reapply for a license on an annual basis, and that process may include a visit from the applicable state regulator. Renewal of a license is generally a fairly routine process. In addition, each ECE center or school program is subject to a variety of state and local regulations. Although these regulations vary greatly from jurisdiction to jurisdiction, governmental agencies generally review the safety, staff qualifications, fitness and adequacy of the buildings and equipment; the ratio of staff to children; the dietary program; the daily curriculum and compliance with health and transportation standards. In most jurisdictions, these agencies conduct scheduled and unscheduled inspections of locations. Repeated failures by a location to comply with applicable regulations can subject it to sanctions that might include probation or, in more serious cases, suspension or revocation of the center's or program's license to operate and could also lead to sanctions against the Company's other centers or programs located in the same jurisdiction. In addition, this type of action could lead to negative publicity extending beyond that jurisdiction. KLC OpCo generally seeks to operate centers and school programs in states with strict regulations in order to avoid unexpected expense and market disruption that may be caused by compliance with regulations adopted in states that previously lacked such regulations. KLC OpCo believes that its operations are in substantial compliance with alt material regulations applicable to its business. However, a licensing authority may determine that a particular center or school program is in violation of applicable regulations and may take action against that center or program and possibly other centers in the same jurisdiction. In addition, there may be unforeseen changes in regulations and licensing requirements, such as changes in the required ratio of child center staff personnel to enrolled children, which could have a material adverse effec