconvertibleintoorexercisableorexchangeableforpartnershipinterests, membershipinterestsorunits,capitalstock,oranyotherequitysecurities,or(g)anyotherinterestclassifiedasan equitysecurityofa Person.

“FundamentalandStatutoryRepresentations” means the representations and warranties in Section2.1(OrganizationandQualification),Section2.2(Authorization;Enforceability),Section2.7(Taxes),andtherepresentationsandwarrantiesconcerningtitletothePurchasedAssets

“GAAP”meansUnitedStatesgenerallyacceptedaccountingprinciples,asineffectfromtimeto time, consistentlyapplied.

“GeneralEnforceabilityExceptions” meansthose exceptions toenforceabilitydue toapplicable bankruptcy,insolvency,reorganization,moratoriumorothersimilarLawsaffectingtheenforcementof creditors’rightsgenerally,andgeneralprinciplesofequity(regardlessofwhethersuchenforceabilityis consideredin a proceedingatLaworin equity).

“GovernmentalAuthority”meanstheUnitedStatesoranystate,provincial,localorforeign government,oranysubdivision,agencyorauthorityofanythereofhavingcompetentjurisdictionover anyof theSeller, the Buyeror the transactions contemplated bythis Agreement, as applicable.

“Indebtedness”means,withrespecttoanyPerson,allLiabilitiesinrespectof:(a)borrowed money;(b)indebtednessevidencedbybonds,notes,debenturesorsimilarinstruments;(c)capitalized leaseobligations;(d)operatingleaseobligationsrelatedtoanypiecesofmaterialequipmentusedinthe Business;(e)thedeferredpurchasepriceofassets,servicesorsecurities(otherthanordinarytradeaccountspayable);(f)conditionalsaleorothertitleretentionagreements;(g)thefactoringordiscountingof accountsreceivable;(h)swaporhedgingagreementsorarrangements;(i)reimbursementobligations, whethercontingentormatured,withrespecttolettersofcredit,bankers’acceptances,bankoverdrafts, suretybonds,otherfinancialguaranteesandinterestrateprotectionagreements(withoutduplicationof other indebtedness supported orguaranteed thereby);and(j) interest, premium,penalties and other amountsowing in respectofthe itemsdescribedinthe foregoing clauses (a) through(i)aftergiving effect totheClosing;(k)allIndebtednessofthetypesreferredtoinclauses(a)through(j)guaranteedinany mannerbysuch Person, whetherornotanyofthe foregoingwould appearona consolidated balancesheet preparedinaccordancewithGAAP;(l)anyunfundedpensionliabilities;and(m)anyso-called“change ofcontrol”payments.

“IntellectualProperty”meansallofthefollowinginanyjurisdictionthroughouttheworld:(a) allinventions(whetherpatentableorunpatentableandwhetherornotreducedtopractice),allimprovementsthereto,andallpatents,patentapplications,andpatentdisclosures,togetherwithallreissuances, continuations,continuations-in-part,revisions,extensions,andreexaminationsthereof;(b)alltrademarks, servicemarks,tradedress,logos,slogans,tradenames,corporatenames,Internetdomain

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names,and rightsintelephonenumbers,togetherwithalltranslations,adaptations,derivations,andcombinations thereofand includingallgoodwillassociated therewith, and allapplications, registrations, and renewals in connectiontherewith;(c)allcopyrightableworks,allcopyrights,andallapplications,registrations,and renewalsinconnectiontherewith;(d)allmaskworksandallapplications,registrations,andrenewalsin connectiontherewith;(e)alltradesecretsandconfidentialbusinessinformation(includingideas,research anddevelopment,know-how,formulas,compositions,manufacturingandproductionprocessesandtechniques,technicaldata,designs,drawings,specifications,customerandsupplierlists,pricingandcostinformation,andbusinessandmarketingplansandproposals);(f)allcomputersoftware(includingsource code,executablecode,data,databases,andrelateddocumentation);(g)alladvertisingandpromotional materials,(h)allotherproprietaryrights;and(i)allcopiesandtangibleembodimentsofanyoftheforegoing(in whateverformormedium).

“Law”meanseachprovisionofanycurrentlyimplementedfederal,state,localorforeignlaw, statute, ordinance, order,code, rule orregulation,promulgated orissued byanyGovernmentalAuthority.

“Lease”meansanylease,subleaseoranyothermaterialagreementpertainingtoanyRealProperty,togetherwithallamendments,extensions,renewals,modifications,alterations,guarantiesandother changes thereto.

“Liability”meansanyliabilityorobligationofwhateverkindornature(whetherknownorunknown,assertedorunasserted,absoluteorcontingent,accruedorunaccrued,liquidatedorunliquidated, due orto become due),includingwithoutlimitation anyliabilityforTaxes.

“LicensesandPermits”meansanylicenses,permits,certificates,certifications,privileges,immunities,notifications,exemptions,classifications,registrations,easements,franchises,approvals,authorizations,ordersandothersimilarrights,oranywaiversoftheforegoing,issuedbyanyGovernmental Authority, andallpendingapplicationstherefororrenewalsthereof.

“Lien”meansanymortgage,pledge,hypothecation,hypothec,rightofothers,claim,security interest,encumbrance,lease,sublease,license,occupancy agreement,adverseclaimorinterest,easement, covenant,encroachment,burden,titledefect,titleretentionagreement,votingtrustagreement,proxy,interest,equity,option,lien,preemptiveright,rightoffirstofferorrefusal,chargeorotherrestrictionsor limitationsofanynaturewhatsoever,otherthanrestrictionsontheofferandsaleofsecuritiesunderfederalandstatesecurities Laws.

“Loss”or“Losses”means,withrespecttoanyPerson,allLiabilities,obligations,deficiencies, demands,claims,suits,actions,orcausesofaction,assessments,losses,Taxes,fines,penalties,damages (includingpunitive, specialand consequentialdamages), lostprofits, diminutionin value (based ona multipleofearningsorotherwise),costsandexpenses(includingreasonableattorneys’fees)sustainedorincurred bysuch Person.

“MaterialAdverseEffect”or“MaterialAdverseChange”meansanychange,effect,event, occurrence, state offacts ordevelopment that, individuallyorin the aggregate, ismateriallyadverseto the business,financialcondition,resultsofoperationsorprospects(includingtheachievementortheability toachieveforecastsofrevenueorearnings)oftheSeller.Fortheavoidanceofdoubt,bywayofillustrationandnotlimitation,a“MaterialAdverseEffect”or“MaterialAdverseChange”shallincludeanymatterormattersthat,aloneorintheaggregate,isorarelikelyto,orcouldreasonablybeexpectedto,result inLossestotheSellerinexcessoftenpercent(10%)ofthePurchasePrice,orthata

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reasonableinvestor would consideras significantlyand adverselyaffectingits investmentdecision with respectto thetransactions contemplated herein.

“Measurement Period” shall mean the twelve (12) month period beginning on September 1, 2015 and ending on August 31, 2016.

“OrdinaryCourseofBusiness”means,inrespectofanyPerson,theordinarycourseofsuch Person’sbusiness,asconductedbyanysuchPersoninaccordancewithpastpracticeandundertakenby such Personin goodfaith and notforpurposes ofevadinganycovenantorrestriction in this Agreementor anyOtherAgreement.

“OrganizationalDocuments”means(a)withrespecttoacorporation,thecertificateorarticles ofincorporation andbylaws;(b)withrespect to a limitedliability company,the articlesoforganizationor certificateofformationandoperatingagreement;(c)withrespecttoanyotherentity,anycharterorsimilardocumentadoptedorfiledinconnectionwiththecreation,formationororganizationofsuchentity; and (d)anyamendment toanyof theforegoing.

“Person”meansanyindividual,soleproprietorship,partnership,jointventure,trust,unincorporatedassociation,corporation,limitedliabilitycompany,entityorgovernment(whetherfederal,state, county,cityorotherwise,including,withoutlimitation,anyinstrumentality,division,agencyordepartment thereof).

“Post-ClosingCovenant” meansany covenant,promise,commitmentorotherobligation(orany portionthereof)madeorundertakenbyanyParty,inthisAgreementoranyOtherAgreement,totheextentperformance orfulfillment thereofisrequired byitsterms to beaccomplished aftertheClosing.

“RealProperty”meansallparcelsandtractsofland,togetherwithallbuildings,structures,fixturesandimprovementslocatedthereon(includingthoseunderconstruction),andallprivileges,rights, easements,hereditamentsandappurtenancesbelongingtoorforthebenefitofsuchland,includingall easementsappurtenanttoandforthebenefitofsuchland,andallrightsexistinginandtoanystreets,alleys,passagesandotherrights-of-wayincludedthereonoradjacentthereto(beforeoraftervacation thereof)and vaults beneathanysuch streets.

“Seller’sKnowledge”or“KnowledgeoftheSeller”meansanymatter,fact,orthingthatis,as of the date hereoforthe ClosingDate,actually known to the Seller.

“Tax”or“Taxes”means(a)anyU.S.federal,state,local,ornon-U.S.income,grossreceipts, license,payroll,employment,excise,severance,stamp,occupation,premium,windfallprofits,environmental(includingtaxesunderSection59AoftheCode),customsduties,capitalstock,franchise,profits, withholding,socialsecurity (orsimilar), unemployment,disability,realproperty,personalproperty,sales, use, transfer,registration, value-added, alternative oradd-onminimum, estimated,orothertaxofany kind whatsoever,includinganyinterest,penalty,oradditionthereto,whetherdisputedornot,(b)anyliability for the paymentofany amountsof the typedescribed inclause (a)as aresultofbeing amemberofaconsolidated,combined,unitaryoraggregategroupforanyTaxperiod,and(c)anyliabilityforthepayment ofanyamountsofthetypedescribedinclause(a)or(b)asaresultofbeingatransfereeorsuccessorto anypersonorasaresultofanyexpressorimpliedobligationtoindemnifyanyotherpersonorpayable pursuant to anytax sharing agreementorany othercontractrelatingto the sharing orpaymentofany such Tax.

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“TaxReturns”meansanyreturn,declaration,report,schedule,notice,form,claimforrefund,or informationreturnorstatement(includinganyattachmenttheretoandanyamendmentthereof)filedwith orsubmittedto, orrequiredto befiled with orsubmitted to, anyTaxingAuthority.

“TaxingAuthority”meansanyGovernmentalAuthority,domesticorforeign,havingjurisdictionover the assessment, determination, collection,orother imposition ofanyTaxes.

ARTICLE 8

MISCELLANEOUS

8.1Notice.  Any notices, consents or other communications required to be sent or given hereunder by any of the Parties shall in every case be in writing and shall be deemed properly served if and when (a) delivered by hand, (b) transmitted by facsimile, e-mail or other means of electronic transmission, or (c) delivered by Federal Express or other express overnight delivery service, or (d) sent by registered or certified mail, return receipt requested, to the Parties at the addresses as set forth below or at such other addresses as may be furnished in writing:

If to the Seller:

Restaurant Coverage Associates, Inc.

133 Broad Street

Clifton, NJ 07013

Attention: Kevin O’Connor

E-mail: koconnor@rca-insurance.com

If to the Buyer:

TriGen Insurance Solutions, Inc.

401 E. Las Olas Blvd., Suite 1650

Fort Lauderdale, Florida 33301

Attention: Christopher A. Pesch, General Counsel

E-mail: cpesch@patnat.com

Dateofserviceofsuchnoticeshallbe(x)thedatesuchnoticeisdeliveredbyhand,facsimile,e-mailor otherformofelectronictransmission,(y)one(1)businessdayfollowingthedeliverybyexpressovernightdeliveryservice,or(z) three(3)businessdaysafterthedateofmailingifsentbycertifiedorregistered mail.

8.2Severability.TheunenforceabilityorinvalidityofanyprovisionofthisAgreementshall notaffecttheenforceabilityorvalidityofanyotherprovision.Uponsuchdeterminationthatanytermor otherprovisionisunenforceableorinvalid,thePartiesheretoshallnegotiateingoodfaithtomodifythis AgreementsoastoeffecttheoriginalintentofthePartiesascloselyaspossibleinalegallyacceptable mannerinorderthat the transactionscontemplatedhereby areconsummatedas originally contemplated to the greatestextentpossible.

8.3Successors;Assignment.ThisAgreementwillbebindingupon,andinuretothebenefit of,thePartiesheretoandtheirrespectivesuccessorsandpermittedassigns,butwillnotbeassignableor delegablebytheSellerwithoutthepriorwrittenconsentoftheBuyerorbytheBuyerwithouttheprior written consentoftheSeller;provided,however, thattheBuyermay assignthis Agreementinwhole orin parttoanyofitsAffiliatesortoanyPersonwhichbecomesasuccessorininterest(bypurchaseofassets

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orstock,orbymergerorotherwise)totheBuyer,andtheBuyermayassignitsrightsunderthisAgreement to its financingsources. 

8.4Counterparts;FacsimileSignatures.ThisAgreementmaybeexecutedinmultiplecounterparts,eachofwhichshallbedeemedanoriginalbutallofwhichtogethershallconstituteoneandthe sameinstrument.ThisAgreement,anyandallagreementsandinstrumentsexecutedanddeliveredinaccordanceherewith,alongwithanyamendmentsheretoorthereto,totheextentsignedanddeliveredby meansofe-mail,facsimileorothermeansofelectronictransmission,shallbetreatedinallmannerand respectsandforallpurposesasanoriginalsignature,agreementorinstrumentandshallbeconsideredto have the same bindinglegaleffectasifit weretheoriginalsigned versionthereofdelivered in person.

8.5Expenses.ExceptasprovidedinSection5.1.1,eachoftheSellerandtheBuyershall bearandpayforallofitsowncosts,feesandexpenses(includinglegal,accounting,investmentbanking, broker’s,finder’sandotherprofessionaloradvisory feesandexpenses) incurred orto be incurred by it, in eachcase,innegotiatingandpreparingthisAgreementandinclosingandcarryingoutthetransactions contemplated herebyand thereby.

8.6GoverningLaw.Allmattersrelatingtotheinterpretation,construction,validityandenforcementofthisAgreementshallbegovernedbyandconstruedinaccordancewiththedomesticlawsof theStateofDelawarewithoutgivingeffecttoanychoiceorconflictoflawprovisionorrule(whetherof theStateofDelawareoranyotherjurisdiction)thatwouldcausetheapplicationofLawsofanyjurisdictionotherthantheState of Delaware.

8.7EntireAgreement. ThisAgreement,the Recitals,the Schedules and theExhibitsattached heretosetforththeentireunderstandingofthePartieswithrespecttothetransactionscontemplatedhereby, supersede allpriordiscussions, understandings, agreements andrepresentations and shallnotbe modifiedoraffectedbyanyoffer,proposal,statementorrepresentation,oralorwritten,madebyorforany Partyinconnectionwiththenegotiationofthetermshereof.ThisAgreementmaybemodifiedonlyby subsequent instruments signed bythe Parties hereto.

8.8ThirdParties.Nothinghereinexpressedorimpliedisintendedorshallbeconstruedto conferupon orgive to any Person, other than the Parties to this Agreement, the BuyerIndemnified Parties ortheSellerIndemnifiedPartiesandtheirrespectivesuccessorsandpermittedassigns,anyrightsorremedies underorbyreason ofthis Agreement.

8.9DisclosureGenerally.AllSchedules attached hereto are incorporated herein and expresslymadeapartofthisAgreementasthoughcompletelysetforthherein.AllreferencestothisAgreement hereinorinanyoftheSchedulesshallbedeemedtorefertothisentireAgreement,includingallSchedules.InformationfurnishedinanyparticularScheduleshallnotbedeemedtobeincludedinallother Schedulesinwhichtheinformationisrequiredtobeincludedunlessspecificallydesignatedwithacross-reference.

8.10InterpretiveMatters.Unlessthecontextotherwiserequires,(a)allreferencestoArticles, Sections,SchedulesorExhibitsshallmeanandrefertoArticles,Sections,SchedulesorExhibitsinthis Agreement;(b) eachaccountingtermnototherwisedefinedinthisAgreementhasthemeaningassigned toitinaccordancewithGAAP;(c)wordsinthesingularorpluralincludethesingularandplural,and pronounsstatedineitherthemasculine,feminineorneutergendershallincludethemasculine,feminine andneuter;(d)theterm“including”shallmean“includingwithoutlimitation”(i.e.,bywayofexample andnotbywayoflimitation);(e)allreferencestostatutesandrelatedregulationsshallincludeall

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amendmentsofthesameandanysuccessororreplacementstatutesandregulations;(f)referencesto “hereof”,“herein”,“hereby”andsimilartermsshallrefertothisentireAgreement(includingtheSchedulesandExhibitshereto);(g) referencestoanyPersonshallbedeemedtomeanandincludethesuccessorsandpermittedassignsofsuchPerson(or,inthecaseofaGovernmentalAuthority,PersonssucceedingtotherelevantfunctionsofsuchPerson);and(h)wheneverthisAgreementreferstoanumberof days,suchnumbershallrefertocalendardays,unlesssuchreferenceisspecificallyto“businessdays.” ThePartiesintendthateachrepresentation,warrantyandcovenantcontainedhereinshallhaveindependentsignificance.IfanyPartyhasbreachedanyrepresentation,warrantyorcovenantcontainedhereinin anyrespect,thefactthatthereexistsanotherrepresentation,warrantyorcovenantrelatingtothesame subjectmatter(regardlessoftherelativelevelsofspecificity)thatthePartyhasnotbreachedshallnot detractfromormitigatethefactthatthePartyisinbreachofsuchrepresentation,warrantyorcovenant. ThesectionheadingsofthisAgreementareincludedforreferencepurposesonlyandshallnotaffectthe constructionorinterpretationofany oftheprovisions ofthisAgreement.Eachof thePartiesacknowledgesthatithasbeenrepresentedbyindependentcounselofitschoicethroughoutallnegotiationsthathave precededtheexecutionofthisAgreementandthatithasexecutedthesamewithconsentanduponthe adviceofsaidindependentcounsel. ThePartieshaveparticipatedjointly in thenegotiation and drafting of thisAgreement.Intheeventanambiguityorquestionofintentarises,thisAgreementshallbeconstrued asifdraftedjointlybythe Parties,andnopresumptionorburdenofproofshallarise,orruleofstrictconstructionapplied,favoring ordisfavoringanyPartybyvirtueoftheauthorshipofanyoftheprovisionsof thisAgreement.Accordingly,anyruleoflaworanylegaldecisionthatwouldrequireinterpretationof anyambiguitiesinthisAgreementagainstthePartythatdrafteditisofnoapplicationandisherebyexpresslywaived bythe Parties hereto. 

8.11Arbitration.AnycontroversyorclaimarisingoutoforrelatingtothisAgreement,orthe breach,termination,enforcement,interpretationorvaliditythereof,includingthedeterminationofthe scopeorapplicabilityofthisagreementtoarbitrate,shallbesettledbyarbitrationinFortLauderdale, Floridabeforethree(3)arbitrators.ThearbitrationshallbeadministeredbytheAmericanArbitrationAssociationunderitsCommercialArbitrationRules,andjudgmentontheawardrenderedbythearbitrator maybe enteredin anycourthavingjurisdictionthereof.

8.12WaiverofJuryTrial.Totheextentnotprohibitedbyapplicablelawthatcannotbe waived,eachPartyherebyirrevocablywaives,andcovenantsthatitwillnotassertanyrighttotrialby juryinanyforuminrespectofanyissue,claim,demand,actionorcauseofactionarisinginwholeorin partunder,relatedto,basedonorinconnectionwiththisagreementorthesubjectmatterhereof,whether nowexistingorhereafterarisingandwhethersoundingintortorcontractorotherwise.AnyPartyhereto mayfileanoriginalcounterpartoracopyofthisSection8.12withanycourtaswrittenevidenceofthe consentofeach such Partyto the waiverofits right totrialbyjury.

[Signature pagefollows]

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IN WITNESS WHEREOF, the Parties have executed this Asset Purchase Agreement on the date first written above.

BUYER:		TRIGEN INSURANCE SOLUTIONS, INC.
	By:	/s/ Carla A. Busick
	Name:	Carla A. Busick
	Title:	Chief Executive Officer
SELLER:		RESTAURANT COVERAGE ASSOCIATES, INC.
	By:	/s/ Kevin O’Connor
	Name:	Kevin O’Connor
	Title:	Vice-President
		RESTAURANT COVERAGE ASSOCIATES OF NEW ENGLAND, INC.
	By:	/s/ Kevin O’Connor
	Name:	Kevin O’Connor
	Title:	Vice-President
EQUITY HOLDERS:		/s/ James Henry
		James Henry
		/s/ Thomas Hartmann
		Thomas Hartmann
		/s/ Kevin O’Connor
		Kevin O’Connor
		/s/ Michael Rosa
		Michael Rosa

* All schedules and exhibits to this Exhibit 2.5 have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The schedules include a list of purchased assets and contracts, intellectual property, customers, consents, licenses and other information. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.

EX-2.6

Exhibit 2.6

ASSETPURCHASEAGREEMENT

This ASSET PURCHASE AGREEMENT (this “Agreement”), effective as of August 14, 2015 (the “Effective Date”), by and among Patriot Risk Services, Inc., a Delaware corporation (the “Buyer”), Risk Control Associates, Inc., a New Jersey corporation (the “Seller”) and the shareholders of the Seller named on the signature page hereto (the “Equity Holders”). Each of the foregoing parties may be referred to herein as a “Party” and collectively as the “Parties.” Capitalized terms used and not otherwise defined herein shall have the meanings set forth in Article 7below.

RECITALS

WHEREAS, the Equity Holders own all of the Equity Interests of the Seller and the Seller is engaged in the business of providing property and casualty insurance for the restaurant and bar industries (the “Business”); and

WHEREAS, the Seller wishes to sell to the Buyer and the Buyer wishes to purchase from the Seller, the rights and obligations of the Seller to the Purchased Assets (as defined herein) subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE1

PURCHASEAND SALEOF THEPURCHASEDASSETS

1.1PurchasedAssets and ExcludedAssets.

1.1.1PurchasedAssets.OnthetermsandsubjecttotheconditionshereofandinconsiderationofthePurchasePricetobepaidtotheSellerbytheBuyer,theBuyerherebypurchasesandacquiresfromtheSeller,andtheSellerherebysell,convey,assign,transferanddelivertotheBuyer, alloftheSeller’sright,titleandinterestinandtothe followingassets,properties,rightsandinterests,whereverlocatedandbywhomeverpossessed,owned,licensedorleasedbytheSeller, all of which are listed on Schedule 1.1.1 (collectively,the“PurchasedAssets”),free andclearofallLiens:

(a)alloftheSeller’sContractsandbusinessarrangements,includingwithoutlimitation,salesandpurchaseorders,confidentiality,vendor, customerandserviceagreements,including renewal rights,allofwhicharelistedonSchedule1.1.1 (collectively,the“Assigned Contracts”), provided however, that the Buyer assumes any/all obligations, arising out of the as to the Assigned Contracts commencing with the effective date of this Agreement, but not prior thereto;

(b)allofthe Seller’s IntellectualProperty;

(c)allofthe Seller’s Licensesand Permits, tothe extenttransferable;

(d)alloftheSeller’sfixed assets all of which are listed on Schedule 1.1.1(d);

(e)alloftheSeller’sadvertising,marketingandpromotionalmaterialsand allotherprinted orwrittenmaterials;

(f)alloftheSeller’slists,recordsandotherinformationpertainingtosuppliersandcustomers(including, but not limited to, customerlists,customermailinglistsandcustomersalesfiles);lists,recordsandotherinformationpertainingtoaccounts,referralsources;books,ledgers,files,documents,correspondenceandbusinessandaccountingrecordsofeverykind(including, but not limited to,allfinancial,businessand marketingplans); and 

(g)allgoodwilloftheSellerasagoingconcernandallotherintangible propertyofthe Seller.

NothinginthisSection1.1.1shallobligatetheBuyertoassumeanyLiability,whetherrelatedto theBusiness,thePurchasedAssetsorotherwise,unlesstheBuyerexpresslyassumessuchLiabilitypursuanttotheterms and conditions ofSection1.2.1ofthis Agreement.

1.1.2ExcludedAssets. NotwithstandingSection1.1.1,thefollowingassets,properties,rightsandinterestsoftheSeller(collectively,the“ExcludedAssets”)areexpresslyexcludedfrom thepurchaseandsalecontemplatedherebyandassucharenotincludedinthePurchasedAssets:

(a)all additional Cash on Hand of the Seller as of the Closing Date;

(b)all of the Seller’s Accounts Receivable related to the Business services provided prior to the Closing Date;

(c)all of the Seller’s rights under or pursuant to this Agreement;

(d)all Real Property owned by the Seller or its affiliates;

(e)all tangible personal property of the Seller, whether used in the Business or otherwise;

(f)all prepaid tax balances;

(g)all other assets, properties, rights and interests of the Seller and the Equity Holders not relating to the Business or the Purchased Assets, including, without limitation, those set forth on Schedule 1.1.2; and

(h)all refunds from cancelled insurance policies and insurance coverage proceeds relating to events requiring payments prior to closing.

1.2Assumption and Exclusionof Liabilities.

1.2.1AssumedLiabilities.AsoftheClosingDate,subjecttothetermsandconditions hereof, and as additionalconsideration for thePurchasedAssets,theBuyershallassumeandpay,perform orotherwisedischarge,inaccordancewiththeirrespectivetermsandsubjecttotheirrespectiveconditions, the Liabilities of theSellerunderanyAssignedContracts relatingtothe Business and the Purchased Assets(butexcludinganyLiabilityarisingpriortotheClosingDateorarisingoutoforrelatedtoany breach, actoromission bythe Seller)and anyLiabilities ofthe Sellersetforth onSchedule 1.2.1, butonly totheextenttheexistenceofsuchLiabilitiesortheparticularfactsandcircumstancesthatgiveriseto suchLiabilitiesdonotorwouldnotconstituteabreachofanyoftheSeller’srepresentationsandwarrantieshereunderorotherwisegiverisetoaclaimforindemnificationbytheBuyerhereunder(collectively, the “Assumed Liabilities”).

1.2.2ExcludedLiabilities.NotwithstandinganythingtothecontraryinthisAgreement,theSellershallretainandshallberesponsibleforpaying,performinganddischargingwhendue, andtheBuyershallnotassumeorhaveanyresponsibilityorliabilityfor,anyoftheSeller’sLiabilities, whetherornotrelatedtotheBusinessorthePurchasedAssets,ofwhateverkindandnature,primaryor secondary,directorindirect,absoluteorcontingent,knownorunknown,andwhetherornotaccrued,not specificallyidentifiedasAssumedLiabilitiespursuanttoSection1.2.1including,withoutlimitation,the followingLiabilities (collectively, the “Excluded Liabilities”): 

(a)allLiabilities arisingoutoforrelatedtothe ExcludedAssets;

(b)the Seller’s obligations underthis Agreement;

(c)allLiabilitiesunderanyAssignedContract,totheextent(i)arisingin thefirst instancepriorto theClosing Date,or(ii)arising after theClosing Datebutrelating toa breachof an Assigned Contractbythe Sellerpriortothe ClosingDate;

(d)allLiabilitiesforaccountspayableoftheSeller,whetherrelatedtothe Business orotherwise;

(e)allLiabilitiesforTaxesimposedwithrespecttotheBusiness,thePurchasedAssetsoranyincomeorgainsderivedwithrespecttheretoforanyTaxperiod,orportionthereof, endingon orbefore the ClosingDate;

(f)allLiabilities relatedtoanyIndebtedness;

(g)allLiabilitiesrelatedtotheSeller’snon-compliancewithanyapplicable Laws;

(h)allLiabilitiesarisingoutoforrelatingtoanybreachofwarrantyorsimilarclaim with respect to theBusiness, to the extentsuchLiabilities relate to servicesprovided by theSellerprior tothe ClosingDate;

(i)allLiabilitiesrelatedtoanypendingorthreatenedlitigationagainstthe Seller, whetherrelated to the Businessorotherwise; and

(j)all other Liabilities of the Seller and the Equity Holders, including, without limitation, those set forth on Schedule 1.2.2.

1.3PurchasePrice.Inconsiderationofthesaleby the Sellerto the BuyerofthePurchasedAssets andtherepresentations,warrantiesandcovenantsmadeby the Sellerto the Buyer,andsubjecttothesatisfaction orwaiverofalloftheconditionscontainedherein,Buyer shall pay to the Seller (a) at Closing, [Two Hundred Fifty Thousand Dollars ($250,000)] (the “Initial Purchase Price”) in cash, by wire transfer of immediately available funds in accordance with the wire transfer instructions set forth in Schedule 1.3; and (b) in accordance with the timing specified in Section 1.4.3, the Earn-Out Payment, if any.

1.4Earn-Out.   

1.4.1Payments.   The Buyer shall pay to the Seller an earn-out payment (the “Earn-Out Payment”) based on Actual EBITDA for the Measurement Period as follows:

Earnout = (7 × Actual EBITDA) – Initial Purchase Price

Actual EBITDA for purposes of calculating the Earn-Out Payment shall be measured in combination as Actual EBITDA of the Seller plus Actual EBITDA of Restaurant Coverage Associates, Inc., an affiliate of Seller. Notwithstanding anything herein, the maximum total combined Earn-Out Payment for the Measurement Period is Two Million Five Hundred Thousand Dollars ($2,500,000). The Earn-Out shall be calculated in accordance with the limited adjustments set forth on Schedule 1.4.1.

1.4.2Procedures Applicable to Determination of the Earn-Out Payment.

(a)On or before the date which is thirty (30) days after the conclusion of the Measurement Period, which shall be construed as September 30, 2016, the Buyer shall prepare and deliver to the Seller a written statement setting forth in reasonable detail its calculation of the resulting Earn-Out Payment (the "Earn-Out Calculation Statement").  A copy of the proposed Earn-Out Calculation Statement is annexed hereto as Schedule 1.4.2(a).

(b)The Seller shall have thirty (30) days after receipt of the Earn-Out Calculation Statement (the "Review Period") to review the Earn-Out Calculation Statement. During the Review Period, the Seller and its accountants shall have the right to inspect the Buyer's books and records during normal business hours at the Buyer's offices, upon reasonable prior notice and solely for purposes reasonably related to the determinations of the Earn-Out Payment. Prior to the expiration of the Review Period, the Seller may object to the Earn-Out Calculation Statement by delivering a written notice of objection (the "Earn-Out Objection Notice") to the Buyer. Any Earn-Out Objection Notice shall specify the items in the applicable Earn-Out Calculation Statement disputed by the Seller and shall describe in reasonable detail the basis for such objection, as well as the amount in dispute. If the Seller fails to deliver an Earn-Out Objection Notice to the Buyer prior to the expiration of the Review Period, then the Earn-Out Calculation Statement shall be final and binding on the parties hereto. If the Seller timely delivers an Earn-Out Objection Notice, the Buyer and the Seller shall negotiate in good faith to resolve the disputed items and agree upon the resulting amount of Actual EBITDA and the Earn-Out Payment. If the Buyer and the Seller are unable to reach agreement within thirty (30) days after such an Earn-Out Objection Notice has been given, all unresolved disputed items shall be promptly referred to an impartial nationally recognized firm of independent certified public accountants, other than the Seller’s accountants or the Buyer’s accountants, appointed by mutual agreement of the Buyer and the Seller (the "Independent Accountant"). The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable Earn-Out Calculation Statement as promptly as practicable, but in no event greater than thirty (30) days after such submission to the Independent Accountant, and to resolve only those unresolved disputed items set forth in the Earn-Out Objection Notice. If unresolved disputed items are submitted to the Independent Accountant, the Buyer and the Seller shall each furnish to the Independent Accountant such work papers, schedules and other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations by the Buyer and the Seller, and not by independent review. The resolution of the dispute and the calculation of Actual EBITDA that is the subject of the applicable Earn-Out Objection Notice by the Independent Accountant shall be final and binding on the parties hereto. The

fees and expenses of the Independent Accountant shall be borne by the Seller and the Buyer in proportion to the amounts by which their respective calculations of Actual EBITDA differ from Actual EBITDA as finally determined by the Independent Accountant. 

1.4.3Timing of Payment of Earn-Out Payment. Any Earn-Out Payment that is undisputed that the Buyer is required to pay pursuant to Section 1.4.1 hereof shall be paid in full no later than October 31, 2016, the disputed amount, if any, shall be paid in full no later than thirty (30) business days following the date upon which the determination of the Earn-Out Payment becomes final and binding upon the parties as provided in Section 1.4.2(b)(including any final resolution of any dispute raised by the Seller in the Earn-Out Objection Notice). The Buyer shall pay to the Seller the Earn-Out Payment, if any, in cash by wire transfer of immediately available funds to the bank account for the Seller set forth on Schedule 1.3.

1.4.4Post-Closing Operation of the Business. Subject to the terms of this Agreement, subsequent to the Closing, the Buyer shall have sole discretion with regard to all matters relating to the operation of the Business and shall operate the Business in good faith and in the ordinary course of business and reasonably consistent with past practices of the Seller prior to the Closing. The Buyer shall not, directly or indirectly, take any actions in bad faith that could unreasonably restrict the achievement of the Earn-Out Payment, or which could have the purpose of avoiding or reducing any of the Earn-Out Payment hereunder. Notwithstanding the foregoing, the Buyer has no obligation to operate the Business in order to maximize the amount of any Earn-Out Payment.

1.4.5Right of Set-off. The Buyer shall have the right to withhold and set off against any amount otherwise due to be paid pursuant to Section 1.4 the amount of any legitimate Losses to which any Buyer Indemnified Party may be entitled, provided Buyer provides Seller with notice regarding any Losses or costs. With regard to any Transition Expense, Buyer’s right of set-off pursuant to this Section 1.4.5 shall be subject to the provisions of Section 5.4.2.

1.4.6No Security Interest. The Parties hereto understand and agree that (a) the contingent rights to receive the Earn-Out Payment shall not be represented by any form of certificate or other instrument, are not transferable, except by operation of Law, (b) the Seller shall not have any rights as a security holder of the Buyer as a result of the Seller’s contingent right to receive the Earn-Out Payment hereunder, and (c) no interest is payable with respect to the Earn-Out Payment.

1.5Third Party Consents. To the extent that the Seller’s rights under any Contract, License or Permit constituting a Purchased Asset, or any other Purchased Asset, may not be assigned to the Buyer without the consent of another Person which has not been obtained, this Agreement shall not constitute an agreement to assign the same if an attempted assignment would constitute a breach thereof or be unlawful, and the Seller, at its expense, shall use its best efforts to obtain any such required consent(s) as promptly as possible. If any such consent shall not be obtained or if any attempted assignment would be ineffective or would impair the Buyer’s rights under the Purchased Asset in question so that the Buyer would not in effect acquire the benefit of all such rights, the Seller, to the maximum extent permitted by law and the Purchased Asset, shall act after the Closing as the Buyer’s agent in order to obtain for it the benefits thereunder and shall cooperate, to the maximum extent permitted by Law and the Purchased Asset, with the Buyer in any other reasonable arrangement designed to provide such benefits to the Buyer. Notwithstanding any provision in this Section 1.5 to the contrary, the Buyer shall not be deemed to have waived its rights under Section 4.2.3 hereof unless and until the Buyer provides written waivers thereof.

1.6Closing.TheclosingofthepurchaseandsaleofthePurchasedAssets(the“Closing”) shalltakeplaceonthedatehereof(the“ClosingDate”)andshallbeeffectiveasof12:01a.m.Eastern Time on the ClosingDate.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller and the Equity Holders, other than James Henry, jointly and severally (Equity Holders liability hereunder shall be solely related to paragraphs 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.14, 2.15, 2.21 and 2.22), hereby represent andwarranttotheBuyerwithrespecttothemattersspecifiedin this Article 2as follows:

2.1OrganizationandQualification.The Sellerisacorporation,dulyorganized,validlyexisting and ingood standing undertheLaws of theState ofNew Jersey. TheSellerdonothaveany subsidiaries.The SellerhastherequisitecorporatepowerandauthoritytoconducttheBusinessasitisnowbeingconductedandto performallofitsobligations undereach Contractbywhich it isbound.

2.2Authorization;Enforceability.The Sellerhastherequisitecorporatepowerandauthority toexecuteanddeliverthisAgreement,toperformitsobligationsunderthisAgreement,andtoconsummatethetransactionscontemplatedbythisAgreement.ThisAgreementhasbeen duly authorized by the Equity Holders and dulyexecutedanddelivered by theSeller,and thisAgreementconstitutesthelegal, validandbinding obligationoftheSeller,enforceableinaccordancewithitstermsandconditions,exceptassuchenforceabilitymaybelimitedbythe GeneralEnforceabilityExceptions.

2.3OrganizationalDocuments.The SellerhasdeliveredtotheBuyercopiesoftheSeller’s OrganizationalDocuments,andallsuchcopiesarecompleteandcorrectasofthedatehereof.Thebooks ofaccountand otherrecords of the Sellerdeliveredto the Buyerhave been maintained in accordance with soundbusinesspractice,andapplicableLawandaccountingpolicies. TheSellerarenotindefaultunderor in violation ofanyprovision ofits OrganizationalDocuments.

2.4Capitalization.  The Equity Holders are the only record and beneficial holders of the Equity Interests of the Seller. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting Equity Interests of the Seller.

2.5NoViolation.ExceptassetforthonSchedule 2.5andsubjecttothereceiptoftheConsentsandtothefilingofnoticesascontemplated bySection2.6, neither theexecution and deliveryof this Agreement, nor the performance bythe Sellerof itsobligationshereunder,ortheconsummationofthetransactionscontemplatedherebywill(withor withoutthepassageoftimeorthegivingofnotice)(a)violate,conflictwithorconstituteadefaultunder theOrganizationalDocumentsoftheSeller,(b) violate,conflictwithorresultinabreachof,constitutea defaultunder, giverise to any rightof termination,cancellation oracceleration under, orcause any lossof benefitunder,anyoftheterms,conditionsorprovisionsofanyAssignedContractoranyContractor LeasetowhichtheSellerareapartyorbywhichthePurchasedAssetsarebound,orgivetoothersany rights(includingrightsoftermination,foreclosure,cancellationoracceleration)inorwithregardtothe Selleroranyofthe Purchased Assets,orresultin,requireorpermitthecreationorimpositionofanyLienofanynatureuponorwithregardtotheSelleroranyofitsassets,or(c) conflictwithorviolateinanymaterial respectanyLawsapplicabletotheSellerorbywhichanyofitsassetsareboundoranyoftheLicenses and Permits held bythe Seller.

2.6Consents.

2.6.1ThirdPartyConsents.ExceptassetforthonSchedule 2.6.1, neithertheexecutionanddeliveryofthisAgreement,nor theperformancebytheSellerofitsobligationshereunderortheconsummationofthetransactionscontemplatedherebywill(withorwithoutthepassageoftimeorthegivingofnotice)requireanyConsent (collectively,the“ThirdPartyConsents”)underanyof

theterms,conditionsorprovisionsofanyAssignedContractoranyContracttowhichtheSeller isapartyorbywhichanyPurchasedAssetsare bound. 

2.6.2GovernmentalConsents.ExceptassetforthonSchedule 2.6.2,no Consentof,permitorexemptionfrom,ordeclaration,filingorregistrationwith,anyPersonorGovernmentalAuthority(collectively,the“GovernmentalConsents”)isrequiredtobemadeorobtainedbythe Seller inconnectionwiththeexecution,delivery andperformanceby theSellerof thisAgreementandthe consummationofthetransactionscontemplatedhereby,which,ifnotmadeorobtained,wouldresultina violationofanyLaw,LicenseorPermit,orresultinanymaterialLiabilitytotheSeller,orwhichwould prohibit the consummationof the transactions contemplated hereby.

2.7Taxes.  The Seller has delivered to Buyer complete and correct copies of the Seller’s Tax Returns (or proof of extension of time to file) for the fiscal years ended December 31, 2012, December 31, 2013 and December 31, 2014. The Seller has filed, will timely file or will cause to be timely filed, or has timely filed for an extension of the time to file, all Tax Returns required by applicable Law to be filed by it prior to or as of the date hereof, and such Tax Returns are, or will be at the time of filing, true, correct and complete in all material respects. The Seller has paid and discharged or, where payment is not yet due, has established, or will establish or cause to be established, on or before the Closing Date, an adequate accrual for the payment of all Taxes due with respect to (a) any period ending prior to or on the Closing Date and (b) the portion through the Closing Date for any period that includes (but does not end on) the Closing Date. There are no Liens, claims or assessments pending against the Seller or its assets for any alleged deficiency in any Tax (other than for current Taxes not yet due and payable), and the Seller has not been notified of any proposed Tax claims, Liens or assessments against the Seller. The Seller is not, has not been, nor has been notified that it will be the subject of any examination by a Taxing Authority. The Seller has withheld from each payment made to any of its past or present employees, and any other Person, as appropriate, the amount of all Taxes and other deductions required to be withheld therefrom, and paid the same to the proper Taxing Authority within the time required by Law. No claim has ever been made by a Taxing Authority in a jurisdiction where the Seller do not file Tax Returns that the Seller is or may be subject to taxation by that jurisdiction. The Seller is not party to any Tax indemnity, allocation or sharing agreement.

2.8MaterialContracts.TheSeller hasdeliveredtotheBuyeracompleteandcorrectcopyof eachwrittenAssignedContract,togetherwithallamendments,exhibits,attachments,waiversorother changesthereto,andwrittendescriptionsofeachoralContract,ifany.EachAssignedContractthatisin any waymaterialtotheBusinessof theSeller(a“MaterialContract”)isvalid,binding,infullforceand effect,andenforceablebytheSelleragainstthepartiestheretoinaccordancewithitsterms,exceptas suchenforceabilitymaybelimitedbytheGeneralEnforceabilityExceptions,andisnotsubjecttoany claims,charges,setoffsordefenses.TheSeller isnotinbreachordefaultunderanyMaterialContract, norhasanyeventoccurredwhichwiththegivingofnoticeorthepassageoftime(orboth)wouldconstituteabreachordefaultbytheSellerthereunder.TheSeller hasnotwaivedanymaterialrightsunderany MaterialContractormodifiedanymaterialtermsthereof.TotheSeller’sKnowledge,nootherpartyto anyMaterialContractisinbreachordefaultinanyrespectthereunder,norhasanyeventoccurredoris expectedtooccur(includingwithoutlimitationthetransactionscontemplatedhereby),whichwiththe givingofnoticeorthepassageoftime(orboth)wouldconstituteabreachordefaultbysuchotherparty thereunder.

2.9RealProperty.No interestin anyRealPropertyis included in the Purchased Assets.

2.10PersonalProperty.TheSeller hasgoodtitleto,avalidleaseholdinterestin,oravalidlicense touse, allassets ownedorused by the Seller, andallassetsused in ornecessary for the operation

of theBusiness, free and clearofany Liens. Alltangible assets owned, leased or licensedby theSeller isin the possession of, andunder the controlof, the Seller. 

2.11IntellectualProperty.Schedule 2.11setsforthacompleteandcorrectlistof allIntellectualPropertyownedbytheSellerorrelatedto,usedinornecessaryfortheoperationofthe Business(the“Seller’sIntellectualProperty”).ExceptassetforthonSchedule 2.11,(a)the Sellerownallright,titleandinterestin,orhasavalidlicensetouse,theSeller’sIntellectualPropertyin theBusiness,freeandclearofallLiens;(b)theuseoftheSeller’sIntellectualPropertyintheconductof theBusinessdoesnotinfringeupon,diluteormisappropriate (and in the past has not infringed upon, diluted or misappropriated)anyIntellectualPropertyrightsofanyPerson;(c)noclaims or allegations of infringement or unauthorized use involving any Seller’s Intellectual Property are pending against a third party;(d) therearenopendingclaimsorallegationsofinfringement orunauthorizeduseofanythirdpartyIntellectualPropertyortechnologyagainsttheSeller;and(e)no circumstancesexistthatwouldformthebasisforanymaterialclaimofinfringement,dilution,unauthorizeduse,orviolationofanySeller’sIntellectualProperty,orchallengetheownership,use,validityorenforceabilityofanySeller’sIntellectualProperty.

2.12InsurancePolicies.TheSeller hasdeliveredtotheBuyer,accurate andcompletecopiesofallpoliciesofinsuranceandpendingapplicationsforpoliciesofinsuranceunder which theSelleror theBusinessareorhave been coveredatany timeduring the lastthree (3)years.AllpoliciesofinsurancewhichprovidecoveragetotheSellerortheBusiness(a)arevalid,outstandingandenforceableonthedatehereof;(b)areissuedbyaninsurerthatisfinanciallysoundandreputable;(c)taken together,provideadequate insurancecoverageforthe Sellerandoperationsof the Businessforallrisksto whichtheSellerandtheBusinessarenormallyexposed;and(d)aresufficientforcompliancewithapplicable Laws and the Contracts of the Seller.The Seller has notreceived anyrefusalofcoverage, anynotice thata defense willbe afforded with reservation ofrights, oranynotice ofcancellation oranyotherindicationthatanypolicyofinsuranceisnolongerinfullforceoreffect,orthattheissuerofanypolicyofinsuranceisunwillingtoperformitsobligationsthereunder.TheSeller hascompliedwithallofitsobligations undereachsuchinsurance policy.

2.13Litigation.Therearenosuits,actions,proceedings,investigations,claimsororders(collectively,“LegalProceedings”)pendingor,totheSeller’sKnowledge,threatenedagainsttheSelleror anyofthecurrentorformerrepresentativesoftheSellerinitsrespectivecapacityasrepresentativesof theSeller,noraretheSeller,oranysuchrepresentative,subjecttoanyjudgment,orderordecreeofany court,judicialauthorityorGovernmentalAuthority(norhaveanyofthembeensubjecttosuchajudgment,orderordecreeinthepastfive(5)years).Schedule 2.13setsforthacompleteandcorrectlistanddescriptionofallLegalProceedingsmade,filedorotherwiseinitiatedinconnectionwiththe Sellerthatarependingorthathavebeenresolvedinthepasttwo(2)years,andtheresolutionthereof.The Seller hasadequateinsurance with respectto allLegalProceedings.

2.14Compliance with Applicable Laws. The Seller has complied in all material respects with all Laws applicable to it or to the operation of the Business and no facts or circumstances exist which would reasonably be expected to cause the Seller to violate or fail to comply with any such Laws in the future. The Seller has not received any written notice from any court, judicial authority or Governmental Authority asserting a failure, or possible failure, to comply with any such applicable Laws, the subject of which notice has not been conclusively resolved as required thereby or otherwise to the satisfaction of the party sending such notice. The Seller is not under investigation with respect to violations of any such Laws.

2.15RegulatoryCompliance.Schedule 2.15containsacompleteandcorrectlistof allLicensesandPermitsissuedtoormaintainedbytheSellerasofthedatehereofthatarenecessaryto theconductoftheBusiness astheBusinesshasbeenoperatedduring thepast twelve(12)months

(collectively,the“MaterialLicensesandPermits”),along withthedateofissuanceandthecurrent termthereof.AllsuchMaterialLicensesandPermitsareinfullforceandeffect.TheSeller isincomplianceinall materialrespectswiththetermsandconditionsoftheMaterialLicensesandPermitsandhasreceivedno writtennoticesthatitisinviolationofanyofthetermsorconditionsofanyMaterialLicensesandPermitsorallegingthefailuretomaintainanyLicensesandPermits.TheSeller hasnotreceivedwrittennotice thatanyof theMaterialLicenses and Permits willnotberenewed. To the Seller’s Knowledge, there are no proceedings pendingtorevokeorwithdrawanysuchMaterialLicensesandPermits and the Seller has no reason to believe that any of the Material Licenses and Permits will be revoked, withdrawn or will not be renewed.ThefacilitiesusedintheBusinessare incompliancewithallapplicablebuildingcodes,ordinancesandregulations,andtheSeller hasnotreceived anynotice assertinga failure, orpossible failure, to complywith anysuch fire codes, ordinances or regulations. 

2.16BooksandRecords.TheSeller hasmaintaineditsbooksandrecordsintheOrdinary CourseofBusiness,consistentwithprofessionalbusinessstandardsandpracticescustomaryfortheindustry.TheSellermakesandkeepsbooks,recordsandaccountswhich,inreasonabledetail,accurately and fairlyreflectthetransactions and dispositions of its assets.

2.17Brokers.Nobroker,finderoragentisentitledtoanybrokeragefees,finder’sfeesor commissionsinconnectionwiththetransactionscontemplatedbythisAgreementbaseduponarrangements made byoron behalfof the Seller.

2.18Customers.Schedule 2.18 setsfortha listofallcustomersof theSeller,showingthetotalsalesbytheSellertoeachcustomer for the years ended 2014 and 2015.AsoftheClosingDate,nocustomerlistedonSchedule 2.18hasterminateditsrelationshipwiththeSellerormateriallyreducedorchangedthepricingorothertermsofitsbusinesswiththeSeller,andnocustomerlistedonSchedule 2.18has notifiedtheSellerthatitintendstoterminateormateriallyreduceorchangethepricingorothertermsof itsbusiness with the Seller.

2.19Employees. Schedule 2.19 sets forth a list of all current employees of the Seller who are necessary to maintain the day-to-day operations of the Business (the “Necessary Employees”). All of the Necessary Employees are “at-will” employees. The Seller has provided Buyer a copy of any non-competition, non-solicitation, proprietary rights or confidentiality agreements currently in force with any of the Necessary Employees.

2.20ForeignPerson. No Seller isaforeignpersonwithinthemeaning ofSection1445of the Code.

2.21Solvency.

(a) Seller is not now and is not expected to be throughout the duration of the Earn-Out Period insolvent, and will not be rendered insolvent by any of the Contemplated Transactions. As used in this Section, “insolvent” means that the sum of the Seller’s debts and other probable Liabilities exceeds the present fair saleable value of Seller’s assets.

(b) Immediately after giving effect to the consummation of the Contemplated Transactions, (i) Seller will be able to pay its Liabilities as they become due in the usual course of its business, (ii) Seller will not have unreasonably small capital with which to conduct its present or proposed business, (iii) Seller will have assets (calculated at fair market value) that exceed its Liabilities and (iv) taking into account all pending and threatened litigation, final judgments against Seller in actions for money damages are not reasonably anticipated to be rendered at a time when, or in amounts such that, Seller will be unable to satisfy any such judgments promptly in accordance with their terms (taking into account the

maximum probable amount of such judgments in any such actions and the earliest reasonable time at which such judgments might be rendered) as well as all other obligations of Seller. The cash available to Seller, after taking into account all other anticipated uses of the cash, will be sufficient to pay all such debts and judgments promptly in accordance with their terms.

2.22FullDisclosure.ThisAgreement,includingallschedulesandexhibits,deliveredbyor onbehalfoftheSellerhereunderarecompleteandcorrectinallmaterialrespects.Norepresentationor warrantyoftheSellercontainedinthisAgreementandnowrittenstatementmadebyoronbehalfofthe SellertotheBuyeroranyofitsAffiliatespursuanttothisAgreementcontainanuntruestatementofa materialfactoromitstostateamaterialfactnecessary tomakethestatementscontainedhereinortherein notmisleading.ThereisnofactknowntotheSellerwhichtheSeller hasnotdisclosedtotheBuyerin writingwhichreasonablycould be expectedto materiallyaffect the Business in anadverse manner.

2.23Financial Statements.  The Company’s financial statements (the “Financial Statements”) fairly present the financial condition and the results of operation, change in members’ equity, and cash flow of the Company as at the respective dates of and for the periods referred to in such Financial Statements of the Company and will be prepared in accordance with generally accepted accounting principles and practices consistently applied and consistent with the books and records of the Company.

ARTICLE3

REPRESENTATIONSANDWARRANTIESOFTHEBUYER

TheBuyerherebyrepresents and warrants tothe Selleras follows:

3.1OrganizationandAuthorityof the Buyer;Enforceability.TheBuyerisacorporationduly organized,validlyexistingandingoodstandingundertheLawsoftheStateofDelaware.TheBuyerhas therequisitecorporatepowerandauthoritytoexecuteanddeliverthisAgreement,toperformitsobligationsunderthisAgreement,andtoconsummatethetransactionscontemplatedhereby.ThisAgreement hasbeendulyandvalidlyexecutedanddeliveredbytheBuyerand,assumingthedueauthorization,executionanddeliverybytheotherpartieshereto,willconstitute,uponsuchexecutionanddeliveryineach casethereof,legal,validandbindingobligationsoftheBuyer,enforceableinaccordancewiththeirterms and conditions, exceptas such enforceability maybe limited bythe GeneralEnforceabilityExceptions.

3.2NoConsents.NomaterialConsentof,permitorexemptionfrom,ordeclaration, filing or registration with,any GovernmentalAuthority is required tobemadeorobtained by theBuyer inconnection withthe execution,deliveryand performanceofthis Agreementbythe Buyer.

3.3NoViolation.NeithertheexecutionanddeliveryofthisAgreementnortheperformance bytheBuyerofthetransactionscontemplatedherebywill(a)violateorconflictwiththeOrganizational Documentsof theBuyer,or(b)conflictwithorviolateany Lawsapplicableto theBuyerorby which any ofits properties is bound.

ARTICLE 4

CLOSING

4.1Time and Place.  The Closing shall occur simultaneously with the execution of this Agreement and shall be effective as of 12:01am Eastern Time on the Closing Date.

4.2DeliveriesbytheSeller.At or immediately prior totheClosing,theSellershalldeliverorcausetobedelivered to the Buyer: 

4.2.1Corporate Documents. A copy of the Articles of Organization of the Seller certified bytheapplicableSecretaryofState,asofadatenotmorethanthirty(30)dayspriortothe ClosingDate;

4.2.2GoodStandingCertificate.Acertificateofgoodstandingwithrespecttothe Seller,issuedbytheapplicableSecretaryofState,asofadatenotmorethanthirty(30)dayspriortothe ClosingDate;

4.2.3Authorizing Resolutions. A copy of the resolutions from the Seller’s board of directors, certified by the respective Secretary of the Seller as having been duly and validly adopted and being in full force and effect, authorizing the execution and delivery of this Agreement and the performance by the Seller of its obligations hereunder;

4.2.4Consents.TheThirdPartyConsentsandGovernmentalConsentsidentifiedon Schedule 2.6.1 and Schedule 2.6.2;

4.2.5Licensesand Permits.AllLicensesand Permitsidentified on Schedule 2.15;

4.2.6Assignment and Assumption. An assignment and assumption agreement in the form of Exhibit A hereto (the “Assignment and Assumption Agreement”) and duly executed by the Seller, effecting the assignment to and assumption by the Buyer of the Purchased Assets and the Assumed Liabilities;

4.2.7Lease Assignment. A lease assignment for each leased office space identified on Schedule 1.2.1 (the “Lease Assignments”);

4.2.8Intellectual Property Assignment.  An intellectual property assignment in the form of Exhibit B hereto (the “Intellectual Property Assignment”) and duly executed by the Seller, effecting the assignment of all of the Seller’s Intellectual Property to the Buyer;

4.2.9Employment Agreements. Executed copies of the employment agreements between Buyer and each of Kevin O’Connor, Michael Rosa and Thomas Hartmann (collectively, the “Employment Agreements”); and

4.2.10OtherDocuments. SuchotherdocumentsandinstrumentsastheBuyermayreasonablyrequestto consummate thetransactionscontemplated hereby.

4.3Deliveriesbythe Buyer.The Buyerwilldeliverorcause to be deliveredtothe Seller:

4.3.1ThePurchase Price.Paymentof the Purchase Price asprovidedin Section1.3;

4.3.2GoodStandingCertificate. A certificateofgoodstandingwithrespecttotheBuyer,issuedbytheSecretaryofStateofDelaware,asofadatenotmorethanthirty(30)dayspriortothe ClosingDate;

4.3.3Countersigned Agreements. Copies of this Agreement, the Assignment and Assumption Agreement, the Lease Assignments, and the Intellectual Property Assignment, and the executed Employment Agreements duly executed by the Buyer;

4.3.4OtherDocuments.SuchotherdocumentsandinstrumentsastheSellershall deemreasonablynecessaryto consummate the transactionscontemplatedhereby. 

ARTICLE5

POST CLOSING COVENANTS

5.1TaxCovenants.

5.1.1The Parties understand that the Buyer, in consultation with its designated third-party valuation advisors, shall be performing a valuation of the Purchased Assets for the purpose, among other things, of valuing the covenants made by the Seller (“Purchase Price Allocation”). Such allocation shall be mutually agreed upon by Seller, which shall not be unreasonably withheld.  The Buyer and Seller each agree that such valuation shall be dispositive regarding the allocation of the respective Purchase Price; provided, however, the Buyer shall prepare and deliver to the Seller for approval the Purchase Price Allocation related to the non-compete. The Seller and the Buyer shall cooperate to prepare IRS Form 8594 and any required exhibits thereto. The Buyer and the Seller shall report the federal, state, local and other income and other tax consequences of the purchase and sale contemplated hereby in a manner consistent with the Purchase Price Allocation and shall not take any position inconsistent therewith.

5.1.2TheSellerandtheBuyerherebywaivecompliancewithany“bulksales”Laws (including any requirementtowithhold any amountfrompaymentof the PurchasePrice)applicable to the saletothe Buyerofthe Purchased Assetsbythe Seller.

5.2AccesstoBooksandRecords.FromandaftertheClosing,eachPartyshallprovidethe otherPartyanditsrepresentativeswithreasonableaccess(forthepurposeofexaminingandcopying), duringnormalbusinesshours,tothebooksandrecordsrelatingtotheBusinesswithrespecttoperiods, portionsthereoforoccurrencespriortotheClosingDateinconnectionwithlegitimatebusinesspurposes of the requestingParty(includingin connection withthe filingofanyTax Returns, the makingofanyTax elections,andthe defense ofanyTax claimauditorproceeding), expressedtotheotherPartyin writing.

5.3Non-Competition;Non-Solicitation;Confidentiality.

5.3.1Non-DisclosureofConfidentialInformation. The Equity Holders and the Seller shall not, directly or indirectly, disclose or use at any time any Confidential Information, except to the extent that such disclosure or use is directly related to and required bytheperformanceoftheSeller’sdutiestotheBuyerorasrequiredbyLaworasotherwiseprovidedhereunder.The Seller and the Equity Holders further agreestotakecommerciallyreasonablesteps,totheextentwithintheircontrol,tosafeguardsuchConfidentialInformationandtoprotect itagainstdisclosure,misuse,espionage,lossandtheft.In the event that the Seller or any Equity Holder isrequiredbyLawto discloseanyConfidentialInformation,suchPartyshallpromptlynotifytheBuyerinwriting,whichnotificationshallincludethenatureofthelegalrequirementandtheextentoftherequireddisclosure,and shallcooperatewiththeBuyer’sreasonablerequeststopreservetheconfidentialityofsuchConfidential Information consistentwithapplicableLaw.ForpurposesofthisAgreement, “ConfidentialInformation”meansallinformationofaconfidentialorproprietarynature(whetherornotspecificallylabeled or identified as “confidential”), in any formormedium,thatrelates to theBusiness orits distributors, customers,independentcontractorsorotherbusinessrelations.ConfidentialInformationincludesthefollowingastheyrelatetotheBusinessand,ineachcase,totheextenttheBusinessobtainsacommercialbenefitfromthesecretnatureofsuchinformation:internalbusinessinformation(includinginformationrelatingtostrategicplansandpractices,business,training,marketing,promotionalandsalesplansandpractices,cost,rateandpricingstructures,accountingandbusinessmethodsandpotentialacquisitioncandidates);identitiesof,

individualrequirementsof,andspecificcontractualarrangementswith,theBusiness’sdistributors,customers,independentcontractorsorotherbusinessrelationsandtheirconfidential information;tradesecrets,know-how,compilationsofdataandanalyses,techniques,systems,formulae, research,records,reports,manuals,documentation,models,dataanddatabasesrelatingthereto;andinventions,innovations,improvements,developments,methods,designs,analyses,drawings,andreports. Notwithstandingtheforegoing,ConfidentialInformationdoesnotincludesuchinformationwhich:(a) at thetimeofdisclosureispubliclyavailableorthereafterbecomespubliclyavailablethroughnoactor omissionof the Seller or any Equity Holder;(b)isthereafterdisclosedorfurnishedtoof the Seller or any Equity Holderbyathirdpartywhoisnot knownbysuchparty tohaveacquiredtheinformationunderanobligationofconfidentiality;or(c)isdisclosedbythe Seller or any Equity Holder(subjecttocompliancewiththeapplicableprovisionsofthisSection5.3.1)under compulsion ofapplicable Law. 

5.3.2Non-Competition.The Seller and the Equity Holders are familiarwiththetradesecretsrelatedtothe BusinessandwithotherConfidentialInformationconcerningtheBusiness,includingall(a)inventions, technologyandresearchanddevelopmentrelatedtotheBusiness,(b)customersandclientsandcustomer andclientlistsrelatedtotheBusiness,(c) products(includingproductsunderdevelopment)andservices related to the Business and related costs and pricing structures, (d)accountingand businessmethods and practicesrelated tothe Businessand(e)similarand relatedConfidentialInformationandtradesecretsrelatedtotheBusiness.The Seller and the Equity Holdersacknowledgesandagreesthat theBusinesswouldbeirreparablydamagedifsuchPartyweretodirectlyorindirectlyprovideservicesto anyPersoncompetingwiththeBusinessorengaginginasimilarbusinessandthatsuchdirectorindirect competitionbyanysuchPartywouldresultinasignificantlossofgoodwillbytheBusiness.Infurther considerationfortheBuyer’spaymentofthePurchasePriceunderthisAgreement(inrespectofwhich paymentthe Equity Holders and the Sellerexpresslyacknowledgesthatheoritderivesasubstantialanddirectbenefit),andin ordertoprotectthevalueoftheBusinessacquiredbytheBuyerhereunder(includingthegoodwillinherentintheBusinessasofthedatehereof),the Seller and the Equity Holders herebyagreesthatduringtheperiodcommencingon the Closing Date and ending onthe third (3rd)anniversary oftheClosing Date (the “Non-Competition Period”),suchPartyshallnotacquireorholdanyeconomicorfinancialinterestin,actasapartner, member,stockholder,orrepresentativeof,renderanyservicesto,orotherwiseoperateorholdaninterest in anyPerson (other than the Seller, Restaurant Coverage Associates, Inc., Risk Control Associates, Inc. and RCA of New England, Inc.)havinganylocation in anycountyin whichthe Business or the Buyer conductsoperations,whichentity,enterpriseorotherPersonprimarilyengagesin,directlyorindirectly, anybusinessthatcompeteswiththeBusinessoroperatesintheindustry;provided,however,thatnothing containedhereinshallbeconstruedtoprohibitanysuchPartyfrompurchasinguptoanaggregateoftwo percent(2%)ofanyclassoftheoutstandingvotingsecuritiesofanyotherPersonwhosesecuritiesare listedon a nationalsecurities exchange (butonlyifsuch investment is heldon apurelypassive basis). Notwithstanding the forgoing, no Equity Holder shall be required to divest their equity interest in any currently owned investment including but not limited to First Jersey Casualty Insurance Company, Borges, Hanlon, Henry & Garcia and/or other RCA related Affiliates.

5.3.3Non-Solicitation;Non-Disparagement.Duringtheperiodcommencingonthe ClosingDate and ending on the third (3rd) anniversary of the Closing Date (the “Non-Solicitation Period”), (a) the Seller and Equity Holders shall not, directly or indirectly, either individually or acting in concert with another Person or Persons, request, induce or attempt to influence any distributor, supplier or customer of goods or services of the Business to curtail, cancel or refrain from maintaining or increasing the amount or type of business such distributor, supplier or customer of goods or services is currently transacting, or may be transacting during the Non-Solicitation Period, with the Business or modify its pricing or other terms of sale with the Business; or (b) make any negative,derogatoryordisparagingstatementsorcommunications regardingthe Buyer, the Business, orthe Affiliates orrepresentatives oftheBuyer.

5.3.4Severability.NotwithstandinganythingtothecontraryinthisAgreement,ifat anytime,inanyjudicialorarbitrationproceeding,anyoftherestrictionsstatedinthisSection5.3are foundbyafinalorderofacourtofcompetentjurisdictionorarbitratortobeunreasonableorotherwise unenforceableundercircumstancesthenexisting,thePartieseachagreethattheperiod,scopeorgeographicalarea,asthecasemaybe,shallbereducedtotheextentnecessarytoenablethecourttoenforce therestrictionstotheextentsuchprovisionsareallowableunderapplicableLaw,givingeffecttothe agreementandintentofthePartiesthattherestrictionscontainedhereinshallbeeffectivetothefullest extentpermissible.IntheeventofabreachorviolationbyanyPartyofanyoftheprovisionsofthisSection5.3,theNon-CompetitionPeriodorNon-SolicitationPeriod,asthecasemaybe,willbetolledforso longassuchPartywasinviolationofsuchprovision.The Seller and the Equity Holdersagreethattherestrictionscontainedin thisAgreementarereasonableinallrespectsandnecessarytoprotecttheBuyer’sinterestin,andthevalue of,the Business. 

5.4Transition Items.

5.4.1TransitionCollections.TheSellershallpromptlyremittotheBuyeranyproceedsreceivedfromanyAccountsReceivablethatconstitutePurchasedAssets,regardlessofwhensuch proceedsarereceivedorwhethersuchproceedswereobtainedasaresultofthecollectionseffortsofthe Seller.

5.4.2Transition Expenses.  The Seller shall promptly reimburse the Buyer (within ten (10) business days after the Buyer provides the Seller with a bill for such reimbursement, with reasonable supporting detail) for any payments made by the Buyer with respect to pre-Closing accounts payable, pre-Closing vendor payments, or any other liabilities of the Business related to any period prior to the Closing Date and which are not paid by the Seller within ten (10) business days after receipt by the Seller of written notice of the Buyer’s intent to make any such payment.

5.4.3UseofName. TheSellerherebyacknowledgesandagreethatupontheconsummationof the transactionscontemplatedhereby andforaperiodofone (1)yearfollowing theClosing Date,theBuyershallhavethesolerighttotheuseofanyservicemarks,trademarks,tradenames,identifyingsymbols,logos,emblems,signsorinsigniarelatedtotheBusiness(includingthename“ “Risk Control Associates”)orcontainingorcomprisinganyof the foregoing, includinganyname ormark confusinglysimilarthereto(collectively,the“BusinessMarks”).TheSellershallnotuseanyofthe BusinessMarks,exceptinconnectionwiththefilingofTaxreturnsorthewindingupoftheSeller’s businessaffairsrelatedto the Business.

5.5Post-Closing Matters.  Each of the Parties shall satisfy the requirements set forth on Schedule 5.5 on or before the date specified for such requirement or such later date to be mutually agreed to by the parties.

5.6FurtherAssurances.FromandaftertheClosing,theSellershallusereasonableeffortsto take,orcause tobe taken,allactions,andto do,orcausetobe done, all thingsnecessary,properoradvisableincompliancewithapplicableLawstoconsummateandmakeeffective,assoonasreasonablypracticable, the transactions contemplated hereby.

ARTICLE 6

INDEMNIFICATION

6.1SurvivaloftheSeller’sRepresentations,WarrantiesandCovenants;TimeLimitsonIndemnificationObligations.AllrepresentationsandwarrantiesoftheSellercontainedin,orarisingoutof, thisAgreementshallsurvivetheClosinghereunderforaperiodoftwo(2)yearsaftertheClosing

Date; provided,however,thattheFundamentalandStatutoryRepresentationsshallsurviveuntiltheexpirationoftheapplicablestatuteoflimitations.AllPost-Closing CovenantsoftheSeller and the Equity Holders, other than James Henry,willsurvivetheClosinginaccordancewiththeirterms.IftheBuyerprovidesnoticeofaclaiminaccordancewiththetermsofthisAgreementpriortotheendoftheperiodofsurvival setforthinthisSection6.1,thentheLiabilityforsuchclaimwillcontinueuntiltheclaimisfullyresolved. 

6.2SurvivaloftheBuyer’sRepresentations,WarrantiesandCovenants;TimeLimitsonIndemnification Obligations.Allrepresentations and warranties ofthe Buyercontained in, orarisingoutof, thisAgreementshallsurvivetheClosinghereunderforaperiodoftwo(2)yearsaftertheClosingDate; provided,however,thattherepresentationsandwarrantiesinSection3.1(OrganizationandAuthorityof Buyer;Enforceability)shallsurviveuntiltheexpirationoftheapplicablestatuteoflimitations.AllPost-ClosingCovenantsoftheBuyerwillsurvivetheClosinginaccordancewiththeirterms.IftheSellerprovidesnoticeofaclaiminaccordancewiththetermsofthisAgreementpriortotheendoftheapplicable periodofsurvivalsetforthinthisSection6.2,thentheLiabilityforsuchclaimwillcontinueuntilthe claimis fullyresolved.

6.3Indemnificationby the Seller.Subjecttothe terms,conditionsandlimitationssetforth in thisArticle6,theSellershall indemnify,defend and holdharmless theBuyerand its representatives,successorsandpermittedassigns(each,a“BuyerIndemnifiedParty”),fromandagainst,andshallpromptly pay orreimburse eachBuyerIndemnifiedParty for, any andallLossessustainedorincurred (including anyLosses actuallysustainedorincurredaftertheendoftheapplicablesurvivalperiod,providedthataclaimis made priortotheend of theapplicablesurvivalperiodin accordance withtheterms ofthis Agreement)by anyBuyerIndemnifiedPartyresultingfrom:(a)anybreachofarepresentationorwarrantymadebytheSeller or Equity HoldersinthisAgreement;(b)anybreachofanyPost-ClosingCovenantmadebytheSeller or Equity Holders inthisAgreement;(c)anyclaimorassertionforobligationsinrespectofIndebtednessorbroker’sorseller’sfeesor expensesarisingoutofthetransactionscontemplatedbythisAgreementbyaPersonclaimingtohave beenengagedbyanySelleroranyofitsAffiliates;(d)anyobligationofanySellerforanyTaxesthat arose, in the first instance,prior to the Closing Date;(e) the failure ofanySellertopay,dischargeandperformanyoftheExcludedLiabilities;or(f)theownershiporoperationoftheBusinessorthePurchased Assets priortothe ClosingDate.

6.4Indemnification bythe Buyer. Subjectto the terms, conditions andlimitations setforth in thisArticle6,fromandaftertheClosing,theBuyershallindemnify,defendand holdharmlesstheSeller and each of theirrepresentatives,successorsandpermittedassigns(each,a“SellerIndemnifiedParty”)fromand againstanyandallLossessustainedorincurredbyanySellerIndemnifiedPartyresultingfrom:(a)any breachofarepresentationorwarrantymadebytheBuyerinthisAgreement;(b)anybreachofaPost-Closing CovenantmadebytheBuyer in this Agreement;(c) the failure of theBuyer topay,dischargeand performanyoftheAssumedLiabilities;or(d)theownershiporoperationoftheBusinessorthePurchased Assetson orafter the ClosingDate.

6.5Indemnification ProcedureforThird PartyClaims.

6.5.1IntheeventthatsubsequenttotheClosing,anyPersonthatisormaybeentitled to indemnification underthis Agreement(an “IndemnifiedParty”)receives notice of the assertion ofany claim,issuanceofanyorderorthecommencementofanyactionorproceedingbyanyPersonwhoisnot aPartyoranAffiliateofaParty,including,withoutlimitation,anydomesticorforeigncourtorGovernmentalAuthority(a“ThirdPartyClaim”),againstsuchIndemnifiedPartyandforwhichaPartyisor mayberequiredtoprovideindemnificationunderthisAgreement(an“IndemnifyingParty”),thensuch IndemnifiedParty shallgivewrittennoticethereof,togetherwitha statementofany

available information regarding such ThirdParty ClaimtosuchIndemnifying Party withinsixty (60)daysafterlearning ofsuch ThirdPartyClaim;provided,however,thatfailuretogivesuchwrittennoticewithinanyparticulartime periodshallnotadverselyaffecttheIndemnifiedParty’srighttoindemnificationexcept,andtotheextent that,theIndemnifying Party canshowthat thefailure togivesuch notificationon atimely basis adversely affectedtheIndemnifyingParty’sabilitytodefendsuchThirdPartyClaim.TheIndemnifyingPartyshall havetherightuponwrittennoticetotheIndemnifiedParty(the“DefenseNotice”),withinthirty(30) daysafterreceiptfromtheIndemnifiedPartyofnoticeofsuchThirdPartyClaim,toconduct,atitsexpense,thedefenseagainst and settlement ofsuchThirdPartyClaiminitsownname,orifnecessaryinthenameoftheIndemnifiedParty.WithoutthepriorwrittenconsentoftheIndemnifiedParty (which consent shall not be unreasonably withheld, delayed or conditioned),theIndemnifyingPartywill notenterintoanysettlementofany ThirdPartyClaimorceasetodefendagainstsuch ThirdPartyClaim, ifpursuanttoorasaresultofsuchsettlementorcessation,(a)injunctiveorotherequitablereliefwould beimposedagainsttheIndemnifiedParty,or(b)eachclaimantorplaintiffinsuchThirdPartyClaimhas notgiventotheIndemnifiedPartyanunconditionalreleasefromallLiabilitywithrespecttosuchThird PartyClaim. 

6.5.2NotwithstandinganythingcontainedinSection6.5.1tothecontrary,theIndemnifyingPartyshallnotbeentitledtocontrol,andtheIndemnifiedPartyshallbeentitledtohavesolecontrolover,thedefenseorsettlementofanyThirdPartyClaimifanyofthefollowingconditionsarenot satisfied:

(a)theIndemnifyingPartyshallacknowledgeinwritingthatitshallbefully responsibleforallLosses relatingtosuchproceeding;

(b)the IndemnifyingParty mustdiligentlydefendsuchproceeding;

(c)theIndemnifying Partymustfurnish theIndemnified Party withevidence thatthefinancialresourcesoftheIndemnifyingParty(orthefundsavailableintheescrowaccountwith respecttoclaimsagainsttheescrowaccount),intheIndemnifiedParty’sreasonablejudgment,areand willbesufficient(whenconsidering Lossesinrespectofallotheroutstanding claims)tosatisfy any Losses relatingto such proceeding;

(d)suchproceedingshallnotinvolvecriminalactionsorallegationsofcriminalconductbytheIndemnifyingParty,andshallnotinvolveclaimsforspecificperformanceorother equitablerelief;and

(e)theredoesnotexist,intheIndemnifiedParty’sgoodfaithjudgment, basedontheadviceofoutsidelegalcounsel,aconflictofinterestwhich,underapplicableprinciplesof legalethics,couldreasonablybeexpectedtoprohibitasinglelegalcounselfromrepresentingboththe Indemnified Partyandthe IndemnifyingPartyin suchproceeding.

6.6Tax TreatmentofIndemnification.AllindemnificationpaymentsmadeunderthisAgreement shallbetreated byallParties as an adjustment tothe Purchase Price for Tax purposes, unless otherwise required by Law.

ARTICLE 7

DEFINITIONS

Definitions.As usedin this Agreement,

“AccountsReceivable”ofanyPersonmeans(a)alltradeaccountsreceivableandotherrightsto paymentfromcustomersofsuchPersonandthefullbenefitofallsecurityforsuchaccountsorrightsto payment,includingalltradeaccountsreceivablerepresentingamountsreceivableinrespectofgood shipped,productssoldorservicesrenderedtocustomersofsuchPerson,(b)allotheraccountsornotes receivableofsuchPersonandthefullbenefitofallsecurity forsuchaccountsornotes,and(c)any claim, remedyorotherrightrelated to anyoftheforegoing.

“ActualEBITDA” means actual EBITDA for the Measurement Period attributable to the accounts purchased hereunder (and the accounts purchased pursuant to that certain Asset Purchase Agreement by and between Buyer and Buyer’s Affiliate, Patriot Risk Services, Inc., and and Seller’s affiliate, Restaurant Coverage Associates, Inc.) and any new business added by Seller or Equity Holders during the Measurement Period.

“Affiliate”means,withrespecttoanyPerson,anyotherPersondirectlyorindirectlyControlling orControlledby,orunderdirectorindirectcommonControlwith,suchPerson.Forpurposesofthisdefinition,aPersonshallbedeemedtoControlanotherPersonifsuchPersonownsorControls,directlyor indirectly,morethantwenty-fivepercent(25%)ofthevotingEquityInterestsoftheotherPerson.“Control,”“Controlled”or“Controlling”meanstheabilityofaPerson(collectivelyorwithitsAffiliates) directlyorindirectlytodirectthe use of, dispositionofand access tothepropertyofanotherPerson.

“CashonHand”meansallcashandcashequivalents,calculatedasof12:01a.m.,EasternTime on thedate ofcalculation, determined inaccordance with GAAP.

“Code” means the U.S. InternalRevenue Code of1986, as amended.

“Consent” means anyapproval, consent,ratification,waiver, orotherauthorization.

“Contract”meansanywrittenororalagreement,note,mortgage,indenture,lease,deedoftrust, license, plan,instrumentorothercontractorlegallybindingarrangementorcommitment.

“EquityInterests”means(a)anypartnershipinterests,(b)anymembershipinterestsorunits,(c) anysharesofcapitalstock,(d)anyotherinterestorparticipationthatconfersonaPersontherighttoreceiveashareoftheprofitsandlossesof,ordistributionofassetsof,theissuingentity,(e)anysubscriptions,calls,warrants,options,orcommitmentsofany kindorcharacterrelating to,orentitling any Person orentitytopurchaseorotherwiseacquiremembershipinterestsorunits,capitalstock,oranyotherequity securities,(f)anysecuritiesconvertibleintoorexercisableorexchangeableforpartnershipinterests, membershipinterestsorunits,capitalstock,oranyotherequitysecurities,or(g)anyotherinterestclassifiedasan equitysecurityofa Person.

“FundamentalandStatutoryRepresentations” means the representations and warranties in Section2.1(OrganizationandQualification),Section2.2(Authorization;Enforceability),Section2.7(Taxes),andtherepresentationsandwarrantiesconcerningtitletothePurchasedAssets

“GAAP”meansUnitedStatesgenerallyacceptedaccountingprinciples,asineffectfromtimeto time, consistentlyapplied.

“GeneralEnforceabilityExceptions” meansthose exceptions toenforceabilitydue toapplicable bankruptcy,insolvency,reorganization,moratoriumorothersimilarLawsaffectingtheenforcementof creditors’rightsgenerally,andgeneralprinciplesofequity(regardlessofwhethersuchenforceabilityis consideredin a proceedingatLaworin equity).

“GovernmentalAuthority”meanstheUnitedStatesoranystate,provincial,localorforeign government,oranysubdivision,agencyorauthorityofanythereofhavingcompetentjurisdictionover anyof theSeller, the Buyeror the transactions contemplated bythis Agreement, as applicable.

“Indebtedness”means,withrespecttoanyPerson,allLiabilitiesinrespectof:(a)borrowed money;(b)indebtednessevidencedbybonds,notes,debenturesorsimilarinstruments;(c)capitalized leaseobligations;(d)operatingleaseobligationsrelatedtoanypiecesofmaterialequipmentusedinthe Business;(e)thedeferredpurchasepriceofassets,servicesorsecurities(otherthanordinarytradeaccountspayable);(f)conditionalsaleorothertitleretentionagreements;(g)thefactoringordiscountingof accountsreceivable;(h)swaporhedgingagreementsorarrangements;(i)reimbursementobligations, whethercontingentormatured,withrespecttolettersofcredit,bankers’acceptances,bankoverdrafts, suretybonds,otherfinancialguaranteesandinterestrateprotectionagreements(withoutduplicationof other indebtedness supported orguaranteed thereby);and(j) interest, premium,penalties and other amountsowing in respectofthe itemsdescribedinthe foregoing clauses (a) through(i)aftergiving effect totheClosing;(k)allIndebtednessofthetypesreferredtoinclauses(a)through(j)guaranteedinany mannerbysuch Person, whetherornotanyofthe foregoingwould appearona consolidated balancesheet preparedinaccordancewithGAAP;(l)anyunfundedpensionliabilities;and(m)anyso-called“change ofcontrol”payments.

“IntellectualProperty”meansallofthefollowinginanyjurisdictionthroughouttheworld:(a) allinventions(whetherpatentableorunpatentableandwhetherornotreducedtopractice),allimprovementsthereto,andallpatents,patentapplications,andpatentdisclosures,togetherwithallreissuances, continuations,continuations-in-part,revisions,extensions,andreexaminationsthereof;(b)alltrademarks, servicemarks,tradedress,logos,slogans,tradenames,corporatenames,Internetdomainnames,and rightsintelephonenumbers,togetherwithalltranslations,adaptations,derivations,andcombinations thereofand includingallgoodwillassociated therewith, and allapplications, registrations, and renewals in connectiontherewith;(c)allcopyrightableworks,allcopyrights,andallapplications,registrations,and renewalsinconnectiontherewith;(d)allmaskworksandallapplications,registrations,andrenewalsin connectiontherewith;(e)alltradesecretsandconfidentialbusinessinformation(includingideas,research anddevelopment,know-how,formulas,compositions,manufacturingandproductionprocessesandtechniques,technicaldata,designs,drawings,specifications,customerandsupplierlists,pricingandcostinformation,andbusinessandmarketingplansandproposals);(f)allcomputersoftware(includingsource code,executablecode,data,databases,andrelateddocumentation);(g)alladvertisingandpromotional materials,(h)allotherproprietaryrights;and(i)allcopiesandtangibleembodimentsofanyoftheforegoing(in whateverformormedium).

“Law”meanseachprovisionofanycurrentlyimplementedfederal,state,localorforeignlaw, statute, ordinance, order,code, rule orregulation,promulgated orissued byanyGovernmentalAuthority.

“Lease”meansanylease,subleaseoranyothermaterialagreementpertainingtoanyRealProperty,togetherwithallamendments,extensions,renewals,modifications,alterations,guarantiesandother changes thereto.

“Liability”meansanyliabilityorobligationofwhateverkindornature(whetherknownorunknown,assertedorunasserted,absoluteorcontingent,accruedorunaccrued,liquidatedorunliquidated, due orto become due),includingwithoutlimitation anyliabilityforTaxes.

“LicensesandPermits”meansanylicenses,permits,certificates,certifications,privileges,immunities,notifications,exemptions,classifications,registrations,easements,franchises,approvals,authorizations,ordersandothersimilarrights,oranywaiversoftheforegoing,issuedbyanyGovernmental Authority, andallpendingapplicationstherefororrenewalsthereof.

“Lien”meansanymortgage,pledge,hypothecation,hypothec,rightofothers,claim,security interest,encumbrance,lease,sublease,license,occupancy agreement,adverseclaimorinterest,easement, covenant,encroachment,burden,titledefect,titleretentionagreement,votingtrustagreement,proxy,interest,equity,option,lien,preemptiveright,rightoffirstofferorrefusal,chargeorotherrestrictionsor limitationsofanynaturewhatsoever,otherthanrestrictionsontheofferandsaleofsecuritiesunderfederalandstatesecurities Laws.

“Loss”or“Losses”means,withrespecttoanyPerson,allLiabilities,obligations,deficiencies, demands,claims,suits,actions,orcausesofaction,assessments,losses,Taxes,fines,penalties,damages (includingpunitive, specialand consequentialdamages), lostprofits, diminutionin value (based ona multipleofearningsorotherwise),costsandexpenses(includingreasonableattorneys’fees)sustainedorincurred bysuch Person.

“MaterialAdverseEffect”or“MaterialAdverseChange”meansanychange,effect,event, occurrence, state offacts ordevelopment that, individuallyorin the aggregate, ismateriallyadverseto the business,financialcondition,resultsofoperationsorprospects(includingtheachievementortheability toachieveforecastsofrevenueorearnings)oftheSeller.Fortheavoidanceofdoubt,bywayofillustrationandnotlimitation,a“MaterialAdverseEffect”or“MaterialAdverseChange”shallincludeanymatterormattersthat,aloneorintheaggregate,isorarelikelyto,orcouldreasonablybeexpectedto,result inLossestotheSellerinexcessoftenpercent(10%)ofthePurchasePrice,orthatareasonableinvestor would consideras significantlyand adverselyaffectingits investmentdecision with respectto thetransactions contemplated herein.

“Measurement Period” shall mean the twelve (12) month period beginning on September 1, 2015 and ending on August 31, 2016.

“OrdinaryCourseofBusiness”means,inrespectofanyPerson,theordinarycourseofsuch Person’sbusiness,asconductedbyanysuchPersoninaccordancewithpastpracticeandundertakenby such Personin goodfaith and notforpurposes ofevadinganycovenantorrestriction in this Agreementor anyOtherAgreement.

“OrganizationalDocuments”means(a)withrespecttoacorporation,thecertificateorarticles ofincorporation andbylaws;(b)withrespect to a limitedliability company,the articlesoforganizationor certificateofformationandoperatingagreement;(c)withrespecttoanyotherentity,anycharterorsimilardocumentadoptedorfiledinconnectionwiththecreation,formationororganizationofsuchentity; and (d)anyamendment toanyof theforegoing.

“Person”meansanyindividual,soleproprietorship,partnership,jointventure,trust,unincorporatedassociation,corporation,limitedliabilitycompany,entityorgovernment(whetherfederal,state, county,cityorotherwise,including,withoutlimitation,anyinstrumentality,division,agencyordepartment thereof).

“Post-ClosingCovenant” meansany covenant,promise,commitmentorotherobligation(orany portionthereof)madeorundertakenbyanyParty,inthisAgreementoranyOtherAgreement,totheextentperformance orfulfillment thereofisrequired byitsterms to beaccomplished aftertheClosing.

“RealProperty”meansallparcelsandtractsofland,togetherwithallbuildings,structures,fixturesandimprovementslocatedthereon(includingthoseunderconstruction),andallprivileges,rights, easements,hereditamentsandappurtenancesbelongingtoorforthebenefitofsuchland,includingall easementsappurtenanttoandforthebenefitofsuchland,andallrightsexistinginandtoanystreets,alleys,passagesandotherrights-of-wayincludedthereonoradjacentthereto(beforeoraftervacation thereof)and vaults beneathanysuch streets.

“Seller’sKnowledge”or“KnowledgeoftheSeller”meansanymatter,fact,orthingthatis,as of the date hereoforthe ClosingDate,actually known to the Seller.

“Tax”or“Taxes”means(a)anyU.S.federal,state,local,ornon-U.S.income,grossreceipts, license,payroll,employment,excise,severance,stamp,occupation,premium,windfallprofits,environmental(includingtaxesunderSection59AoftheCode),customsduties,capitalstock,franchise,profits, withholding,socialsecurity (orsimilar), unemployment,disability,realproperty,personalproperty,sales, use, transfer,registration, value-added, alternative oradd-onminimum, estimated,orothertaxofany kind whatsoever,includinganyinterest,penalty,oradditionthereto,whetherdisputedornot,(b)anyliability for the paymentofany amountsof the typedescribed inclause (a)as aresultofbeing amemberofaconsolidated,combined,unitaryoraggregategroupforanyTaxperiod,and(c)anyliabilityforthepayment ofanyamountsofthetypedescribedinclause(a)or(b)asaresultofbeingatransfereeorsuccessorto anypersonorasaresultofanyexpressorimpliedobligationtoindemnifyanyotherpersonorpayable pursuant to anytax sharing agreementorany othercontractrelatingto the sharing orpaymentofany such Tax.

“TaxReturns”meansanyreturn,declaration,report,schedule,notice,form,claimforrefund,or informationreturnorstatement(includinganyattachmenttheretoandanyamendmentthereof)filedwith orsubmittedto, orrequiredto befiled with orsubmitted to, anyTaxingAuthority.

“TaxingAuthority”meansanyGovernmentalAuthority,domesticorforeign,havingjurisdictionover the assessment, determination, collection,orother imposition ofanyTaxes.

ARTICLE 8

MISCELLANEOUS

8.1Notice.   Any notices, consents or other communications required to be sent or given hereunder by any of the Parties shall in every case be in writing and shall be deemed properly served if and when (a) delivered by hand, (b) transmitted by facsimile, e-mail or other means of electronic transmission, or (c) delivered by Federal Express or other express overnight delivery service, or (d) sent by registered or certified mail, return receipt requested, to the Parties at the addresses as set forth below or at such other addresses as may be furnished in writing:

If to the Seller:

Risk Control Associates, Inc.

133 Broad Street

Clifton, NJ 07013

Attention: Kevin O’Connor

E-mail: koconnor@rca-insurance.com

If to the Buyer:

TriGen Insurance Solutions, Inc.

401 E. Las Olas Blvd., Suite 1650

Fort Lauderdale, Florida 33301

Attention: Christopher A. Pesch, General Counsel

E-mail: cpesch@patnat.com

Dateofserviceofsuchnoticeshallbe(x)thedatesuchnoticeisdeliveredbyhand,facsimile,e-mailor otherformofelectronictransmission,(y)one(1)businessdayfollowingthedeliverybyexpressovernightdeliveryservice,or(z) three(3)businessdaysafterthedateofmailingifsentbycertifiedorregistered mail.

8.2Severability.TheunenforceabilityorinvalidityofanyprovisionofthisAgreementshall notaffecttheenforceabilityorvalidityofanyotherprovision.Uponsuchdeterminationthatanytermor otherprovisionisunenforceableorinvalid,thePartiesheretoshallnegotiateingoodfaithtomodifythis AgreementsoastoeffecttheoriginalintentofthePartiesascloselyaspossibleinalegallyacceptable mannerinorderthat the transactionscontemplatedhereby areconsummatedas originally contemplated to the greatestextentpossible.

8.3Successors;Assignment.ThisAgreementwillbebindingupon,andinuretothebenefit of,thePartiesheretoandtheirrespectivesuccessorsandpermittedassigns,butwillnotbeassignableor delegablebytheSellerwithoutthepriorwrittenconsentoftheBuyerorbytheBuyerwithouttheprior written consentoftheSeller;provided,however, thattheBuyermay assignthis Agreementinwhole orin parttoanyofitsAffiliatesortoanyPersonwhichbecomesasuccessorininterest(bypurchaseofassets orstock,orbymergerorotherwise)totheBuyer,andtheBuyermayassignitsrightsunderthisAgreement to its financingsources.

8.4Counterparts; Facsimile Signatures. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. This Agreement, any and all agreements and instruments executed and delivered in accordance herewith, along with any amendments hereto or thereto, to the extent signed and delivered by means of e-mail, facsimile or other means of electronic transmission, shall be treated in all manner and respects and for all purposes as an original signature, agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.

8.5Expenses.ExceptasprovidedinSection5.1.1,eachoftheSellerandtheBuyershall bearandpayforallofitsowncosts,feesandexpenses(includinglegal,accounting,investmentbanking, broker’s,finder’sandotherprofessionaloradvisory feesandexpenses) incurred orto be incurred by it, in eachcase,innegotiatingandpreparingthisAgreementandinclosingandcarryingoutthetransactions contemplated herebyand thereby.

8.6GoverningLaw.Allmattersrelatingtotheinterpretation,construction,validityandenforcementofthisAgreementshallbegovernedbyandconstruedinaccordancewiththedomesticlawsof theStateofDelawarewithoutgivingeffecttoanychoiceorconflictoflawprovisionorrule(whetherof theStateofDelawareoranyotherjurisdiction)thatwouldcausetheapplicationofLawsofanyjurisdictionotherthantheState of Delaware.

8.7EntireAgreement. ThisAgreement,the Recitals,the Schedules and theExhibitsattached heretosetforththeentireunderstandingofthePartieswithrespecttothetransactionscontemplatedhereby, supersede allpriordiscussions, understandings, agreements andrepresentations and shallnotbe modifiedoraffectedbyanyoffer,proposal,statementorrepresentation,oralorwritten,madebyorfor

any Partyinconnectionwiththenegotiationofthetermshereof.ThisAgreementmaybemodifiedonlyby subsequent instruments signed bythe Parties hereto. 

8.8ThirdParties.Nothinghereinexpressedorimpliedisintendedorshallbeconstruedto conferupon orgive to any Person, other than the Parties to this Agreement, the BuyerIndemnified Parties ortheSellerIndemnifiedPartiesandtheirrespectivesuccessorsandpermittedassigns,anyrightsorremedies underorbyreason ofthis Agreement.

8.9Disclosure Generally. All Schedules attached hereto are incorporated herein and expressly made a part of this Agreement as though completely set forth herein. All references to this Agreement herein or in any of the Schedules shall be deemed to refer to this entire Agreement, including all Schedules. Information furnished in any particular Schedule shall not be deemed to be included in all other Schedules in which the information is required to be included unless specifically designated with a cross-reference.

8.10InterpretiveMatters.Unlessthecontextotherwiserequires,(a)allreferencestoArticles, Sections,SchedulesorExhibitsshallmeanandrefertoArticles,Sections,SchedulesorExhibitsinthis Agreement;(b) eachaccountingtermnototherwisedefinedinthisAgreementhasthemeaningassigned toitinaccordancewithGAAP;(c)wordsinthesingularorpluralincludethesingularandplural,and pronounsstatedineitherthemasculine,feminineorneutergendershallincludethemasculine,feminine andneuter;(d)theterm“including”shallmean“includingwithoutlimitation”(i.e.,bywayofexample andnotbywayoflimitation);(e)allreferencestostatutesandrelatedregulationsshallincludeall amendmentsofthesameandanysuccessororreplacementstatutesandregulations;(f)referencesto “hereof”,“herein”,“hereby”andsimilartermsshallrefertothisentireAgreement(includingtheSchedulesandExhibitshereto);(g) referencestoanyPersonshallbedeemedtomeanandincludethesuccessorsandpermittedassignsofsuchPerson(or,inthecaseofaGovernmentalAuthority,PersonssucceedingtotherelevantfunctionsofsuchPerson);and(h)wheneverthisAgreementreferstoanumberof days,suchnumbershallrefertocalendardays,unlesssuchreferenceisspecificallyto“businessdays.” ThePartiesintendthateachrepresentation,warrantyandcovenantcontainedhereinshallhaveindependentsignificance.IfanyPartyhasbreachedanyrepresentation,warrantyorcovenantcontainedhereinin anyrespect,thefactthatthereexistsanotherrepresentation,warrantyorcovenantrelatingtothesame subjectmatter(regardlessoftherelativelevelsofspecificity)thatthePartyhasnotbreachedshallnot detractfromormitigatethefactthatthePartyisinbreachofsuchrepresentation,warrantyorcovenant. ThesectionheadingsofthisAgreementareincludedforreferencepurposesonlyandshallnotaffectthe constructionorinterpretationofany oftheprovisions ofthisAgreement.Eachof thePartiesacknowledgesthatithasbeenrepresentedbyindependentcounselofitschoicethroughoutallnegotiationsthathave precededtheexecutionofthisAgreementandthatithasexecutedthesamewithconsentanduponthe adviceofsaidindependentcounsel. ThePartieshaveparticipatedjointly in thenegotiation and drafting of thisAgreement.Intheeventanambiguityorquestionofintentarises,thisAgreementshallbeconstrued asifdraftedjointlybythe Parties,andnopresumptionorburdenofproofshallarise,orruleofstrictconstructionapplied,favoring ordisfavoringanyPartybyvirtueoftheauthorshipofanyoftheprovisionsof thisAgreement.Accordingly,anyruleoflaworanylegaldecisionthatwouldrequireinterpretationof anyambiguitiesinthisAgreementagainstthePartythatdrafteditisofnoapplicationandisherebyexpresslywaived bythe Parties hereto.

8.11Arbitration.AnycontroversyorclaimarisingoutoforrelatingtothisAgreement,orthe breach,termination,enforcement,interpretationorvaliditythereof,includingthedeterminationofthe scopeorapplicabilityofthisagreementtoarbitrate,shallbesettledbyarbitrationinFortLauderdale, Floridabeforethree(3)arbitrators.ThearbitrationshallbeadministeredbytheAmericanArbitrationAssociationunderitsCommercialArbitrationRules,andjudgmentontheawardrenderedbythearbitrator maybe enteredin anycourthavingjurisdictionthereof.

8.12WaiverofJuryTrial.Totheextentnotprohibitedbyapplicablelawthatcannotbe waived,eachPartyherebyirrevocablywaives,andcovenantsthatitwillnotassertanyrighttotrialby

juryinanyforuminrespectofanyissue,claim,demand,actionorcauseofactionarisinginwholeorin partunder,relatedto,basedonorinconnectionwiththisagreementorthesubjectmatterhereof,whether nowexistingorhereafterarisingandwhethersoundingintortorcontractorotherwise.AnyPartyhereto mayfileanoriginalcounterpartoracopyofthisSection8.12withanycourtaswrittenevidenceofthe consentofeach such Partyto the waiverofits right totrialbyjury. 

[Signature pagefollows]

IN WITNESS WHEREOF, the Parties have executed this Asset Purchase Agreement on the date first written above.

BUYER:		TRIGEN INSURANCE SOLUTIONS, INC.
	By:	/s/ Carla A. Busick
	Name:	Carla A. Busick
	Title:	Chief Executive Officer
SELLER:		RISK CONTROL ASSOCIATES, INC.
	By:	/s/ Kevin O’Connor
	Name:	Kevin O’Connor
	Title:	Vice-President
EQUITY HOLDERS:		/s/ James Henry
		James Henry
		/s/ Thomas Hartmann
		Thomas Hartmann
		/s/ Kevin O’Connor
		Kevin O’Connor
		/s/ Michael Rosa
		Michael Rosa

* All schedules and exhibits to this Exhibit 2.6 have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The schedules include a list of purchased assets and contracts, intellectual property, customers, consents, licenses and other information. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.

[Signature Page to Asset Purchase Agreement]

EX-2.7

Exhibit 2.7

FACILITATION AGREEMENT

This Facilitation Agreement ("Agreement") is effective as of October 29, 2015, and is between Carman Corporation with offices at 940 West Sproul Road Suite 103 Springfield, PA 19064 ("Carman") and TriGen Insurance Solutions, Inc., with offices at 401 E. Las Olas Blvd. suite 1700, Fort Lauderdale, FL 33301, a Florida company, as well as its subsidiaries and affiliates ("TriGen").

The parties hereto, in consideration of the mutual covenants and stipulations set out herein, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, agree as follows:

1. Nature of the Work. During the term of this Agreement, Carman will provide to TriGen the services outlined in Schedule A, which is attached hereto and made a part of this Agreement (the "Services").

2. Payment of Fees. As compensation for the Services provided by Carman, TriGen shall pay Carman Two Million Dollars ($2,000,000) on or before execution of a Managing Producer Agreement or similar document with AmTrust, subject to prorated repayment (“Clawback”) if less than Nine Million Dollars ($9,000,000) of premiums are generated annually pursuant to the said Agreement. By way of example, if only Four Million Five Hundred Thousand Dollars ($4,500,000) of premium are generated in a given twelve month period, then Carman will be required to repay One Million Dollars ($1,000,000) to TriGen. The Clawback shall be payable within 30 days of TriGen’s report of AmTrust premiums.

3. Programs Included Within the Contract. Programs included within this Agreement consist of business produced by or through TriGen, or its subsidiaries/affiliates, and issued on insurance policies from AmTrust, which was introduced to TriGen as a result of the efforts of Carman.

4. Reporting, Record Keeping and Right to Audit. TriGen shall prepare and submit to Carman  within 60 days of the end of the 18 month period, a report of collected AmTrust premiums. TriGen shall maintain complete and accurate records including, but not limited to, accounting records in a form and in accordance with generally accepted accounting practices to substantiate transactions that are the subject of this Agreement. Carman shall, upon reasonable notice, have access to such records for purposes of audit during normal business hours. Such accounting records shall be deemed the property of TriGen and shall remain in its possession.

5. Evaluation and Selection. TriGen shall have the sole discretion and final responsibility for evaluating and sending premium business to AmTrust.

6. Agency. The parties understand and agree that neither party shall be considered to be the agent, Managing or servant of the other party for any purpose whatsoever, and that neither has any authority to enter into any contract, assume any obligation or to make any warranties or representations on behalf of the other except as provided for in Schedule A. Carman is acting solely as a market finder in assisting TriGen in identifying AmTrust that may be interested in issuing insurance policies for business produced by or through TriGen and Carman shall not be responsible, contractually or otherwise, for performing services or assuming any obligations other than those set forth herein.

7. Indemnification.Carman does hereby indemnify and hold TriGen and its directors, officers, employees, agents, successors, and assigns harmless from and against all claims, demands, damages, losses, and other expenses resulting from the acts, errors, or omissions committed by Carman in the procurement of the Managing Producer Agreement, including but not limited to any claims for collateral, IBNR, or any cost of any kind associated with the assumption of risk by any entity under the AmTrust program. This covenant survives the term of this Agreement. 

8. Termination. TriGen may terminate this agreement upon written notice to Carman; however, in no event shall it terminate prior to the time TriGen, or any sub-agent of TriGen, ceases to produce insurance policies for any Insurance Company introduced to, and in a contractual relationship with TriGen as a result of Carman's efforts under the terms of this Agreement (the "Term").

9. Governing Law. This Agreement shall be subject to and governed by the laws of the State of Florida, and all questions concerning the meaning and intention of the terms of this Agreement and concerning the validity thereof and questions relating to performance hereunder shall be determined in accordance with the laws of that state without regard to that state's law relating to the conflict of laws. Venue for the enforcement of the terms of this Agreement shall lie in Florida.

10. Notice. All notices and other communications under this Agreement shall be in writing and mailed by first class certified mail, return receipt requested, or delivered by hand to the party at its address set forth above.

11. Miscellaneous. This Agreement shall be binding upon the parties hereto and their respective successors and assigns. No modification, extension or waiver of this Agreement or any of the provisions contained herein shall be binding upon either party, unless made in writing and signed by each party by a person duly authorized.

This Agreement contains the entire agreement between the parties, and no statements, promises, or inducements made by either party that are not contained in this written contract shall be valid or binding.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same document.

THE CARMAN CORPORATION		TRIGEN INSURANCE SOLUTIONS, INC
By:	/s/ Edward Snow	By:	/s/ Gex Richardson
Name:	Edward Snow	Name:	Gex Richardson
Title:	President/CEO	Title:	Secretary

* All schedules and exhibits to this Exhibit 2.7 have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The schedules include a list of services. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.

EX-10.1

Exhibit 10.1

SECOND AMENDMENT TO CREDIT AGREEMENT

This Second Amendment (this “Amendment”) to the Credit Agreement dated January 22, 2015 among Patriot National, Inc., a Delaware corporation (“Borrower”), the Lenders (as defined therein) and BMO Harris Bank N.A., as administrative agent (as previously amended, supplemented or otherwise modified, the “Credit Agreement”) is dated as of August 14, 2015.

1.Definitions.   Capitalized terms used and not defined in this Amendment have the respective meanings assigned to them in the Credit Agreement.

2.Amendments to the Credit Agreement.   As of the Second Amendment Effective Date (defined below), the Credit Agreement is hereby amended as follows:

(a)In Section 1.1, the following new defined terms shall be inserted in proper alphabetical order:

“Add-On Term Lender” means any Lender that is the holder of an Add-On Term Loan.

“Add-On Term Loan” – see Section 2.1.3.

“Initial Term Loan” – see Section 2.1.3.  

“Second Amendment” means the Second Amendment to Credit Agreement dated as of August 13, 2015 among the Borrower, the other Loan Parties, the Lenders party thereto and the Administrative Agent.

“Second Amendment Effective Date” means the date on which all of the conditions set forth in Section 4 of the Second Amendment have been satisfied.

(b)In Section 1.1, the following definitions are amended in their entirety to read as follows:

“Adjusted EBITDA” is defined as Consolidated Net Income plus, to the extent deducted in determining net income, tax expense (or less any tax benefits), Interest Expense, depreciation and amortization, net realized losses (or less any gains) on investments, loss on exchange of units and warrants, increase (or less any decrease) in the fair value of common stock and warrant redemption liability, non-cash stock compensation, and up to (x) $5,000,000 in any Fiscal Year beginning with Fiscal Year 2016 and (y) $5,000,000 for the period from the Second Amendment Effective Date through the end of Fiscal Year 2015 of non-capitalized fees and expenses related to Permitted Acquisitions that have been completed.  For any period in which a Permitted Acquisition of a line of business or entity occurs, Adjusted EBITDA shall be calculated on a pro forma basis as if the acquired line of business or entity had been acquired on the first day of such

period.  Adjusted EBITDA for the Fiscal Quarter ending September 30, 2014 shall equal $9,737,868.

“Lender” means (a) each Person identified as a “Lender” on the signature pages hereof, (b) each Person that becomes a party hereto pursuant to an Assignment Agreement or a joinder agreement and (c) the respective successors and assigns of the foregoing.  References to the “Lenders” and to the “Revolving Lenders” shall include each Issuing Lender and the Swing Line Lender; for purposes of clarification only, to the extent that BMO Harris Bank N.A. (or any other Issuing Lender or successor Swing Line Lender) may have rights or obligations in addition to those of the other Lenders or the other Revolving Lenders, as applicable, due to its status as an Issuing Lender or the Swing Line Lender, its status as such will be specifically referenced.

“Term Percentage” means, as to any Term Lender, the percentage that (a) the outstanding principal amount of such Lender’s Term Loan is of (b) the aggregate outstanding principal amount of all Term Loans.  The Term Percentage of each Lender as of the Second Amendment Effective Date is set forth across from such Lender’s name on Schedule 2.1.

(c)Section 2.1.1 is amended in its entirety to read as follows:

2.1.1Revolving Loans.  Each Revolving Lender will make loans in Dollars to the Borrower on a revolving basis (“Revolving Loans”) during the period from the Effective Date to the Revolving Termination Date in an amount equal to such Revolving Lender’s Revolving Percentage of the aggregate amount of all Revolving Loans requested by the Borrower from time to time; provided that the Revolving Outstandings shall not at any time exceed the Revolving Commitment Amount; provided further that until such time as the Borrower delivers a Compliance Certificate demonstrating that the Total Leverage Ratio is equal to or less than 2.25 to 1.00 and the Borrower’s Adjusted EBITDA for the twelve-month period then ended is at least $70,000,000, the Revolving Outstandings shall not exceed $30,000,000 (for purposes of calculating Adjusted EBITDA in any Compliance Certificate delivered pursuant to this Section 2.1.1, the add-back in the definition of Adjusted EBITDA for non-capitalized fees and expenses related to Permitted Acquisitions shall be excluded).

(d)Section 2.1.2 is amended in its entirety to read as follows:

2.1.2Letters of Credit.  (a) Each Issuing Lender will issue standby letters of credit (each a “Letter of Credit”) in Dollars at the request of and for the account of the Borrower from time to time, subject to Section 2.3, before the date that is 30 days prior to the scheduled Revolving Termination Date, and (b) as more fully set forth in Section 2.3, each Revolving Lender agrees to purchase a participation in each Letter of Credit; provided that (x) the aggregate Stated Amount of all Letters of Credit shall not at any time exceed $10,000,000 and (y) the Revolving Outstandings shall not at any time exceed the Revolving Commitment Amount;

provided further until such time as the Borrower delivers a Compliance Certificate demonstrating that the Total Leverage Ratio is equal to or less than 2.25 to 1.00 and the Borrower’s Adjusted EBITDA for the twelve-month period then ended is at least $70,000,000, the Revolving Outstandings shall not exceed $30,000,000 (for purposes of calculating Adjusted EBITDA in any Compliance Certificate delivered pursuant to this Section 2.1.2, the add-back in the definition of Adjusted EBITDA for non-capitalized fees and expenses related to Permitted Acquisitions shall be excluded). 

(e)Section 2.1.3 is amended in its entirety to read as follows:

2.1.3Term Loans.  

(a)On the Effective Date, each Term Lender made a term loan (each, an “Initial Term Loan”) in Dollars to the Borrower in the amount set forth on Part A of Schedule 2.1.3.  The aggregate amount of Initial Term Loans on the Effective Date was $40,000,000.  

(b)Prior to the Second Amendment Effective Date, certain Term Lenders made Incremental Term Loans to the Borrower in the amounts set forth on Part B of Schedule 2.1.3 and in an aggregate amount of $20,000,000 (the “Initial Incremental Term Loans” and together with the Initial Term Loans, the “Initial Loans”)

(c)On the Second Amendment Effective Date, each Add-On Term Lender will make a term loan (each, an “Add-On Term Loan”, and together with the Initial Loans and any Incremental Term Loans made pursuant to Section 2.5, the “Term Loans”) in Dollars in the amount set forth on Part C of Schedule 2.1.3.  The aggregate amount of all Add-On Term Loans on the Second Amendment Effective Date is $50,000,000.

(c)Term Loans that are repaid may not be reborrowed.

(f)Section 2.4.1

2.4.1.Swing Line Loans.  Subject to the terms and conditions of this Agreement, the Swing Line Lender may from time to time, in its discretion, make loans to the Borrower (collectively the “Swing Line Loans” and individually each a “Swing Line Loan”) in accordance with this Section 2.4 in an aggregate amount not at any time exceeding $10,000,000; provided that the Revolving Outstandings shall not at any time exceed the Revolving Commitment Amount; provided further that until such time as the Borrower delivers a Compliance Certificate demonstrating that the Total Leverage Ratio is equal to or less than 2.25 to 1.00 and the Borrower’s Adjusted EBITDA for the twelve-month period then ended is at least $70,000,000, the Revolving Outstandings shall not exceed $30,000,000 (for purposes of calculating Adjusted EBITDA in any Compliance Certificate delivered pursuant to this Section 2.4.1, the add-back in the definition of Adjusted EBITDA for non-capitalized fees and expenses related to Permitted Acquisitions

shall be excluded).  Amounts borrowed under this Section 2.4 may be borrowed, repaid and (subject to the agreement of the Swing Line Lender) reborrowed until the Revolving Termination Date.  Swing Line Loans shall be Base Rate Loans. 

(g)Section 2.5(a) is amended in its entirety to read as follows:

(a)If no Unmatured Event of Default or Event of Default exists, the Borrower may, by written notice (substantially in the form of Exhibit I) to the Administrative Agent (which shall promptly advise each Lender) request the making of an additional tranche of term loans (each an “Incremental Term Loan”) by an amount for all such requests, plus the amount of any increases in the Revolving Commitments pursuant to Section 2.6, not to exceed $40,000,000 from and after the Second Amendment Effective Date; provided that any such request shall (x) be in a minimum amount of $5,000,000 or a higher integral multiple of $1,000,000 and (y) set forth the date that the Borrower proposes the Incremental Term Loans be made, the requested amount and the proposed terms of the Incremental Term Loans.  At the time of sending such notice, the Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Lenders).

(h)Section 2.5(e) is amended in its entirety to read as follows:

(e)The Incremental Term Loans shall be on the same terms as the Term Loans made prior to such date with an amortization schedule in accordance with Schedule 6.1(b).  The supplement to this Agreement referenced in Section 2.5(f) may, without the consent of any Lender that is not an Incremental Lender, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent to effect the provisions of this Section 2.5, including an amortization schedule that sets forth the amounts of each amortization payment in accordance with Schedule 6.1(b).

(i)Section 2.5(h) is amended in its entirety to read as follows:

(h)The Incremental Term Loans, shall constitute Term Loans under, and shall be entitled to all the benefits afforded by, this Agreement and the other Loan Documents and shall, without limiting the foregoing, benefit equally and ratably with respect to the security interests created by the Collateral Documents.  The Loan Parties shall take any actions reasonably required by the Administrative Agent to ensure and/or demonstrate that the Lien and security interests granted by the Collateral Documents continue to be perfected under the Uniform Commercial Code (as defined in the Security Agreement) or other Applicable Law relating to the perfection of security interests after giving effect to the establishment of the Incremental Term Loans.

(j)Section 2.6(a) is amended in its entirety to read as follows: 

(a)Request for Increase.  Provided there exists no Unmatured Event of Default or Event of Default, upon notice (substantially in the form of Exhibit I) to the Administrative Agent (which shall promptly notify the Lenders), the Borrower may from time to time request an increase in the Revolving Commitments by an amount for all such requests, plus the amount of any Incremental Term Loans, not to exceed $40,000,000 from and after the Second Amendment Effective Date; provided that (i) any such request for an increase shall be in a minimum amount of $5,000,000 or a higher integral multiple of $1,000,000 and (ii) the Borrower may make a maximum of three such requests.  At the time of sending such notice, the Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Revolving Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Revolving Lenders).

(k)Section 6.1 is amended in its entirety to read as follows:

6.1Repayment of Loans.  (a)  The Initial Loans and the Add-On Term Loans shall be repaid in installments on the dates and in the amounts set forth on Schedule 6.1(a) and the Incremental Term Loans shall be repaid in installments on the dates and in the amounts set forth on Schedule 6.1(b), in each case, with a final installment on the Term Maturity Date in an amount equal to the then unpaid principal balance of such Term Loans.  Each such installment shall be applied to repay such Term Loans of the Term Lenders according to their respective Term Percentages.

(l)Section 12.1 is amended by replacing the term “Term Loans” with “Initial Term Loans” in each place where it appears therein.

(m)Schedule 2.1 of the Credit Agreement is replaced with Schedule 2.1 attached hereto.

(n)Schedule 2.1.3 attached hereto is added to the Credit Agreement.

(o)Schedule 6.1 of the Credit Agreement is replaced with Schedules 6.1(a) and 6.1(b) attached hereto.

(p)Schedule 9.14 of the Credit Agreement is replaced with Schedule 9.14 attached hereto.

3.Representations and Warranties. Each Loan Party represents and warrants to the Administrative Agent and the Lenders that:

(a)Authorization; No Conflict.  The execution, delivery and performance by such Loan Party of this Amendment, and the consummation of the transactions contemplated hereby, (i) are within such Loan Party’s limited liability company, limited partnership or corporate powers, as applicable, (ii) have been duly authorized by all

necessary limited liability company, limited partnership or corporate action, as applicable, (iii) do not contravene (x) such Loan Party’s organizational documents or (y) any law, regulation or contractual restriction binding on or affecting such Loan Party and (iv) will not result in or require the creation or imposition of any Lien upon or with respect to any of the properties of such Loan Party or any of its Subsidiaries.  

(b)Governmental Approvals.  No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or regulatory body or any other third party is required for the due execution, delivery and performance by such Loan Party of this Amendment.

(c)Enforceability.  This Amendment has been duly executed and delivered by such Loan Party and is the legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms, except as affected by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws relating to or affecting the enforcement of creditors’ rights generally and/or (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity).

(d)Representations and Warranties.  On the date hereof, each representation and warranty set forth in Section 9 of the Credit Agreement, as amended by this Amendment, is true and correct in all material respects on and as of the date hereof with the same effect as if made on and as of the date hereof (except to the extent any such representation or warranty is expressly stated to have been made as of a specific date, in which case such representation or warranty was true and correct as of such date).

(e)No Default.  No Event of Default or Unmatured Event of Default exists or will exist after giving effect to this Amendment.

4.Effectiveness. This Amendment shall become effective on the date (the “Second Amendment Effective Date”) when the Administrative Agent has received each of the following, in form and substance satisfactory to the Administrative Agent:

(a)counterparts of this Amendment signed by each Loan Party, the Administrative Agent, each Add-On Term Lender and the Required Lenders;

(b)a certificate signed by each Loan Party certifying that the representations and warranties set forth in Sections 3(a) through 3(e) are true and correct;

(c)favorable opinions of Baker & Hostetler LLP, counsel to the Loan Parties, addressed to the Lenders and the Administrative Agent;

(d)evidence that concurrently with the effectiveness of this Amendment, the Borrower will acquire Global HR Research, LLC;

(e)certified copies of all documents evidencing any necessary corporate (or other similar) action, and any material third-party consents and governmental approvals

(if any) required for the execution, delivery and performance (including the intended use of the Add-On Term Loans) by each Loan Party of this Amendment; 

(f)certified copies of resolutions of the Governing Body of each Loan Party authorizing or ratifying the execution, delivery and performance by such Person of this Amendment;

(g)certified copies of Uniform Commercial Code and other lien search reports dated a date reasonably near to the Second Amendment Effective Date, listing all effective financing statements that name any Loan Party (under its present name and any previous names) as debtor, together with copies of such financing statements;

(h)a pro forma Compliance Certificate giving effect to the Acquisition of Global HR Research, LLC and the Add-On Term Loans;

(i)all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act;

(j)certification that since December 31, 2014, there has been no event that constitutes or would reasonably be expected to have a Material Adverse Effect;

(k)evidence that all fees and other amounts that are then due and payable pursuant to the Fee Letter dated as of June 29, 2015 between the Borrower and BMO Capital Markets Corp. and pursuant to Section 15.6 of the Credit Agreement shall have been paid;

(l)a joinder agreement with respect to any Add-On Lender that was not a party to the Credit Agreement;

(m)evidence that on the Second Amendment Effective Date, after giving effect to the Add-On Term Loans and the Acquisition described in Section 4(h), the Borrower has a Total Leverage Ratio of less than 3.0 to 1.0; provided that solely for purposes of this Section 4(m), Total Leverage Ratio shall be calculated by including in Total Debt the unused portion of the Revolving Commitment Amount and excluding from Total Debt the amount of any Capitalized Lease Obligations;

(n)the Revolving Oustandings shall not be greater than $30,000,000; and

(o)such other documents as the Administrative Agent or any Lender may reasonably request.

5.Continuing Effectiveness, etc.

(a)Except to the extent expressly set forth herein, all of the terms and conditions of the Credit Agreement and the other Loan Documents remain unchanged and in full force and effect.  Each Loan Party affirms that after giving effect to this Amendment, the Credit Agreement, as modified hereby, and each other Loan Document

to which any Loan Party is a party will remain in full force and effect and will continue to constitute a legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms except insofar as such enforcement may be limited by Debtor Relief Laws. 

(b)Upon the effectiveness hereof, all references to the Credit Agreement set forth in any other agreement or instrument shall, unless otherwise specifically provided, be references to the Credit Agreement as amended hereby.  

6.Miscellaneous.  The provisions of Sections 1.2, 15.6(a), 15.7, 15.9, 15.10, 15.11, 15.12, 15.16 and 15.17 of the Credit Agreement are incorporated herein by reference, mutatis mutandis.  

[Signature Page Follows]

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.

PATRIOT NATIONAL, INC.
By:	/s/ Steven M. Mariano
Name:	Steven M. Mariano
Title:	CEO
PATRIOT SERVICES, INC.
By:	/s/ Steven M. Mariano
Name:	Steven M. Mariano
Title:	CEO
PATRIOT BENEFITS ADMINISTRATORS, INC.
By:	/s/ Steven M. Mariano
Name:	Steven M. Mariano
Title:	CEO
PATRIOT CAPTIVE MANAGEMENT, INC.
By:	/s/ Steven M. Mariano
Name:	Steven M. Mariano
Title:	CEO
PATRIOT CARE, INC.
By:	/s/ Steven M. Mariano
Name:	Steven M. Mariano
Title:	CEO
PATRIOT CARE HOLDINGS, INC.
By:	/s/ Steven M. Mariano
Name:	Steven M. Mariano
Title:	CEO
PATRIOT CARE SERVICES, INC.
By:	/s/ Steven M. Mariano
Name:	Steven M. Mariano
Title:	CEO

PATRIOT CLAIM SERVICES, INC.
By:	/s/ Steven M. Mariano
Name:	Steven M. Mariano
Title:	CEO
PATRIOT LEGAL SERVICES, INC.
By:	/s/ Steven M. Mariano
Name:	Steven M. Mariano
Title:	CEO
PATRIOT RECOVERY SERVICES, INC.
By:	/s/ Steven M. Mariano
Name:	Steven M. Mariano
Title:	CEO
PATRIOT TECHNOLOGY SOLUTIONS, INC.
By:	/s/ Steven M. Mariano
Name:	Steven M. Mariano
Title:	CEO
VIKARAN TECHNOLOGY SOLUTIONS, INC.
By:	/s/ Steven M. Mariano
Name:	Steven M. Mariano
Title:	CEO
CORPORATE CLAIMS MANAGEMENT, INC.
By:	/s/ Steven M. Mariano
Name:	Steven M. Mariano
Title:	CEO
FORZA LIEN, INC.
By:	/s/ Steven M. Mariano
Name:	Steven M. Mariano
Title:	CEO

INSURELINX, INC.
By:	/s/ Steven M. Mariano
Name:	Steven M. Mariano
Title:	CEO
PATRIOT RISK SERVICES, INC.
By:	/s/ Christopher L. Pizzo
Name:	Christopher L. Pizzo
Title:	Secretary
PATRIOT CARE MANAGEMENT, INC.
By:	/s/ Christopher L. Pizzo
Name:	Christopher L. Pizzo
Title:	Vice-President, Secretary
PATRIOT UNDERWRITERS, INC.
By:	/s/ Christopher L. Pizzo
Name:	Christopher L. Pizzo
Title:	Secretary
CONTEGO INVESTIGATIVE SERVICES, INC.
By:	/s/ Christopher L. Pizzo
Name:	Christopher L. Pizzo
Title:	Vice-President
TRIGEN INSURANCE SOLUTIONS, INC.
By:	/s/ Christopher L. Pizzo
Name:	Christopher L. Pizzo
Title:	Vice-President, Secretary
TRIGEN HOSPITALITY GROUP, INC.
By:	/s/ Elizabeth M. Hensen
Name:	Elizabeth M. Hensen
Title:	Assistant Secretary

CWIBENEFITS, INC.
By:	/s/ Elizabeth M. Hensen
Name:	Elizabeth M. Hensen
Title:	Assistant Secretary

CONTEGO SERVICES GROUP, LLC
By:	Patriot Services, Inc., its Manager
	By:	/s/ Steven M. Mariano
	Name:	Steven M. Mariano
	Title:	CEO

CONTEGO RECOVERY, LLC
By:	Contego Services Group, LLC, its Manager
	By:	Patriot Services, Inc., its Manager
		By:	/s/ Steven M. Mariano
		Name:	Steven M. Mariano
		Title:	CEO

DECISION UR, LLC
By:	Patriot Technology Solutions, Inc., its Manager
	By:	/s/ Steven M. Mariano
	Name:	Steven M. Mariano
	Title:	CEO

BMO HARRIS BANK N.A., as Administrative Agent and a Lender
By:	/s/ Joan Spiotto Murphy
Name:	Joan Spiotto Murphy
Title:	Director
FIFTH THIRD BANK
By:	/s/ Gary Ladolcetta
Name:	Gary Ladolcetta
Title:	SVP
SUNTRUST
By:	/s/ Paula Mueller
Name:	Paula Mueller
Title:	Director
CITY NATIONAL BANK OF FLORIDA
By:	/s/ Gabriella Cioli
Name:	Gabriella Cioli
Title:	SVP – Corporate Banking
THE PRIVATEBANK AND TRUST COMPANY
By:	/s/ Andrew C. Haak
Name:	Andrew C. Haak
Title:	Managing Director

* All schedules and exhibits to this Exhibit 2.11 have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The schedules include a list of assumed customer contracts, assumed liabilities, wiring instructions, and licenses. The exhibits include the assignment and assumption agreement and the intellectual property assignment agreement. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.

EX-10.2

Exhibit 10.2

PATRIOT NATIONAL, INC.

ACQUISITION INCENTIVE PLANUNDER THE
PATRIOT NATIONAL, INC. 2014 OMNIBUS INCENTIVE PLAN

1.Purpose.  The purpose of this Patriot National, Inc. Acquisition Incentive Plan (the “Plan”) is to promote the interests of the Company and its shareholders by (i) retaining officers and other key employees of the Company and its subsidiaries and (ii) motivating such individuals to grow the business of the Company through one or more Acquisitions.  This Plan is established pursuant to Sections 4 and 10 of the Patriot National, Inc. 2014 Omnibus Incentive Plan (the “Omnibus Plan”) for the purpose of granting Other Cash-Based Awards.

2.Definitions.  All capitalized terms used in the Plan shall have the meanings set forth in Schedule A attached hereto.

3.Operation of the Plan.  Subject to applicable law, and in addition to other express powers and authorizations conferred on the Administrator by the Plan, the Administrator shall have full power and authority to: (i) designate Participants; (ii) determine the terms and conditions of the payment of any Incentive consistent with the provisions of the Plan; (iii) establish, amend, suspend, terminate or waive any terms or conditions of the Plan (subject to Section 5(g)); (iv) determine whether, to what extent, and under what circumstances and method(s) Incentives may be settled, canceled, forfeited, or suspended; (v) appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (vi) make any other determination and take any other action that the Administrator deems necessary or desirable for the administration of the Plan.  All determinations and other decisions under or with respect to the Plan shall be final, conclusive, and binding upon all Persons, including the Company, any Participant, any beneficiary of any Participant and any employee of the Company charged with implementing any such determinations or decisions. Neither of the Administrator or any of its designees shall be personally liable for any action or determination made in good faith with respect to the Plan hereunder.

4.Incentive Pool and Payments.

a)Establishment and Allocation of Incentive Pool.  On or prior to any Closing Date of an Acquisition, the Company shall establish an Incentive Pool in respect of such Acquisition in an amount based upon the Acquisition Incentive Plan Matrix, as determined by the Administrator in its sole discretion, with such Incentive Pool to be allocated to all or a portion of the Participants as the Administrator may determine in its sole discretion (and with the advice of and in consultation with the Executive Vice President of Mergers and Acquisitions, or any successor position); provided, however, that, in all events such portion of the Incentive Pool shall be fully allocated.

b)Payment of Incentives; Clawback.  Subject to the terms and conditions of the Plan and subject to the Participant’s continued employment with the Company or one of its subsidiaries through and including the applicable payment date, a Participant’s Incentive in respect of each Acquisition (if any) shall be paid in cash in a lump sum (unless otherwise determined by the Administrator) on the first payroll date following the Closing Date of such Acquisition (but in no event more than sixty (60) days following such Closing Date); provided that in the event the acquired entity, assets or business relating to an Acquisition does not meet or exceed certain target performance measures, objectives or metrics (set by the Administrator, in its discretion, in connection with the entry into or consummation of such Acquisition), then the Administrator may, in its sole discretion, (i) unilaterally require repayment of up to 50% (the “Clawback Amount”) of the proceeds of any Incentive paid to the Participant in respect of

such Acquisition or (ii) to the extent the Participant remains employed with the Company or its subsidiaries and is eligible to participate in the Plan, reduce (including down to zero) such Participant’s allocation of any future Incentive in connection with any future Acquisition by the Clawback Amount.   

5.General Provisions.

a)Nontransferability.  Any rights of a Participant to any Incentive under the Plan shall not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant otherwise than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company.

b)No Inclusion in Calculation of Benefits. Any payment hereunder represents a unique payment to a Participant, and any such amounts shall not be considered in calculating, or determining the level of entitlement to, any Participant’s salary or other compensation-related benefits (including, without limitation, bonus, pension and 401(k)).

c)Withholding.  The Company and its subsidiaries shall have the right and are hereby authorized to withhold from any payment due hereunder or from any compensation or other amount owing to a Participant by the Company or its subsidiaries, the amount of any applicable withholding taxes in respect of any payment hereunder, and the Company and its subsidiaries are further authorized to take such other action as may be necessary in the opinion of the Company or its subsidiaries to satisfy all obligations for the payment of such taxes.

d)No Right to Employment.  The participation of any Participant in the Plan shall not be construed as giving a Participant the right to be retained in the employ of, or in any consulting relationship to, the Company.  

e)Governing Law.  The validity, construction, and effect of the Plan shall be determined in accordance with the laws of the State of Delaware, without regard to conflict of laws provisions thereof.

f)No Trust or Fund Created.  The Plan is intended to constitute an “unfunded” bonus plan.  The Plan shall not create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant or any other Person.  To the extent that any Person acquires a right to receive payments from the Company pursuant to this Plan, such right shall be no greater than the right of any unsecured general creditor of the Company.

g)Amendment and Termination.  

i)The Committee may amend, alter, suspend, waive, discontinue or terminate the Plan or any portion thereof, at any time and from time to time; provided, however, that no such amendment, alteration, suspension, discontinuance or termination occurring after the Closing Date of any Acquisition shall adversely affect the rights of any Participant or any holder or beneficiary with respect to any unpaid Incentive amount in respect of such Acquisition, unless consented to, in writing, by the affected Participant or beneficiary thereof.  Notwithstanding the foregoing, nothing in this Section 5(g) shall impair the ability of the Administrator under clause 4(b)(ii) hereof to require repayment of any previously paid Incentive or unilaterally reduce the amount of future Incentives as provided therein.

ii)Without limiting the foregoing, the Plan shall remain in full force and effect until the earlier of (y) the date the Plan is terminated by the Committee (in its sole discretion) or (y) the date the Omnibus Plan is amended, restated or terminated.  Participants shall not be entitled to receive any

payments under the Plan with respect to any Acquisition whose Closing Date occurs after the termination of the Plan. 

h)Section 409A of the Code.  It is intended that the payments under the Plan will be exempt from the provisions of Section 409A of the Code (or comply with Section 409A of the Code, to the extent subject thereto). Notwithstanding other provisions of the Plan, no payment shall be granted, deferred, accelerated, extended, paid out or modified under this Plan in a manner that would result in the imposition of an additional tax under Section 409A of the Code upon a Participant.  In the event that it is reasonably determined by the Administrator that, as a result of Section 409A of the Code, payments under the Plan may not be made at the time contemplated by the terms of the Plan without causing the Participant receiving such payment to be subject to taxation under Section 409A of the Code, the Company will make such payment on the first day that would not result in the Participant incurring any tax liability under Section 409A of the Code.  For purposes of Section 409A of the Code, a Participant’s right to receive any installment payments shall be treated as a right to receive a series of separate and distinct payments.  If pursuant to the provisions of Section 409A of the Code any distribution or payment is required to be delayed as a result of a Participant being deemed to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then any such distributions or payments under the Plan shall not be made or provided prior to the earlier of (A) the expiration of the six month period measured from the date of the Participant’s separation from service (as defined under Section 409A of the Code) or (B) the date of the Participant’s death. The Company shall use commercially reasonable efforts to implement the provisions of this Section 5(h) in good faith; provided that none of the Company, the Administrator or any of the Company’s employees, directors or representatives shall have any liability to Participants with respect to this Section 5(h).

i)Successors and Assigns.  The Plan and the obligations of the Company hereunder shall be binding on its successors and assigns, whether by operation of law or otherwise.

Schedule A

Definitions

“Acquisition” shall mean the acquisition by the Company or any of its subsidiaries, whether by merger, equity sale, sale of assets or other business combination, of the voting or economic interests of any Person or business (or a subsidiary, a division or the assets of such Person or business); provided that an Acquisition shall not include any transaction that results in a Change in Control of the Company.  The Administrator shall determine, in its sole discretion, whether and when an Acquisition has occurred and such determination shall be conclusive and binding on the Company and all Participants.

“Acquisition Incentive Plan Matrix” shall mean the matrix set forth in Schedule B attached hereto.

“Administrator” shall mean the Chief Executive Officer of the Company, or such other committee or officer of the Company that the Committee may designate from time to time; provided that with respect to the Chief Executive Officer or any other “executive officer” (within the meaning of Rule 3b-7 of the Securities Exchange Act of 1934, as amended) of the Company (to the extent they are Participants under the Plan), the Administrator shall be the Committee.

“Board” shall mean the Board of Directors of the Company.

“Change in Control” shall have the meaning given to such term in the Patriot National, Inc. 2014 Omnibus Incentive Plan, as amended from time to time, or any successor plan thereto.

“Closing Date” shall mean, as to any Acquisition, the date on which the consummation of an Acquisition occurs.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Committee” ” shall mean the Compensation Committee of the Board or any properly delegated subcommittee thereof or, if no such Compensation Committee or subcommittee thereof exists, the Board.

“Company” shall mean Patriot National, Inc., a Delaware corporation.

“Deal Size” means the aggregate amount of any consideration paid, or payable, by or on behalf of the Company or its subsidiaries in connection with an Acquisition, whether in the form of cash, stock, debt securities, or otherwise. The Administrator shall determine, in its sole discretion, the Deal Size applicable to an Acquisition (including, without limitation, whether contingent payouts based upon “earn-outs”, amounts placed into escrow or the principal amount of all indebtedness assumed by the Company and its subsidiaries in connection with an Acquisition will be included in Deal Size).

“Incentive” shall mean a cash payment (representing a portion of the Incentive Pool) granted to a Participant pursuant to the terms of the Plan.

“Incentive Pool” shall mean a cash bonus pool that is established by the Company pursuant to the Plan and available for allocation by the Administrator to Participants, from time to time in connection with the closing of an Acquisition, in accordance with the Plan.

“Participant” shall mean any officer or key employee of the Company selected by the Administrator to receive an Incentive under the Plan.

“Person” shall mean a “person”, as such term is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (or any successor section thereto).

Schedule B

Acquisition Incentive Plan Matrix

Patriot National, Inc.
Acquisition Incentive Plan Matrix
$ in thousands
	Deal Size		Total
	Min	Max	Incentive Pool
	$                 -	$              500	5.00%
	501	1,000	4.80%
	1,001	1,500	4.60%
	1,501	2,000	4.40%
	2,001	2,500	4.20%
	2,501	3,000	4.00%
	3,001	3,500	3.80%
	3,501	4,000	3.60%
	4,001	4,500	3.40%
	4,501	5,000	3.20%
	5,001	5,500	3.00%
	5,501	6,000	2.80%
	6,001	6,500	2.60%
	6,501	7,000	2.40%
	7,001	7,500	2.20%
	7,501	8,000	2.00%
	8,001	8,500	1.80%
	8,501	9,000	1.60%
	9,001	9,500	1.40%
	9,501	10,000	1.20%
	10,001	(Unlimited)	1.00%

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Steven M. Mariano, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 of Patriot National, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 12, 2015

/s/ Steven M. Mariano

Steven M. Mariano

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Thomas C. Shields, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 of Patriot National, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 12, 2015

/s/ Thomas C. Shields

Thomas C. Shields

Executive Vice President, Chief Financial

Officer and Treasurer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY

ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Patriot National, Inc. (the “Company”) for the quarterly period ended September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven M. Mariano, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 12, 2015

/s/ Steven M. Mariano

Steven M. Mariano

President and Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY

ACT OF 2002

In connection with the Annual Report on Form 10-Q of Patriot National, Inc. (the “Company”) for the quarterly period ended September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas C. Shields, Executive Vice President, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 12, 2015

/s/ Thomas C. Shields

Thomas C. Shields

Executive Vice President, Chief Financial

Officer and Treasurer

(Principal Financial Officer)

XML

Business Combinations - Aggregate Estimated Fair Values of the Net Assets Acquired (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Assets Acquired:
Goodwill	$ 119,408	$ 61,493
Business Acquisition
Assets Acquired:
Cash	4,069
Restricted cash	4,838
Accounts receivable	5,069
Fixed assets	2,002
Other assets	2,272
Goodwill	57,915
Intangible assets:
Total intangible assets	52,395
Total assets acquired	128,560
Liabilities assumed	15,081
Total net assets acquired	113,479
Business Acquisition | Customer & carrier relationships
Intangible assets:
Total intangible assets	31,039
Business Acquisition | Service contracts
Intangible assets:
Total intangible assets	320
Business Acquisition | Non-compete agreements
Intangible assets:
Total intangible assets	4,739
Business Acquisition | Developed technology
Intangible assets:
Total intangible assets	13,268
Business Acquisition | Trade name portfolio
Intangible assets:
Total intangible assets	$ 3,029

XML

Capital Lease Obligations - Schedule of Capital Lease Obligations for Future Payments Based on Interest Rate Swap Rate (Details) $ in Thousands	Sep. 30, 2015 USD ($)
Principal
2015	$ 397
2016	2,429
Total	2,826
Interest
2015	17
2016	51
Total	68
Payments on Capital Lease
2015	414
2016	2,480
Total	$ 2,894

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Goodwill and Other Intangible Assets - Schedule of Intangible Assets, their Original Fair Value, and their Net Book Values (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Finite Lived Intangible Assets [Line Items]
Gross asset	$ 87,195	$ 34,800
Accumulated amortization	(8,260)	(1,812)
Net asset	78,935	32,988
Service contracts
Finite Lived Intangible Assets [Line Items]
Gross asset	35,120	34,800
Accumulated amortization	(5,105)	(1,812)
Net asset	30,015	$ 32,988
Customer & carrier relationships
Finite Lived Intangible Assets [Line Items]
Gross asset	31,039
Accumulated amortization	(1,244)
Net asset	29,795
Non-compete agreements
Finite Lived Intangible Assets [Line Items]
Gross asset	4,739
Accumulated amortization	(914)
Net asset	3,825
Developed technology
Finite Lived Intangible Assets [Line Items]
Gross asset	13,268
Accumulated amortization	(894)
Net asset	12,374
Trade Names
Finite Lived Intangible Assets [Line Items]
Gross asset	3,029
Accumulated amortization	(103)
Net asset	$ 2,926

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Earnings Per Share - Components of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Basic net earnings (loss) per share
Net income (loss) available to common shareholders	$ 3,788	$ 16,902	$ (8)	$ 12,807
Weighted average number of common shares outstanding	26,802	16,368	26,006	14,981
Basic net earnings (loss) per share	$ 0.14	$ 1.03	$ 0.00	$ 0.85
Diluted net earnings (loss) per share
Net income (loss) available to common shareholders	$ 3,788	$ 16,902	$ (8)	$ 12,807
Adjustments to net income (loss) applicable to dilutive shares		(8,760)	(1,385)	(2,257)
Net earnings (loss) attributable to diluted shares	$ 3,788	$ 8,142	$ (8)	$ 10,550
Weighted average number of common shares outstanding	26,802	16,368	26,006	14,981
Dilutive effect of warrants, options, and restricted shares using the treasury stock method	1,138	1,183		1,202
Weighted average number of common and common equivalent shares outstanding	27,940	17,551	26,006	16,183
Diluted net earnings (loss) per share	$ 0.14	$ 0.46	$ 0.00	$ 0.65

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Goodwill and Other Intangible Assets - Additional Information (Details)	9 Months Ended
	Sep. 30, 2015 USD ($) Business
Goodwill And Intangible Assets Disclosure [Abstract]
Impairment of goodwill	$ 0
Goodwill acquired in acquisition	$ 57,915,000
Number Of Businesses Acquired | Business	17
Intangible assets acquired in acquisition	$ 52,400,000

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Components of Basic and Diluted EPS

The components of basic and diluted EPS are as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
In thousands (except earnings per share)	2015		2014			2015			2014
Basic net earnings (loss) per share
Net income (loss) available to common shareholders	$	3,788	$	16,902		$	(8	)	$	12,807
Weighted average number of common shares outstanding		26,802		16,368			26,006			14,981
Basic net earnings (loss) per share	$	0.14	$	1.03		$	(0.00	)	$	0.85
Diluted net earnings (loss) per share
Net income (loss) available to common shareholders	$	3,788	$	16,902		$	(8	)	$	12,807
Adjustments to net income (loss) applicable to dilutive shares		-		(8,760	)		-			(2,257	)
Net earnings (loss) attributable to diluted shares	$	3,788	$	8,142		$	(8	)	$	10,550
Weighted average number of common shares outstanding		26,802		16,368			26,006			14,981
Dilutive effect of warrants, options, and restricted shares   using the treasury stock method		1,138		1,183			-			1,202
Weighted average number of common and common equivalent shares   outstanding		27,940		17,551			26,006			16,183
Diluted net earnings (loss) per share	$	0.14	$	0.46		$	(0.00	)	$	0.65

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Stock-Based Compensation - Additional Information (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015 USD ($) shares	Sep. 30, 2015 USD ($) Installments shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock option vesting installments | Installments		3
Number of stock options awarded		1,366,791
Number of stock options forfeited		129,013
Number of stock options outstanding	1,237,778	1,237,778
Aggregate intrinsic value of options outstanding | $	$ 1,932	$ 1,932
Stock compensation expense | $	2,586	$ 8,791
Employee Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock award expiration period		10 years
Stock recognized compensation expense associated with these options | $	1,200	$ 1,200
Total unrecognized compensation cost related to unvested stock options | $	2,900	$ 2,900
Weighted average period of recognition for costs not yet recognized		3 years
Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock recognized compensation expense associated with these options | $	6,800	$ 6,800
Total unrecognized compensation cost related to unvested stock options | $	$ 5,900	$ 5,900
Weighted average period of recognition for costs not yet recognized		3 years
Restricted shares granted		906,362
Restricted shares forfeited		22,059
Restricted shares vested		310,652
Unvested restricted shares outstanding at end of period	573,651	573,651
Restricted Stock Awards | Directors Officers and Key Employees
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted shares granted		906,362
Restricted shares forfeited		22,059
Restricted shares vested		310,652
Unvested restricted shares outstanding at end of period	573,651	573,651
Unvested restricted shares outstanding , total fair value | $		$ 8,300
Restricted Stock Unit
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total unrecognized compensation cost related to unvested stock options | $	$ 2,000	$ 2,000
Weighted average period of recognition for costs not yet recognized		3 years
Restricted shares granted		193,290
Restricted shares forfeited		11,655
Unvested restricted shares outstanding at end of period	181,635	181,635
Unvested restricted shares outstanding , total fair value | $		$ 2,700
Stock compensation expense | $		$ 800

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Subsequent Events

9 Months Ended

Sep. 30, 2015

Subsequent Events [Abstract]

Subsequent Events

17.Subsequent Events

On October 5, 2015 the Company publicly filed a registration statement on Form S-1 with the SEC relating to a proposed public offering by the Company and certain selling stockholders of $80.0 million of common stock. In response to market conditions, on October 20, 2015, the Company filed a Form RW with the SEC withdrawing the registration statement.

On October 29, 2015, TriGen Insurance Solutions, Inc. (“TriGen”) entered into a Facilitation Agreement with The Carman Corporation, a Pennsylvania corporation (“Carman”), pursuant to which Carman will provide Trigen with certain market-finding and consulting activities for an upfront payment of $2.0 million. In conjunction with the Facilitation Agreement, TriGen also entered into a Managing Producer Agreement with AmTrust International Underwriters Limited (“AmTrust”) as of October 15, 2015 pursuant to which TriGen will provide a hospitality-focused insurance program for AmTrust.

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Notes Payable and Lines of Credit - Notes Payable (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Notes payable, Gross	$ 107,875	$ 119,573
Less original issue discount		(3,085)
Less value attributable to stock warrants		(5,667)
Notes Payable and Current Portion of Notes Payable	107,875	110,821
Less current portion of notes payable	(5,500)	(15,782)
Notes payable	102,375	95,039
BMO Senior Secured Term Loans
Debt Instrument [Line Items]
Notes payable, Gross	$ 107,875
PennantPark Loan Agreement
Debt Instrument [Line Items]
Notes payable, Gross		63,285
UBS Credit Agreement
Debt Instrument [Line Items]
Notes payable, Gross		$ 56,288

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Equity and Fixed Income Security Investments - Additional Information (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Investments Debt And Equity Securities [Abstract]
Equity and fixed income security investments	$ 3,249,000	$ 0

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Business Combinations - Additional Information (Details)		3 Months Ended		9 Months Ended		12 Months Ended
	Aug. 21, 2015 USD ($) shares	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) Business	Sep. 30, 2014 USD ($)	Dec. 31, 2016 USD ($)
Business Acquisition [Line Items]
Number Of Businesses Acquired | Business				17
Business acquisition, contingent consideration liability		$ 12,100,000		$ 12,100,000
Business acquisition, cash paid				78,083,000
Total revenues		58,523,000	$ 45,469,000	148,848,000	$ 77,019,000
Business acquisition, deferred purchase consideration				16,831,000
Asset impairment charges				0	0
Net income or loss		$ 3,788,000	$ 16,902,000	(8,000)	$ 12,807,000
Global HR Research LLC
Business Acquisition [Line Items]
Business acquisition, cash paid	$ 24,000,000			23,500,000
Business acquisition, amount held in escrow	$ 500,000
Business acquisition, stock consideration | shares	444,096
Business acquisition, number of shares issued | shares	349,645
Business acquisition, number of shares held in escrow | shares	94,451
Business acquisition, deferred purchase consideration, shares | shares	618,478
Business acquisition, deferred purchase consideration, cash	$ 10,477,017			$ 11,400,000
Business acquisition, deferred purchase consideration, description				The Deferred Consideration is payable solely to In Touch Holdings LLC, one of the former principal stockholders of Global HR, on the earlier of (x) November 20, 2015, (y) the 21st day after the date we mail an information statement to the shareholders in connection with the Global HR Acquisition or (z) we file a registration statement with the SEC that is declared effective. As of the filing date, no decision has been made on the settlement of Deferred Consideration in cash or stock. If the revenues for Global HR for its fiscal year 2016 are less than $12.8 million, then In Touch Holdings LLC will forfeit and return 10% of its Stock Consideration and Deferred Stock Consideration to us.
Business acquisition, deferred purchase consideration				$ 11,920,000
Business acquisition, deferred purchase consideration amount held in escrow				500,000
TriGen Holding Group, Inc
Business Acquisition [Line Items]
Business acquisition, cash paid				3,340,000
Business acquisition, deferred purchase consideration				4,911,000
Business Acquisition
Business Acquisition [Line Items]
Total revenues				21,700,000
Net income or loss				2,100,000
Fiscal year 2016 | Global HR Research LLC
Business Acquisition [Line Items]
Stock consideration and deferred stock consideration percentage						10.00%
Maximum
Business Acquisition [Line Items]
Business Combination Aggregate Earnout Obligation related to acquisitions				$ 15,200,000
Acquired finite lived intangible assets useful life				10 years
Discount rate				30.00%
Maximum | Customer & carrier relationships
Business Acquisition [Line Items]
Acquired finite lived intangible assets useful life				10 years
Maximum | Non-compete agreements
Business Acquisition [Line Items]
Acquired finite lived intangible assets useful life				2 years
Maximum | Trade Names
Business Acquisition [Line Items]
Acquired finite lived intangible assets useful life				7 years
Maximum | Fiscal year 2016 | Global HR Research LLC
Business Acquisition [Line Items]
Total revenues						$ 12,800,000
Minimum
Business Acquisition [Line Items]
Acquired finite lived intangible assets useful life				2 years
Discount rate				17.00%
Minimum | Non-compete agreements
Business Acquisition [Line Items]
Acquired finite lived intangible assets useful life				1 year
Minimum | Trade Names
Business Acquisition [Line Items]
Acquired finite lived intangible assets useful life				5 years

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Notes Payable and Lines of Credit - UBS Credit Agreement - Additional Information (Details) - UBS Credit Agreement - USD ($) $ in Millions		9 Months Ended
	Aug. 06, 2014	Sep. 30, 2015
Debt Instrument [Line Items]
Credit facility term	5 years
Aggregate principal amount	$ 57.0
Debt instrument maturity date		Aug. 06, 2019

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Warrant Redemption Liability - Additional Information (Details) - USD ($)	9 Months Ended
	Sep. 30, 2015	Jan. 22, 2015	Dec. 31, 2014	Aug. 06, 2014	Nov. 27, 2013
Class Of Warrant Or Right [Line Items]
Warrant redemption liability			$ 12,879,000
Warrants outstanding, value			(5,667,000)
Common Stock | Previous Lenders
Class Of Warrant Or Right [Line Items]
Warrant redemption liability	$ 0
Warrant exercised detachable common stock		965,700
Warrant issued detachable common stock		1,110,555
Exercise price of warrants		$ 2.67
Remaining detachable common stock warrants		144,855
Warrants expiration date	Nov. 27, 2023
Common Stock | New Lenders
Class Of Warrant Or Right [Line Items]
Warrant issued detachable common stock					626,295
Exercise price of warrants					$ 2.67
Warrants expiration date	Nov. 27, 2023
Warrants outstanding, value			7,300,000
Common Stock | Additional Tranche
Class Of Warrant Or Right [Line Items]
Warrant issued detachable common stock				484,260
Exercise price of warrants				$ 2.67
Warrants expiration date	Nov. 27, 2023
Warrants outstanding, value			$ 5,600,000

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Fair Value Measurement of Financial Liabilities - Summary of Fair Value Measurement of Equity and fixed Income Security Investments (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Equity and fixed income security investments	$ 3,249,000	$ 0
Common and preferred stocks
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Equity and fixed income security investments	388,000
Corporate notes and bonds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Equity and fixed income security investments	2,861,000
Quoted Prices in Active Markets for Identical Securities (Level 1)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Equity and fixed income security investments	3,249,000
Quoted Prices in Active Markets for Identical Securities (Level 1) | Common and preferred stocks
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Equity and fixed income security investments	388,000
Quoted Prices in Active Markets for Identical Securities (Level 1) | Corporate notes and bonds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Equity and fixed income security investments	$ 2,861,000

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Goodwill and Other Intangible Assets - Summary of Changes in Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Balance as of December 31, 2014	$ 61,493
Goodwill acquired	57,915
Balance as of September 30, 2015	$ 119,408

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Description of Business and Basis of Presentation

9 Months Ended

Sep. 30, 2015

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Description of Business and Basis of Presentation

1. Description of Business and Basis of Presentation

Description of Business

Patriot National, Inc. (“Patriot National” or the “Company”) is an independent national provider of comprehensive technology-enabled outsourcing solutions that help insurance carriers, employers and other clients mitigate risk, comply with complex regulations, and save time and money. We offer a full suite of end-to-end insurance related and specialty services that allow our clients to improve efficiencies and reduce expenses through our value-added processes. The core of our value proposition includes the benefit of a “one-stop” solution with our broad array of offered services, scalable state-of-the-art technology, and solutions to complex business and regulatory processes. Our goal is to be the preferred provider of mandatory employer services such as risk management services, health and welfare services, employee onboarding and compliance services.

The Company offers two types of services: front-end services, such as brokerage, underwriting and policyholder services, and back-end services, such as claims adjudication and administration. We provide our services either on an individual basis, as bundles of two or more services tailored to a client’s specific needs or on a turnkey basis where we provide a comprehensive set of front-end and back-end services to a client. We also offer specialty services currently including technology outsourcing and other IT services, as well as employment pre-screening and background checks. As a service company, we do not assume any underwriting or insurance risk.

Our revenue is primarily fee-based, most of which is contractually committed or highly recurring. Unlike our insurance and reinsurance carrier clients, we do not generate underwriting income or assume underwriting risk on workers’ compensation plans. Patriot National is headquartered in Ft. Lauderdale, Florida.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements have been omitted pursuant to such rules and regulations. Included for comparative purposes are our combined financial statements for the three and nine month periods ended September 30, 2014, which combined the financial activity of Patriot National with the results of an acquisition under common control.  This acquisition was completed on August 6, 2014.  The combined financial statements presented for the periods ended September 30, 2014 are the Statement of Operations and the Statement of Cash Flows.  This acquisition is discussed fully in our annual report for the year ended December 31, 2014.

The unaudited consolidated financial statements included herein are, in the opinion of management, prepared on a basis consistent with our audited combined financial statements for the year ended December 31, 2014 and include all normal recurring adjustments necessary for a fair presentation of the information set forth. The quarterly results of operations are not necessarily indicative of the results of operations to be reported for subsequent quarters or the full year. These unaudited consolidated financial statements should be read in conjunction with the audited combined financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014. In the preparation of our unaudited consolidated financial statements as of September 30, 2015, management evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued for potential recognition or disclosure therein.

For Contego Services Group, LLC (“Contego Services Group”), the Company’s combined subsidiary that is 97% owned, and for DecisionUR, LLC (“DecisionUR”), the Company’s combined subsidiary that is 98.8% owned, the third party holdings of equity interests are referred to as non-controlling interest. The portion of the third party members’ equity (deficit) of Contego Services Group and DecisionUR are presented as non-controlling interest in the accompanying consolidated balance sheets as of September 30, 2015 and combined balance sheet as of December 31, 2014. The Company discloses the following three measures of net income (loss): (i) net income (loss), including non-controlling interest in subsidiary, (ii) net income (loss) attributable to non-controlling interest in subsidiary, and (iii) net income (loss).

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Fair Value Measurement of Financial Liabilities - Additional Information (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Fair Value Disclosures [Abstract]
Equity and fixed income security investments	$ 3,249,000	$ 0

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Fixed Assets and Other Long Term Assets - Additional Information (Details)	9 Months Ended
	Sep. 30, 2015
Computer Equipment
Property Plant And Equipment [Line Items]
Estimated useful life	5 years
Software
Property Plant And Equipment [Line Items]
Estimated useful life	3 years
Furniture and Fixtures
Property Plant And Equipment [Line Items]
Estimated useful life	7 years
Building
Property Plant And Equipment [Line Items]
Estimated useful life	39 years
Capitalized Policy and Claims Administration System Development Costs
Property Plant And Equipment [Line Items]
Estimated useful life	5 years

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Fixed Assets And Other Long Term Assets(Tables)

9 Months Ended

Sep. 30, 2015

Fixed Assets And Other Long Term Assets [Abstract]

Major Classes of Fixed Assets

As of September 30, 2015 and December 31, 2014, our major classes of fixed assets consisted of the following:

In thousands	September 30, 2015			December 31, 2014
	(Unaudited)
Fixed Assets
Computer equipment, software and furniture and fixtures	$	7,640		$	5,722
Building		1,428			-
Leasehold improvements		3,534			2,545
Total fixed assets		12,602			8,267
Less accumulated depreciation and amortization		(7,804	)		(6,388	)
Fixed assets, net of accumulated depreciation and amortization	$	4,798		$	1,879

Other Long Term Assets

As of September 30, 2015 and December 31, 2014, other long term assets consisted of the following:

In thousands	September 30, 2015			December 31, 2014
	(Unaudited)
Other long term assets
Capitalized policy and claims administration system development costs	$	17,016		$	13,093
Less accumulated depreciation		(5,459	)		(3,251	)
Other long term assets, net of accumulated depreciation	$	11,557		$	9,842

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Equity and Fixed Income Security Investments (Tables)

9 Months Ended

Sep. 30, 2015

Investments Debt And Equity Securities [Abstract]

Schedule of Major Classes of Investments

As of September 30, 2015, our major classes of investments consisted of the following:

	September 30, 2015
In thousands	Cost Basis		Gains		Losses			Fair Value
	(Unaudited)
Equity and Fixed Income Security Investments
Common and preferred stocks	$	429	$	—	$	(41	)	$	388
Corporate notes and bonds		2,969		—		(108	)		2,861
Total	$	3,398	$	—	$	(149	)	$	3,249

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Earnings Per Share - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Schedule Of Earnings Per Share Basic And Diluted [Line Items]
Net income (loss) available to common shareholders	$ 3,788	$ 16,902	$ (8)	$ 12,807
Basic net loss per share	$ 0.14	$ 1.03	$ 0.00	$ 0.85
Diluted net loss per share	$ 0.14	$ 0.46	$ 0.00	$ 0.65
Common Stock Warrants
Schedule Of Earnings Per Share Basic And Diluted [Line Items]
Weighted average outstanding detachable shares not dilutive			160,295
Contingent Purchase Consideration
Schedule Of Earnings Per Share Basic And Diluted [Line Items]
Weighted average outstanding detachable shares not dilutive			107,070
Restricted Shares and Stock Options
Schedule Of Earnings Per Share Basic And Diluted [Line Items]
Weighted average outstanding detachable shares not dilutive			114,634

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Fixed Assets and Other Long Term Assets - Major Classes of Fixed Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Fixed Assets
Fixed assets	$ 12,602	$ 8,267
Less accumulated depreciation and amortization	(7,804)	(6,388)
Fixed assets, net of accumulated depreciation and amortization	4,798	1,879
Computer Equipment, Software and Furniture and Fixtures
Fixed Assets
Fixed assets	7,640	5,722
Building
Fixed Assets
Fixed assets	1,428
Leasehold Improvements
Fixed Assets
Fixed assets	$ 3,534	$ 2,545

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2015

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Changes in Goodwill

Changes in goodwill are summarized as follows:

In thousands
Balance as of December 31, 2014	$	61,493
Goodwill acquired		57,915
Balance as of September 30, 2015	$	119,408

Schedule of Intangible Assets Including Original Fair Values and Net Book Values

The intangible assets, their original fair values, and their net book values are detailed below as of the dates presented:

	September 30, 2015							December 31, 2014
In thousands	Gross Asset		Accumulated Amortization			Net Asset		Gross Asset		Accumulated Amortization			Net Asset
	(Unaudited)
Intangible Assets
Service contracts	$	35,120	$	(5,105	)	$	30,015	$	34,800	$	(1,812	)	$	32,988
Customer and carrier relationships		31,039		(1,244	)		29,795		—		—			—
Non-compete agreements		4,739		(914	)		3,825		—		—			—
Developed technology		13,268		(894	)		12,374		—		—			—
Trade names		3,029		(103	)		2,926		—		—			—
Total	$	87,195	$	(8,260	)	$	78,935	$	34,800	$	(1,812	)	$	32,988

Schedule of Estimated Future Amortization Expense of Intangible Assets

The table below reflects the estimated amortization expense for the Company’s intangible assets for each of the next five years and thereafter:

In thousands	September 30, 2015
Amortization expense	(Unaudited)
2015 (remaining three months)	$	3,286
2016		13,140
2017		11,625
2018		10,770
2019		10,770
Thereafter		29,344
Total	$	78,935

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Notes Payable and Lines of Credit (Tables)

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Notes Payable

As of September 30, 2015 and December 31, 2014, notes payable were comprised of the following:

In thousands	September 30, 2015			December 31, 2014
	(Unaudited)
BMO Senior Secured Term Loans	$	107,875		$	—
PennantPark Loan Agreement		—			63,285
UBS Credit Agreement		—			56,288
Gross Notes Payable and Current Portion of Notes Payable		107,875			119,573
Less original issue discount		—			(3,085	)
Less value attributable to stock warrants		—			(5,667	)
Notes Payable and Current Portion of Notes Payable		107,875			110,821
Less current portion of notes payable		(5,500	)		(15,782	)
Notes Payable	$	102,375		$	95,039

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Consolidated Statements of Stockholders Equity (Deficit) (Unaudited) - 9 months ended Sep. 30, 2015 - USD ($) shares in Thousands, $ in Thousands	Total	MPCS	Common Stock	Additional Paid In Capital	Additional Paid In Capital MPCS	Accumulated Deficit	Non-Controlling Interest
Balance at Dec. 31, 2014	$ (28,261)		$ 14			$ (27,930)	$ (345)
Balance (in Shares) at Dec. 31, 2014			18,075
Issuance of common stock	97,831		$ 7	$ 97,824
Issuance of common stock, shares			7,350
Exercise of detachable common stock warrants, shares			965
Stock consideration issued for acquisitions	6,503			6,503
Stock consideration issued for acquisitions, shares			350
Restricted stock awards exercised			311
Stock compensation	8,791			8,791
Deemed dividend attributable to acquisition		$ (750)			$ (750)
Contribution of warrant redemption liability	1,499			1,499
Balance before Net Loss	85,613		$ 21	113,867		(27,930)	(345)
Balance before Net Loss, shares			27,051
Net (Loss) Income	103					(8)	111
Balance at Sep. 30, 2015	$ 85,716		$ 21	$ 113,867		$ (27,938)	$ (234)
Balance (in Shares) at Sep. 30, 2015			27,051

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Capital Lease Obligations (Tables)

9 Months Ended

Sep. 30, 2015

Capital Lease Obligations

Debt Instrument [Line Items]

Schedule of Future Payments on Capital Lease Obligations Based on Interest Rate Swap Rate

The Company’s obligations for future payments on the capital lease as of September 30, 2015, based on the interest rate swap rate in effect on that date, are as follows:

In thousands	Principal		Interest		Total
Payments on Capital Lease
2015	$	397	$	17	$	414
2016		2,429		51		2,480
Total	$	2,826	$	68	$	2,894

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Business Combinations - Summary of Unaudited Pro Forma Historical Results (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Business Combinations [Abstract]
Total revenues	$ 174,376	$ 141,658
Net (loss) income	$ 1,107	$ 14,508
Basic net (loss) income per share	$ 0.04	$ 0.97
Diluted net (loss) income per share	$ 0.04	$ 0.76

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Capital Lease Obligations - Additional Information (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Leases [Abstract]
Expiration of monthly payments on capital lease	Dec. 03, 2016
Capital lease obligation monthly lease payments	$ 206,000

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Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Current Assets
Cash	$ 15,209,000	$ 4,251,000
Equity and fixed income security investments	3,249,000	0
Total cash and investments	18,458,000	4,251,000
Restricted cash	16,289,000	6,923,000
Fee income receivable	13,372,000	1,942,000
Fee income receivable from related party	22,141,000	11,988,000
Net receivable from related parties	152,000	1,773,000
Deferred costs for initial public offering		2,682,000
Income taxes receivable	3,224,000
Other current assets	2,207,000	430,000
Total current assets	75,843,000	29,989,000
Fixed assets, net of depreciation	4,798,000	1,879,000
Deferred loan fees	2,343,000	5,911,000
Goodwill	119,408,000	61,493,000
Intangible assets	78,935,000	32,988,000
Other long term assets	11,557,000	9,842,000
Total Assets	292,884,000	142,102,000
Liabilities
Deferred claims administration services income	10,781,000	8,515,000
Net advanced claims reimbursements	7,040,000	6,803,000
Income taxes payable		11,548,000
Current earn-out payable	10,235,000
Accounts payable, accrued expenses and other liabilities	38,921,000	15,027,000
Deferred purchase consideration	16,831,000
Revolver borrowings outstanding	10,832,000
Current portion of notes payable	5,500,000	15,782,000
Current portion of capital lease obligation	2,409,000	2,332,000
Total current liabilities	102,549,000	60,007,000
Earn-out payable	1,827,000
Notes payable	102,375,000	95,039,000
Capital lease obligation	417,000	2,438,000
Warrant redemption liability		12,879,000
Total Liabilities	$ 207,168,000	$ 170,363,000
Equity (Deficit)
Preferred stock, $.001 par value; 100,000 shares authorized, no shares issued and outstanding as of September 30, 2015 and December 31, 2014
Common stock, $.001 par value; 1,000,000 shares authorized, 27,051 and 18,075 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively	$ 21,000	$ 14,000
Additional paid in capital	113,867,000
Accumulated deficit	(27,938,000)	(27,930,000)
Total Patriot National, Inc. Stockholders' Equity (Deficit)	85,950,000	(27,916,000)
Less Non-controlling interest	(234,000)	(345,000)
Total Equity (Deficit)	85,716,000	(28,261,000)
Total Liabilities and Equity (Deficit)	$ 292,884,000	$ 142,102,000

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Fixed Assets and Other Long Term Assets - Other Long Term Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Other long term assets
Capitalized policy and claims administration system development costs	$ 17,016	$ 13,093
Less accumulated depreciation	(5,459)	(3,251)
Other long term assets, net of accumulated depreciation	$ 11,557	$ 9,842

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Operating Activities
Net Income	$ 103	$ 12,875
Adjustments to reconcile net (loss) income to net cash from operating activities:
Net (Income) attributable to business generated by GUI, exclusive of depreciation expense		(2,252)
Depreciation and amortization	10,075	3,699
Amortization of loan discounts and loan costs	206	1,295
Decrease in fair value of warrant redemption liability	(1,385)	(2,257)
Stock compensation expense	8,791
Write-off of deferred financing and original issue discounts	9,342
Net realized losses (gains) on investments	149	(14,038)
Deferred income taxes		(482)
Provision for uncollectible fee income	351	100
Changes in certain assets and liabilities:
Fee income receivable	(8,212)	(719)
Fee income receivable from related party	(10,153)	(4,849)
Other current assets	(1,715)	(85)
Net payable to related parties	781	3,618
Deferred claims administration services income	539	569
Net advanced claims reimbursements	237	629
Income taxes payable	(14,081)	8,833
Accounts payable and accrued expenses	11,963	8,593
Net Cash Provided by Operating Activities	6,991	15,529
Investment Activities:
Net increase in restricted cash	(4,528)	(672)
Net increase in note receivable from related party		(492)
Purchase of equity securities	(3,662)	(3,914)
Proceeds from sale of equity securities	264	4,037
Purchase of fixed assets and other long-term assets	(4,565)	(437)
Acquisitions, net of $4,069 and $912 cash acquired in 2015 and 2014, respectively	(74,014)	(52,744)
Net Cash Used in Investment Activities	(86,505)	(54,222)
Financing Activities:
Proceeds from initial public offering, net	98,275
Proceeds from senior secured term loans, net of fees	107,497
Proceeds from notes payable, net of detachable common stock warrants and loan fees		55,290
Repayment of senior secured term loans	(2,125)
Payment of loan fees		(3,388)
Payment of costs for initial public offering	(2,479)
Revolver facility borrowings	51,900
Revolver facility repayments	(41,068)
Repayment of note payable	(119,573)	(6,656)
Repayment of capital lease obligation	(1,955)	(188)
Net Cash Provided by Financing Activities	90,472	45,058
Increase in cash	10,958	6,365
Cash, beginning of period	4,251	1,661
Cash, end of period	15,209	8,026
Net Loss Attributable to Business Generated by GUI, Exclusive of Depreciation Expense
GUI total net loss	(8)	12,807
Net Loss Attributable to Business Generated by GUI, Exclusive of Depreciation Expense		(2,252)
Non-Cash Capital Contribution Associated with Assets and Liabilities of GUI
Interest Paid	2,504	4,877
Income Taxes Paid	11,062	533
Non-Cash Stock Consideration Issued for the Acquisition of Global HR Research LLC	(6,503)
GUI
Adjustments to reconcile net (loss) income to net cash from operating activities:
Net (Income) attributable to business generated by GUI, exclusive of depreciation expense		(2,252)
Net Loss Attributable to Business Generated by GUI, Exclusive of Depreciation Expense
GUI total net loss		45
Depreciation expense		(2,297)
Net Loss Attributable to Business Generated by GUI, Exclusive of Depreciation Expense		(2,252)
Non-Cash Capital Contribution Associated with Assets and Liabilities of GUI
Fixed assets and other long term assets acquired from GUI		334
Elimination of balances payable to GUI		3,168
Change in capital lease obligation assumed from GUI		1,304
Note receivable transferred to GUI		(492)
Note payable associated with acquisition of assets and liabilities of GUI		(30,000)
Non-Cash Capital Contribution Associated with Assets and Liabilities		(25,686)
Non-Cash Financing Activities
Deemed dividend attributable to acquisition		(49,150)
Global HR Research LLC
Non-Cash Capital Contribution Associated with Assets and Liabilities of GUI
Non-Cash Stock Consideration Issued for the Acquisition of Global HR Research LLC	6,503
MPCS
Non-Cash Financing Activities
Deemed dividend attributable to acquisition	$ (750)
SPV2
Non-Cash Financing Activities
Deemed dividend attributable to acquisition		$ (6,750)

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Stock - Based Compensation - Schedule of Stock Option Activity (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($) $ / shares shares
Number of Shares
Number of shares , options granted | shares	1,366,791
Number of shares, options cancelled or forfeited | shares	(129,013)
Number of shares, options outstanding, ending balance | shares	1,237,778
Number of shares, options expected to vest at end of period | shares	1,238,000
Weighted Average Exercise Price Per Share
Weighted average exercise price, Granted	$ 14.40
Weighted average exercise price, Canceled or Forfeited	14.33
Weighted average exercise price, Outstanding at end of period	14.39
Weighted average exercise price, Expected to vest	$ 14.39
Weighted Average Remaining Contractual Term (In Years)
Weighted average remaining contractual term of Options Outstanding at end of period	9 years 4 months 24 days
Weighted average remaining contractual term of Options Expected to vest at end of period	9 years 4 months 24 days
Weighted average remaining contractual term of Options Exercisable at end of period	0 years
Aggregate Intrinsic Value
Aggregate intrinsic value of Options outstanding at September 30, 2015 | $	$ 1,932
Aggregate intrinsic value of Options Expected to vest at September 30, 2015 | $	$ 1,932

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Fair Value Measurement of Financial Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Summary of Fair Value Measurement of Financial Liabilities

The Company’s equity and fixed income security investments for which carrying values were equal to fair values, classified by level within the fair value hierarchy, were as follows as of September 30, 2015:

	Fair Value Measurement, Using
September 30, 2015 (in thousands)	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Common and preferred stocks	$	388	$	—	$	—	$	388
Corporate notes and bonds		2,861		—		—		2,861
Total	$	3,249	$	—	$	—	$	3,249

The Company’s notes payable, capital lease obligation, earnout obligations of acquisitions and warrant redemption liability, for which carrying values were equal to fair values, classified by level within the fair value hierarchy, were as follows as of September 30, 2015 and December 31, 2014:

	Fair Value Measurement, Using
September 30, 2015 (in thousands)	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Earnout payable on acquisitions	$	—	$	—	$	12,062	$	12,062
Deferred purchase consideration		—		—		16,831		16,831
Warrant redemption liability		—		—		—		—
Total	$	—	$	—	$	28,893	$	28,893
	Fair Value Measurement, Using
December 31, 2014 (in thousands)	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Earnout payable on acquisitions	$	—	$	—	$	—	$	—
Deferred purchase consideration		—		—		—		—
Warrant redemption liability		—		—		12,879		12,879
Total	$	—	$	—	$	12,879	$	12,879

Summary of Reconciliation of the Fair Value of Financial Liabilities

The following is a reconciliation of the fair value of the Company’s financial liabilities that were measured using significant unobservable (Level 3) inputs:

Nine Months Ended September 30, 2015 (in thousands)	Earnout Payable			Deferred Purchase Consideration		Warrant Redemption Liability			Total
Fair value, January 1, 2015	$	—		$	—	$	12,879		$	12,879
Record present value earnout payable    on acquisitions		19,163			—		—			19,163
Earnout payments made		(7,101	)		—		—			(7,101	)
Record deferred purchase consideration    on acquisitions		—			16,831		—			16,831
Exercise of warrants		—			—		(9,995	)		(9,995	)
Decrease in fair value of common stock and    warrant redemption liability		—			—		(1,385	)		(1,385	)
Contribute remaining liability balance    due to equity warrants		—			—		(1,499	)		(1,499	)
Fair Value, September 30, 2015	$	12,062		$	16,831	$	—		$	28,893

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Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands			3 Months Ended		9 Months Ended
	Jul. 31, 2015	Apr. 17, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Jul. 20, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
Fee income from related party			$ 23,773	$ 15,803	$ 68,852	$ 24,589
Fee income receivable from related party			22,141		22,141			$ 11,988
Global HR Research LLC
Related Party Transaction [Line Items]
Percentage of equity interests owned							75.50%
Shanfelter | In Touch Holdings L L C
Related Party Transaction [Line Items]
Percentage of equity interests owned							84.00%
Entities controlled by Mr. Mariano
Related Party Transaction [Line Items]
Fee income receivable from related party			200		200
Mr. Mariano | Vikaran Solutions, LLC; April 17, 2015
Related Party Transaction [Line Items]
Non-controlling interest ownership percentage		45.00%
Proceeds from sale of acquisition		$ 3,800
Guarantee Insurance
Related Party Transaction [Line Items]
Fee income from related party			23,800	$ 15,800	68,900	$ 24,600
Fee income receivable from related party			$ 22,100		$ 22,100			$ 12,000
MPCS
Related Party Transaction [Line Items]
Percentage of ownership interest by subsidiary	100.00%
Purchase consideration on acquisition of business	$ 1,500
MPCS | Subsidiary Issuer
Related Party Transaction [Line Items]
Percentage of ownership interest granted to subsidiary company			51.10%		51.10%
MPCS | Steven M Mariano
Related Party Transaction [Line Items]
Amount paid to beneficial owner on purchase of interest			$ 700
Remaining amount paid to beneficial owner on purchase of interest, upon approval					$ 700
MPCS | Sandeep Mehta
Related Party Transaction [Line Items]
Non-controlling interest ownership percentage							49.99%
MPCS | Steven J. Pazol
Related Party Transaction [Line Items]
Non-controlling interest ownership percentage							49.99%
MPCS | Satyapal Mehta
Related Party Transaction [Line Items]
Non-controlling interest ownership percentage							0.02%

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2015

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

14. Commitments and Contingencies

Contractual Obligations and Commitments

In connection with the Senior Secured Credit Facility as described in Note 7, Notes Payable and Lines of Credit, the common stock of the Company and the common stock or units of each of the Company’s wholly and majority owned subsidiaries were pledged as collateral.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

The Company has employment agreements with certain executives and other employees, which provide for compensation and certain other benefits and for severance payments under certain circumstances. The employment agreements contain clauses that become effective upon a change of control of the Company. Upon the occurrence of any of the defined events in the employment agreements, the Company would be obligated to pay certain amounts to the relevant employees.

The Company maintains cash at various financial institutions, and, at times, balances may exceed federally insured limits. Management does not believe this results in any material effect on the Company’s financial position or results of operations.

In the normal course of business, the Company may be party to various legal actions that management believes will not result in any material effect on the Company’s financial position or results of operations.

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Description of Business and Basis of Presentation - Additional Information (Details)	Sep. 30, 2015 Services
Description Of Business And Basis Of Presentation [Line Items]
Number of services offered	2
Contego Services Group, LLC
Description Of Business And Basis Of Presentation [Line Items]
Ownership interest percentage in the subsidiary	97.00%
DecisionUR, LLC
Description Of Business And Basis Of Presentation [Line Items]
Ownership interest percentage in the subsidiary	98.80%

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Income Taxes

9 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

Income Taxes

16. Income Taxes

The Company uses an estimated annual effective tax rate method of computing its interim tax provision. Certain items, including those deemed to be unusual, infrequent or that cannot be reliably estimated, are excluded from the estimated annual effective tax rates. In these cases, the actual tax expense or benefit applicable to that item is treated discretely and is reported in the same period as the related item. For the nine-month period ended September 30, 2015, the tax effects of warrants were treated as a discrete item.

The effective tax rate is based on forecasted annual pre-tax income, permanent differences and statutory tax rates. For the nine months ended September 30, 2015, the effective income tax rate was 44%. The main drivers of the difference in the effective tax rate from the statutory rate are warrants, success based fees, and meals and entertainment.

The Company and its subsidiaries are subject to U.S. federal income tax, as well as income tax in multiple states with heavy concentration in Florida, California, and Pennsylvania. The net deferred tax asset as of September 30, 2015 was $10.9 million before valuation allowance. A valuation allowance related to deferred tax assets is required when it is considered more likely than not that all or part of the benefit related to such assets will not be realized. In assessing the need for a valuation allowance, the Company considered both positive and negative evidence in concluding that a full valuation allowance was necessary against its net deferred tax assets at September 30, 2015.

At September 30, 2015 and December 31, 2014, the Company had no unrecognized tax benefits and no amounts recorded for uncertain tax positions.

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Income Taxes - Additional Information (Details) - USD ($)	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Effective income tax rate	44.00%
Deferred Tax Assets, Gross	$ 10,900,000
Unrecognized tax benefits	0	$ 0
Uncertain tax positions	$ 0	$ 0

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Combined Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Statement Of Cash Flows [Abstract]
Cash acquired for acquisition	$ 4,069	$ 912

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Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized	100,000,000	100,000,000
Preferred stock, issued	0	0
Preferred Stock, outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	1,000,000,000	1,000,000,000
Common stock, issued	27,051,000	18,075,000
Common Stock, outstanding	27,051,000	18,075,000

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Earnings Per Share

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Earnings Per Share

9. Earnings Per Share

Basic earnings per share is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include detachable common stock warrants and stock-based awards of restricted shares and stock options, and contingent shares attributable to deferred purchase consideration.

The components of basic and diluted EPS are as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
In thousands (except earnings per share)	2015		2014			2015			2014
Basic net earnings (loss) per share
Net income (loss) available to common shareholders	$	3,788	$	16,902		$	(8	)	$	12,807
Weighted average number of common shares outstanding		26,802		16,368			26,006			14,981
Basic net earnings (loss) per share	$	0.14	$	1.03		$	(0.00	)	$	0.85
Diluted net earnings (loss) per share
Net income (loss) available to common shareholders	$	3,788	$	16,902		$	(8	)	$	12,807
Adjustments to net income (loss) applicable to dilutive shares		-		(8,760	)		-			(2,257	)
Net earnings (loss) attributable to diluted shares	$	3,788	$	8,142		$	(8	)	$	10,550
Weighted average number of common shares outstanding		26,802		16,368			26,006			14,981
Dilutive effect of warrants, options, and restricted shares   using the treasury stock method		1,138		1,183			-			1,202
Weighted average number of common and common equivalent shares   outstanding		27,940		17,551			26,006			16,183
Diluted net earnings (loss) per share	$	0.14	$	0.46		$	(0.00	)	$	0.65

Due to the net loss of $8,000 reported for the nine months ended September 30, 2015, weighted average outstanding detachable common stock warrants of 160,295, contingent shares attributable to deferred purchase consideration of 107,070, and restricted shares and stock options of 114,634 were not dilutive.  As a result, basic and diluted earnings per share both reflect a net loss of $0.00 per share for the nine months then ended. Adjustments to net income (loss) attributable to dilutive shares for the three and nine months ended September 30, 2014 represent income generated from a decrease in the fair value of the warrants as reported on the statement of operations.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 12, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Trading Symbol	PN
Entity Registrant Name	Patriot National, Inc.
Entity Central Index Key	0001619917
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		27,050,694

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2015

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

10. Stock-Based Compensation

Omnibus Incentive Plan

On January 15, 2015, the Board of Directors approved the Patriot National 2014 Omnibus Incentive Plan (the “Omnibus Incentive Plan”), subject to and with effect upon approval of such plan by the stockholders of the Company.

The Compensation Committee of our Board of Directors determines the participants under the Omnibus Incentive Plan. The Omnibus Incentive Plan provides for non-qualified and incentive stock options, restricted stock and restricted stock units, any or all of which may be made contingent upon the achievement of performance criteria. Subject to the Omnibus Incentive Plan limits, the compensation committee has the discretionary authority to determine the size of an award and on May 11, 2015 delegated the authority to Steven Mariano, our President, to award the grants without the consent of the Compensation Committee.

Shares of our common stock available for issuance under the Omnibus Incentive Plan include authorized and unissued shares of common stock or authorized and issued shares of common stock reacquired and held as treasury shares or otherwise, or a combination thereof. The number of available shares is reduced by the aggregate number of shares that become subject to outstanding awards granted under the Omnibus Incentive Plan. To the extent that shares subject to an outstanding award granted under either the Omnibus Incentive Plan are not issued or delivered by reason of the expiration, termination, cancellation or forfeiture of such award or by reason of the settlement of such award in cash, then such shares will again be available for grant under the Omnibus Incentive Plan. Shares withheld to satisfy tax withholding requirements upon the vesting of awards other than stock options will also be available for grant under the Omnibus Incentive Plan. Shares that are used to pay the exercise price of an option, shares delivered to or withheld by us to pay withholding taxes related to stock options, and shares that are purchased on the open market with the proceeds of an option exercise, may not again be made available for issuance.

Stock Options

In the nine months ended September 30 30, 2015, we issued stock options as incentive compensation for officers and certain key employees. The exercise price of each stock option is the closing market price of our common stock on the date of grant. The options will vest in three equal annual installments on the first, second and third anniversaries of grant and expire 10 years after the grant date. The fair values of these stock options were estimated using the Black-Scholes valuation model with the following weighted-average assumptions:

	Nine Months Ended September 30,
In thousands	2015
Expected dividend yield		0	%
Risk-free interest rate (1)		0.49	%
Expected volatility (2)		33.02	%
Expected life in years (3)		3.0

(1) The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.

(2) The expected volatility is a measure of the amount by which a stock price has fluctuated or is expected to fluctuate based primarily on our and our peers' historical data.

(3) The expected life is the period of time, on average, that participants are expected to hold their options before exercise based primarily on our historical data.

For the nine months ended September 30, 2015, we awarded 1,366,791 options, of which 129,013 were forfeited, leaving 1,237,778 outstanding.  At September 30, 2015 the intrinsic value of these options was $1.9 million. Option activity for the nine months ended September 30, 2015 was as follows:

In thousands, except weighted-average price and remaining contractual term	Number of Shares			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
Options outstanding at December 31, 2014		—		$	—
Options granted		1,367		$	14.40
Options exercised		—		$	—
Options cancelled or forfeited		(129	)	$	14.33
Options outstanding at September 30, 2015		1,238		$	14.39		9.4	$	1,932
Options expected to vest at September 30, 2015		1,238		$	14.39		9.4	$	1,932
Options exercisable at September 30, 2015		—		$	—		—	$	—

As of September 30, 2015, we recognized $1.2 million of stock compensation expense associated with these options, and there was $2.9 million of total unrecognized stock compensation cost related to unvested stock options that is expected to be recognized over a period of 3 years.

Restricted Stock Awards

In the nine months ended September 30, 2015, we issued 906,362 restricted shares as incentive compensation for officers, directors, and certain key employees. Subsequent to issuance, 22,059 restricted shares were forfeited and 310,652 were settled leaving 573,651 remaining restricted shares outstanding as of September 30, 2015. The fair value of outstanding restricted shares at September 30, 2015 was $8.3 million. Grants of restricted shares for the nine months ended September 30, 2015 were as follows:

In thousands, except weighted-average fair value price	Number of Shares			Weighted-Average Grant-Date Fair Value
Unvested restricted shares outstanding at December 31, 2014		—		$	—
Restricted shares granted		906		$	14.32
Restricted shares vested		(310	)	$	14.00
Restricted shares forfeited		(22	)	$	14.00
Unvested restricted shares outstanding as of September 30, 2015		574		$	14.51

As of September 30, 2015, we recognized $6.8 million of stock compensation expense associated with these restricted shares, and there was $5.9 million of total unrecognized stock compensation cost related to unvested restricted stock to be recognized over a  period of 3 years.

Restricted Stock Units

During the nine months ended September 30, 2015, we issued 193,290 restricted stock units.  Of those issued, 11,655 were subsequently forfeited, resulting in 181,635 restricted stock units outstanding as of September 30, 2015. The fair value of these awards at September 30, 2015 was $2.7 million.  During the nine months ended September 30, 2015, we recognized $0.8 million of stock compensation expense associated with these restricted stock units. Unrecognized stock compensation expense associated with RSUs is $2.0 million and will be recognized over the remaining contractual lives of these awards, 3 years.

In thousands, except weighted-average fair value price	Number of Shares			Weighted-Average Grant-Date Fair Value
Unvested restricted stock units outstanding at December 31, 2014		—		$	—
Restricted stock units granted		193		$	15.02
Restricted stock units vested		—		$	—
Restricted stock units forfeited		(11	)	$	14.20
Unvested restricted stock units outstanding as of September 30, 2015		182		$	15.06

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Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenues
Fee income		$ 34,759	$ 15,630	$ 80,060	$ 37,896
Fee income from related party		23,773	15,803	68,852	24,589
Total fee income and fee income from related party		58,532	31,433	148,912	62,485
Net investment income		49	76	85	496
Net realized (losses) gains on investments		(58)	13,960	(149)	14,038
Total Revenues		58,523	45,469	148,848	77,019
Expenses
Salaries and related expenses		21,549	9,726	53,782	17,907
Commission expense		8,173	5,891	25,556	9,491
Management fees to related party for administrative support services			861		5,390
Outsourced services		2,369	1,713	7,623	3,118
Allocation of marketing, underwriting and policy issuance costs from related party			333		1,872
Other operating expenses		11,974	4,538	25,259	7,801
Acquisition costs		1,453		4,372
Interest expense		806	2,836	2,525	5,427
Depreciation and amortization		4,380	1,652	10,075	3,699
Amortization of loan discounts and loan costs		62	650	206	1,295
Stock compensation expense		2,586		8,791
Costs from debt payoff	[1]			13,681
Decrease in fair value of warrant redemption liability			(8,760)	(1,385)	(2,257)
Gain on disposal of fixed assets		(7)		(7)
Total Expenses		53,345	19,440	150,478	53,743
Net Income before income tax expense		5,178	26,029	(1,630)	23,276
Income tax (benefit) expense		1,331	9,101	(1,733)	10,401
Net Income Including Non-Controlling Interest in Subsidiary		3,847	16,928	103	12,875
Net Income attributable to non-controlling interest in subsidiary		59	26	111	68
Net Income		$ 3,788	$ 16,902	$ (8)	$ 12,807
Earnings Per Common Share
Basic		$ 0.14	$ 1.03	$ 0.00	$ 0.85
Diluted		$ 0.14	$ 0.46	$ 0.00	$ 0.65
Weighted Average Common Shares Outstanding
Basic		26,802	16,368	26,006	14,981
Diluted		27,940	17,551	26,006	16,183

[1] Costs from debt payoff include $4.3 million of early payment penalties and $9.3 million associated with the write-off of related deferred financing fees and original issue discounts.

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Equity and Fixed Income Security Investments

9 Months Ended

Sep. 30, 2015

Investments Debt And Equity Securities [Abstract]

Equity and Fixed Income Security Investments

4. Equity and Fixed Income Security Investments

Equity and fixed income security investments are carried at fair value.  We classify these investments as a trading portfolio with changes to the fair value of investments marked-to-market value and reflected in the aggregate net income or loss for the period incurred.  The trading portfolio is utilized to generate investment income with available cash on hand.

As of September 30, 2015, our major classes of investments consisted of the following:

	September 30, 2015
In thousands	Cost Basis		Gains		Losses			Fair Value
	(Unaudited)
Equity and Fixed Income Security Investments
Common and preferred stocks	$	429	$	—	$	(41	)	$	388
Corporate notes and bonds		2,969		—		(108	)		2,861
Total	$	3,398	$	—	$	(149	)	$	3,249

There were no investments as of December 31, 2014.

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Business Combinations

9 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

Business Combinations

3. Business Combinations

The Company completed seventeen acquisitions during the nine-month period ended September 30, 2015. We acquired substantially all of the net assets of the following companies in cash and stock transactions. These acquisitions have been accounted for using the acquisition method for recording business combinations, except for DecisionUR, as further discussed below.

Name and Effective Date of Acquisition (In thousands):	Cash Paid		Stock Issued		Accrued Liability		Deferred Purchase Consideration		Recorded Earnout Payable		Maximum Potential Earnout Payable		Total Recorded Purchase Price
Phoenix Risk Management, Inc (January 31, 2015)	$	1,099	$	—	$	—	$	—	$	2,790	$	3,000	$	3,889
DecisionUR, LLC (February 5, 2015)		2,240		—		23		—		—		—		2,240
Capital & Guaranty, LLC (February 9, 2015)		175		—		—		—		175		175		350
TriGen Holding Group, Inc (March 31, 2015)		3,340		—		3,364		4,911		1,433		1,500		9,684
Hospitality Supportive Systems, LLC (April 1, 2015)		9,650		—		—		—		—		—		9,650
Selective Risk Management, LLC (April 1, 2015)		3,846		—		—		—		—		—		3,846
Vikaran Solutions, LLC (April 17, 2015)		8,500		—		152		—		—		—		8,500
Corporate Claims Management, Inc (April 24, 2015)		7,900		—		4,434		—		825		1,000		8,725
Candid Investigation Services, LLC (May 8, 2015)		1,033		—		—		—		367		450		1,400
Brandywine Insurance Advisors, LLC   (May 22, 2015)		3,000		—		—		—		220		1,205		3,220
Infinity Insurance Solutions, LLC (June 1, 2015)		1,750		—		100		—		552		650		2,302
InsureLinx, Inc (June 12, 2015)		6,300		—		1,840		—		—		—		6,300
The Carman Corporation (June 15, 2015)		2,000		—		—		—		—		—		2,000
CWI Benefits, Inc (July 9, 2015)		2,750		—		2,061		—		3,400		4,675		6,150
Restaurant Coverage Associates, Inc (August 14, 2015)		750		—		—		—		1,725		1,825		2,475
Risk Control Associates, Inc (August 14, 2015)		250		—		650		—		575		675		825
Global HR Research LLC (August 21, 2015)		23,500		6,503		2,457		11,920		—		—		41,923
Total	$	78,083	$	6,503	$	15,081	$	16,831	$	12,062	$	15,155	$	113,479

The Company acquired DecisionUR from Six Points Investment Partners, LLC, a company under common control.  However, results of operations for DecisionUR are included from acquisition date, as its operations are immaterial with respect to the financial statements taken as a whole for all periods presented.

The “maximum potential earnout payables” disclosed in the foregoing table represent the maximum amount of additional consideration that could be paid pursuant to the terms of the purchase agreement for the applicable acquisition. The “recorded earnout payables” disclosed in the foregoing table are primarily based upon the estimated future operating results of the acquired entities over a one- to three-year period subsequent to the acquisition date. The recorded earnout payables are measured at fair value as of the acquisition date and are included on that basis in the total recorded purchase price in the foregoing table. We will record subsequent changes in these estimated earnout obligations, including the accretion of discount, in our statement of operations when incurred.

The fair value of these earnout obligations is based on the present value of the expected future payments to be made to the sellers of the acquired entities in accordance with the provisions outlined in the respective purchase agreements, which is a Level 3 fair value measurement, as discussed further in Note 11, Fair Value of Financial Assets and Liabilities. In determining fair value, we estimated the acquired entity’s future performance using financial projections developed by management for the acquired entity and market participant assumptions that were derived for revenue growth and/or profitability.  We estimated future payments using the earnout formula and performance targets specified in each purchase agreement and these financial projections. We then discounted these payments to present value using a risk-adjusted rate that takes into consideration market-based rates of return that reflect the ability of the acquired entity to achieve the targets. Changes in financial projections, market participant assumptions for revenue growth and/or profitability, or the risk-adjusted discount rate, would result in a change in the fair value of recorded earnout obligations.

The aggregate amount of maximum earnout obligations related to acquisitions made in 2015, as of September 30, 2015 was $15.2 million, of which $12.1 million was recorded in our consolidated balance sheet as of September 30, 2015, based on the aggregate estimated fair value of the expected future payments to be made.

   The purchase price for the Global HR Acquisition consists of (a) $24 million in cash, of which, $0.5 million is held in escrow, (b) 444,096 shares of our common stock (the “Stock Consideration”) of which 349,645 were issued and 94,451 are held in escrow, plus (c) certain deferred consideration payable, at our sole discretion, in either 618,478 shares of our common stock or $10,477,017 in cash (the “Deferred Consideration”). The Deferred Consideration is payable solely to In Touch Holdings LLC, one of the former principal stockholders of Global HR, on the earlier of (x) November 20, 2015, (y) the 21st day after the date we mail an information statement to the shareholders in connection with the Global HR Acquisition or (z) we file a registration statement with the SEC that is declared effective. As of the filing date, no decision has been made on the settlement of Deferred Consideration in cash or stock. If the revenues for Global HR for its fiscal year 2016 are less than $12.8 million, then In Touch Holdings LLC will forfeit and return 10% of its Stock Consideration and Deferred Stock Consideration to us.

The deferred purchase consideration disclosed in the foregoing table represents non-contingent purchase consideration payable to sellers.  These include $5.0 million payable to a seller of TriGen Holding Group, Inc. on the first anniversary of the effective date, and deferred stock consideration of $11.4 million and cash escrow amounts of $0.5 million to sellers of Global HR Research LLC payable on November 20, 2015, all recorded at fair value.

The following is a summary of the aggregate estimated fair values of the net assets acquired at the date of each of the acquisitions made in the nine months ended September 30, 2015:

In thousands	Total
Assets Acquired:
Cash	$	4,069
Restricted cash		4,838
Accounts receivable		5,069
Fixed assets		2,002
Other assets		2,272
Goodwill		57,915
Intangible assets:
Customer & carrier relationships		31,039
Service contracts		320
Non-compete agreements		4,739
Developed technology		13,268
Trade name portfolio		3,029
Total intangible assets		52,395
Total assets acquired		128,560
Liabilities assumed		15,081
Total net assets acquired	$	113,479

The net assets acquired are preliminary and subject to measurement period adjustments.

In accordance with FASB ASC 350, Intangibles—Goodwill and Other, intangible assets, which are comprised of the estimated fair value of the service contracts acquired, customer and carrier relationships, non-compete agreements, developed technology and trade names are being amortized over the respective estimated life, ranging from two to ten years, in a manner that, in management’s opinion, reflects the pattern in which the intangible asset’s future economic benefits are expected to be realized. Intangible assets are tested for impairment at least annually (more frequently if certain indicators are present). In the event that management determines that the value of the intangible asset has become impaired, the company will incur an accounting charge for the amount of impairment during the fiscal quarter in which the determination is made.

Provisional estimates of fair value and the allocation of the purchase price are established at the time of each acquisition and are subsequently reviewed within the first year of operations, the measurement period, following the acquisition date to determine the necessity for adjustments. The fair value of the tangible assets and liabilities for each applicable acquisition at the acquisition date approximated their carrying values. We estimate the fair value as the present value of the benefits anticipated from ownership of the subject customer list in excess of returns required on the investment in contributory assets necessary to realize those benefits. The rate used to discount the net benefits was based on a risk-adjusted rate that takes into consideration market-based rates of return and reflects the risk of the asset relative to the acquired business. These discount rates generally ranged from 17% to 30% for our 2015 acquisitions through September 30, 2015. The fair value of non-compete agreements was established using estimated financial projections for the acquired company based on market participant assumptions and various non-compete scenarios.

Customer and carrier relationships, non-compete agreements and trade names related to our acquisitions are amortized using the straight-line method over their estimated useful lives (ten years for customer and carrier relationships, one to two years for non-compete agreements and five to seven years for trade names), while goodwill is not subject to amortization. We use the straight-line method to amortize these intangible assets because the pattern of their economic benefits cannot be reasonably determined with any certainty. We review all of our intangible assets for impairment periodically (at least annually) and whenever events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. In reviewing intangible assets, if the fair value is less than the carrying amount of the respective (or underlying) asset, an indicator of impairment would exist, and further analysis would be required to determine whether or not a loss would need to be charged against current period earnings. Based on the results of impairment reviews during the nine-month periods ended September 30, 2015 and 2014, no impairments were required.

Our consolidated financial statements for the nine months ended September 30, 2015 include the operations of the acquired entities from their respective acquisition dates, totaling $21.7 million of revenues and $2.1 million of net income.

The following is a summary of the unaudited pro forma historical results, as if these entities and Patriot Care Management, Inc. (“Patriot Care Management”), which was acquired on August 6, 2014, had been acquired at January 1, 2014 (in thousands, except per share data):

	Nine Months Ended September 30,
In thousands (except per share data)	2015		2014
Total revenues		174,376		141,658
Net (loss) income		1,107		14,508
Basic net (loss) income per share	$	0.04	$	0.97
Diluted net (loss) income per share	$	0.04	$	0.76

This unaudited supplemental pro forma financial information includes the results of operations of acquired businesses presented as if they had been combined as of January 1, 2014. The unaudited supplemental pro forma financial information has been provided for illustrative purposes only. The unaudited supplemental pro forma financial information does not purport to be indicative of the actual results that would have been achieved by the combined companies for the periods presented, or of the results that may be achieved by the combined companies in the future. Future results may vary significantly from the results reflected in the following unaudited supplemental pro forma financial information because of future events and transactions, as well as other factors, many of which are beyond the Company’s control.

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Warrant Redemption Liability

9 Months Ended

Sep. 30, 2015

Warrants And Rights Note Disclosure [Abstract]

Warrant Redemption Liability

15. Warrant Redemption Liability

There was no warrant redemption liability as of September 30, 2015.  Concurrent with our IPO and repayment of the PennantPark Loan Agreement on January 22, 2015, the PennantPark Entities exercised 965,700 of their 1,110,555 detachable common stock warrants for common stock at an exercise price of $2.67 per share. The PennantPark Entities waived their put right on the remaining 144,855 detachable common stock warrants.  By eliminating the put right, the PennantPark Entities cannot require the Company to redeem the remaining detachable common stock warrants for cash, thereby eliminating the warrant redemption liability previously required. The remaining 144,855 detachable common stock warrants can be used to purchase shares of the Company’s common stock at an exercise price of $2.67 per share and expire on November 27, 2023.

On November 27, 2013, the Company issued 626,295 detachable common stock warrants to new lenders to purchase shares of the Company’s common stock at an exercise price of $2.67 per share. The warrants expire on November 27, 2023. Prior to the exercise and removal of the put right, at the fifth anniversary date of the warrants and any time after the eighth anniversary date of the warrants, the warrant holders could have required the Company to redeem the warrants for cash, in an amount equal to the estimated fair value of the warrants, as determined by an independent appraisal, less the total exercise price of the redeemed warrants. The value of the warrants was recorded as a discount on the loan and a warrant liability on November 27, 2013. The discount on the loan was amortized as interest expense over the term of the loan. The Company attributed a value to these warrants of approximately $7.3 million as of December 31, 2014.

On August 6, 2014, in connection with the additional tranche described in Note 7, Notes Payable and Lines of Credit, the Company issued 484,260 detachable common stock warrants to the PennantPark Entities to purchase shares of the Company’s common stock at an exercise price of $2.67 per share. The warrants expire on November 27, 2023. Prior to the exercise and removal of the put right, at the fifth anniversary date of the warrants and any time after the eighth anniversary date of the warrants, the warrant holders could have required the Company to redeem the warrants for cash, in an amount equal to the estimated fair value of the warrants, as determined by an independent appraisal, less the total exercise price of the redeemed warrants. The value of the warrants was recorded as a discount on the loan and a warrant liability on August 6, 2014. The discount on the loan was amortized as interest expense over the term of the loan. The Company attributed a value to these warrants of approximately $5.6 million as of December 31, 2014.

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Fair Value Measurement of Financial Assets and Liabilities

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurement of Financial Assets and Liabilities

11. Fair Value Measurement of Financial Assets and Liabilities

With respect to the Company’s financial assets and liabilities, which include short term investments, notes payable, capital lease obligation, earnout obligations of acquisitions and warrant redemption liability, the Company has adopted current accounting guidance which establishes the authoritative definition of fair value, establishes a framework for measuring fair value, creates a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. This guidance defines fair value as the price that would be paid to transfer the warrant redemption liability in an orderly transaction between market participants at the measurement date.  As required under current accounting guidance, the Company has identified and disclosed its financial assets and liabilities in a fair value hierarchy, which consists of the following three levels:

		Definition
Level 1	Observable unadjusted quoted prices in active markets for identical securities.
Level 2	Observable inputs other than quoted prices in active markets for identical securities, including:
	(i)	quoted prices in active markets for similar securities.
	(ii)	quoted prices for identical or similar securities in markets that are not active.
	(iii)	inputs other than quoted prices that are observable for the security (e.g., interest rates, yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, credit risks and default rates).
	(iv)	inputs derived from or corroborated by observable market data by correlation or other means.
Level 3	Unobservable inputs, including the reporting entity’s own data, as long as there is no contrary data indicating market participants would use different assumptions.

The Company’s equity and fixed income security investments for which carrying values were equal to fair values, classified by level within the fair value hierarchy, were as follows as of September 30, 2015:

	Fair Value Measurement, Using
September 30, 2015 (in thousands)	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Common and preferred stocks	$	388	$	—	$	—	$	388
Corporate notes and bonds		2,861		—		—		2,861
Total	$	3,249	$	—	$	—	$	3,249

There were no equity and fixed income security investments as of December 31, 2014.

The Company’s notes payable, capital lease obligation, earnout obligations of acquisitions and warrant redemption liability, for which carrying values were equal to fair values, classified by level within the fair value hierarchy, were as follows as of September 30, 2015 and December 31, 2014:

	Fair Value Measurement, Using
September 30, 2015 (in thousands)	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Earnout payable on acquisitions	$	—	$	—	$	12,062	$	12,062
Deferred purchase consideration		—		—		16,831		16,831
Warrant redemption liability		—		—		—		—
Total	$	—	$	—	$	28,893	$	28,893
	Fair Value Measurement, Using
December 31, 2014 (in thousands)	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Earnout payable on acquisitions	$	—	$	—	$	—	$	—
Deferred purchase consideration		—		—		—		—
Warrant redemption liability		—		—		12,879		12,879
Total	$	—	$	—	$	12,879	$	12,879

The following is a reconciliation of the fair value of the Company’s financial liabilities that were measured using significant unobservable (Level 3) inputs:

Nine Months Ended September 30, 2015 (in thousands)	Earnout Payable			Deferred Purchase Consideration		Warrant Redemption Liability			Total
Fair value, January 1, 2015	$	—		$	—	$	12,879		$	12,879
Record present value earnout payable    on acquisitions		19,163			—		—			19,163
Earnout payments made		(7,101	)		—		—			(7,101	)
Record deferred purchase consideration    on acquisitions		—			16,831		—			16,831
Exercise of warrants		—			—		(9,995	)		(9,995	)
Decrease in fair value of common stock and    warrant redemption liability		—			—		(1,385	)		(1,385	)
Contribute remaining liability balance    due to equity warrants		—			—		(1,499	)		(1,499	)
Fair Value, September 30, 2015	$	12,062		$	16,831	$	—		$	28,893

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Notes Payable and Lines of Credit

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Notes Payable and Lines of Credit

7. Notes Payable and Lines of Credit

As of September 30, 2015 and December 31, 2014, notes payable were comprised of the following:

In thousands	September 30, 2015			December 31, 2014
	(Unaudited)
BMO Senior Secured Term Loans	$	107,875		$	—
PennantPark Loan Agreement		—			63,285
UBS Credit Agreement		—			56,288
Gross Notes Payable and Current Portion of Notes Payable		107,875			119,573
Less original issue discount		—			(3,085	)
Less value attributable to stock warrants		—			(5,667	)
Notes Payable and Current Portion of Notes Payable		107,875			110,821
Less current portion of notes payable		(5,500	)		(15,782	)
Notes Payable	$	102,375		$	95,039

Senior Secured Credit Facility

On January 22, 2015, we entered into a Credit Agreement with BMO Harris Bank N.A., as administrative agent (the “Administrative Agent”), and the other lenders party thereto, which provides for a $40.0 million revolving credit facility and a $40.0 million term loan facility (the “Senior Secured Credit Facility”). The Senior Secured Credit Facility has a maturity of five years, and borrowings thereunder bear interest, at our option, at LIBOR plus a margin ranging from 250 basis points to 325 basis points or at base rate plus a margin ranging from 150 basis points to 225 basis points. Margins on all loans and fees will be increased by 2% per annum during the existence of an event of default. The revolving credit facility includes borrowing capacity available for letters of credit and borrowings on same-day notice, referred to as swing line loans. At any time prior to maturity, we have the right to increase the size of the revolving credit facility or the term loan facility by an aggregate amount of up to $20.0 million, but in minimum increments of $5.0 million. As of June 30, 2015, we increased the term loan facility by $20.0 million through two $10.0 million incremental term loans. Additionally, on August 14, 2015, we entered into a second amendment to our Senior Secured Credit Facility (the “Second Amendment”) which provides for an additional $50.0 million of term loans plus the ability to increase the term loan by and additional $50.0 million under certain conditions.  The Second Amendment also added a requirement that until we deliver a certificate certifying that (a) our total leverage ratio is equal to or less than 2.25 to 1.00 and (b) our Adjusted EBITDA for the twelve-months then ended is at least $70.0 million, the outstanding revolving loans (plus any swing line loans and the aggregate stated amount of all letters of credit) shall not exceed $30.0 million.  All other material terms and conditions in the Senior Secured Credit Facility were unchanged by the Second Amendment.

As of September 30, 2015, the outstanding balance under our Senior Secured Credit Facility was $118.7 million (comprised of $107.9 million outstanding under the term loan facility and $10.8 million outstanding under the revolving credit facility). Accordingly, we had $29.2 million available to borrow under the revolving credit facility.

In addition to paying interest on outstanding principal under the Senior Secured Credit Facility, we are required to pay a commitment fee to the Administrative Agent for the ratable benefit of the lenders under the revolving credit facility in respect of the unutilized commitments thereunder, ranging from 35 basis points to 50 basis points, depending on specified leverage ratios. With respect to letters of credit, we are also required to pay a per annum participation fee equal to the applicable LIBOR margin on the face amount of each letter of credit as well as a fee equal to 0.125% on the face amount of each letter of credit issued (or the term of which is extended). This latter 0.125% fee is payable to the issuer of the letter of credit for its own account, along with any standard documentary and processing charges incurred in connection with any letter of credit.

The term loan facility amortizes quarterly beginning the first full quarter after the closing date at a rate of 5% per annum of the original principal amount during the first two years, 7.5% per annum of the original principal amount during the third and fourth years and 10% per annum of the original principal amount during the fifth year, with the remainder due at maturity. Principal amounts outstanding under the revolving credit facility are due and payable in full at maturity. In the event of any sale or other disposition by us or our subsidiaries guaranteeing the Senior Secured Credit Facility (as described below) of any assets with certain exceptions, we are required to prepay all proceeds received from such a sale towards the remaining scheduled payments of the term loan facility.

Additionally, all obligations under the Senior Secured Credit Facility (as described below) are guaranteed by all of our existing and future subsidiaries, other than foreign subsidiaries to the extent the assets of such foreign subsidiaries do not exceed 5% of our and our subsidiaries’ total assets on a consolidated basis, and secured by a first-priority perfected security interest in substantially all of our and our guaranteeing subsidiaries’ tangible and intangible assets, whether now owned or hereafter acquired, including a pledge of 100% of the stock of each guarantor.

The Senior Secured Credit Facility contains certain covenants that, among other things and subject to significant exceptions, limit our ability and the ability of our restricted subsidiaries to engage in certain business and financing activities and that require us to maintain certain financial covenants, including requirements to maintain (i) a maximum total leverage ratio of total outstanding debt to adjusted EBITDA for the most recently-ended four fiscal quarters of no more than 300% and (ii) a minimum fixed charge coverage ratio of adjusted EBITDA to the sum of cash interest expense (which amount shall be calculated on an annualized basis for the three-, six-, and nine-month periods ended March 31, 2015, June 30, 2015 and September 30, 2015) plus income tax expense (or less any income tax benefits) plus capital expenditures plus dividends, share repurchases and other restricted payments plus regularly scheduled principal payments of debt for the same period of a least 150% for the most recently ended four quarters. The Senior Secured Credit Facility allows us to pay dividends in an amount up to 50% of our net income if certain other financial conditions are met.

The Senior Secured Credit Facility contains other restrictive covenants, including those regarding: indebtedness (including capital leases) and guarantees; liens; operating leases; investments and acquisitions; loans and advances; mergers, consolidations and other fundamental changes; sales of assets; transactions with affiliates; no material changes in nature of business; dividends and distributions, stock repurchases, and other restricted payments; change in name, jurisdiction of organization or fiscal year; burdensome agreements; and capital expenditures.

The Senior Secured Credit Facility also has events of default that may result in acceleration of the borrowings thereunder, including: (i) nonpayment of principal, interest, fees or other amounts (subject to customary grace periods for items other than principal); (ii) failure to perform or observe covenants set forth in the loan documentation (subject to customary grace periods for certain affirmative covenants); (iii) any representation or warranty proving to have been incorrect in any material respect when made; (iv) cross-default to other indebtedness and contingent obligations in an aggregate amount in excess of an amount to be agreed upon; (v) bankruptcy and insolvency defaults (with grace period for involuntary proceedings); (vi) inability to pay debts; (vii) monetary judgment defaults in excess of an agreed upon amount; (viii) ERISA defaults; (ix) change of control; (x) actual invalidity or unenforceability of any loan document, any security interest on any material portion of the collateral or asserted (by any loan party) invalidity or unenforceability of any security interest on any collateral; (xi) actual or asserted (by any loan party) invalidity or unenforceability of any guaranty; (xii) material unpaid, final judgments that have not been vacated, discharged, stayed or bonded pending appeal within a specified number of days after the entry thereof; and (xiii) any other event of default agreed to by us and the Administrative Agent.

As of September 30, 2015, we were in compliance with the financial and other restrictive covenants under our outstanding material debt obligations, including our Senior Secured Credit Facility.

Repayment of UBS Credit Agreement

On August 6, 2014, in connection with the Patriot Care Management Acquisition, we and certain of our subsidiaries entered into a credit agreement with UBS Securities LLC (the “UBS Credit Agreement”), which provided for a five-year term loan facility in an aggregate principal amount of $57.0 million that would mature on August 6, 2019. The loan was secured by the common stock of Patriot Care Management and guaranteed by Guarantee Insurance Group and its wholly owned subsidiaries. Following our initial public offering (the “IPO”), on January 22, 2015 we prepaid all outstanding borrowings under the UBS Credit Agreement, including accrued interest and applicable prepayment premium. This instrument was repaid in full upon closing on the Senior Secured Credit Facility.

Repayment of PennantPark Loan Agreement

On August 6, 2014, in connection with the GUI Acquisition, we and certain of our subsidiaries, as borrowers, and certain of our other subsidiaries and certain affiliated entities, as guarantors, entered into a loan agreement with the PennantPark Entities as lenders (the “PennantPark Loan Agreement”). Following our IPO, we prepaid all outstanding borrowings under the PennantPark Loan Agreement, including accrued interest and applicable prepayment premium. This instrument was repaid in full on January 22, 2015 upon closing on the Senior Secured Credit Facility.

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Stock-Based Compensation - Summary of Grants of Restricted Shares (Details)	9 Months Ended
	Sep. 30, 2015 $ / shares shares
Restricted Stock Awards
Number of Shares
Restricted shares granted | shares	906,362
Restricted shares vested | shares	(310,652)
Restricted shares forfeited | shares	(22,059)
Unvested restricted shares outstanding as of September 30, 2015 | shares	573,651
Weighted-Average Grant-Date Fair Value
Weighted-Average Grant-Date Fair Value, Restricted shares granted	$ 14.32
Weighted-Average Grant-Date Fair Value, Restricted shares vested	14.00
Weighted-Average Grant-Date Fair Value, Restricted shares forfeited	14.00
Weighted-Average Grant-Date Fair Value, Unvested restricted shares outstanding as of September 30, 2015	$ 14.51
Restricted Stock Unit
Number of Shares
Restricted shares granted | shares	193,290
Restricted shares forfeited | shares	(11,655)
Unvested restricted shares outstanding as of September 30, 2015 | shares	181,635
Weighted-Average Grant-Date Fair Value
Weighted-Average Grant-Date Fair Value, Restricted shares granted	$ 15.02
Weighted-Average Grant-Date Fair Value, Restricted shares forfeited	14.20
Weighted-Average Grant-Date Fair Value, Unvested restricted shares outstanding as of September 30, 2015	$ 15.06

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Fixed Assets And Other Long Term Assets

9 Months Ended

Sep. 30, 2015

Fixed Assets And Other Long Term Assets [Abstract]

Fixed Assets And Other Long Term Assets

5. Fixed Assets and Other Long Term Assets

Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation and amortization. Expenditures for computer equipment, software, and furniture and fixtures are capitalized and depreciated on a straight-line basis over a five, three, and seven year estimated useful lives, respectively. Expenditures for building are capitalized and depreciated on a straight-line basis over a thirty-nine year estimated useful life. Expenditures for leasehold improvements on office space and facilities are capitalized and amortized on a straight-line basis over the term of the lease.

As of September 30, 2015 and December 31, 2014, our major classes of fixed assets consisted of the following:

In thousands	September 30, 2015			December 31, 2014
	(Unaudited)
Fixed Assets
Computer equipment, software and furniture and fixtures	$	7,640		$	5,722
Building		1,428			-
Leasehold improvements		3,534			2,545
Total fixed assets		12,602			8,267
Less accumulated depreciation and amortization		(7,804	)		(6,388	)
Fixed assets, net of accumulated depreciation and amortization	$	4,798		$	1,879

Other Long Term Assets

Other long term assets, which are solely comprised of capitalized policy and claims administration system development costs, are also stated at cost, net of accumulated depreciation. Expenditures for capitalized policy and claims administration system development costs are capitalized and depreciated on a straight line basis over a five-year estimated useful life.

As of September 30, 2015 and December 31, 2014, other long term assets consisted of the following:

In thousands	September 30, 2015			December 31, 2014
	(Unaudited)
Other long term assets
Capitalized policy and claims administration system development costs	$	17,016		$	13,093
Less accumulated depreciation		(5,459	)		(3,251	)
Other long term assets, net of accumulated depreciation	$	11,557		$	9,842

We periodically review all fixed assets and other long term assets that have finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Upon sale or retirement, the cost and related accumulated depreciation and amortization of assets disposed of are removed from the accounts, and any resulting gain or loss is reflected in earnings.

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Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2015

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

6. Goodwill and Other Intangible Assets

Goodwill

Goodwill represents the excess of consideration paid over the fair value of net assets acquired. Goodwill is not amortized but is tested at least annually for impairment (or more frequently if certain indicators are present or management otherwise believes it is appropriate to do so). In the event that management determines that the value of goodwill has become impaired, we will record a charge for the amount of impairment during the fiscal quarter in which the determination is made. We determined that there was no impairment as of September 30, 2015.

The Company acquired $57.9 million of goodwill during the nine-month period ended September 30, 2015 as a result of the seventeen acquisitions discussed in Note 3, Business Combinations. Changes in goodwill are summarized as follows:

In thousands
Balance as of December 31, 2014	$	61,493
Goodwill acquired		57,915
Balance as of September 30, 2015	$	119,408

Intangible Assets

Intangible assets that have finite lives are amortized over their useful lives. The company acquired $52.4 million of intangible assets during the nine-month period ended September 30, 2015 as a result of the seventeen acquisitions discussed in Note 3, Business Combinations. The intangible assets, their original fair values, and their net book values are detailed below as of the dates presented:

	September 30, 2015							December 31, 2014
In thousands	Gross Asset		Accumulated Amortization			Net Asset		Gross Asset		Accumulated Amortization			Net Asset
	(Unaudited)
Intangible Assets
Service contracts	$	35,120	$	(5,105	)	$	30,015	$	34,800	$	(1,812	)	$	32,988
Customer and carrier relationships		31,039		(1,244	)		29,795		—		—			—
Non-compete agreements		4,739		(914	)		3,825		—		—			—
Developed technology		13,268		(894	)		12,374		—		—			—
Trade names		3,029		(103	)		2,926		—		—			—
Total	$	87,195	$	(8,260	)	$	78,935	$	34,800	$	(1,812	)	$	32,988

The table below reflects the estimated amortization expense for the Company’s intangible assets for each of the next five years and thereafter:

In thousands	September 30, 2015
Amortization expense	(Unaudited)
2015 (remaining three months)	$	3,286
2016		13,140
2017		11,625
2018		10,770
2019		10,770
Thereafter		29,344
Total	$	78,935

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Capital Lease Obligations

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Capital Lease Obligations

8. Capital Lease Obligations

Equipment subject to capital lease is comprised of capitalized policy and claims administration software development costs and related computer equipment. Monthly payments on the capital lease, which expires on December 3, 2016, were approximately $206,000 as of September 30, 2015. Payments may be adjusted in connection with a change in the interest rate swap rate quoted in the Bloomberg Swap Rate Report. The Company’s obligations for future payments on the capital lease as of September 30, 2015, based on the interest rate swap rate in effect on that date, are as follows:

In thousands	Principal		Interest		Total
Payments on Capital Lease
2015	$	397	$	17	$	414
2016		2,429		51		2,480
Total	$	2,826	$	68	$	2,894

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Fair Value Measurement of Financial Assets and Liabilities - Summary of Reconciliation of the Fair Value of Financial Liabilities (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value, beginning balance	$ 12,879
Record present value earnout payable on acquisitions	19,163
Earnout payments made	(7,101)
Record deferred purchase consideration on acquisitions	16,831
Exercise of warrants	(9,995)
Decrease in fair value of common stock and warrant redemption liability	(1,385)
Contribute remaining liability balance due to equity warrants	(1,499)
Fair value, ending balance	28,893
Earnout Payable
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Record present value earnout payable on acquisitions	19,163
Earnout payments made	(7,101)
Fair value, ending balance	12,062
Deferred Purchase Consideration
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Record deferred purchase consideration on acquisitions	16,831
Fair value, ending balance	16,831
Warrant Redemption Liability
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value, beginning balance	12,879
Exercise of warrants	(9,995)
Decrease in fair value of common stock and warrant redemption liability	(1,385)
Contribute remaining liability balance due to equity warrants	$ (1,499)

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Concentration - Additional Information (Details) - Customer Concentration Risk	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Fee income | Second Largest Customer
Concentration Risk [Line Items]
Concentration Risk, Percentage	6.00%	10.00%	8.00%	22.00%
Fee income | Third Largest Customer
Concentration Risk [Line Items]
Concentration Risk, Percentage		7.00%
Fee income receivable | Second Largest Customer
Concentration Risk [Line Items]
Concentration Risk, Percentage			2.00%		8.00%
Fee income receivable | Third Largest Customer
Concentration Risk [Line Items]
Concentration Risk, Percentage			1.00%		2.00%
Guarantee Insurance | Fee income | Largest Customer
Concentration Risk [Line Items]
Concentration Risk, Percentage	66.00%	76.00%	72.00%	66.00%
Guarantee Insurance | Fee income receivable | Largest Customer
Concentration Risk [Line Items]
Concentration Risk, Percentage			62.00%		86.00%

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Fair Value Measurement of Financial Assets and Liabilities - Summary of Fair Value Measurement of Financial Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Earnout payable on acquisitions	$ 12,062
Deferred purchase consideration	16,831
Warrant redemption liability		$ 12,879
Total	28,893	12,879
Significant Unobservable Inputs (Level 3)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Earnout payable on acquisitions	12,062
Deferred purchase consideration	16,831
Warrant redemption liability		12,879
Total	$ 28,893	$ 12,879

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2015

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Schedule of Significant Assumptions Used in Black-Scholes Model to Estimate Fair Value of Stock Options

The fair values of these stock options were estimated using the Black-Scholes valuation model with the following weighted-average assumptions:

	Nine Months Ended September 30,
In thousands	2015
Expected dividend yield		0	%
Risk-free interest rate (1)		0.49	%
Expected volatility (2)		33.02	%
Expected life in years (3)		3.0

(1) The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.

(2) The expected volatility is a measure of the amount by which a stock price has fluctuated or is expected to fluctuate based primarily on our and our peers' historical data.

(3) The expected life is the period of time, on average, that participants are expected to hold their options before exercise based primarily on our historical data.

Summary of Stock Options Activity

For the nine months ended September 30, 2015, we awarded 1,366,791 options, of which 129,013 were forfeited, leaving 1,237,778 outstanding.  At September 30, 2015 the intrinsic value of these options was $1.9 million. Option activity for the nine months ended September 30, 2015 was as follows:

In thousands, except weighted-average price and remaining contractual term	Number of Shares			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
Options outstanding at December 31, 2014		—		$	—
Options granted		1,367		$	14.40
Options exercised		—		$	—
Options cancelled or forfeited		(129	)	$	14.33
Options outstanding at September 30, 2015		1,238		$	14.39		9.4	$	1,932
Options expected to vest at September 30, 2015		1,238		$	14.39		9.4	$	1,932
Options exercisable at September 30, 2015		—		$	—		—	$	—

Summary of Grants of Restricted Shares

Grants of restricted shares for the nine months ended September 30, 2015 were as follows:

In thousands, except weighted-average fair value price	Number of Shares			Weighted-Average Grant-Date Fair Value
Unvested restricted shares outstanding at December 31, 2014		—		$	—
Restricted shares granted		906		$	14.32
Restricted shares vested		(310	)	$	14.00
Restricted shares forfeited		(22	)	$	14.00
Unvested restricted shares outstanding as of September 30, 2015		574		$	14.51

Restricted Stock Unit

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Summary of Grants of Restricted Shares

In thousands, except weighted-average fair value price	Number of Shares			Weighted-Average Grant-Date Fair Value
Unvested restricted stock units outstanding at December 31, 2014		—		$	—
Restricted stock units granted		193		$	15.02
Restricted stock units vested		—		$	—
Restricted stock units forfeited		(11	)	$	14.20
Unvested restricted stock units outstanding as of September 30, 2015		182		$	15.06

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Notes Payable and Lines of Credit - Senior Secured Credit Facility - Additional Information (Details) - USD ($)			9 Months Ended
	Aug. 14, 2015	Jan. 22, 2015	Sep. 30, 2015
Revolving Credit Facility
Debt Instrument [Line Items]
Amount borrowed under credit agreement		$ 40,000,000	$ 10,800,000
Increase in size of credit facility		20,000,000
Line of credit facility, available borrowing amount			$ 29,200,000
Revolving Credit Facility | Minimum
Debt Instrument [Line Items]
Commitment fee basis points			0.35%
Revolving Credit Facility | Maximum
Debt Instrument [Line Items]
Increase in size of credit facility		$ 5,000,000
Commitment fee basis points			0.50%
Senior Secured Credit Facility
Debt Instrument [Line Items]
Amount borrowed under credit agreement			$ 118,700,000
Credit facility term			5 years
Increase in size of credit facility	$ 50,000,000
Increase in term loan facility	$ 50,000,000
Credit facility covenant terms	(a) our total leverage ratio is equal to or less than 2.25 to 1.00 and (b) our Adjusted EBITDA for the twelve-months then ended is at least $70.0 million, the outstanding revolving loans (plus any swing line loans and the aggregate stated amount of all letters of credit) shall not exceed $30.0 million.		(i) a maximum total leverage ratio of total outstanding debt to adjusted EBITDA for the most recently-ended four fiscal quarters of no more than 300% and (ii) a minimum fixed charge coverage ratio of adjusted EBITDA to the sum of cash interest expense (which amount shall be calculated on an annualized basis for the three-, six-, and nine-month periods ended March 31, 2015, June 30, 2015 and September 30, 2015) plus income tax expense (or less any income tax benefits) plus capital expenditures plus dividends, share repurchases and other restricted payments plus regularly scheduled principal payments of debt for the same period of a least 150% for the most recently ended four quarters.
Percentage of stock pledged			100.00%
Maximum leverage ratio of total outstanding debt to adjusted EBITDA			300.00%
Minimum fixed charge coverage ratio			150.00%
Dividends payable, maximum percentage of net income			50.00%
Senior Secured Credit Facility | Minimum
Debt Instrument [Line Items]
Debt covenant adjusted EBITDA	$ 70,000,000
Senior Secured Credit Facility | Maximum
Debt Instrument [Line Items]
Increase on margins on loans and fees, percentage		2.00%
Debt covenant total leverage ratio	225.00%
Debt covenant outstanding revolving loans	$ 30,000,000
Percentage of assets guaranteed			5.00%
Senior Secured Credit Facility | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate		2.50%
Senior Secured Credit Facility | LIBOR | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate		3.25%
Senior Secured Credit Facility | Base Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate		2.25%
Senior Secured Credit Facility | Base Rate | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate		1.50%
Letter of Credit
Debt Instrument [Line Items]
Participation fee payable percentage			0.125%
BMO Term Loan
Debt Instrument [Line Items]
Amount borrowed under credit agreement		$ 40,000,000
Percentage of amortization of principal amount of term loan facility during first two years			5.00%
Percentage of amortization of principal amount of term loan facility during third and fourth year			7.50%
Percentage of amortization of principal amount of term loan facility during fifth year			10.00%
BMO Term Loan | Minimum
Debt Instrument [Line Items]
Increase in size of credit facility		5,000,000
Increase in term loan facility			$ 20,000,000
BMO Term Loan | Maximum
Debt Instrument [Line Items]
Increase in size of credit facility		$ 20,000,000
BMO Senior Secured Term Loans
Debt Instrument [Line Items]
Amount borrowed under credit agreement			$ 107,900,000

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Concentration

9 Months Ended

Sep. 30, 2015

Risks And Uncertainties [Abstract]

Concentration

13. Concentration

For the three months ended September 30, 2015, approximately 66% of total combined fee income and fee income from related party was attributable to contracts with Guarantee Insurance, the Company’s largest customer and a related party, and approximately 6% was attributable to contracts with the Company’s second largest customer. For the three months ended September 30, 2014, approximately 76% of total combined fee income and fee income from related revenues was attributable to contracts with Guarantee Insurance, and approximately 10% and 7% were attributable to contracts with the Company’s second and third largest customers, respectively.

For the nine months ended September 30, 2015, approximately 72% of total combined fee income and fee income from related party was attributable to contracts with Guarantee Insurance and approximately 8% was attributable to contracts with the Company’s second largest customer. For the nine months ended September 30, 2014, approximately 66% of total combined fee income and fee income from related revenues was attributable to contracts with Guarantee Insurance, and approximately 22% was attributable to contracts with the Company’s second largest customer.

As of September 30, 2015, approximately 62% of combined fee income receivable and fee income receivable from related party was attributable to contracts with Guarantee Insurance and approximately 2% and 1% of combined fee income receivable and fee income receivable from related party were attributable to contracts with the Company’s second and third largest customers, respectively. As of December 31, 2014, approximately 86% of combined fee income receivable and fee income receivable from related party was attributable to contracts with Guarantee Insurance and approximately 8% and 2% of combined fee income receivable and fee income receivable from related party were attributable to contracts with the Company’s second and third largest customers, respectively.

Because fee income from related party for claims administration services is based on the net portion of claims expense retained by Guarantee Insurance, the Company’s revenues attributable to contracts with Guarantee Insurance do not necessarily represent fee income from related party.

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Description of Business and Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Description of Business

Description of Business

Patriot National, Inc. (“Patriot National” or the “Company”) is an independent national provider of comprehensive technology-enabled outsourcing solutions that help insurance carriers, employers and other clients mitigate risk, comply with complex regulations, and save time and money. We offer a full suite of end-to-end insurance related and specialty services that allow our clients to improve efficiencies and reduce expenses through our value-added processes. The core of our value proposition includes the benefit of a “one-stop” solution with our broad array of offered services, scalable state-of-the-art technology, and solutions to complex business and regulatory processes. Our goal is to be the preferred provider of mandatory employer services such as risk management services, health and welfare services, employee onboarding and compliance services.

The Company offers two types of services: front-end services, such as brokerage, underwriting and policyholder services, and back-end services, such as claims adjudication and administration. We provide our services either on an individual basis, as bundles of two or more services tailored to a client’s specific needs or on a turnkey basis where we provide a comprehensive set of front-end and back-end services to a client. We also offer specialty services currently including technology outsourcing and other IT services, as well as employment pre-screening and background checks. As a service company, we do not assume any underwriting or insurance risk.

Our revenue is primarily fee-based, most of which is contractually committed or highly recurring. Unlike our insurance and reinsurance carrier clients, we do not generate underwriting income or assume underwriting risk on workers’ compensation plans. Patriot National is headquartered in Ft. Lauderdale, Florida.

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements have been omitted pursuant to such rules and regulations. Included for comparative purposes are our combined financial statements for the three and nine month periods ended September 30, 2014, which combined the financial activity of Patriot National with the results of an acquisition under common control.  This acquisition was completed on August 6, 2014.  The combined financial statements presented for the periods ended September 30, 2014 are the Statement of Operations and the Statement of Cash Flows.  This acquisition is discussed fully in our annual report for the year ended December 31, 2014.

The unaudited consolidated financial statements included herein are, in the opinion of management, prepared on a basis consistent with our audited combined financial statements for the year ended December 31, 2014 and include all normal recurring adjustments necessary for a fair presentation of the information set forth. The quarterly results of operations are not necessarily indicative of the results of operations to be reported for subsequent quarters or the full year. These unaudited consolidated financial statements should be read in conjunction with the audited combined financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014. In the preparation of our unaudited consolidated financial statements as of September 30, 2015, management evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued for potential recognition or disclosure therein.

For Contego Services Group, LLC (“Contego Services Group”), the Company’s combined subsidiary that is 97% owned, and for DecisionUR, LLC (“DecisionUR”), the Company’s combined subsidiary that is 98.8% owned, the third party holdings of equity interests are referred to as non-controlling interest. The portion of the third party members’ equity (deficit) of Contego Services Group and DecisionUR are presented as non-controlling interest in the accompanying consolidated balance sheets as of September 30, 2015 and combined balance sheet as of December 31, 2014. The Company discloses the following three measures of net income (loss): (i) net income (loss), including non-controlling interest in subsidiary, (ii) net income (loss) attributable to non-controlling interest in subsidiary, and (iii) net income (loss).

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Goodwill and Other Intangible Assets - Estimated Amortization Expense for Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Amortization expense
2015 (remaining three months)	$ 3,286
2016	13,140
2017	11,625
2018	10,770
2019	10,770
Thereafter	29,344
Net asset	$ 78,935	$ 32,988

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Equity and Fixed Income Security Investments - Schedule of Major Classes of Investments (Details) - USD ($)	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Schedule Of Trading Securities And Other Trading Assets [Line Items]
Equity and fixed income security investments, cost basis	$ 3,398,000
Equity and fixed income security investments, losses	(149,000)
Equity and fixed income security investments, fair value	3,249,000	$ 0
Common and preferred stocks
Schedule Of Trading Securities And Other Trading Assets [Line Items]
Equity and fixed income security investments, cost basis	429,000
Equity and fixed income security investments, losses	(41,000)
Equity and fixed income security investments, fair value	388,000
Corporate notes and bonds
Schedule Of Trading Securities And Other Trading Assets [Line Items]
Equity and fixed income security investments, cost basis	2,969,000
Equity and fixed income security investments, losses	(108,000)
Equity and fixed income security investments, fair value	$ 2,861,000

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Consolidated Statements of Operations (Unaudited) (Parenthetical) $ in Thousands	6 Months Ended
	Jun. 30, 2015 USD ($)
Income Statement [Abstract]
Early payment penalties on repayment of debt	$ 4,300
Write-off of deferred financing and original issue discounts	$ 9,342

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Effect of Recently Issued Financial Accounting Standards

9 Months Ended

Sep. 30, 2015

New Accounting Pronouncements And Changes In Accounting Principles [Abstract]

Effect of Recently Issued Financial Accounting Standards

2. Effect of Recently Issued Financial Accounting Standards

In September 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments”, an update to Accounting Standard Codification (“ASC”)Topic 805, Business Combinations.  This update requires that an acquirer recognize adjustments to the provisional amounts that are identified during the measurement period in the reporting period in which the adjusting amounts are determined. The amendment requires that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments in this update require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The amendments are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The update should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this update with earlier application permitted for financial statements that have not been issued.  We will evaluate this guidance as potential adjustments arise.  

In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs”. The update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. The update requires retrospective application. ASU 2015-03 is effective for fiscal years, and interim reporting periods within those years, beginning after December 15, 2015. Early adoption is permitted but we do not anticipate electing early adoption.  We are currently evaluating the financial impact of this standard.

In August 2014, the FASB issued ASU 2014-15 regarding ASC Topic 205, Presentation of Financial Statements – Going Concern. The updated guidance related to determining whether substantial doubt exists about an entity's ability to continue as a going concern. The amendment provides guidance for determining whether conditions or events give rise to substantial doubt that an entity has the ability to continue as a going concern within one year following issuance of the financial statements and requires specific disclosures regarding the conditions or events leading to substantial doubt. The updated guidance is effective for annual reporting periods and interim periods within those annual periods beginning after December 15, 2016. Earlier adoption is permitted, but we do not anticipate electing early adoption. We do not expect the adoption of this guidance to have a material impact on our combined financial statements.

In May 2014, the FASB issued ASU 2014-09 regarding ASC Topic 606, Revenue from Contracts with Customers. The standard provides principles for recognizing revenue for the transfer of promised goods or services to customers with the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued a deferral of effective date for this standard.  For public companies this standard applies to annual reporting period beginning after December 15, 2017, including interim reporting periods within that reporting period, and early adoption is not permitted. We are currently evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption.

In April 2014, the FASB issued ASU 2014-08, “Reporting Discontinued Operations”, regarding ASC Topic 205, Presentation of Financial Statements, and ASC Topic 360, Property, Plant and Equipment. The updated guidance related to reporting discontinued operations and disclosures of disposals of components of an entity. Under the amendment, only those disposals of components of an entity that represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements. Additionally, the elimination of the component's operations, cash flows and significant continuing involvement conditions have been removed. Further, an equity method investment could be reported as discontinued operations. The updated guidance is effective prospectively for all disposals or classifications as held for sale that occur within annual periods beginning after December 15, 2014. The adoption of this guidance has not had a material impact on our combined financial statements.

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Stock-Based Compensation - Summary of Significant Assumptions Used in Black-Scholes Option Pricing Model to Estimate Fair Value of Stock Options Granted to Employees (Details)	9 Months Ended
	Sep. 30, 2015
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Expected dividend yield	0.00%
Risk-free interest rate	0.49%	[1]
Expected volatility	33.02%	[2]
Expected life in years	3 years	[3]

[1] The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.

[2] The expected volatility is a measure of the amount by which a stock price has fluctuated or is expected to fluctuate based primarily on our and our peers' historical data.

[3] The expected life is the period of time, on average, that participants are expected to hold their options before exercise based primarily on our historical data.

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Subsequent Events - Additional Information (Details) - USD ($) $ in Thousands			9 Months Ended
	Oct. 29, 2015	Oct. 05, 2015	Sep. 30, 2015
Subsequent Event [Line Items]
Issuance of common stock			$ 97,831
Subsequent Event | Proposed Public Offering
Subsequent Event [Line Items]
Issuance of common stock		$ 80,000
Subsequent Event | Facilitation Agreement
Subsequent Event [Line Items]
Trigen provide upfront payment to Carman	$ 2,000

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Business Combinations (Tables)

9 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

Summary of Purchase Prices of Businesses Acquired

These acquisitions have been accounted for using the acquisition method for recording business combinations, except for DecisionUR, as further discussed below.

Name and Effective Date of Acquisition (In thousands):	Cash Paid		Stock Issued		Accrued Liability		Deferred Purchase Consideration		Recorded Earnout Payable		Maximum Potential Earnout Payable		Total Recorded Purchase Price
Phoenix Risk Management, Inc (January 31, 2015)	$	1,099	$	—	$	—	$	—	$	2,790	$	3,000	$	3,889
DecisionUR, LLC (February 5, 2015)		2,240		—		23		—		—		—		2,240
Capital & Guaranty, LLC (February 9, 2015)		175		—		—		—		175		175		350
TriGen Holding Group, Inc (March 31, 2015)		3,340		—		3,364		4,911		1,433		1,500		9,684
Hospitality Supportive Systems, LLC (April 1, 2015)		9,650		—		—		—		—		—		9,650
Selective Risk Management, LLC (April 1, 2015)		3,846		—		—		—		—		—		3,846
Vikaran Solutions, LLC (April 17, 2015)		8,500		—		152		—		—		—		8,500
Corporate Claims Management, Inc (April 24, 2015)		7,900		—		4,434		—		825		1,000		8,725
Candid Investigation Services, LLC (May 8, 2015)		1,033		—		—		—		367		450		1,400
Brandywine Insurance Advisors, LLC   (May 22, 2015)		3,000		—		—		—		220		1,205		3,220
Infinity Insurance Solutions, LLC (June 1, 2015)		1,750		—		100		—		552		650		2,302
InsureLinx, Inc (June 12, 2015)		6,300		—		1,840		—		—		—		6,300
The Carman Corporation (June 15, 2015)		2,000		—		—		—		—		—		2,000
CWI Benefits, Inc (July 9, 2015)		2,750		—		2,061		—		3,400		4,675		6,150
Restaurant Coverage Associates, Inc (August 14, 2015)		750		—		—		—		1,725		1,825		2,475
Risk Control Associates, Inc (August 14, 2015)		250		—		650		—		575		675		825
Global HR Research LLC (August 21, 2015)		23,500		6,503		2,457		11,920		—		—		41,923
Total	$	78,083	$	6,503	$	15,081	$	16,831	$	12,062	$	15,155	$	113,479

Aggregate Estimated Fair Values of the Net Assets Acquired

The following is a summary of the aggregate estimated fair values of the net assets acquired at the date of each of the acquisitions made in the nine months ended September 30, 2015:

In thousands	Total
Assets Acquired:
Cash	$	4,069
Restricted cash		4,838
Accounts receivable		5,069
Fixed assets		2,002
Other assets		2,272
Goodwill		57,915
Intangible assets:
Customer & carrier relationships		31,039
Service contracts		320
Non-compete agreements		4,739
Developed technology		13,268
Trade name portfolio		3,029
Total intangible assets		52,395
Total assets acquired		128,560
Liabilities assumed		15,081
Total net assets acquired	$	113,479

Summary of Unaudited Pro Forma Historical Results

The following is a summary of the unaudited pro forma historical results, as if these entities and Patriot Care Management, Inc. (“Patriot Care Management”), which was acquired on August 6, 2014, had been acquired at January 1, 2014 (in thousands, except per share data):

	Nine Months Ended September 30,
In thousands (except per share data)	2015		2014
Total revenues		174,376		141,658
Net (loss) income		1,107		14,508
Basic net (loss) income per share	$	0.04	$	0.97
Diluted net (loss) income per share	$	0.04	$	0.76

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Business Combinations - Summary of Purchase Prices of Businesses Acquired (Details) - USD ($)		9 Months Ended
	Aug. 21, 2015	Sep. 30, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid		$ 78,083,000
Business acquisition, stock issued		6,503,000
Business acquisition, accrued liability		15,081,000
Business acquisition, deferred purchase consideration		16,831,000
Business acquisition, recorded earnout payable		12,062,000
Business acquisition, maximum potential earnout payable		15,155,000
Business acquisition, total recorded purchase price		113,479,000
Phoenix Risk Management, Inc; January 31, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid		1,099,000
Business acquisition, recorded earnout payable		2,790,000
Business acquisition, maximum potential earnout payable		3,000,000
Business acquisition, total recorded purchase price		3,889,000
DecisionUR, LLC; February 5, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid		2,240,000
Business acquisition, accrued liability		23,000
Business acquisition, total recorded purchase price		2,240,000
Capital & Guaranty, LLC; February 9, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid		175,000
Business acquisition, recorded earnout payable		175,000
Business acquisition, maximum potential earnout payable		175,000
Business acquisition, total recorded purchase price		350,000
TriGen Holding Group, Inc
Business Acquisition [Line Items]
Business acquisition, cash paid		3,340,000
Business acquisition, accrued liability		3,364,000
Business acquisition, deferred purchase consideration		4,911,000
Business acquisition, recorded earnout payable		1,433,000
Business acquisition, maximum potential earnout payable		1,500,000
Business acquisition, total recorded purchase price		9,684,000
Hospitality Supportive Systems, LLC; April 1, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid		9,650,000
Business acquisition, total recorded purchase price		9,650,000
Selective Risk Management, LLC; April 1, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid		3,846,000
Business acquisition, total recorded purchase price		3,846,000
Vikaran Solutions, LLC; April 17, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid		8,500,000
Business acquisition, accrued liability		152,000
Business acquisition, total recorded purchase price		8,500,000
Corporate Claims Management, Inc; April 24, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid		7,900,000
Business acquisition, accrued liability		4,434,000
Business acquisition, recorded earnout payable		825,000
Business acquisition, maximum potential earnout payable		1,000,000
Business acquisition, total recorded purchase price		8,725,000
Candid Investigation Services, LLC; May 8, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid		1,033,000
Business acquisition, recorded earnout payable		367,000
Business acquisition, maximum potential earnout payable		450,000
Business acquisition, total recorded purchase price		1,400,000
Brandywine Insurance Advisors, LLC: May 22, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid		3,000,000
Business acquisition, recorded earnout payable		220,000
Business acquisition, maximum potential earnout payable		1,205,000
Business acquisition, total recorded purchase price		3,220,000
Infinity Insurance Solutions, LLC; June 1, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid		1,750,000
Business acquisition, accrued liability		100,000
Business acquisition, recorded earnout payable		552,000
Business acquisition, maximum potential earnout payable		650,000
Business acquisition, total recorded purchase price		2,302,000
InsureLinx, Inc; June 12, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid		6,300,000
Business acquisition, accrued liability		1,840,000
Business acquisition, total recorded purchase price		6,300,000
The Carman Corporation; June 15, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid		2,000,000
Business acquisition, total recorded purchase price		2,000,000
CWI Benefits, Inc; July 9, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid		2,750,000
Business acquisition, accrued liability		2,061,000
Business acquisition, recorded earnout payable		3,400,000
Business acquisition, maximum potential earnout payable		4,675,000
Business acquisition, total recorded purchase price		6,150,000
Restaurant Coverage Associates, Inc; August 14, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid		750,000
Business acquisition, recorded earnout payable		1,725,000
Business acquisition, maximum potential earnout payable		1,825,000
Business acquisition, total recorded purchase price		2,475,000
Risk Control Associates, Inc; August 14, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid		250,000
Business acquisition, accrued liability		650,000
Business acquisition, recorded earnout payable		575,000
Business acquisition, maximum potential earnout payable		675,000
Business acquisition, total recorded purchase price		825,000
Global HR Research LLC; August 21, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid	$ 24,000,000	23,500,000
Business acquisition, stock issued		6,503,000
Business acquisition, accrued liability		2,457,000
Business acquisition, deferred purchase consideration		11,920,000
Business acquisition, total recorded purchase price		$ 41,923,000

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Related Party Transactions

9 Months Ended

Sep. 30, 2015

Related Party Transactions [Abstract]

Related Party Transactions

12. Related Party Transactions

Fee income from related party represents fee income earned from Guarantee Insurance Company (“Guarantee Insurance”), a related party. Fee income from Guarantee Insurance for claims administration services is based on the net portion of claims expense retained by Guarantee Insurance pursuant to quota share reinsurance agreements between Guarantee Insurance, the third party insurance company customers of Patriot Underwriters, Inc. and the segregated portfolio cell reinsurers that assume business written by Guarantee Insurance. Certain fee income from third-party segregated portfolio cell reinsurers is remitted to the Company by Guarantee Insurance on behalf of the segregated portfolio cell reinsurers. Fee income from Guarantee Insurance for brokerage, underwriting and policyholder services represents fees for soliciting applications for workers’ compensation insurance for Guarantee Insurance, based on a percentage of premiums written or other amounts negotiated by the parties.

Our prices by customer for our brokerage and policyholder services and claims administration services were unchanged for the nine-month period ended September 30, 2015 relative to the nine-month period ended September 30, 2014, and, accordingly, the net increase in fee income was solely related to changes in the volume of business we managed.

Because fee income from related party for claims administration services is based on the net portion of claims expense retained by Guarantee Insurance, as described in Note 13, Concentration, the Company’s revenues attributable to contracts with Guarantee Insurance do not necessarily represent fee income from related party.

Fee income from related party for the three months ended September 30, 2015 was $23.8 million compared to $15.8 million for the three months ended September 30, 2014. For the nine months ended September 30, 2015, fee income from related party was $68.9 million compared to $24.6 million for the nine months ended September 30, 2014.  

Fee income receivable from related party was $22.1 million as of September 30, 2015, and$12.0 million at December 31, 2014.   

During the nine months ended September 30, 2014, the allocation of marketing, underwriting and policy issuance costs from related party in the accompanying combined statements of operations represents costs reimbursed to Guarantee Insurance Group for salaries and other costs incurred by Guarantee Insurance Group to provide its policyholder services. Management fees paid to related party for administrative support services in the accompanying combined statements of operations represent amounts paid to Guarantee Insurance Group for management oversight, legal, accounting, human resources and technology support services. Effective August 6, 2014, the management services agreement pursuant to which these fees were payable was terminated, and all costs associated with our operations began to be incurred directly by us. Accordingly, beginning August 6, 2014, such expenses, rather than being reflected in this item, are recorded in the line items to which they relate, which are primarily “salaries and salary related expenses,” “outsourced services” and “other operating expenses.”

As of September 30, 2015, we had a net receivable from related parties of $0.2 million due to entities controlled by Mr. Mariano, our founder, Chairman, President and Chief Executive Officer.

On April 17, 2015, the Company acquired Vikaran Solutions, LLC (“Vikaran”).  Prior to acquisition, Mr. Mariano held a non-controlling, 45% interest in Vikaran.  Upon closing, Mr. Mariano received proceeds of $3.8 million from the sale of Vikaran to Patriot National.

On July 20, 2015, the Company entered into a membership interest purchase agreement with Global HR Research LLC, a Florida limited liability company (“Global HR”), In Touch Holdings LLC, a Florida limited liability company (“ITH”), the members of Global HR, and Brandon G. Phillips as the sellers’ representative, pursuant to which, subject to the satisfaction or waiver of certain conditions, the Company will acquire all of the outstanding membership interest of Global HR.  The Global HR transaction closed on Augustst 21, 2015.  One of the Company’s independent directors, Austin J. Shanfelter, indirectly controlled Global HR.  Mr. Shanfelter owned 84% of the equity interests in ITH, which owned 75.5% of the equity interests of Global HR.

On July 31, 2015, we entered into a Purchase Agreement by and among Patriot Technology Solutions, Inc. and PN India Holdings (a wholly owned subsidiary of Patriot Technology Solutions, Inc. and Mehta and Pazol Consulting Services Private Limited (“MPCS”).  MPCS is an Indian company of computer programmers, solely focused on the development of Patriot’s WCE technology platform. Under the terms of the purchase agreement, PN India Holdings will acquire 100% of the capital stock of MPCS for the total purchase amount of $1.5 million.  The three sellers of MPCS include Sandeep Mehta, a 49.99% holder, Steven J. Pazol, a 49.99% holder, and Satyapal Mehta a 0.02% holder.  Steven J. Pazol’s interest is beneficially owned by Steve M. Mariano who previously purchased it in a prior transaction, making this a related party transaction.  During the three months ended September 30, 2015, PN India Holdings executed the purchase of the interests held by Satyapal Mehta and Steven Mariano. Amounts paid to Steven Mariano totaled $0.7 million granting PN India Holdings a 51.1% ownership interest of MPCS, Ltd.  The purchase of Steven Mariano’s interest in MPCS was recorded as a deemed dividend of a common control transaction, rather than a business combination. Although, MPCS was acquired from a party under common control, the results of operations for MPCS are included from acquisition date, as its operations are immaterial with respect to the financial statements taken as a whole for all periods presented. The remaining $0.7 million portion of the transaction is pending approval from the government of India.  Upon approval, Patriot will acquire the remaining 49.9% interest in MPCS from Sandeep Mehta.