Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 15, 2024 | Jun. 30, 2023 | |
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-40033 | ||
Entity Registrant Name | P3 Health Partners Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 85-2992794 | ||
Entity Address, Address Line One | 2370 Corporate Circle Suite 300 | ||
Entity Address, City or Town | Henderson | ||
Entity Address, State or Province | NV | ||
Entity Address, Postal Zip Code | 89074 | ||
City Area Code | 702 | ||
Local Phone Number | 910-3950 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 116.9 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement for its 2024 annual meeting of stockholders to be filed with the Securities and Exchange Commission (the “SEC”) within 120 days after December 31, 2023 are incorporated by reference into Part III of this Annual Report on Form 10-K. | ||
Entity Central Index Key | 0001832511 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Class A Common Stock | |||
Title of 12(b) Security | Class A common stock, par value $0.0001 per share | ||
Trading Symbol | PIII | ||
Security Exchange Name | NASDAQ | ||
Entity Common Stock, Shares Outstanding | 119,334,054 | ||
Warrants | |||
Title of 12(b) Security | Warrants, each whole warrant exercisable for oneshare of Class A common stock at an exercise priceof $11.50 | ||
Trading Symbol | PIIIW | ||
Security Exchange Name | NASDAQ | ||
Class V Common Stock | |||
Entity Common Stock, Shares Outstanding | 196,569,360 |
Auditor Information
Auditor Information | 12 Months Ended |
Dec. 31, 2023 | |
Auditor Information [Abstract] | |
Auditor Firm ID | 243 |
Auditor Name | BDO USA, P.C. |
Auditor Location | Las Vegas, Nevada |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | |
CURRENT ASSETS: | |||
Cash | $ 36,320 | $ 17,537 | |
Restricted cash | 4,614 | 920 | |
Health plan receivable, net of allowance for credit losses of $150 and $0, respectively | 118,497 | 72,092 | |
Clinic fees, insurance and other receivable | 2,973 | 7,500 | |
Prepaid expenses and other current assets | 3,613 | 2,643 | |
TOTAL CURRENT ASSETS | 166,017 | 100,692 | |
Property and equipment, net | 8,686 | 8,839 | |
Intangible assets, net | 666,733 | 751,050 | |
Other long-term assets | 19,531 | 15,990 | |
TOTAL ASSETS | [1] | 860,967 | 876,571 |
CURRENT LIABILITIES: | |||
Accounts payable | 8,663 | 11,542 | |
Accrued expenses and other current liabilities | 36,884 | 16,647 | |
Accrued payroll | 3,506 | 8,224 | |
Health plan settlements payable | 34,992 | 13,608 | |
Claims payable | 178,009 | 151,207 | |
Premium deficiency reserve | 13,670 | 26,375 | |
Accrued interest | 23,648 | 14,061 | |
TOTAL CURRENT LIABILITIES | 299,372 | 241,664 | |
Operating lease liability | 13,622 | 11,516 | |
Warrant liabilities | 1,085 | 1,517 | |
Contingent consideration | 4,907 | 4,794 | |
Long-term debt, net | 108,319 | 94,421 | |
TOTAL LIABILITIES | [1] | 427,305 | 353,912 |
COMMITMENTS AND CONTINGENCIES (Note 16 and Note 20) | |||
MEZZANINE EQUITY: | |||
Redeemable non-controlling interest | 291,532 | 516,805 | |
STOCKHOLDERS’ EQUITY: | |||
Additional paid in capital | 509,442 | 315,375 | |
Accumulated deficit | (367,344) | (309,545) | |
TOTAL STOCKHOLDERS’ EQUITY | 142,130 | 5,854 | |
TOTAL LIABILITIES, MEZZANINE EQUITY, and STOCKHOLDERS’ EQUITY | 860,967 | 876,571 | |
Class A Common Stock | |||
STOCKHOLDERS’ EQUITY: | |||
Common stock | 12 | 4 | |
Class V Common Stock | |||
STOCKHOLDERS’ EQUITY: | |||
Common stock | $ 20 | $ 20 | |
[1] The Company’s consolidated balance sheets include the assets and liabilities of its consolidated variable interest entities (“VIEs”). As discussed in Note 22: Variable Interest Entities, P3 LLC is itself a VIE. P3 LLC represents substantially all the assets and liabilities of the Company. As a result, the language and numbers below refer only to VIEs held at the P3 LLC level. The consolidated balance sheets include total assets that can be used only to settle obligations of P3 LLC’s consolidated VIEs totaling $8.6 million and $3.1 million as of December 31, 2023 and 2022, respectively, and total liabilities of P3 LLC’s consolidated VIEs for which creditors do not have recourse to the general credit of the Company totaled $13.6 million and $9.9 million as of December 31, 2023 and 2022, respectively. These VIE assets and liabilities do not include $44.2 million and $33.0 million of net amounts due to affiliates as of December 31, 2023 and 2022, respectively, as these are eliminated in consolidation and not presented within the consolidated balance sheets. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Health plan receivable, allowance for credit loss | $ 150 | $ 0 |
Related Party | ||
Accounts payable, other | 44,200 | 33,000 |
VIE | ||
Assets to settle obligations | 8,600 | 3,100 |
Liabilities without recourse to company assets | $ 13,600 | $ 9,900 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 800,000,000 | 800,000,000 |
Common stock, shares issued (in shares) | 116,588,000 | 41,579,000 |
Common stock, shares outstanding (in shares) | 116,588,000 | 41,579,000 |
Class V Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 205,000,000 | 205,000,000 |
Common stock, shares issued (in shares) | 196,569,000 | 201,592,000 |
Common stock, shares outstanding (in shares) | 196,569,000 | 201,592,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
OPERATING REVENUE: | ||
TOTAL OPERATING REVENUE | $ 1,266,375 | $ 1,049,471 |
OPERATING EXPENSE: | ||
Medical expense | 1,234,740 | 1,057,224 |
Premium deficiency reserve | (12,705) | (11,461) |
Corporate, general and administrative expense | 122,362 | 157,284 |
Sales and marketing expense | 3,233 | 5,096 |
Depreciation and amortization | 86,675 | 87,289 |
Goodwill impairment | 0 | 1,314,952 |
TOTAL OPERATING EXPENSE | 1,434,305 | 2,610,384 |
OPERATING LOSS | (167,930) | (1,560,913) |
OTHER INCOME (EXPENSE): | ||
Interest expense, net | (15,985) | (11,404) |
Mark-to-market of stock warrants | 433 | 9,865 |
Other | (249) | 2,757 |
TOTAL OTHER (EXPENSE) INCOME | (15,801) | 1,218 |
LOSS BEFORE INCOME TAXES | (183,731) | (1,559,695) |
PROVISION FOR INCOME TAXES | (2,695) | (1,862) |
NET LOSS | (186,426) | (1,561,557) |
LESS: NET LOSS ATTRIBUTABLE TO REDEEMABLE NON-CONTROLLING INTEREST | (128,653) | (1,291,430) |
NET LOSS ATTRIBUTABLE TO CONTROLLING INTEREST | $ (57,773) | $ (270,127) |
NET LOSS PER SHARE (Note 15): | ||
Basic (in dollars per share) | $ (0.61) | $ (6.50) |
Diluted (in dollars per share) | $ (0.63) | $ (6.50) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Note 15): | ||
Basic (in shares) | 94,889 | 41,579 |
Diluted (in shares) | 294,590 | 41,579 |
Capitated revenue | ||
OPERATING REVENUE: | ||
TOTAL OPERATING REVENUE | $ 1,252,309 | $ 1,034,800 |
Other patient service revenue | ||
OPERATING REVENUE: | ||
TOTAL OPERATING REVENUE | $ 14,066 | $ 14,671 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND MEZZANINE EQUITY - USD ($) $ in Thousands | Total | Cumulative adjustment due to adoption of new credit loss standard | Class A Common Stock | Class V Common Stock | Redeemable Non-controlling Interest | Redeemable Non-controlling Interest Cumulative adjustment due to adoption of new credit loss standard | Common Stock Class A Common Stock | Common Stock Class V Common Stock | Additional Paid in Capital | Additional Paid in Capital Class V Common Stock | Accumulated Deficit | Accumulated Deficit Cumulative adjustment due to adoption of new credit loss standard |
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Beginning balance | $ 273,552 | $ 4 | $ 20 | $ 312,946 | $ (39,418) | |||||||
Beginning balance at Dec. 31, 2021 | $ 1,790,617 | |||||||||||
Increase (Decrease) in Temporary Equity | ||||||||||||
Equity-based compensation | 17,618 | |||||||||||
Net loss | (1,291,430) | |||||||||||
Ending balance at Dec. 31, 2022 | 516,805 | $ (124) | ||||||||||
Beginning balance (in shares) at Dec. 31, 2021 | 41,579,000 | 196,554 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Vesting of Class V common stock awards (in shares) | 5,038,000 | |||||||||||
Class A common stock warrants issued | 643 | 643 | ||||||||||
Equity-based compensation | 1,786 | 1,786 | ||||||||||
Net loss | (270,127) | (270,127) | ||||||||||
Ending balance (in shares) at Dec. 31, 2022 | 41,579,000 | 201,592,000 | 41,579,000 | 201,592,000 | ||||||||
Ending balance at Dec. 31, 2022 | $ 5,854 | $ (26) | $ 4 | $ 20 | 315,375 | (309,545) | $ (26) | |||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2016-13 [Member] | |||||||||||
Beginning balance | $ 5,854 | $ (26) | $ 4 | $ 20 | 315,375 | (309,545) | $ (26) | |||||
Equity-based compensation | 785 | |||||||||||
Remeasurement adjustment to redeemable non-controlling interest resulting from ownership changes | (117,860) | |||||||||||
Fair value adjustment to redeemable non-controlling interest | 20,579 | |||||||||||
Net loss | (128,653) | |||||||||||
Ending balance at Dec. 31, 2023 | $ 291,532 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Private placement, net of offering costs (in shares) | 69,157,000 | |||||||||||
Private placement, net of offering costs | 86,583 | $ 7 | 86,576 | |||||||||
At-the-market sales, net of offering costs | 33 | $ 27 | 33 | |||||||||
Issuance of Class A common stock upon settlement of RSUs, net of shares withheld for tax (in shares) | 204,000 | |||||||||||
Issuance of Class A common stock upon settlement of restricted stock units, net of shares withheld for tax | (16) | (16) | ||||||||||
Restricted stock unit awards issued in satisfaction of executive transaction bonuses | 5,000 | 5,000 | ||||||||||
Issuance of restricted stock awards (in shares) | 250,000 | |||||||||||
Vesting of Class V common stock awards (in shares) | 348,000 | |||||||||||
Vesting of Class V common stock awards | 0 | $ 1 | (1) | |||||||||
Equity-based compensation | 5,194 | 5,194 | ||||||||||
Exchanges of redeemable non-controlling interests for Class A common stock (in shares) | 5,371,000 | (5,371,000) | ||||||||||
Exchanges of redeemable non-controlling interest for Class A common stock | $ 0 | $ 1 | $ (1) | $ 0 | ||||||||
Remeasurement adjustment to redeemable non-controlling interest resulting from ownership changes | 117,860 | 117,860 | ||||||||||
Fair value adjustment to redeemable non-controlling interest | (20,579) | (20,579) | ||||||||||
Net loss | (57,773) | (57,773) | ||||||||||
Ending balance (in shares) at Dec. 31, 2023 | 116,588,000 | 196,569,000 | 116,588,000 | 196,569,000 | ||||||||
Ending balance at Dec. 31, 2023 | 142,130 | $ 12 | $ 20 | 509,442 | (367,344) | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Beginning balance | $ 142,130 | $ 12 | $ 20 | $ 509,442 | $ (367,344) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (186,426) | $ (1,561,557) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 86,675 | 87,289 |
Equity-based compensation | 5,979 | 19,404 |
Goodwill impairment | 0 | 1,314,952 |
Amortization of original issue discount and debt issuance costs | 472 | 0 |
Accretion of contingent consideration | 113 | 400 |
Mark-to-market adjustment of stock warrants | (433) | (9,865) |
Premium deficiency reserve | (12,705) | (11,461) |
Changes in operating assets and liabilities: | ||
Health plan receivable | (46,555) | (21,841) |
Clinic fees, insurance, and other receivable | 4,560 | (5,338) |
Prepaid expenses and other current assets | (1,243) | 4,266 |
Other long-term assets | (58) | 100 |
Accounts payable, accrued expenses, and other current liabilities | 15,988 | 6,082 |
Accrued payroll | 282 | 1,920 |
Health plan settlements payable | 21,384 | (8,941) |
Claims payable | 26,802 | 49,249 |
Accrued interest | 9,587 | 5,290 |
Operating lease liability | (450) | 4,032 |
Net cash used in operating activities | (76,028) | (126,019) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (1,827) | (2,233) |
Acquisitions, net of cash acquired | 0 | (5,500) |
Net cash used in investing activities | (1,827) | (7,733) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from long-term debt, net of original issue discount | 14,101 | 15,000 |
Payment of debt issuance costs | (173) | 0 |
Proceeds from private placement offering, net of offering costs paid | 86,595 | 0 |
Deferred offering costs paid | (175) | 0 |
Payment of tax withholdings upon settlement of restricted stock unit awards | (16) | 0 |
Repayment of short-term and long-term debt | 0 | (3,625) |
Net cash provided by financing activities | 100,332 | 11,375 |
Net change in cash and restricted cash | 22,477 | (122,377) |
Cash and restricted cash at beginning of year | 18,457 | 140,834 |
Cash and restricted cash at end of year | 40,934 | 18,457 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 5,813 | 5,714 |
Cash paid for income taxes | 567 | 0 |
Supplemental disclosures of non-cash investing and financing information: | ||
Operating lease liabilities arising from obtaining new right-of-use assets | 7,222 | 6,839 |
Increase in accrued expenses related to debt issuance costs and original issue discount | 212 | 525 |
Increase in accounts payable related to private placement offering costs | 12 | 0 |
Increase in accounts payable related to at-the-market offering costs | 19 | 0 |
Increase in accrued expenses related to at-the-market offering costs | 206 | 0 |
Increase in other receivable related to at-the-market sales proceeds | 33 | 0 |
Restricted stock unit awards issued in satisfaction of executive transaction bonuses | 5,000 | 0 |
Remeasurement adjustment to redeemable noncontrolling interest resulting from ownership changes | (117,860) | 0 |
Fair value adjustment to redeemable noncontrolling interest | 20,579 | 0 |
Warrants issued in connection with new debt | 0 | 643 |
Reconciliation of cash and restricted cash: | ||
Cash | 36,320 | 17,537 |
Restricted cash | 4,614 | 920 |
Total cash and restricted cash | $ 40,934 | $ 18,457 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Note 1: Organization P3 Health Partners Inc. (“P3”) is a patient-centered and physician-led population health management company and, for accounting purposes, the successor to P3 Health Group Holdings, LLC and its subsidiaries (collectively, “P3 LLC,” and together with P3, the “Company”) after the consummation of a series of business combinations in 2021 with Foresight Acquisition Corp. (the “Business Combinations”). As the sole manager of P3 LLC, P3 operates and controls all of the business and affairs of P3 LLC. P3 LLC was founded on April 12, 2017 and began commercial operations on April 20, 2017 to provide population health management services on an at-risk basis to insurance plans offering medical coverage to Medicare beneficiaries under Medicare Advantage programs. Medicare Advantage programs are insurance products created solely for Medicare beneficiaries. Insurance plans contract directly with the Centers for Medicare and Medicaid Services (“CMS”) to offer Medicare beneficiaries benefits that replace traditional Medicare fee-for-service (“FFS”) coverage. The Company’s contracts with health plans are based on an at-risk shared savings model. Under this model, the Company is financially responsible for the cost of all contractually-covered services provided to members assigned to the Company by health plans in exchange for a fixed monthly “capitation” payment, which is generally a percentage of the payment health plans receive from CMS. Under this arrangement, Medicare beneficiaries generally receive all their healthcare coverage through the Company’s network of employed and affiliated physicians and specialists. The services provided to health plans’ members vary by contract. These may include utilization management, care management, disease education, and maintenance of a quality improvement and quality management program for members assigned to the Company. The Company is also responsible for the credentialing of its providers, processing and payment of claims, and the establishment of a provider network for certain health plans. In addition to the Company’s contracts with health plans, the Company provides primary healthcare services through its employed physician clinic locations. These primary care clinics are reimbursed for services provided under FFS contracts with various payers and through capitated – per member, per month (“PMPM”) arrangements. |
Going Concern and Liquidity
Going Concern and Liquidity | 12 Months Ended |
Dec. 31, 2023 | |
Going Concern and Liquidity | |
Going Concern and Liquidity | Note 2: Going Concern and Liquidity The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has experienced losses since its inception and had net losses of $186.4 million and $1,561.6 million for the years ended December 31, 2023 and 2022, respectively. Such losses were primarily the result of goodwill impairment charges with respect to the year ended December 31, 2022, and costs incurred in adding new members, building relationships with physician partners and payors, and developing new services. The Company anticipates operating losses and negative cash flows to continue for the foreseeable future due to the strong growth the Company has experienced over the last six years and the investments the Company is making in expanding its business, which require up-front expenses. As of December 31, 2023 and 2022, the Company had $36.3 million and $17.5 million, respectively, in unrestricted cash and cash equivalents available to fund future operations. The Company’s capital requirements will depend on many factors, including the pace of the Company’s growth, ability to manage medical costs, the maturity of its members, and its ability to raise capital. The Company may need to use available capital resources and/or raise additional capital earlier than currently anticipated. When the Company pursues additional debt and/or equity financing, there can be no assurance that such financing will be available on terms commercially acceptable to the Company. If the Company is unable to obtain additional funding when needed, it will need to curtail planned activities in order to reduce costs, which will likely have an unfavorable effect on the Company’s ability to execute on its business plan, and have an adverse effect on its business, results of operations, and future prospects. As a result of these matters, substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 3: Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of the Company. All intercompany accounts and transactions have been eliminated. The Company periodically evaluates entities for consolidation either through ownership of a majority voting interest, or through means other than voting interest, in accordance with the Variable Interest Entity (“VIE”) accounting model. This evaluation includes a qualitative review of the design of the entity, its organizational structure, including decision making ability and financial agreements, as well as a quantitative review. The Company consolidates a VIE when it has a variable interest that provides it with a controlling financial interest in the VIE, referred to as the primary beneficiary of the VIE. As the sole managing member of P3 LLC, P3 has the right to direct the most significant activities of P3 LLC and the obligation to absorb losses and receive benefits. The rights of the non-managing members of P3 LLC are limited and protective in nature and do not give substantive participation rights over the sole managing member. Accordingly, P3 identifies itself as the primary beneficiary of P3 LLC and began consolidating P3 LLC as of December 3, 2021, the closing date of the Business Combinations (the “Closing Date”), resulting in a non-controlling interest related to the common units of P3 LLC (“Common Units”) held by members other than P3. Additionally, as more fully described in Note 22 “Variable Interest Entities,” P3 LLC is the primary beneficiary of the following physician practices (collectively, the “Network VIEs”): • Kahan, Wakefield, Abdou, PLLC • Bacchus, Wakefield, Kahan, PC • P3 Health Partners Professional Services, P.C. • P3 Medical Group, P.C. • P3 Health Partners California, P.C. (f/k/a Omni IPA Medical Group, Inc.) Comprehensive Loss Comprehensive loss includes net loss to common stockholders as well as other changes in equity that result from transactions and economic events other than those with stockholders. There was no difference between comprehensive loss and net loss to common stockholders for the periods presented. Use of Estimates The preparation of these consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that could affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to allowance for credit losses, revenue recognition, the liability for unpaid claims, equity-based compensation, premium deficiency reserves (“PDR”), fair value and impairment recognition of long-lived assets (including intangibles), fair value of liability classified instruments, and judgments related to deferred income taxes. The Company bases its estimates on the best information available at the time, its experiences, and various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates. Commitments and Contingencies An accrual is established for commitments and contingencies when management, after considering the facts and circumstances of each matter as then known to management, has determined a specific contingency is probable and estimable. The Company also faces contingencies that are reasonably possible to occur that cannot currently be estimated. When only a range of amounts is reasonably estimable and no amount within the range is more likely than another, the low end of the range is recorded. The Company expenses costs associated with loss contingencies, including any related legal fees, as they are incurred. Due to the inherent uncertainties surrounding gain contingencies, the Company does not recognize potential gains until realized. Net Loss per Share Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of warrants, stock options, restricted stock units, restricted stock awards, and Common Units convertible into shares of Class A common stock during the period by applying the treasury stock method or if-converted method, as applicable. Cash and Restricted Cash Cash includes all cash and liquid investments with an initial maturity of three months or less. Cash deposits held in accounts at each financial institution are insured up to $250,000 by the Federal Deposit Insurance Corporation (“FDIC”). The Company maintains its cash in bank deposit accounts that, at times, may exceed FDIC insured limits. Management does not expect any losses to occur on such accounts. As of December 31, 2023 and 2022, the Company had cash of $36.3 million and $17.5 million, respectively, deposited at banking institutions which are subject to the FDIC insured limit. Restricted cash is held for a specific purpose (such as payment of healthcare claims) and is thus not available to the Company for immediate or general business use. As of December 31, 2023 and 2022, the Company had restricted cash of $4.6 million and $0.9 million, respectively. Revenue Recognition The Company categorizes revenue based on various factors such as the nature of contracts as follows: Revenue Type Year Ended % of Total Year Ended % of Total (dollars in thousands) Capitated revenue $ 1,252,309 99 % $ 1,034,800 99 % Other patient service revenue: Clinical fees & insurance revenue 5,192 0 6,158 0 Shared risk revenue — — 351 0 Care coordination / management fees 8,301 1 7,924 1 Incentive fees 573 0 238 0 Total other patient service revenue 14,066 1 14,671 1 Total revenue $ 1,266,375 100 % $ 1,049,471 100 % During the years ended December 31, 2023 and 2022, four health plan customers each accounted for 10% or more of total revenue and collectively comprised 60% and 66%, respectively, of the Company’s total revenue. Capitated Revenue The Company contracts with health plans using an at-risk model. Under the at-risk model, the Company is responsible for the cost of all covered services provided to members assigned by the health plans to the Company in exchange for a fixed premium payment, which generally is a percentage of the health plans’ premiums (“POP”) paid by CMS. Through this capitation arrangement, the Company stands ready to provide assigned Medicare Advantage beneficiaries all their medical care via the Company’s directly employed and affiliated physician/provider network. Since the Company controls and provides medical care to its assigned members, the Company acts as a principal in these capitation arrangements. As of December 31, 2023 and 2022, the Company had at-risk contracts in effect with 23 health plans and 24 health plans, respectively, across five states. The capitated revenue the Company receives is determined via a competitive bidding process with CMS and is based on the costs of care in local markets and the average utilization of services by patients enrolled. Medicare pays capitation using a “risk adjustment model,” which compensates providers based on the health status (acuity) of each individual patient, also known as hierarchal condition categories (“HCC”). Medicare Advantage plans with higher acuity patients receive higher premiums. Conversely, Medicare Advantage plans with lower acuity patients receive lesser premiums. Under the risk adjustment model, capitation is paid on an interim basis based on enrollee data submitted for the preceding year and is adjusted in subsequent periods after final data is compiled (using a Risk Adjustment Factor or “RAF”). The Company generally estimates transaction prices using the most likely methodology. Amounts are only included in the transaction price to the extent any significant uncertainty of reversal on cumulative revenue will not occur and is resolved. In certain contracts, PMPM fees also include adjustments for items such as performance incentives or penalties based on the achievement of certain clinical quality metrics as contracted with payors. Capitated revenue is recognized based on a PMPM transaction price to transfer the service for a distinct increment of the series (e.g., month), net of projected acuity adjustments and performance incentives or penalties. The Company recognizes revenue in the month in which eligible members are entitled to receive healthcare benefits during the contract term. The capitation amount is subject to possible retroactive premium risk adjustments based on the member’s individual acuity. Premium risk adjustments recorded in 2023 which relate to prior years were $20.3 million. Premium risk adjustments recorded in 2022 related to prior years were $3.3 million. In the fourth quarter of 2023, the Company released a portion of the constraint applied in previous periods with respect to risk adjustment revenue for dates of service in 2022, which resulted in an increase to capitation revenue in the amount of $27.7 million for the year ended December 31, 2023. As the period between the time of service and time of payment is typically one year or less, the Company elected the practical expedient not to adjust for the effects of a significant financing component. The Company’s contracts with health plans may include core functions and services for managing assigned patients’ medical care, the combination of which is offered as a single solution. Capitation contracts have a single performance obligation that is a stand ready obligation to perform healthcare services to the population of enrolled members and constitutes a series for the provision of managed healthcare services for the term of the contract, which is deemed to be one month since the mix of patients-customers can change month over month. The Company does not offer nor price each individual function as a standalone service to health plans. Monthly, each plan is contractually obligated to reserve for payment of medical claims equal to a defined POP attributable to members assigned to the Company. In turn, the Company administers medical claims for contractually covered services for assigned health plan members from that health plan’s reserve. On a quarterly or monthly basis, health plans conduct a settlement of the reserve to determine any surplus or deficit amount. The reconciliation and distribution of the reserve occur within 120 days following the end of each quarter. An annual settlement reconciliation and distribution occur within the period specified by the individual health plan’s contract (which can be up to 21 months following each year-end). Three health plan customers accounted for 10% or more of total health plan receivable each as of December 31, 2023 and 2022. As of December 31, 2023 and 2022, Management has deemed the Company’s settlement receivables to be fully collectible from those health plans where the Company is not delegated for claims processing. Accordingly, a constraint on the variable consideration associated with settlement receivables was not recorded. Other Patient Service Revenue – Clinical Fees and Insurance Revenue Clinical fees and insurance revenue relates to net patient fees received from various payors and direct patients under contracts in which the Company’s sole performance obligation is to provide healthcare services through the operation of medical clinics. The Company recognizes clinic fees and insurance revenue in the period in which services are provided. Under FFS payment arrangements, revenue is recognized on the date of service using a portfolio approach. The Company’s performance obligations are typically satisfied in the same day services are provided. All the Company’s contracts with its customers under these arrangements include a single performance obligation. The Company’s contractual relationships with patients, in most cases, also involve third-party payors (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through state-sponsored health insurance exchanges). Transaction prices for services provided are dependent upon specific rules in place with third party payors–specifically, Medicare/Medicaid and pre-negotiated rates with managed care health plans and commercial insurance companies. Contractual arrangements with third parties typically include payments at amounts which are less than standard charges. These charges generally have predetermined rates for diagnostic service codes or discounted FFS rates. The Company perpetually reviews its contractual estimation processes to consider and incorporate updates to laws, regulations, and frequent changes in the managed care system. Contractual terms are negotiated and updated accordingly upon renewal. Clinical fees and insurance revenue is based upon the estimated amounts the Company expects to receive from patients and third-party payors. Estimates of explicit price concessions under managed care and commercial insurance plans are tied to payment terms specified in related contractual agreements. Retroactively calculated explicit price concessions tied to reimbursement agreements with third-party payers are recognized on an estimated basis in the period related services are rendered and adjusted in future periods as final payments are received. Revenue related to uninsured patients, uninsured co-payments, and deductibles (for patients with healthcare coverage) may also be discounted. The Company records implicit price concessions (based on historical collection experience) related to uninsured accounts to recognize self-pay revenue at their most likely amounts to be collected. The Company deems FFS revenue to be variable consideration and its estimates of associated transaction prices will not result in a significant revenue reversal in the future. The Company has elected the practical expedient not to adjust the transaction price for any financing components as those were deemed to be insignificant and to expense all incremental customer contract acquisition costs as incurred as such costs are not material and would be amortized over a period less than one year. Other Patient Service Revenue – Care Coordination Fees and Management Fees The Company’s delegated health plans may also pay a Care Coordination Fee (“CCF”) or management fee to the Company. CCFs and management fees are intended to fund the costs of delegated services provided to certain health plans. CCFs are specifically identified and separated in each monthly capitation payment the Company receives from these parties. None of the Company’s other health plans bifurcate CCFs nor are any of them contractually required to do so. Based on similarities of the terms of the care coordination and administrative services, the Company uses a portfolio approach to record revenue from CCFs and management fees. Patient Fees Receivable Substantially all client fees and insurance receivables are due under FFS contracts with third party payors, such as commercial insurance companies, government-sponsored healthcare programs, or directly from patients. The Company has agreements with third-party payors that provide for payments at amounts different from the established rates. Payment arrangements include prospectively determined rates per discharge, reimbursed costs, discounted charges, and per diem payments. Patient fees receivable, where a third-party payor is responsible for the amount due, are recorded at the invoiced amount, net of any expected contractual adjustments and implicit price concessions, and do not bear interest. Contractual adjustments arising under reimbursement arrangements with third-party payors are accrued on an estimated basis in the period the related services are rendered and are adjusted in future periods as final settlements are determined. The Company continuously monitors activities from payors (including patients) and records an implicit price concession as a reduction of revenue based on specific contracts and actual historical collection patterns to reflect the estimated amounts the Company expects to collect. Patient fees receivable of $0.7 million and $0.8 million are included in clinic fees, insurance and other receivable in the Company’s consolidated balance sheets as of December 31, 2023 and 2022, respectively, and are recorded net of contractual allowances. Property and Equipment Property and equipment is carried at acquisition cost, net of accumulated depreciation. Costs for repairs and maintenance of property and equipment, after such property and equipment has been placed in service, are expensed as incurred. Costs and related accumulated depreciation are eliminated when property and equipment is sold or otherwise disposed. Sales and disposals may result in asset-specific gains or losses. Any such gains or losses are included as a component of operations. The Company records depreciation using the straight-line method over the estimated useful lives of the respective assets. The following table summarizes the estimated useful lives of the Company’s property and equipment: Classification Depreciation Cycle Leasehold improvements (cycle: lease term) 1 to 10 Years Furniture and fixtures 7 Years Vehicles 5 Years Computer equipment 3 Years Medical equipment 7 Years Software 3 Years The Company capitalizes certain costs incurred in connection with developing its own proprietary technology to serve core functions of its business operations such as revenue and medical cost analysis, care management and various facets that promote impactful utilization. As of December 31, 2023 and 2022, the Company has capitalized $3.9 million and $3.5 million, respectively, to property and equipment for these software costs (specifically to work in progress). In 2022, $0.7 million of capitalized costs were placed into service. No capitalized costs were placed into service in 2023. All costs associated with internally developed technology following deployment, or that otherwise do not meet capitalization criteria, are expensed as incurred. Fair Value Measurements The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels (see Note 5 “Fair Value Measurements and Hierarchy” for further discussion): Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate their carrying amounts may not be recoverable. Recoverability of an asset or asset group is measured by comparing its carrying amount to the future undiscounted net cash flows the asset or asset group is expected to generate. If such assets are considered impaired (e.g., future undiscounted cash flows are less than net book value), an impairment charge is recognized, measured by the difference between the carrying value and the estimated fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Goodwill Goodwill represents the excess of the purchase price over the fair value assigned to tangible and identifiable intangible assets acquired and liabilities assumed. Goodwill is tested for impairment at the reporting unit level on an annual basis in the fourth quarter, or more frequently if events or changes in circumstances indicate the carrying value of goodwill may not be recoverable (a “triggering event”). On the occurrence of a triggering event, an entity has the option to first assess qualitative factors to determine whether a quantitative impairment test is necessary. If it is more likely than not that goodwill is impaired, the fair value of the reporting unit is compared with its carrying value. An impairment charge is recognized for the amount by which the carrying amount exceeds the fair value, provided, the loss recognized cannot exceed the total amount of goodwill. Intangible Assets Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives. In determining the estimated useful lives of definite-lived intangibles, the Company considers the nature, competitive position, life cycle position and historical and expected future operating cash flows of each acquired asset, as well as its commitment to support these assets through continued investment and legal infringement protection. The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Determining whether an impairment loss occurred requires comparing the carrying amount to the sum of undiscounted cash flows expected to be generated by the asset. Such events and circumstances include the occurrence of an adverse change in the market involving the business employing the assets or a situation in which it is more likely than not that the Company will dispose of such assets. If the comparison indicates that there is impairment, the impairment loss to be recognized as a non-cash charge to earnings is measured by the amount by which the carrying amount of the asset exceeds its fair value and the impaired asset is written down to its fair value or, if fair value is not readily determinable, to an estimated fair value based on discounted expected future cash flows. Leases The Company determines whether a contract is or contains a lease at the inception of the contract. For leases with terms greater than 12 months, the Company records the related operating or finance right-of-use asset and lease liability at the present value of lease payments over the lease term. The Company is generally not able to readily determine the implicit rate in the lease and therefore uses the determined incremental borrowing rate at lease commencement to compute the present value of lease payments. The incremental borrowing rate represents an estimate of the market interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. Renewal options are not included in the measurement of the right-of-use assets and lease liabilities unless the Company is reasonably certain to exercise the optional renewal periods. Some leases also include early termination options, which can be exercised under specific conditions. Additionally, certain leases contain incentives, such as construction allowances from landlords, which reduce the right-of-use asset related to the lease. Certain of the Company’s leases contain rent escalations over the lease term. The Company recognizes expense for operating leases on a straight-line basis over the lease term. The Company’s lease agreements contain variable payments for common area maintenance and utilities. The Company has elected the practical expedient to combine lease and non-lease components for all asset categories; therefore, the lease payments used to measure the lease liability for these leases include fixed minimum rentals along with fixed non-lease component charges. Variable lease payments are excluded from the measurement of right-of-use assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. The Company does not have significant residual value guarantees or restrictive covenants in its lease portfolio. Business Combinations The price tendered in business combinations is allocated using the acquisition method of accounting among the identifiable tangible and intangible assets and assumed liabilities and non-controlling interests, all of which are based on estimates of corresponding fair value as of the acquisition date. The Company applies valuation methods which are ultimately used in the Company’s purchase price allocations. Goodwill is recorded based on the difference between the fair value of consideration exchanged and the fair value of the net assets and liabilities assumed. Such fair values that are not finalized for reporting periods following the acquisition date are estimated and recorded as provisional amounts. Adjustments to these provisional amounts during the measurement period (defined as the date through which all information required to identify and measure the consideration transferred, the assets acquired, the liabilities assumed, and the non-controlling interests obtained, limited to one year from the acquisition date) are recorded when identified. During the year ended December 31, 2022, the Company acquired two medical practices in separate transactions. The total cash purchase price was $5.5 million, net of cash acquired, and was allocated primarily to goodwill. Equity-Based Compensation Equity-based compensation cost is measured at the grant date for all equity-based awards based on the fair value of the awards. For equity awards that vest subject to the satisfaction of service-based conditions, compensation cost is recognized on a straight-line basis over the requisite service period, which varies by award. For equity awards that vest subject to the satisfaction of performance-based conditions, the Company evaluates the probability of achieving each performance-based condition at each reporting date and recognizes compensation cost when it is deemed probable that the performance-based condition will be met on an accelerated basis over the requisite service period, which varies by award. Equity-based compensation is recorded within corporate, general and administrative expense in the accompanying consolidated statements of operations. The Company accounts for forfeitures as they occur. The Company uses the Black-Sholes option-pricing model to determine the fair value of the Company’s stock option awards. The risk-free interest rate estimate was based on constant maturity, which is the theoretical value of a U.S. Treasury that is based on recent values of auctioned U.S. Treasuries with remaining terms similar to the expected term of the stock option awards. The expected dividend yield was based on the Company’s expectation of not paying dividends in the foreseeable future. The expected term was calculated using the “simplified” method; whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the stock option due to P3’s lack of sufficient historical data. The expected volatility was estimated using an average of the historical volatilities of a peer group comprised of publicly traded companies in the same industry. The Company assesses the impact of material nonpublic information on its share price or expected volatility, as applicable, at the time of grant. The Company’s restricted stock and restricted stock unit awards are measured based on the fair market value of the underlying shares of Class A common stock on the date of grant. Warrant Liability The Company has public and private placement warrants of Class A common stock classified as liabilities as well as warrants of Class A common stock issued to a lender classified as equity. The Company classifies as equity any equity-linked contracts that (1) require physical settlement or net-share settlement or (2) give the Company a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement). Warrants classified as equity are initially measured at fair value. Subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity. The Company classifies as assets or liabilities any equity-linked contracts that (1) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside the Company’s control) or (2) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). For equity-linked contracts that are classified as liabilities, the Company records the fair value of the equity-linked contracts at each balance sheet date and records the change in the statements of operations as a gain (loss) from change in fair value of warrant liability. The Company’s public warrant liability is valued using observable market prices for those public warrants. The Company’s private placement warrants are valued using a binomial lattice pricing model when the warrants are subject to the make-whole table, or otherwise are valued using a Black-Scholes pricing model. The Company’s warrants issued to a capital provider are valued using a Black-Scholes-Merton pricing model based on observable market prices for public shares and warrants. The assumptions used in preparing these models include estimates such as volatility, contractual terms, discount rates, dividend yield, expiration dates and risk-free rates. The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms. The assessment considers whether the warrants are freestanding financial instruments, meet the definition of a liability, and whether the warrants meet all of the requirements for equity classification, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. Premium Deficiency Reserve PDR liabilities are established when it is probable that expected future health care costs and maintenance costs under a group of existing contracts will exceed anticipated future premiums and stop-loss insurance recoveries on those contracts. The Company assesses if a PDR liability is needed through review of current results and forecasts. For purposes of determining premium deficiency losses, contracts are grouped consistent with our method of acquiring, servicing, and measuring the profitability of such contracts based on the expected medical loss ratio. The Company grouped its Medicare Advantage health plan contracts together as a single group as it operates in one line of business. The Company further concluded that the costs to administer these contracts are based on centralized and shared service functions. As of December 31, 2023 and 2022, the PDR liability was $13.7 million and $26.4 million, respectively, which represented its estimate of probable contract losses expected to be generated by the Company’s health plans. Medical Expense and Claims Payable The cost of healthcare services is recognized in the period services are provided. This also includes an estimate of the cost of services that have been incurred, but not yet reported (“IBNR”). Medical expense also includes costs for overseeing the quality of care and programs, which focus on patient wellness. Additionally, medical expense can include, from time to time, remediation of certain claims that might result from periodic reviews conducted by various regulatory agencies. Management estimates the Company’s IBNR by applying standard actuarial methodologies, which utilize histori |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2023 | |
Recent Accounting Pronouncements Adopted | |
Recent Accounting Pronouncements | Note 4: Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”) Accounting Standards Update (“ASU”) 2021-08 requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts as if it had originated the contracts. In the fourth quarter of 2023, the Company adopted ASU 2021-08 effective January 1, 2023. The guidance will be applied to future business combinations. ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) ASU 2016-13 introduced a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The new current expected credit losses model generally calls for the immediate recognition of all expected credit losses and applies to loans, accounts and trade receivables as well as other financial assets measured at amortized cost, loan commitments and off-balance sheet credit exposures, debt securities and other financial assets measured at fair value through other comprehensive income, and beneficial interests in securitized financial assets. The new guidance replaced the current incurred loss model for measuring expected credit losses, requires expected losses on available for sale debt securities to be recognized through an allowance for credit losses rather than as reductions in the amortized cost of the securities, and provides for additional disclosure requirements. In April 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-04, which, among other amendments, allowed for certain policy elections and practical expedients related to accrued interest on financial instruments. In May 2019, the FASB issued ASU 2019-05, which granted targeted transition relief by allowing entities to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost. In November 2019, the FASB issued ASU 2019-10 and ASU 2019-11, which addressed certain aspects of the guidance related to effective dates, expected recoveries, troubled debt restructurings, accrued interest receivables, and financial assets secured by collateral. The Company adopted ASU 2016-13 and related amendments as of January 1, 2023 on a modified retrospective basis. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements and related disclosures. Recent Accounting Pronouncements Not Yet Adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) ASU 2023-09 enhances the transparency and decision usefulness of income tax disclosures, in response to investors’ feedback, indicating the need for improved information to assess an entity’s operations, tax risks, and planning opportunities, particularly in understanding exposure to jurisdictional tax changes and their impact on cash flows. The amendments address these concerns by improving income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. The amendments in this update are effective for annual periods beginning after December 15, 2024 and should be applied prospectively. Early adoption and retrospective application is permitted. The Company is evaluating the effect ASU 2023-09 will have on its consolidated financial statements and related disclosures. ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”) ASU 2023-07 improves the disclosures about a public entity’s reportable segments and addresses requests from investors for additional, more detailed information about a reportable segment’s expenses. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The amendments require retrospective application to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company is evaluating the effect ASU 2023-07 will have on its financial statements and related disclosures. ASU 2023-06, Disclosure Improvements: Codification Amendments In Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”) ASU 2023-06 clarifies or improves disclosure and presentation requirements on a variety of topics and aligns the requirements in the FASB accounting standards codification (the “Codification”) with the SEC’s regulations. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The amendments in this update should be applied prospectively. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. The Company is evaluating the effect ASU 2023-06 will have on its consolidated financial statements and related disclosures. ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) ASU 2020-06 eliminates two of the three models in ASC 470-20 that require issuers to separately account for embedded conversion features and eliminates some of the requirements for equity classification in ASC 815-40-25 for contracts in an entity’s own equity. The guidance also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and generally requires them to include the effect of potential share settlement for instruments that may be settled in cash or shares. As a smaller reporting company, the amendments in this update are effective for annual periods beginning after December 15, 2023, and interim periods therein. The Company does not expect the adoption of ASU 2020-06 to have a material impact on its consolidated financial statements and related disclosures. |
Fair Value Measurements and Hie
Fair Value Measurements and Hierarchy | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Hierarchy | Note 5: Fair Value Measurements and Hierarchy Information about the Company’s financial liabilities measured at fair value on a recurring basis is presented below: Level 1 Level 2 Level 3 Total (in thousands) Warrant liability as of December 31, 2023 $ 1,056 $ — $ 29 $ 1,085 Warrant liability as of December 31, 2022 $ 1,477 $ — $ 40 $ 1,517 The key Level 3 inputs into the option pricing model related to the private placement warrants to purchase Class A common stock were as follows: December 31, 2023 2022 Volatility 75 % 55 % Risk-free interest rate 4.01 % 4.11 % Exercise price $ 11.50 $ 11.50 Expected term 2.9 Years 3.9 Years Generally, an increase in the market price of the Company’s shares of common stock, an increase in the volatility of the Company’s shares of common stock, and an increase in the remaining term of the warrants would each result in a directionally similar change in the estimated fair value of the Company’s warrant liabilities. Such changes would increase the associated liability while decreases in these assumptions would decrease the associated liability. An increase in the risk-free interest rate would result in a decrease in the estimated fair value measurement and thus a decrease in the associated liability. The Company has not, and does not plan to, declare dividends on its common stock and, as such, there is no change in the estimated fair value of the warrant liabilities due to the dividend assumption. The following table sets forth a summary of changes in the fair value of the Company’s private placement warrants to purchase Class A common stock, which are considered to be Level 3 fair value measurements: December 31, 2023 2022 (in thousands) Beginning balance $ 40 $ 502 Mark-to-market adjustment of stock warrants (11) (462) Ending balance $ 29 $ 40 The Company recorded gains on the changes in the fair value of public warrants of $0.4 million and $9.4 million during the years ended December 31, 2023 and 2022, respectively. The book value of cash; clinic fees, insurance receivables, and other receivables; accounts payable; and accrued expenses and other current liabilities approximate fair value because of the short maturity and high liquidity of these instruments. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 6: Property and Equipment The Company’s property and equipment balances consisted of the following: December 31, 2023 2022 (in thousands) Leasehold improvements $ 2,933 $ 1,810 Furniture & fixtures 1,165 1,262 Computer equipment & software 3,699 3,206 Medical equipment 1,106 1,067 Software (development in process) 3,877 3,460 Vehicles 654 618 Other 33 37 13,467 11,460 Less: accumulated depreciation (4,781) (2,621) Property and equipment, net $ 8,686 $ 8,839 Total depreciation of property and equipment recognized on the consolidated statements of operations was $2.3 million and $2.4 million for the years ended December 31, 2023 and 2022, respectively. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 7: Goodwill The following table provides a reconciliation of goodwill and accumulated goodwill impairment losses as of (in thousands): Balance at December 31, 2021 Goodwill $ 1,309,750 Accumulated goodwill impairment losses — 1,309,750 Acquisitions 5,202 Impairment losses (1,314,952) Balance at December 31, 2022 Goodwill 1,314,952 Accumulated goodwill impairment losses (1,314,952) $ — In the second quarter of 2022, the Company identified indicators of impairment related to goodwill due to a significant deterioration in the overall market and a sustained decrease in the price of the Company’s Class A common stock. As a result, the Company performed an interim assessment for impairment as of June 30, 2022 and noted that the Company’s share price (i) was significantly lower than its opening price on December 2, 2021, (ii) had not surpassed its opening price since December 15, 2021, and (iii) had steadily declined through the end of the second quarter of 2022, which did not follow the overall rebound pattern in the healthcare industry. Management concluded that, given the macroeconomic and financial market conditions, industry-specific considerations, the decline in the Company’s performance as a result of higher than expected medical expenses due to the COVID-19 pandemic, and the sustained decrease in share price, it was more likely than not that the Company’s fair value was less than its carrying amount at June 30, 2022. Accordingly, management performed the impairment test by estimating the Company’s fair value using a weighted combination of (i) discounted cash flows, using Level 3 inputs such as revenue, profit margin, and discount rate and (ii) market-based approach, using Level 3 inputs such as comparable companies’ market multiples. Based on management’s comparison of the Company’s weighted estimated fair value to its carrying amount, an $851.5 million goodwill impairment charge was recorded for the three months ended June 30, 2022. In the fourth quarter of 2022, the Company identified indicators of impairment related to goodwill due to the Company’s overall financial performance and a sustained decrease in the price of the Company’s Class A common stock. As a result, the Company performed an assessment for impairment as of December 31, 2022 and noted that the Company’s share price closed at its lowest price in its trading history and had steadily declined through the end of December 31, 2022, which was not consistent or was significantly worse when compared to the performance of its peers and the healthcare industry as a whole. Management concluded that, given the decline in the Company’s performance and the sustained decrease in its share price, it was more likely than not that the Company’s fair value was less than its carrying amount at December 31, 2022. Accordingly, management performed the impairment test by estimating the Company’s fair value using a weighted combination of (i) discounted cash flows, using Level 3 inputs such as revenue, profit margin, and discount rate; and (ii) market-based approach, using Level 3 inputs such as comparable companies’ market multiples. Based on management’s comparison of the Company’s weighted estimated fair value to its carrying amount, a $463.5 million goodwill impairment charge was recorded for the three months ended December 31, 2022. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Intangible Assets [Abstract] | |
Intangible Assets | Note 8: Intangible Assets Intangible assets, net consisted of the following as of: December 31, 2023 2022 Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Amortization Net Carrying (in thousands) Indefinite lived intangible assets: Medical licenses $ 700 $ — $ 700 $ 700 $ — $ 700 Definite lived intangible assets: Customer relationships 684,000 (142,500) 541,500 684,000 (74,100) 609,900 Trademarks 148,635 (31,671) 116,964 148,635 (16,704) 131,931 Payor contracts 4,700 (940) 3,760 4,700 (470) 4,230 Provider network 4,800 (991) 3,809 4,800 (511) 4,289 Total $ 842,835 $ (176,102) $ 666,733 $ 842,835 $ (91,785) $ 751,050 Amortization of intangible assets was $84.3 million and $84.8 million during the years ended December 31, 2023 and 2022, respectively. Estimated future amortization of intangible assets is $84.2 million for each of the years 2024 through 2028. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2023 | |
Warrants | |
Warrants | Note 9: Warrants As of December 31, 2023 and 2022, there were an aggregate of 81.9 million and 11.2 million warrants outstanding, respectively, which include the public warrants, private placement warrants, VGS Warrants (as defined below), and the March 2023 Warrants. No warrants were exercised during the years ended December 31, 2023 and 2022. Liability-classified Public and Private Placement Warrants Each public and private placement warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share. The public warrants will expire five years after the completion of the Business Combinations. The Company has the right to redeem the public warrants when the price per share of Class A common stock equals or exceeds $18.00 for 20 days within a 30-day trading period. The private placement warrants are identical to the public warrants, except that the private placement warrants are subject to certain transfer restrictions, are not redeemable by the Company if they are held by sponsors, and are exercisable on a cashless basis. The public and private placement warrants are recorded as a liability on the consolidated balance sheets with a balance of $1.1 million and $1.5 million as of December 31, 2023 and 2022, respectively. The Company recorded gains of $0.4 million and $9.9 million from the change in fair value of the warrants during the years ended December 31, 2023 and 2022, respectively. Equity-classified VGS Warrants In connection with the Unsecured Promissory Note issued in December 2022 (see Note 11 “Debt”), the Company and VGS entered into a warrant agreement (the “VGS Warrant Agreement”) pursuant to which the Company issued warrants to purchase 0.4 million shares of Class A common stock of the Company at an exercise price of $4.26 per share to VGS (the “VGS Warrants”). The number of shares of common stock for which the VGS Warrants is exercisable and the exercise price may be adjusted upon any event involving subdivisions, combinations, distributions, recapitalizations, and similar transactions. Pursuant to the VGS Warrant Agreement, the warrants and the right to purchase securities upon the exercise of the warrants will terminate upon the earliest to occur of the following: (a) December 13, 2027; and (b) the consummation of (i) a sale, conveyance, consolidation with any other corporation (other than a wholly owned subsidiary corporation) or (ii) any other transaction or series of related transactions in which more than 50% of the voting power of which the Company or P3 LLC is disposed. The Company recorded the fair value of the VGS Warrants of $0.6 million as an increase to additional paid in capital during the year ended December 31, 2022. The key Level 3 inputs into the option pricing model related to the VGS Warrants were as follows: Volatility 49 % Risk-free interest rate 3.80 % Exercise price $ 4.26 Expected term 5.0 Years March 2023 Warrants In connection with the Purchase Agreement dated March 2023 (see Note 13 “Capitalization”), the Company issued warrants to purchase an aggregate of 59.9 million shares of Class A common stock (the “Common Warrants”), and pre-funded warrants to purchase an aggregate of 10.8 million shares of Class A common stock (the “Pre-Funded Warrants” and, together with the Common Warrants, the “March 2023 Warrants”) to the Purchasers (as defined in Note 13 “Capitalization”). Pursuant to the warrant agreements, the March 2023 Warrants and the right to purchase securities upon the exercise of the March 2023 Warrants will terminate upon the earliest to occur of the following: (a) April 5, 2028, with respect to the Common Warrants only; and (b) the consummation of (i) a sale, conveyance, disposal, or encumbrance of all or substantially all of the Company’s property or business or the Company’s merger into or consolidation with any other corporation (other than a wholly owned subsidiary corporation) or (ii) any other transaction or series of related transactions in which more than 50% of the voting power of which the Company is disposed and the proceeds thereof are paid to the then-existing stockholders of the Company. |
Claims Payable
Claims Payable | 12 Months Ended |
Dec. 31, 2023 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract] | |
Claims Payable | Note 10: Claims Payable Activity in the liability for claims payable was as follows: December 31, 2023 2022 (in thousands) Claims unpaid, beginning of period $ 151,207 $ 101,958 Incurred, related to: Current period 1,064,341 942,570 Prior period(s) (2,617) 882 Total incurred 1,061,724 943,452 Paid, related to: Current period 893,092 794,026 Prior period(s) 141,830 100,177 Total paid 1,034,922 894,203 Claims unpaid, end of period $ 178,009 $ 151,207 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Note 11: Debt Long-term debt consisted of the following: December 31, 2023 2022 (in thousands) Repurchase Promissory Note $ 15,000 $ 15,000 Term Loan Facility 65,000 65,000 VGS Promissory Note 29,102 15,000 Long-term debt, gross 109,102 95,000 Less: unamortized debt issuance costs and original issue discount (783) (579) Long-term debt, net $ 108,319 $ 94,421 Repurchase Promissory Note In June 2019, the Company issued a share repurchase promissory note to a former equity investor for $15.0 million, which was subsequently amended in November 2020 (as amended, the “Repurchase Promissory Note”). The Repurchase Promissory Note automatically matures and is due and payable on the earlier of June 30, 2026, a change in control transaction, or an underwritten primary public offering, each as defined in the agreement. The Repurchase Promissory Note accrues paid-in-kind (“PIK”) interest of 11.0% per year. The principal balance, accrued interest, and an exit fee of $0.6 million are due at maturity. Accrued interest was $11.7 million and $9.0 million as of December 31, 2023 and 2022, respectively. Term Loan Facility In November 2020, the Company entered into a Term Loan Agreement and Security Agreement with a commercial lender (as amended, the “Term Loan Agreement”), which provided funding up to $100.0 million (the “Term Loan Facility”), of which $65.0 million was drawn as of December 31, 2023 and 2022. The Company’s access to additional borrowings under the Term Loan Facility ended upon termination of the commitment period on February 28, 2022. The Term Loan Agreement was amended on November 16, 2021 to provide for certain modifications and to obtain consent from the lenders to consummate the Business Combinations. The Term Loan Agreement was amended on December 21, 2021 to provide for certain modifications and to permit the consummation of an acquisition in a prior year and related transactions. The Term Loan Agreement was amended on December 13, 2022 to provide for certain modifications and to permit the issuance of the Unsecured Promissory Note (defined below) and related transactions. The Security Agreement provides the lenders collateral in 100% of the Company’s pledged stock, its subsidiaries (including tangible and intangible personal property), and bank accounts. The principal balance is due in full on the maturity date, which is December 31, 2025. This maturity date may be accelerated as a remedy under certain default provisions in the agreement or in the event a mandatory prepayment trigger occurs. Interest is payable at 12.0% per annum on a quarterly cycle (in arrears). The Company has elected to pay interest of 8.0% per annum in cash with the remaining 4.0% per annum being added to principal as PIK interest for a period of three years (or 12 payments). The PIK is subject to acceleration in the event certain occurrences in the Term Loan Facility’s agreement are triggered. Accrued interest was $7.9 million and $5.0 million as of December 31, 2023 and 2022, respectively. The Term Loan Facility includes certain restrictive covenants, including restrictions on the payment of cash dividends. The Company must remain in compliance with financial covenants such as minimum liquidity of $5.0 million and annual minimum revenue levels. On an annual basis, the Company must post a minimum amount of annual revenue equal to or greater than $525.0 million in 2023, $585.0 million in 2024, and $650.0 million in 2025. The Company is also subject to certain restrictions that include indebtedness and liens. As of December 31, 2023, the Company was not in compliance with its Term Loan Facility covenants related to issuance of the 2023 financial statements with an audit opinion free of a “going concern” qualification. The Term Loan Facility lenders granted a waiver of the covenant under the Term Loan Facility related to the existence of a “going concern” qualification in the audit opinion for our audited financial statements for the fiscal year ended December 31, 2023. The Company was in compliance with all other covenants under the Term Loan Facility as of December 31, 2023; however, there can be no assurance that the Company will be able to maintain compliance with these covenants in the future or that the lenders under the Term Loan Facility or the lenders of any future indebtedness the Company may incur will grant any such waiver or forbearance in the future. VGS Promissory Note In December 2022, the Company entered into a related party financing transaction (see Note 21 “Related Parties”) with VBC Growth SPV LLC (“VGS”) which included the issuance of an unsecured promissory note (the “VGS Promissory Note”) to VGS; warrant agreement, pursuant to which the Company issued warrants to purchase 0.4 million shares of Class A common stock at an exercise price of $4.26 per share to VGS (see Note 9 “Warrants”); and a subordination agreement (the “2022 Subordination Agreement”), pursuant to which VGS agreed to subordinate its right of payment under the VGS Promissory Note to the right of payment and security interests of the lenders under the Term Loan Facility. The VGS Promissory Note provided for funding of up to $40.0 million, which ended upon the termination of the commitment period on February 3, 2023. The Company paid VGS an up-front fee of 1.5% at the time of each draw. As of December 31, 2023 and 2022, $29.1 million and $15.0 million had been drawn on the VGS Promissory Note, respectively, and the Company had recorded debt issuance costs and original issue discount of $0.8 million and $0.6 million, respectively. The VGS Promissory Note matures on May 19, 2026. Interest is payable at 14.0% per annum on a quarterly cycle (in arrears) beginning March 31, 2023. The Company may elect to pay interest 6.0% in kind and 8.0% in cash, but if the terms of the 2022 Subordination Agreement do not permit the Company to pay interest in cash, interest will be paid entirely in-kind. Accrued interest was $4.0 million and $0.1 million as of December 31, 2023 and 2022, respectively. The Company will pay VGS a back-end fee of 9.0% at the time the VGS Promissory Note is paid. The VGS Promissory Note may be prepaid, at the Company’s option, either in whole or in part, without penalty or premium, at any time and from time to time, subject to the payment of the back-end fee; provided that prepayments must be in increments of at least $2.0 million. The VGS Promissory Note restricts the Company’s ability and the ability of its subsidiaries to, among other things, incur indebtedness and liens, and make investments and restricted payments. The maturity date may be accelerated as a remedy under the certain default provisions in the agreement, or in the event a mandatory prepayment event occurs. As of December 31, 2023, long-term debt maturities are as follows (in thousands): 2024 $ — 2025 65,000 2026 44,102 109,102 Less: unamortized debt issuance costs and original issue discount (783) $ 108,319 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12: Income Taxes As a result of the Business Combinations, substantially all the Company’s assets and operations are held and conducted by P3 LLC and its subsidiaries, and the Company’s only assets are equity interests in P3 LLC. P3 LLC is treated as a partnership for U.S. federal and most applicable state and local income tax jurisdictions. As a partnership, P3 LLC is generally not subject to taxes, other than entity level state income taxes. Any taxable income or loss generated by P3 LLC is passed through to and included within the taxable income or loss of its members in accordance with the terms of the P3 LLC Amended & Restated Limited Liability Agreement dated as of the Closing Date (“P3 LLC A&R LLC Agreement”). Prior to the Business Combinations, the income and losses of P3 LLC were passed through to its members and nontaxable to P3 LLC. The Company is taxed as a corporation and pays corporate federal, state, and local taxes on income allocated to it from P3 LLC based on the Company’s economic interest held in P3 LLC. While the Company consolidates P3 LLC for financial purposes as a VIE, the Company will not be taxed on the earnings attributed to the non-controlling interests. As a result, the income tax burden on the earnings taxed on the non-controlling interests is not reported by the Company in its consolidated financial statements. The components of loss before income taxes were as follows: Year Ended December 31, 2023 2022 (in thousands) Domestic $ (183,731) $ (1,559,695) Foreign — — Total $ (183,731) $ (1,559,695) The components of income tax expense were as follows: Year Ended December 31, 2023 2022 (in thousands) Current income taxes: Federal $ 170 $ 111 State 2,525 1,751 Total current income taxes 2,695 1,862 Deferred income taxes: Federal — — State — — Total deferred income taxes — — Total income tax expense $ 2,695 $ 1,862 A reconciliation of the statutory federal income tax to the Company’s provision for income taxes is as follows: Year Ended December 31, 2023 2022 (dollars in thousands) Tax at federal statutory rate $ (38,584) $ (327,536) Non-controlling interest and nontaxable income 24,486 260,020 Change in valuation allowance 29,781 33,961 Investment in P3 LLC (20,420) 35,147 Return to provision 4,134 — Deferred tax adjustments 1,754 — Other reconciling items 1,544 270 Total $ 2,695 $ 1,862 Effective tax rate (1.5) % (0.1) % The Company’s tax rate is affected primarily by the recognition of a valuation allowance and the portion of income and expense allocated to the non-controlling interest. It is also affected by discrete items that may occur in any given year such as benefits from changes in the fair value of private placement and public warrants. Deferred Income Taxes Deferred income taxes result from differences in the recognition of amounts for tax and financial reporting purposes, as well as operating loss and tax credit carryforwards. Significant components of the Company’s deferred income tax assets and liabilities are as follows: December 31, 2023 2022 (in thousands) Deferred tax assets: Investment in P3 LLC $ 19,709 $ 20,684 Net operating loss carryforwards 21,525 17,601 Accrued liabilities 221 2,764 Goodwill and identifiable intangible assets 1,923 589 Section 163j interest limitation 3,031 1,995 Other deferred tax assets 632 94 Total deferred tax assets 47,041 43,727 Less: valuation allowance (46,370) (43,558) Net deferred tax assets 671 169 Deferred tax liabilities: Operating lease, right-of-use assets (338) (19) Other deferred tax liabilities (333) (150) Total deferred tax liabilities (671) (169) Net deferred tax asset $ — $ — The Company recognizes deferred tax assets to the extent it believes that these assets are more likely than not to be realized. The realization of tax benefits of net deferred tax assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable. Based on the available evidence as of December 31, 2023, the Company believes that it is more likely than not that the tax benefits of the U.S. losses incurred will not be realized. Accordingly, the Company has recorded a valuation allowance against the tax benefits of the U.S. losses incurred. The Company intends to maintain the valuation allowance on the U.S. net deferred tax assets until sufficient positive evidence exists to support a reversal of, or decrease in, the valuation allowance. The Company has recognized no deferred taxes in connection with its subsidiary, Medcore Health Plan Inc. (“MHP”). Because MHP does not file a consolidated corporate income tax return with the Company, the deferred tax assets of MHP are separately assessed for realizability. Based on the weight of all available evidence as of December 31, 2023, including cumulative losses in recent years, the Company believes that it is more likely than not that the tax benefits of the deferred tax assets of MHP will not be realized. Accordingly, the Company has recorded a valuation allowance against the tax benefits of the related deferred tax assets. The Company has recognized no deferred taxes in connection with the Network VIEs. Because the Network VIEs do not file a consolidated corporate income tax return with the Company, the deferred tax assets are separately assessed for realizability. Based on the weight of all available evidence as of December 31, 2023, including cumulative losses in recent years, the Company believes that it is more likely than not that the tax benefits of the deferred tax assets of the Network VIEs will not be realized. Accordingly, the Company has recorded a valuation allowance against the tax benefits of the related deferred tax assets. As of December 31, 2023, the Company has recognized a deferred tax asset with an offsetting valuation allowance in connection with its investment in P3 LLC. During 2023, the Company adjusted the deferred taxes on the investment in P3 LLC for changes in methodology and other adjustments recognized through entity. As of December 31, 2023, the Company has U.S. federal income tax net operating loss carryforwards of $94.7 million available to offset future taxable income, all of which will be carried forward indefinitely, but utilization is limited to 80% of taxable income in any given year. The Company also has state net operating loss carryforwards of $33.9 million, of which $1.5 million will expire in 2033, $4.5 million will expire in 2034, $6.5 million will expire in 2035, $5.5 million will expire in 2039, $0.1 million will expire in 2041, $2.3 million will expire in 2042, $0.5 million will expire in 2043, and $13.0 million will be carried forward indefinitely. The federal and state net operating loss carryforwards may be subject to limitations under Section 382 and Section 383 of the Internal Revenue Code of 1986 (the “Code”) and similar provisions under state law. The Tax Reform Act of 1986 contains provisions that limit the federal net operating loss carryforwards that may be used in any given year in the event of special occurrences, including significant ownership changes. The Company has completed a Section 382 analysis covering the period January 1, 2018 through September 30, 2023. The Section 382 analysis tested the Company’s stock for each occurrence of stock issuance during the covered period. Through the analysis period, ownership changes were identified resulting in annual limitations to tax attributes; however, due to the indefinite carryforward of U.S. federal income tax net operating losses, no such carryforwards have been derecognized. The Company did not record any penalties or interest related to income taxes or uncertain tax positions, as management has concluded that no such positions exist, on the consolidated balance sheets as of December 31, 2023 and 2022. In addition, the Company did not record any penalties or interest related to income taxes on the consolidated statements of comprehensive income during the years ended December 31, 2023 and 2022. The Company is subject to examination for tax years beginning with the year ended December 31, 2020. The Company is not currently under any U.S. federal or state income tax audits for any tax year. Tax Receivable Agreement In connection with the Business Combinations, the Company entered into a TRA that provides for the payment by the Company of 85% of the amount of any tax benefits that are realized, or in some cases are deemed to realize, as a result of (i) increases in the Company’s share of the tax basis in the net assets of P3 LLC resulting from any redemptions or exchanges of P3 LLC, (ii) tax basis increases attributable to payments made under the TRA, and (iii) deductions attributable to imputed interest pursuant to the TRA. The Company expects to benefit from the remaining 15% of any tax benefits that are realized. Pursuant to the Company’s election under Section 754 of the Code, the Company expects to obtain an increase in its share of the tax basis in the net assets of P3 LLC when Common Units are redeemed or exchanged. The Company intends to treat any redemptions and exchanges of Common Units as direct purchases of the units for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that the Company would otherwise pay in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent the tax basis is allocated to those capital assets. The estimation of liability under the TRA is, by its nature, imprecise and subject to significant assumptions regarding a number of factors, including the timing and amount of taxable income generated by the Company each year, as well as the tax rate then applicable, among other factors. Actual tax benefits realized by the Company may differ from tax benefits calculated under the TRA as a result of the use of certain assumptions in the TRA, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits. The payment obligation under the TRA is an obligation of the Company and not of P3 LLC. The payments that the Company will be required to make will generally reduce the amount of the overall cash flow that might have otherwise been available, but the Company expects the cash tax savings realized from the utilization of the related tax benefits will exceed the amount of any required payments. As of December 31, 2023 and 2022, the TRA liability is estimated to be $11.0 million and $4.6 million, respectively; however, due to the full valuation allowance recorded by the Company, which results in no tax benefits that are to be realized related to the amortization of the step-up, the Company determined that payments to TRA holders are not probable and no TRA liability has been recorded as of December 31, 2023 and 2022. As non-controlling interest holders exercise their right to exchange their Common Units, a TRA liability may be recorded based on 85% of the estimated future tax benefits that the Company may realize as a result of increases in its tax basis of P3 LLC. The amount of the increase in the tax basis, the related estimated tax benefits, and the related TRA liability to be recorded will depend on the price of a share of the Company’s Class A common stock at the time of the relevant redemption or exchange. |
Capitalization
Capitalization | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Capitalization | Note 13: Capitalization As of December 31, 2023, under the Company’s amended and restated certificate of incorporation dated August 20, 2020, the Company is authorized to issue: (i) 800 million shares of Class A common stock with a par value of $0.0001 per share, (ii) 205 million shares of Class V common stock with a par value of $0.0001 per share, and (iii) 10 million shares of preferred stock with a par value of $0.0001 per share, of which no shares were issued or outstanding as of December 31, 2023 and 2022. Holders of shares of Class A common stock and Class V common stock are each entitled to one vote on all matters to be voted upon by stockholders. The declaration, amount, and payment of any future dividends on shares of Class A common stock will be at the discretion of the Company’s Board of Directors and will depend upon many factors, including the Company’s results of operations, financial condition, capital requirements, restrictions in its debt agreements, and other factors that the Company’s Board of Directors deems relevant. Holders of shares of Class A common stock are entitled to receive such dividends declared by the Company’s Board of Directors. Holders of shares of Class V common stock are not entitled to participate in any such dividends declared by the Company’s Board of Directors. The Company’s Board of Directors has not declared any cash dividends during the years ended December 31, 2023 or 2022. March 2023 Private Placement On April 6, 2023, pursuant to a Securities Purchase Agreement (the “Purchase Agreement”), dated March 30, 2023 with the purchasers named therein (the “Purchasers”), which included certain affiliated entities of Chicago Pacific Founders GP, L.P., a Delaware limited partnership (“CPF”), and the Company’s Chief Medical Officer and member of the Company’s board of directors, the Company issued 79.9 million units at a price of approximately $1.12 per unit for institutional investors, and a purchase price of approximately $1.19 per unit for employees and consultants. Each unit consists of one share of Class A common stock and 0.75 of a warrant to purchase one share of Class A common stock at an exercise price of $1.13. Certain institutional investors elected to receive pre-funded warrants to purchase Class A common stock in lieu of a portion of their Class A common stock. In total, the Company sold (i) an aggregate of 69.2 million shares of its Class A common stock (the “Shares”), (ii) warrants to purchase an aggregate of 59.9 million shares of Class A common stock, and (iii) pre-funded warrants to purchase an aggregate of 10.8 million shares of Class A common stock for aggregate proceeds of $86.6 million, net of $2.9 million in offering costs (collectively, the “March 2023 Private Placement”). Registration Rights Agreement On April 6, 2023, in connection with the Purchase Agreement, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Purchasers. Pursuant to the Registration Rights Agreement, the Company agreed to prepare a registration statement for purposes of registering the resale of the Shares and shares of common stock issuable upon exercise of the March 2023 Warrants, which was filed with the SEC on May 2, 2023 and declared effective by the SEC on June 14, 2023. The Registration Rights Agreement also contains certain shelf takedown and piggyback rights. The Company has also agreed, among other things, to indemnify the Purchasers, their officers, directors, members, employees and agents, successors and assigns under the registration statement from certain liabilities and to pay all fees and expenses incident to the Company’s obligations under the Registration Rights Agreement. Letter Agreement with CPF On April 6, 2023, in connection with the Purchase Agreement, the Company entered into a letter agreement (the “Letter Agreement”) with CPF, Chicago Pacific Founders GP III, L.P., a Delaware limited partnership (“CPF GP III”) (on behalf of the funds of which CPF is the general partner, certain funds of which CPF GP III is the general partner) and/or certain of their affiliated entities and funds (collectively, the “CPF Parties”). The Letter Agreement provides, pursuant to certain stipulations, that CPF will be entitled to designate one additional independent member of the Company’s board of directors and that CPF will be entitled to certain information rights and protective provisions. As of the date of the issuance of these consolidated financial statements, CPF has not exercised its right to designate a director under the terms of the Letter Agreement. CPF Parties also agreed to a standstill restriction from the date of the closing of the March 2023 Private Placement to June 30, 2024 that limits the ownership of the CPF Parties to 49.99% of the Company’s Class A common stock and Class V common stock. Shelf Registration On November 9, 2023, the Company filed a shelf Registration Statement on Form S-3 with a capacity of $250 million (the “Shelf Registration”), which was declared effective by the SEC on November 20, 2023, and entered into an Open Market Sales Agreement (“Sales Agreement”) pursuant to which the Company may issue and sell, from time to time, through the sales agent, shares of the Company’s Class A common stock, par value $0.0001 per share, with an aggregate value of up to $75 million. The sales agent will make commercially reasonable efforts, following the Company’s instructions, to sell shares over time, adhering to specified limits. Sales will be conducted through at-the-market offerings as defined by Rule 415(a)(4) under the Securities Act of 1933, as amended. The aggregate value of shares of Class A common stock that may be offered, issued, and sold under the Sales Agreement is included in the aggregate value of securities that may be offered, issued, and sold by the Company under the Shelf Registration. Upon termination of the Sales Agreement, any unused portion will be available for sale in other offerings pursuant to the Shelf Registration. |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Equity-Based Compensation | Note 14: Equity-Based Compensation Common Unit Awards In connection with the closing of the Business Combinations, unvested incentive unit awards granted under the then-current equity plan were converted into Common Units, which were paired with an equal number of shares of the Company’s Class V common stock, and remained subject to the original vesting conditions. If a forfeiture of unvested Common Units occurred, the associated shares of Class V common stock were also forfeited. The following summarizes Common Unit award activity for the year ended December 31, 2023: Weighted Number of Non-vested as of December 31, 2022 $ 9.20 380 Granted $ — — Vested $ 9.20 (349) Forfeited $ 9.20 (31) Non-vested as of December 31, 2023 — Total fair value of Common Unit awards vested during the years ended December 31, 2023 and 2022 was $0.5 million and $17.6 million, respectively. The Common Unit awards vested ratably over a period between one month and two years, so long as the grantee stayed employed. 2021 Incentive Award Plan In connection with the Business Combinations, the Company’s Board of Directors adopted, and its stockholders approved, the 2021 Incentive Award Plan (the “2021 Plan”), effective on its adoption date, in order to facilitate the grant of cash and equity incentives to employees, consultants, and directors of the Company and certain affiliates. The 2021 Plan provides that the initial aggregate number of shares reserved and available for issuance is 14.6 million plus an increase each January 1, beginning on January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (i) 1% of the aggregate number of shares of Class A common stock and Class V common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of Class A common stock as is determined by the Company’s Board of Directors. Since January 1, 2022, the aggregate number of shares of Class A common stock reserved and available for issuance under the 2021 Plan has increased by a total of 4.9 million pursuant to the automatic annual increase provision under the 2021 Plan. As of December 31, 2023, the number of shares of Class A common stock reserved and available for issuance under the 2021 Plan was 5.9 million. The 2021 Plan allows for the grant of (i) stock options, including incentive stock options, (ii) stock appreciation rights, (iii) restricted stock awards (“RSAs”), (iv) restricted stock unit (“RSU”) awards, or (v) other stock or cash based awards as may be determined by the plan’s administrator from time to time. The term of each option award shall be no more than 10 years from the date of grant. Options exercised under the 2021 Plan provide the purchaser with full rights equivalent to those of existing Class A common stockholders and holders as of the date of exercise. The Company’s policy for issuing shares upon stock option exercise is to issue new shares of Class A common stock. Additionally, the P3 LLC A&R LLC Agreement states that P3 LLC will maintain at all times a one-to-one ratio between the number of Common Units owned by the Company and the number of outstanding shares of Class A common stock, including, but not limited to, those issued as result of stock option exercises and vesting of RSU awards. The 2021 Plan also provides for dividend equivalent units based on the value of the dividends per share paid on the Company’s Class A common stock, which are accumulated on RSUs during the vesting period. The following table summarizes time-based stock option activity for the year ended December 31, 2023: Number of Weighted Weighted Aggregate Outstanding as of December 31, 2022 3,402 $ 5.60 9.62 $ — Granted 1,663 $ 1.35 Forfeited (978) $ 3.79 Outstanding as of December 31, 2023 4,087 $ 4.24 8.77 $ 140 Fully vested and expected to vest as of December 31, 2023 4,087 $ 4.24 8.77 $ 140 Exercisable as of December 31, 2023 1,102 $ 5.78 8.39 $ 13 The following additional disclosures are provided for time-based stock options: Year Ended December 31, 2023 2022 Weighted average grant date fair value $ 0.81 $ 2.58 The following table summarizes performance-based stock option activity for the year ended December 31, 2023: Number of Weighted Weighted Aggregate Outstanding as of December 31, 2022 1,500 $ 4.95 9.83 $ — Granted 150 $ 1.07 Outstanding as of December 31, 2023 1,650 $ 4.60 9.00 $ 51 Fully vested and expected to vest as of December 31, 2023 1,650 $ 4.60 9.00 $ 51 Exercisable as of December 31, 2023 — $ — — $ — The following additional disclosures are provided for performance-based stock options: Year Ended December 31, 2023 2022 Weighted average grant date fair value $ 0.77 $ 3.34 The vesting criteria for 0.1 million performance-based stock option awards has not yet been achieved; therefore, no expense has been recorded. There were no stock options exercised during the years ended December 31, 2023 and 2022. The weighted average assumptions used in estimating the grant date fair value of stock options are listed in the table below: Year Ended December 31, 2023 2022 Expected volatility 60.2 % 51.0 % Risk-free interest rate 3.8 % 3.2 % Expected term 6.6 years 7.3 years Dividend rate 0.0 % 0.0 % Time-based stock options vest ratably over a period between two The following table summarizes RSU activity for the year ended December 31, 2023: Weighted Number of Non-vested as of December 31, 2022 $ — — Granted $ 1.80 7,548 Vested $ 2.15 (2,713) Non-vested as of December 31, 2023 $ 1.60 4,835 The following additional disclosures are provided for RSU awards: Year Ended Weighted average grant date fair value $ 1.80 Total fair value of shares vested (in thousands) $ 5,826 In August 2023, the Company granted an aggregate of 2.5 million RSUs pursuant to the 2021 Plan to the Company’s Chief Executive Officer and Chief Medical Officer (collectively, the “Executives”) in full satisfaction of the “Second Bonus” earned by each Executive during the year ended December 31, 2022 pursuant to the terms of the transaction bonus agreements, dated May 2022, entered into between each Executive and the Company and P3 Health Group Management, LLC in connection with the consummation of the Business Combinations (together, the “RSU Transaction Bonuses”). The Second Bonus of $5.0 million in the aggregate was recorded within accrued payroll on the consolidated balance sheet as of December 31, 2022. The RSUs were fully vested at the time of grant. The fair value of the RSUs granted was $5.6 million, $0.6 million of which was recorded in equity-based compensation during the year ended December 31, 2023. The RSUs were settled in Class A common stock on January 9, 2024. RSUs vest ratably over a period between two The following table summarizes RSA activity for the year ended December 31, 2023: Weighted Number of Non-vested as of December 31, 2022 $ — — Granted $ 1.82 250 Vested $ 1.82 (250) Non-vested as of December 31, 2023 — The following additional disclosures are provided for RSAs: Year Ended Weighted average grant date fair value $ 1.82 Total fair value of shares vested (in thousands) $ 598 Compensation Expense Equity-based compensation recorded within corporate, general and administrative expense on the consolidated statements of operations was $6.0 million and $19.4 million during the years ended December 31, 2023 and 2022, respectively. The Company did not recognize any tax benefits related to equity-based compensation for the years ended December 31, 2023 and 2022. |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Note 15: Net Loss per Share The following table provides the computation of basic and diluted net loss per share: Year Ended December 31, 2023 2022 (in thousands, except per share data) Numerator–basic: Net loss attributable to Class A common stockholders–basic $ (57,773) $ (270,127) Numerator–diluted: Net loss attributable to Class A common stockholders–basic $ (57,773) $ (270,127) Effective of dilutive securities: Shares of Class V common stock (128,653) — Net loss attributable to Class A common stockholders–diluted $ (186,426) $ (270,127) Denominator–basic: Weighted average Class A common shares outstanding–basic 94,889 41,579 Net loss per share attributable to Class A common stockholders–basic $ (0.61) $ (6.50) Denominator–diluted: Weighted average Class A common shares outstanding–basic 94,889 41,579 Weighted average effect of dilutive securities: Shares of Class V common stock 199,701 — Weighted average shares outstanding–diluted 294,590 41,579 Net loss per share attributable to Class A common stockholders–diluted $ (0.63) $ (6.50) Shares of Class V common stock do not share in the earnings or losses of P3 Health Partners, Inc. and are therefore not participating securities. As such, separate presentation of basic and diluted net income per share for Class V common stock under the two-class method is not required. The following table presents potentially dilutive securities excluded from the computation of diluted net loss per share for the periods presented because their effect would have been anti-dilutive. Year Ended December 31, 2023 2022 (in thousands) Stock warrants (1) 81,938 11,248 Stock options (1) 5,837 3,402 RSUs (1) 4,835 — Shares of Class V common stock (2) — 201,972 Total 92,610 216,622 __________________ (1) Represents the number of instruments outstanding at the end of the period. Application of the treasury stock method would reduce this amount if they had a dilutive effect and were included in the computation of diluted net loss per share (2) Shares of Class V common stock at the end of the period, including shares tied to unvested Common Units, are considered potentially dilutive shares of Class A common stock under application of the if-converted method. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Lessee Disclosure [Abstract] | |
Leases | Note 16: Leases The Company leases real estate, in the form of corporate office space and operating facilities, and certain office equipment. The Company’s real estate leases have noncancelable terms expiring in 2024 to 2033, certain of which have one to two renewal options of five Operating lease right-of-use assets of $15.3 million and $11.7 million were included within other long-term assets Operating lease costs are included within operating expenses on the consolidated statements of operations and were $4.5 million and $3.1 million for the years ended December 31, 2023 and 2022, respectively. Lease terms and discount rates consisted of the following as of: December 31, 2023 2022 Weighted average remaining lease term (years) 5.8 6.2 Weighted average discount rate 11.4 % 11.7 % Maturities of operating lease liabilities as of December 31, 2023 are as follows (in thousands): Year Ending December 31, 2024 $ 4,625 2025 4,084 2026 3,549 2027 3,211 2028 3,007 Thereafter 5,244 Total undiscounted future cash flows 23,720 Less: interest (7,375) Present value of operating lease liabilities $ 16,345 The current portions of operating right-of-use liabilities of $2.7 million and $1.6 million are included in accrued expenses and other current liabilities Supplemental cash flows and other information related to leases are as follows: Year Ended December 31, 2023 2022 (in thousands) Operating cash flows paid for operating leases $ 4,204 $ 3,339 |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Retirement Plan | Note 17: Retirement Plan |
Redeemable Non-Controlling Inte
Redeemable Non-Controlling Interests | 12 Months Ended |
Dec. 31, 2023 | |
Noncontrolling Interest [Abstract] | |
Redeemable Non-Controlling Interest | Note 18: Redeemable Non-controlling Interest Non-controlling interest represents the portion of P3 LLC that the Company controls and consolidates but does not own (i.e., the Common Units held directly by equity holders other than the Company). The ownership of the Common Units is summarized as follows: December 31, 2023 December 31, 2022 Units (in thousands) Ownership % Units (in thousands) Ownership % P3 Health Partners Inc. ’ s ownership of Common Units 116,588 37.2 % 41,579 17.1 % Non-controlling interest holders ’ ownership of Common Units 196,569 62.8 201,592 82.9 Total Common Units 313,157 100.0 % 243,171 100.0 % Common Units participate in net income or loss allocations and distributions and entitle their holder to the right, subject to the terms set forth in the limited liability company agreement, to require the Company to redeem all or a portion of the Common Units held by such participant, together with a corresponding number of shares of Class V common stock, in exchange for Class A common stock or at the Company’s option, and subject to certain limitations, in cash. As the non-controlling interest holders had an approximate 63% and 83% voting interest in the Company through their Class V common stock as of December 31, 2023 and 2022, respectively, and appointed most of the members to the Board of Directors, the ability to elect cash settlement upon redemption is outside of the control of the Company. As a result, the Common Units held by outside shareholders have been classified as redeemable non-controlling interest and presented as temporary equity in the Company’s consolidated balance sheets. The redeemable non-controlling interest was initially measured at its fair value on the Closing Date. Net income or loss is attributed to the redeemable non-controlling interest during each reporting period based on a daily weighted average ownership percentage. In subsequent periods, the redeemable non-controlling interest is measured at its fair value (i.e., based on the five-day volume-weighted average price of a share of Class A common stock) at the end of each reporting period, with the remeasurement amount being no less than the initial value, as adjusted for the redeemable non-controlling interest’s share of net income or loss and ownership changes. The offset of any fair value adjustment is recorded to additional paid in capital, with no impact to net income or loss. As of December 31, 2023, there was a $20.6 million remeasurement adjustment recorded as the fair value of redeemable non-controlling interest was greater than the carrying value. As of December 31, 2022, there was no remeasurement adjustment recorded as the fair value of redeemable non-controlling interest was less than the carrying value. During the year ended December 31, 2023, there were an aggregate of 5.4 million shares of Class A common stock issued to P3 LLC members in connection with such members’ redemptions of an equivalent number of Common Units and corresponding cancellation and retirement of an equivalent number of Class V common stock. Such retired shares of Class V common stock may not be reissued. The redemptions occurred pursuant to the terms of the P3 LLC A&R LLC Agreement. There was no Common Unit exchange or redemption activity during the year ended December 31, 2022. As the P3 LLC A&R LLC Agreement states that P3 LLC will maintain at all times a one-to-one ratio between the number of Common Units owned by the Company and the number of outstanding shares of Class A common stock, there were an aggregate of 69.2 million Common Units issued to the Company resulting from the March 2023 Private Placement during the year ended December 31, 2023. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 19: Segment Reporting The Company’s operations are organized under one reportable segment. The Chief Executive Officer, who is the Company’s chief operating decision maker, manages the Company’s operations and reviews financial information on a consolidated basis. Decisions regarding resource allocation and assessment of profitability are based on the Company’s responsibility to deliver high quality primary medical care services to its patient population. For the periods presented, all the Company’s revenue was earned in the United States. Likewise, all the Company’s long-lived assets were located in the United States. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 20: Commitments and Contingencies The Company is a party to various claims, legal and regulatory proceedings, lawsuits, and administrative actions arising in the ordinary course of business and associated with the Business Combinations. The Company carries general and professional liability insurance coverage to mitigate the Company’s risk of potential loss in such cases. The Company believes that disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, net loss or cash flows. In 2021, a discrepancy was identified in the service agreement with one of the Company’s health plans resulting in a renegotiation of the agreement. In January 2023, the renegotiation was settled and the Company reflected the known settlement of $5.0 million within health plan settlements payable as of December 31, 2022. The remaining settlement balance of $3.0 million is recorded within health plan settlements payable as of December 31, 2023. Uncertainties The healthcare industry is subject to numerous laws and regulations of Federal, state, and local governments. These laws and regulations include, but are not limited to, matters of licensure, accreditation, government healthcare program participation requirements, reimbursement for patient services, and Medicare / Medicaid Fraud, Waste and Abuse Prevention. Recently, government activity has increased with respect to investigations and allegations concerning possible violations of Fraud, Waste and Abuse statutes and regulations by healthcare providers. Violations of these laws and regulations could result in expulsion from government healthcare programs together with imposition of significant fines and penalties as well as significant repayment for patient services billed. Management believes the Company is compliant with Fraud, Waste and Abuse regulations as well as other applicable government laws. While no regulatory inquiries have been made, compliance with such laws and regulations is subject to government review and interpretation, as well as other regulatory actions which might be unknown at this time. Healthcare reform legislation at both the Federal and state levels continues to evolve. Changes continue to impact existing and future laws and rules. Such changes may impact the manner in which the Company conducts business, restrict the Company’s revenue growth in certain eligibility categories, slow down revenue growth rates for certain eligibility categories, increase certain medical, administrative and capital costs, and expose the Company to increased risk of loss or further liabilities. As a result, the Company’s consolidated financial position could be impacted by such changes. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Parties | Note 21: Related Parties Atrio Health Plans CPF, a principal equity holder of the Company, has an equity investment in Atrio Health Plans (“Atrio”). The Company has a full-risk capitation agreement in place with Atrio whereby the Company is delegated to perform services on behalf of Atrio’s members assigned to the Company. These delegated services include but are not limited to provider network credentialing, patient authorizations, and medical management (care management, quality management and utilization management). The following tables summarize the Company’s transactions with Atrio: Year Ended December 31, 2023 2022 (in thousands) Capitated revenue $ 192,577 $ 158,941 Other patient service revenue $ 2,737 $ 2,286 Medical expense $ 197,641 $ 178,300 December 31, 2023 2022 (in thousands) Health plan receivable $ 5,290 $ 177 Claims payable $ 41,348 $ 27,838 Health plan settlements payable $ 4,176 $ 2,536 Deferred revenue (1) $ 12,700 $ — __________________ (1) Amount is included within accrued expenses and other current liabilities on the Company’s consolidated balance sheet. VGS Promissory Note As described in Note 11, in December 2022, the Company issued an unsecured promissory note to VGS, an entity managed by CPF and whose equity holders consist of two members of the Company’s Board of Directors and the Company’s Chief Executive Officer and Chief Medical Officer, among others. The following tables summarize the Company’s transactions with VGS: Year Ended December 31, 2023 2022 (in thousands) Interest expense, net $ 3,905 $ 105 December 31, 2023 2022 (in thousands) Long-term debt, net $ 28,319 $ 14,421 Accrued interest $ 4,010 $ 105 Accrued expenses $ 331 $ 225 |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2023 | |
Variable Interest Entities | |
Variable Interest Entities | Note 22: Variable Interest Entities P3 LLC has Management Services Agreements (“MSAs”) and deficit funding agreements with the Network VIEs. The MSAs provide that the P3 LLC will furnish administrative personnel, office supplies and equipment, general business services, contract negotiation, and billing and collection services to the Network VIEs. Fees for these services are the excess of the Network VIEs’ revenue over expenses. Per the deficit funding agreements, P3 LLC is obligated to advance funds, as needed, to support the Network VIE’s working capital needs to the extent operating expenses exceed gross revenue. These advances accrue interest at a rate of prime plus 2%. Net advances made to the Network VIEs and accrued interest on those advances are presented within due to consolidated entities of P3 in the table below. Additionally, P3 LLC entered into stock transfer restriction agreements with the practice shareholders of the Network VIEs, which, by way of a call option, unequivocally permit P3 LLC to appoint successor physicians if a practice shareholder vacates their ownership position. Accordingly, P3 LLC identifies itself as the primary beneficiary of the Network VIEs. Practice shareholders, who are employees of P3 LLC, retain equity ownership in the Network VIEs, which represents nominal non-controlling interests; however, the non-controlling interests do not participate in the profit or loss of the Network VIEs. P3 LLC, directly or indirectly via its wholly owned subsidiaries, may not use or access any net assets of the Network VIEs to settle its obligations or the obligations of its wholly owned subsidiaries. Additionally, the creditors of the Network VIEs do not have recourse to the net assets of P3 LLC. Since P3 LLC represents substantially all the assets and liabilities of the Company, the following tables provide a summary of the assets, liabilities, and operating performance of only VIEs held at the P3 LLC level. December 31, 2023 2022 (in thousands) ASSETS Cash $ 6,491 $ 1,759 Clinic fees, insurance and other receivable 138 1,178 Health plan receivable 571 — Prepaid expenses and other current assets 1,261 121 Property and equipment, net 23 44 Other long-term assets 153 — Due from consolidated entities of P3 — 3,012 TOTAL ASSETS $ 8,637 $ 6,114 LIABILITIES AND MEMBERS’ DEFICIT Accounts payable $ 5,073 $ 7,800 Accrued expenses and other current liabilities 515 262 Accrued payroll 3,141 1,885 Claims payable 3,973 — Other long-term liabilities 946 — Due to consolidated entities of P3 44,200 36,025 TOTAL LIABILITIES 57,848 45,972 MEMBERS’ DEFICIT (49,211) (39,858) TOTAL LIABILITIES AND MEMBERS’ DEFICIT $ 8,637 $ 6,114 Year Ended December 31, 2023 2022 (in thousands) Revenue $ 39,551 $ 55,237 Expense 45,999 69,638 Net loss $ (6,448) $ (14,401) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 23: Subsequent Events VGS 2 Promissory Note On March 22, 2024, P3 LLC entered into a related party financing transaction with VBC Growth SPV 2, LLC (“VGS 2”), consisting of the issuance by P3 LLC of an unsecured promissory note (the “VGS 2 Promissory Note”) to VGS 2. The VGS 2 Promissory Note provides for funding of up to $25.0 million, available for draw by P3 LLC in two tranches, as follows: (i) a first tranche of $10.0 million which was drawn immediately on March 22, 2024, and (ii) a second tranche of $15.0 million available at the Company’s sole option in a single draw, on or around March 29, 2024, but no later than April 5, 2024. The VGS 2 Promissory Note matures on September 30, 2027. Interest is payable at 17.5% per annum on a quarterly cycle (in arrears) beginning June 30, 2024. P3 LLC may elect to pay either (1) 8.0% cash interest and 9.5% PIK interest, or (2) 17.5% PIK interest, provided that payment of cash interest will be permitted only to the extent permitted by the Term Loan Agreement and the 2024 Subordination Agreement (defined below), and if not so permitted, such interest shall accrue as PIK interest. The VGS 2 Promissory Note provides for mandatory prepayments with the proceeds of certain asset sales, and VGS 2 has the right to demand payment in full upon (i) a change of control of the Company and (ii) certain qualified financings (as defined in the VGS 2 Promissory Note). The VGS 2 Promissory Note restricts P3 LLC’s ability and the ability of its subsidiaries to, among other things, incur indebtedness and liens, and make investments and restricted payments. The maturity date may be accelerated as a remedy under the certain default provisions in the agreement, or in the event a mandatory prepayment event occurs. P3 LLC paid VGS 2 an up-front fee of 1.5% of the aggregate principal amount of the loan in-kind. In addition, P3 LLC will pay VGS 2 a back-end fee at the time the VGS 2 Promissory Note is redeemed as follows: (i) if paid prior to June 30, 2024, 2.25%; (ii) if paid after June 30, 2024 and on or before September 30, 2024, 4.5%; (iii) if paid after September 30, 2024 and on or before December 31, 2024, 6.75% and (iv) if paid after December 31, 2024, 9.0%. 2024 Subordination Agreement In connection with the transactions described above, P3 LLC entered into a subordination agreement, dated as of March 22, 2024 (the “2024 Subordination Agreement”), by and among the Company, CRG Servicing LLC (“CRG”), as administrative agent under the Term Loan Facility and VGS 2. Pursuant to the 2024 Subordination Agreement, VGS 2 agreed to subordinate its right of payment under the VGS 2 Promissory Note to the right of payment and security interests of the lenders under the Term Loan Facility. The terms of the 2024 Subordination Agreement will effectively require P3 LLC to pay all interest under the VGS 2 Promissory Note in-kind. Amendment to Term Loan Agreement and Consent |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) Attributable to Parent | $ (57,773) | $ (270,127) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of the Company. All intercompany accounts and transactions have been eliminated. The Company periodically evaluates entities for consolidation either through ownership of a majority voting interest, or through means other than voting interest, in accordance with the Variable Interest Entity (“VIE”) accounting model. This evaluation includes a qualitative review of the design of the entity, its organizational structure, including decision making ability and financial agreements, as well as a quantitative review. The Company consolidates a VIE when it has a variable interest that provides it with a controlling financial interest in the VIE, referred to as the primary beneficiary of the VIE. As the sole managing member of P3 LLC, P3 has the right to direct the most significant activities of P3 LLC and the obligation to absorb losses and receive benefits. The rights of the non-managing members of P3 LLC are limited and protective in nature and do not give substantive participation rights over the sole managing member. Accordingly, P3 identifies itself as the primary beneficiary of P3 LLC and began consolidating P3 LLC as of December 3, 2021, the closing date of the Business Combinations (the “Closing Date”), resulting in a non-controlling interest related to the common units of P3 LLC (“Common Units”) held by members other than P3. Additionally, as more fully described in Note 22 “Variable Interest Entities,” P3 LLC is the primary beneficiary of the following physician practices (collectively, the “Network VIEs”): • Kahan, Wakefield, Abdou, PLLC • Bacchus, Wakefield, Kahan, PC • P3 Health Partners Professional Services, P.C. • P3 Medical Group, P.C. • P3 Health Partners California, P.C. (f/k/a Omni IPA Medical Group, Inc.) |
Comprehensive Loss | Comprehensive Loss Comprehensive loss includes net loss to common stockholders as well as other changes in equity that result from transactions and economic events other than those with stockholders. There was no difference between comprehensive loss and net loss to common stockholders for the periods presented. |
Use of Estimates | Use of Estimates The preparation of these consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that could affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to allowance for credit losses, revenue recognition, the liability for unpaid claims, equity-based compensation, premium deficiency reserves (“PDR”), fair value and impairment recognition of long-lived assets (including intangibles), fair value of liability classified instruments, and judgments related to deferred income taxes. The Company bases its estimates on the best information available at the time, its experiences, and various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates. |
Commitments and Contingencies | Commitments and Contingencies An accrual is established for commitments and contingencies when management, after considering the facts and circumstances of each matter as then known to management, has determined a specific contingency is probable and estimable. The Company also faces contingencies that are reasonably possible to occur that cannot currently be estimated. When only a range of amounts is reasonably estimable and no amount within the range is more likely than another, the low end of the range is recorded. The Company expenses costs associated with loss contingencies, including any related legal fees, as they are incurred. Due to the inherent uncertainties surrounding gain contingencies, the Company does not recognize potential gains until realized. |
Net Loss per Share | Net Loss per Share |
Cash and Restricted Cash | Cash and Restricted Cash Cash includes all cash and liquid investments with an initial maturity of three months or less. Cash deposits held in accounts at each financial institution are insured up to $250,000 by the Federal Deposit Insurance Corporation (“FDIC”). The Company maintains its cash in bank deposit accounts that, at times, may exceed FDIC insured limits. Management does not expect any losses to occur on such accounts. As of December 31, 2023 and 2022, the Company had cash of $36.3 million and $17.5 million, respectively, deposited at banking institutions which are subject to the FDIC insured limit. |
Revenue Recognition | Revenue Recognition Capitated Revenue The Company contracts with health plans using an at-risk model. Under the at-risk model, the Company is responsible for the cost of all covered services provided to members assigned by the health plans to the Company in exchange for a fixed premium payment, which generally is a percentage of the health plans’ premiums (“POP”) paid by CMS. Through this capitation arrangement, the Company stands ready to provide assigned Medicare Advantage beneficiaries all their medical care via the Company’s directly employed and affiliated physician/provider network. Since the Company controls and provides medical care to its assigned members, the Company acts as a principal in these capitation arrangements. As of December 31, 2023 and 2022, the Company had at-risk contracts in effect with 23 health plans and 24 health plans, respectively, across five states. The capitated revenue the Company receives is determined via a competitive bidding process with CMS and is based on the costs of care in local markets and the average utilization of services by patients enrolled. Medicare pays capitation using a “risk adjustment model,” which compensates providers based on the health status (acuity) of each individual patient, also known as hierarchal condition categories (“HCC”). Medicare Advantage plans with higher acuity patients receive higher premiums. Conversely, Medicare Advantage plans with lower acuity patients receive lesser premiums. Under the risk adjustment model, capitation is paid on an interim basis based on enrollee data submitted for the preceding year and is adjusted in subsequent periods after final data is compiled (using a Risk Adjustment Factor or “RAF”). The Company generally estimates transaction prices using the most likely methodology. Amounts are only included in the transaction price to the extent any significant uncertainty of reversal on cumulative revenue will not occur and is resolved. In certain contracts, PMPM fees also include adjustments for items such as performance incentives or penalties based on the achievement of certain clinical quality metrics as contracted with payors. Capitated revenue is recognized based on a PMPM transaction price to transfer the service for a distinct increment of the series (e.g., month), net of projected acuity adjustments and performance incentives or penalties. The Company recognizes revenue in the month in which eligible members are entitled to receive healthcare benefits during the contract term. The capitation amount is subject to possible retroactive premium risk adjustments based on the member’s individual acuity. Premium risk adjustments recorded in 2023 which relate to prior years were $20.3 million. Premium risk adjustments recorded in 2022 related to prior years were $3.3 million. In the fourth quarter of 2023, the Company released a portion of the constraint applied in previous periods with respect to risk adjustment revenue for dates of service in 2022, which resulted in an increase to capitation revenue in the amount of $27.7 million for the year ended December 31, 2023. As the period between the time of service and time of payment is typically one year or less, the Company elected the practical expedient not to adjust for the effects of a significant financing component. The Company’s contracts with health plans may include core functions and services for managing assigned patients’ medical care, the combination of which is offered as a single solution. Capitation contracts have a single performance obligation that is a stand ready obligation to perform healthcare services to the population of enrolled members and constitutes a series for the provision of managed healthcare services for the term of the contract, which is deemed to be one month since the mix of patients-customers can change month over month. The Company does not offer nor price each individual function as a standalone service to health plans. Monthly, each plan is contractually obligated to reserve for payment of medical claims equal to a defined POP attributable to members assigned to the Company. In turn, the Company administers medical claims for contractually covered services for assigned health plan members from that health plan’s reserve. On a quarterly or monthly basis, health plans conduct a settlement of the reserve to determine any surplus or deficit amount. The reconciliation and distribution of the reserve occur within 120 days following the end of each quarter. An annual settlement reconciliation and distribution occur within the period specified by the individual health plan’s contract (which can be up to 21 months following each year-end). As of December 31, 2023 and 2022, Management has deemed the Company’s settlement receivables to be fully collectible from those health plans where the Company is not delegated for claims processing. Accordingly, a constraint on the variable consideration associated with settlement receivables was not recorded. Other Patient Service Revenue – Clinical Fees and Insurance Revenue Clinical fees and insurance revenue relates to net patient fees received from various payors and direct patients under contracts in which the Company’s sole performance obligation is to provide healthcare services through the operation of medical clinics. The Company recognizes clinic fees and insurance revenue in the period in which services are provided. Under FFS payment arrangements, revenue is recognized on the date of service using a portfolio approach. The Company’s performance obligations are typically satisfied in the same day services are provided. All the Company’s contracts with its customers under these arrangements include a single performance obligation. The Company’s contractual relationships with patients, in most cases, also involve third-party payors (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through state-sponsored health insurance exchanges). Transaction prices for services provided are dependent upon specific rules in place with third party payors–specifically, Medicare/Medicaid and pre-negotiated rates with managed care health plans and commercial insurance companies. Contractual arrangements with third parties typically include payments at amounts which are less than standard charges. These charges generally have predetermined rates for diagnostic service codes or discounted FFS rates. The Company perpetually reviews its contractual estimation processes to consider and incorporate updates to laws, regulations, and frequent changes in the managed care system. Contractual terms are negotiated and updated accordingly upon renewal. Clinical fees and insurance revenue is based upon the estimated amounts the Company expects to receive from patients and third-party payors. Estimates of explicit price concessions under managed care and commercial insurance plans are tied to payment terms specified in related contractual agreements. Retroactively calculated explicit price concessions tied to reimbursement agreements with third-party payers are recognized on an estimated basis in the period related services are rendered and adjusted in future periods as final payments are received. Revenue related to uninsured patients, uninsured co-payments, and deductibles (for patients with healthcare coverage) may also be discounted. The Company records implicit price concessions (based on historical collection experience) related to uninsured accounts to recognize self-pay revenue at their most likely amounts to be collected. The Company deems FFS revenue to be variable consideration and its estimates of associated transaction prices will not result in a significant revenue reversal in the future. The Company has elected the practical expedient not to adjust the transaction price for any financing components as those were deemed to be insignificant and to expense all incremental customer contract acquisition costs as incurred as such costs are not material and would be amortized over a period less than one year. Other Patient Service Revenue – Care Coordination Fees and Management Fees The Company’s delegated health plans may also pay a Care Coordination Fee (“CCF”) or management fee to the Company. CCFs and management fees are intended to fund the costs of delegated services provided to certain health plans. CCFs are specifically identified and separated in each monthly capitation payment the Company receives from these parties. None of the Company’s other health plans bifurcate CCFs nor are any of them contractually required to do so. Based on similarities of the terms of the care coordination and administrative services, the Company uses a portfolio approach to record revenue from CCFs and management fees. Patient Fees Receivable |
Property and Equipment | Property and Equipment Property and equipment is carried at acquisition cost, net of accumulated depreciation. Costs for repairs and maintenance of property and equipment, after such property and equipment has been placed in service, are expensed as incurred. Costs and related accumulated depreciation are eliminated when property and equipment is sold or otherwise disposed. Sales and disposals may result in asset-specific gains or losses. Any such gains or losses are included as a component of operations. The Company records depreciation using the straight-line method over the estimated useful lives |
Fair Value Measurements | Fair Value Measurements The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels (see Note 5 “Fair Value Measurements and Hierarchy” for further discussion): Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate their carrying amounts may not be recoverable. Recoverability of an asset or asset group is measured by comparing its carrying amount to the future undiscounted net cash flows the asset or asset group is expected to generate. If such assets are considered impaired (e.g., future undiscounted cash flows are less than net book value), an impairment charge is recognized, measured by the difference between the carrying value and the estimated fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value assigned to tangible and identifiable intangible assets acquired and liabilities assumed. Goodwill is tested for impairment at the reporting unit level on an annual basis in the fourth quarter, or more frequently if events or changes in circumstances indicate the carrying value of goodwill may not be recoverable (a “triggering event”). On the occurrence of a triggering event, an entity has the option to first assess qualitative factors to determine whether a quantitative impairment test is necessary. If it is more likely than not that goodwill is impaired, the fair value of the reporting unit is compared with its carrying value. An impairment charge is recognized for the amount by which the carrying amount exceeds the fair value, provided, the loss recognized cannot exceed the total amount of goodwill. |
Intangible Assets | Intangible Assets Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives. In determining the estimated useful lives of definite-lived intangibles, the Company considers the nature, competitive position, life cycle position and historical and expected future operating cash flows of each acquired asset, as well as its commitment to support these assets through continued investment and legal infringement protection. The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Determining whether an impairment loss occurred requires comparing the carrying amount to the sum of undiscounted cash flows expected to be generated by the asset. Such events and circumstances include the occurrence of an adverse change in the market involving the business employing the assets or a situation in which it is more likely than not that the Company will dispose of such assets. If the comparison indicates that there is impairment, the impairment loss to be recognized as a non-cash charge to earnings is measured by the amount by which the carrying amount of the asset exceeds its fair value and the impaired asset is written down to its fair value or, if fair value is not readily determinable, to an estimated fair value based on discounted expected future cash flows. |
Leases | Leases The Company determines whether a contract is or contains a lease at the inception of the contract. For leases with terms greater than 12 months, the Company records the related operating or finance right-of-use asset and lease liability at the present value of lease payments over the lease term. The Company is generally not able to readily determine the implicit rate in the lease and therefore uses the determined incremental borrowing rate at lease commencement to compute the present value of lease payments. The incremental borrowing rate represents an estimate of the market interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. Renewal options are not included in the measurement of the right-of-use assets and lease liabilities unless the Company is reasonably certain to exercise the optional renewal periods. Some leases also include early termination options, which can be exercised under specific conditions. Additionally, certain leases contain incentives, such as construction allowances from landlords, which reduce the right-of-use asset related to the lease. Certain of the Company’s leases contain rent escalations over the lease term. The Company recognizes expense for operating leases on a straight-line basis over the lease term. The Company’s lease agreements contain variable payments for common area maintenance and utilities. The Company has elected the practical expedient to combine lease and non-lease components for all asset categories; therefore, the lease payments used to measure the lease liability for these leases include fixed minimum rentals along with fixed non-lease component charges. Variable lease payments are excluded from the measurement of right-of-use assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. The Company does not have significant residual value guarantees or restrictive covenants in its lease portfolio. |
Business Combinations | Business Combinations The price tendered in business combinations is allocated using the acquisition method of accounting among the identifiable tangible and intangible assets and assumed liabilities and non-controlling interests, all of which are based on estimates of corresponding fair value as of the acquisition date. The Company applies valuation methods which are ultimately used in the Company’s purchase price allocations. Goodwill is recorded based on the difference between the fair value of consideration exchanged and the fair value of the net assets and liabilities assumed. Such fair values that are not finalized for reporting periods following the acquisition date are estimated and recorded as provisional amounts. Adjustments to these provisional amounts during the measurement period (defined as the date through which all information required to identify and measure the consideration transferred, the assets acquired, the liabilities assumed, and the non-controlling interests obtained, limited to one year from the acquisition date) are recorded when identified. |
Equity-Based Compensation | Equity-Based Compensation Equity-based compensation cost is measured at the grant date for all equity-based awards based on the fair value of the awards. For equity awards that vest subject to the satisfaction of service-based conditions, compensation cost is recognized on a straight-line basis over the requisite service period, which varies by award. For equity awards that vest subject to the satisfaction of performance-based conditions, the Company evaluates the probability of achieving each performance-based condition at each reporting date and recognizes compensation cost when it is deemed probable that the performance-based condition will be met on an accelerated basis over the requisite service period, which varies by award. Equity-based compensation is recorded within corporate, general and administrative expense in the accompanying consolidated statements of operations. The Company accounts for forfeitures as they occur. The Company uses the Black-Sholes option-pricing model to determine the fair value of the Company’s stock option awards. The risk-free interest rate estimate was based on constant maturity, which is the theoretical value of a U.S. Treasury that is based on recent values of auctioned U.S. Treasuries with remaining terms similar to the expected term of the stock option awards. The expected dividend yield was based on the Company’s expectation of not paying dividends in the foreseeable future. The expected term was calculated using the “simplified” method; whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the stock option due to P3’s lack of sufficient historical data. The expected volatility was estimated using an average of the historical volatilities of a peer group comprised of publicly traded companies in the same industry. The Company assesses the impact of material nonpublic information on its share price or expected volatility, as applicable, at the time of grant. The Company’s restricted stock and restricted stock unit awards are measured based on the fair market value of the underlying shares of Class A common stock on the date of grant. |
Warrant Liability | Warrant Liability The Company has public and private placement warrants of Class A common stock classified as liabilities as well as warrants of Class A common stock issued to a lender classified as equity. The Company classifies as equity any equity-linked contracts that (1) require physical settlement or net-share settlement or (2) give the Company a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement). Warrants classified as equity are initially measured at fair value. Subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity. The Company classifies as assets or liabilities any equity-linked contracts that (1) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside the Company’s control) or (2) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). For equity-linked contracts that are classified as liabilities, the Company records the fair value of the equity-linked contracts at each balance sheet date and records the change in the statements of operations as a gain (loss) from change in fair value of warrant liability. The Company’s public warrant liability is valued using observable market prices for those public warrants. The Company’s private placement warrants are valued using a binomial lattice pricing model when the warrants are subject to the make-whole table, or otherwise are valued using a Black-Scholes pricing model. The Company’s warrants issued to a capital provider are valued using a Black-Scholes-Merton pricing model based on observable market prices for public shares and warrants. The assumptions used in preparing these models include estimates such as volatility, contractual terms, discount rates, dividend yield, expiration dates and risk-free rates. The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms. The assessment considers whether the warrants are freestanding financial instruments, meet the definition of a liability, and whether the warrants meet all of the requirements for equity classification, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. |
Premium Deficiency Reserve | Premium Deficiency Reserve PDR liabilities are established when it is probable that expected future health care costs and maintenance costs under a group of existing contracts will exceed anticipated future premiums and stop-loss insurance recoveries on those contracts. The Company assesses if a PDR liability is needed through review of current results and forecasts. For purposes of determining premium deficiency losses, contracts are grouped consistent with our method of acquiring, servicing, and |
Medical Expense and Claims Payable | Medical Expense and Claims Payable The cost of healthcare services is recognized in the period services are provided. This also includes an estimate of the cost of services that have been incurred, but not yet reported (“IBNR”). Medical expense also includes costs for overseeing the quality of care and programs, which focus on patient wellness. Additionally, medical expense can include, from time to time, remediation of certain claims that might result from periodic reviews conducted by various regulatory agencies. Management estimates the Company’s IBNR by applying standard actuarial methodologies, which utilize historical data, including the period between the date services are rendered and the date claims are received and paid, the completion factor, per member per month healthcare trends, denied claims activity, expected medical cost inflation, seasonality patterns, changes in membership mix, and a provision for adverse deviation. IBNR estimates are subject to the impact from changes in both the regulatory and economic environments. Such estimates are made on an accrual basis and adjusted in future periods as required. Future and actual results typically differ from estimates. Differences could result from an overall change in medical expenses per member, changes in member mix or simply due to the addition of new members. Any adjustments to prior period estimates are included in the current period. The Company’s claims payable represents management’s best estimate of its liability for unpaid medical costs as of December 31, 2023 and 2022. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are evaluated for future realization and reduced by a valuation allowance to the extent the Company believes it is more likely than not that they will not be realized. The Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under tax law, and results of recent operations. The Company records uncertain tax positions on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company considers many factors when evaluating its uncertain tax positions during the course of the year through a review of policies and procedures, reviews of customary and regular tax filings, and discussions with third party experts. This review can involve significant judgment and may require periodic adjustments. The resolution of these uncertain tax positions in a manner inconsistent with management’s expectations could have a material impact on the Company’s consolidated financial statements. The Company recognizes interest and penalties related to uncertain tax positions as a component of its provision for income taxes. Accrued interest and penalties are included with the related tax liability. See Note 12 “Income Taxes” for further information. |
Advertising Expense | Advertising Expense The Company uses advertising primarily to promote the health plans with which it conducts business as well as its physician clinics throughout the geographic areas it serves. Advertising costs are charged directly to operations as incurred. Advertising expense totaled $3.2 million and $4.5 million for the years ended December 31, 2023 and 2022, respectively. |
Reclassifications | Reclassifications Certain amounts in the accompanying consolidated financial statements and accompanying notes have been reclassified to be consistent with the current period presentation. These reclassifications had no impact on the Company’s financial condition, results of operations, or net cash flows. |
Recently Adopted Accounting Pronouncements/ Recent Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”) Accounting Standards Update (“ASU”) 2021-08 requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts as if it had originated the contracts. In the fourth quarter of 2023, the Company adopted ASU 2021-08 effective January 1, 2023. The guidance will be applied to future business combinations. ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) ASU 2016-13 introduced a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The new current expected credit losses model generally calls for the immediate recognition of all expected credit losses and applies to loans, accounts and trade receivables as well as other financial assets measured at amortized cost, loan commitments and off-balance sheet credit exposures, debt securities and other financial assets measured at fair value through other comprehensive income, and beneficial interests in securitized financial assets. The new guidance replaced the current incurred loss model for measuring expected credit losses, requires expected losses on available for sale debt securities to be recognized through an allowance for credit losses rather than as reductions in the amortized cost of the securities, and provides for additional disclosure requirements. In April 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-04, which, among other amendments, allowed for certain policy elections and practical expedients related to accrued interest on financial instruments. In May 2019, the FASB issued ASU 2019-05, which granted targeted transition relief by allowing entities to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost. In November 2019, the FASB issued ASU 2019-10 and ASU 2019-11, which addressed certain aspects of the guidance related to effective dates, expected recoveries, troubled debt restructurings, accrued interest receivables, and financial assets secured by collateral. The Company adopted ASU 2016-13 and related amendments as of January 1, 2023 on a modified retrospective basis. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements and related disclosures. Recent Accounting Pronouncements Not Yet Adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) ASU 2023-09 enhances the transparency and decision usefulness of income tax disclosures, in response to investors’ feedback, indicating the need for improved information to assess an entity’s operations, tax risks, and planning opportunities, particularly in understanding exposure to jurisdictional tax changes and their impact on cash flows. The amendments address these concerns by improving income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. The amendments in this update are effective for annual periods beginning after December 15, 2024 and should be applied prospectively. Early adoption and retrospective application is permitted. The Company is evaluating the effect ASU 2023-09 will have on its consolidated financial statements and related disclosures. ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”) ASU 2023-07 improves the disclosures about a public entity’s reportable segments and addresses requests from investors for additional, more detailed information about a reportable segment’s expenses. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The amendments require retrospective application to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company is evaluating the effect ASU 2023-07 will have on its financial statements and related disclosures. ASU 2023-06, Disclosure Improvements: Codification Amendments In Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”) ASU 2023-06 clarifies or improves disclosure and presentation requirements on a variety of topics and aligns the requirements in the FASB accounting standards codification (the “Codification”) with the SEC’s regulations. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The amendments in this update should be applied prospectively. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. The Company is evaluating the effect ASU 2023-06 will have on its consolidated financial statements and related disclosures. ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) ASU 2020-06 eliminates two of the three models in ASC 470-20 that require issuers to separately account for embedded conversion features and eliminates some of the requirements for equity classification in ASC 815-40-25 for contracts in an entity’s own equity. The guidance also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and generally requires them to include the effect of potential share settlement for instruments that may be settled in cash or shares. As a smaller reporting company, the amendments in this update are effective for annual periods beginning after December 15, 2023, and interim periods therein. The Company does not expect the adoption of ASU 2020-06 to have a material impact on its consolidated financial statements and related disclosures. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Disaggregation of Revenue | The Company categorizes revenue based on various factors such as the nature of contracts as follows: Revenue Type Year Ended % of Total Year Ended % of Total (dollars in thousands) Capitated revenue $ 1,252,309 99 % $ 1,034,800 99 % Other patient service revenue: Clinical fees & insurance revenue 5,192 0 6,158 0 Shared risk revenue — — 351 0 Care coordination / management fees 8,301 1 7,924 1 Incentive fees 573 0 238 0 Total other patient service revenue 14,066 1 14,671 1 Total revenue $ 1,266,375 100 % $ 1,049,471 100 % |
Summary of Estimated Useful Lives of Property and Equipment | The following table summarizes the estimated useful lives of the Company’s property and equipment: Classification Depreciation Cycle Leasehold improvements (cycle: lease term) 1 to 10 Years Furniture and fixtures 7 Years Vehicles 5 Years Computer equipment 3 Years Medical equipment 7 Years Software 3 Years |
Fair Value Measurements and H_2
Fair Value Measurements and Hierarchy (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Hierarchy for Financial Liabilities | Information about the Company’s financial liabilities measured at fair value on a recurring basis is presented below: Level 1 Level 2 Level 3 Total (in thousands) Warrant liability as of December 31, 2023 $ 1,056 $ — $ 29 $ 1,085 Warrant liability as of December 31, 2022 $ 1,477 $ — $ 40 $ 1,517 |
Schedule of Fair Value Measurement Inputs and Valuation Techniques | The key Level 3 inputs into the option pricing model related to the private placement warrants to purchase Class A common stock were as follows: December 31, 2023 2022 Volatility 75 % 55 % Risk-free interest rate 4.01 % 4.11 % Exercise price $ 11.50 $ 11.50 Expected term 2.9 Years 3.9 Years |
Schedule of Changes in the Fair Value | The following table sets forth a summary of changes in the fair value of the Company’s private placement warrants to purchase Class A common stock, which are considered to be Level 3 fair value measurements: December 31, 2023 2022 (in thousands) Beginning balance $ 40 $ 502 Mark-to-market adjustment of stock warrants (11) (462) Ending balance $ 29 $ 40 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | The Company’s property and equipment balances consisted of the following: December 31, 2023 2022 (in thousands) Leasehold improvements $ 2,933 $ 1,810 Furniture & fixtures 1,165 1,262 Computer equipment & software 3,699 3,206 Medical equipment 1,106 1,067 Software (development in process) 3,877 3,460 Vehicles 654 618 Other 33 37 13,467 11,460 Less: accumulated depreciation (4,781) (2,621) Property and equipment, net $ 8,686 $ 8,839 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Reconciliation of Goodwill and Accumulated Goodwill Impairment Losses | The following table provides a reconciliation of goodwill and accumulated goodwill impairment losses as of (in thousands): Balance at December 31, 2021 Goodwill $ 1,309,750 Accumulated goodwill impairment losses — 1,309,750 Acquisitions 5,202 Impairment losses (1,314,952) Balance at December 31, 2022 Goodwill 1,314,952 Accumulated goodwill impairment losses (1,314,952) $ — |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Intangible Assets [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net consisted of the following as of: December 31, 2023 2022 Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Amortization Net Carrying (in thousands) Indefinite lived intangible assets: Medical licenses $ 700 $ — $ 700 $ 700 $ — $ 700 Definite lived intangible assets: Customer relationships 684,000 (142,500) 541,500 684,000 (74,100) 609,900 Trademarks 148,635 (31,671) 116,964 148,635 (16,704) 131,931 Payor contracts 4,700 (940) 3,760 4,700 (470) 4,230 Provider network 4,800 (991) 3,809 4,800 (511) 4,289 Total $ 842,835 $ (176,102) $ 666,733 $ 842,835 $ (91,785) $ 751,050 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets, net consisted of the following as of: December 31, 2023 2022 Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Amortization Net Carrying (in thousands) Indefinite lived intangible assets: Medical licenses $ 700 $ — $ 700 $ 700 $ — $ 700 Definite lived intangible assets: Customer relationships 684,000 (142,500) 541,500 684,000 (74,100) 609,900 Trademarks 148,635 (31,671) 116,964 148,635 (16,704) 131,931 Payor contracts 4,700 (940) 3,760 4,700 (470) 4,230 Provider network 4,800 (991) 3,809 4,800 (511) 4,289 Total $ 842,835 $ (176,102) $ 666,733 $ 842,835 $ (91,785) $ 751,050 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Warrants | |
Schedule of Key Level 3 Inputs into the Option Pricing Model Related to the VGS Warrants | The key Level 3 inputs into the option pricing model related to the VGS Warrants were as follows: Volatility 49 % Risk-free interest rate 3.80 % Exercise price $ 4.26 Expected term 5.0 Years |
Claims Payable (Tables)
Claims Payable (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract] | |
Schedule of Activity in the Liability for Claims Payable and Healthcare Expenses | Activity in the liability for claims payable was as follows: December 31, 2023 2022 (in thousands) Claims unpaid, beginning of period $ 151,207 $ 101,958 Incurred, related to: Current period 1,064,341 942,570 Prior period(s) (2,617) 882 Total incurred 1,061,724 943,452 Paid, related to: Current period 893,092 794,026 Prior period(s) 141,830 100,177 Total paid 1,034,922 894,203 Claims unpaid, end of period $ 178,009 $ 151,207 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consisted of the following: December 31, 2023 2022 (in thousands) Repurchase Promissory Note $ 15,000 $ 15,000 Term Loan Facility 65,000 65,000 VGS Promissory Note 29,102 15,000 Long-term debt, gross 109,102 95,000 Less: unamortized debt issuance costs and original issue discount (783) (579) Long-term debt, net $ 108,319 $ 94,421 |
Schedule of Maturities of Long-Term Debt | As of December 31, 2023, long-term debt maturities are as follows (in thousands): 2024 $ — 2025 65,000 2026 44,102 109,102 Less: unamortized debt issuance costs and original issue discount (783) $ 108,319 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Loss Before Taxes | The components of loss before income taxes were as follows: Year Ended December 31, 2023 2022 (in thousands) Domestic $ (183,731) $ (1,559,695) Foreign — — Total $ (183,731) $ (1,559,695) |
Schedule of Components of Income Tax Expense | The components of income tax expense were as follows: Year Ended December 31, 2023 2022 (in thousands) Current income taxes: Federal $ 170 $ 111 State 2,525 1,751 Total current income taxes 2,695 1,862 Deferred income taxes: Federal — — State — — Total deferred income taxes — — Total income tax expense $ 2,695 $ 1,862 |
Schedule of Reconciliation Between the Income Tax Provision Computed By Applying The Statutory Federal Rate and the Actual Provision | A reconciliation of the statutory federal income tax to the Company’s provision for income taxes is as follows: Year Ended December 31, 2023 2022 (dollars in thousands) Tax at federal statutory rate $ (38,584) $ (327,536) Non-controlling interest and nontaxable income 24,486 260,020 Change in valuation allowance 29,781 33,961 Investment in P3 LLC (20,420) 35,147 Return to provision 4,134 — Deferred tax adjustments 1,754 — Other reconciling items 1,544 270 Total $ 2,695 $ 1,862 Effective tax rate (1.5) % (0.1) % |
Schedule of Deferred Income Tax Assets and Liabilities | Deferred income taxes result from differences in the recognition of amounts for tax and financial reporting purposes, as well as operating loss and tax credit carryforwards. Significant components of the Company’s deferred income tax assets and liabilities are as follows: December 31, 2023 2022 (in thousands) Deferred tax assets: Investment in P3 LLC $ 19,709 $ 20,684 Net operating loss carryforwards 21,525 17,601 Accrued liabilities 221 2,764 Goodwill and identifiable intangible assets 1,923 589 Section 163j interest limitation 3,031 1,995 Other deferred tax assets 632 94 Total deferred tax assets 47,041 43,727 Less: valuation allowance (46,370) (43,558) Net deferred tax assets 671 169 Deferred tax liabilities: Operating lease, right-of-use assets (338) (19) Other deferred tax liabilities (333) (150) Total deferred tax liabilities (671) (169) Net deferred tax asset $ — $ — |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Common Unit Award Activity | The following summarizes Common Unit award activity for the year ended December 31, 2023: Weighted Number of Non-vested as of December 31, 2022 $ 9.20 380 Granted $ — — Vested $ 9.20 (349) Forfeited $ 9.20 (31) Non-vested as of December 31, 2023 — |
Schedule of Stock Option Activity | The following table summarizes time-based stock option activity for the year ended December 31, 2023: Number of Weighted Weighted Aggregate Outstanding as of December 31, 2022 3,402 $ 5.60 9.62 $ — Granted 1,663 $ 1.35 Forfeited (978) $ 3.79 Outstanding as of December 31, 2023 4,087 $ 4.24 8.77 $ 140 Fully vested and expected to vest as of December 31, 2023 4,087 $ 4.24 8.77 $ 140 Exercisable as of December 31, 2023 1,102 $ 5.78 8.39 $ 13 The following table summarizes performance-based stock option activity for the year ended December 31, 2023: Number of Weighted Weighted Aggregate Outstanding as of December 31, 2022 1,500 $ 4.95 9.83 $ — Granted 150 $ 1.07 Outstanding as of December 31, 2023 1,650 $ 4.60 9.00 $ 51 Fully vested and expected to vest as of December 31, 2023 1,650 $ 4.60 9.00 $ 51 Exercisable as of December 31, 2023 — $ — — $ — |
Schedule of Fair Value of Stock Options | The following additional disclosures are provided for time-based stock options: Year Ended December 31, 2023 2022 Weighted average grant date fair value $ 0.81 $ 2.58 The following additional disclosures are provided for performance-based stock options: Year Ended December 31, 2023 2022 Weighted average grant date fair value $ 0.77 $ 3.34 The following additional disclosures are provided for RSU awards: Year Ended Weighted average grant date fair value $ 1.80 Total fair value of shares vested (in thousands) $ 5,826 The following additional disclosures are provided for RSAs: Year Ended Weighted average grant date fair value $ 1.82 Total fair value of shares vested (in thousands) $ 598 |
Schedule of Weighted Average Assumptions used in Estimating the Grant Date Fair Value of Stock Options | The weighted average assumptions used in estimating the grant date fair value of stock options are listed in the table below: Year Ended December 31, 2023 2022 Expected volatility 60.2 % 51.0 % Risk-free interest rate 3.8 % 3.2 % Expected term 6.6 years 7.3 years Dividend rate 0.0 % 0.0 % |
Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes RSU activity for the year ended December 31, 2023: Weighted Number of Non-vested as of December 31, 2022 $ — — Granted $ 1.80 7,548 Vested $ 2.15 (2,713) Non-vested as of December 31, 2023 $ 1.60 4,835 The following table summarizes RSA activity for the year ended December 31, 2023: Weighted Number of Non-vested as of December 31, 2022 $ — — Granted $ 1.82 250 Vested $ 1.82 (250) Non-vested as of December 31, 2023 — |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss Per Share | The following table provides the computation of basic and diluted net loss per share: Year Ended December 31, 2023 2022 (in thousands, except per share data) Numerator–basic: Net loss attributable to Class A common stockholders–basic $ (57,773) $ (270,127) Numerator–diluted: Net loss attributable to Class A common stockholders–basic $ (57,773) $ (270,127) Effective of dilutive securities: Shares of Class V common stock (128,653) — Net loss attributable to Class A common stockholders–diluted $ (186,426) $ (270,127) Denominator–basic: Weighted average Class A common shares outstanding–basic 94,889 41,579 Net loss per share attributable to Class A common stockholders–basic $ (0.61) $ (6.50) Denominator–diluted: Weighted average Class A common shares outstanding–basic 94,889 41,579 Weighted average effect of dilutive securities: Shares of Class V common stock 199,701 — Weighted average shares outstanding–diluted 294,590 41,579 Net loss per share attributable to Class A common stockholders–diluted $ (0.63) $ (6.50) |
Schedule of potential dilutive securities excluded from the computation of diluted net loss per share their effect would have been anti-dilutive | The following table presents potentially dilutive securities excluded from the computation of diluted net loss per share for the periods presented because their effect would have been anti-dilutive. Year Ended December 31, 2023 2022 (in thousands) Stock warrants (1) 81,938 11,248 Stock options (1) 5,837 3,402 RSUs (1) 4,835 — Shares of Class V common stock (2) — 201,972 Total 92,610 216,622 __________________ (1) Represents the number of instruments outstanding at the end of the period. Application of the treasury stock method would reduce this amount if they had a dilutive effect and were included in the computation of diluted net loss per share (2) Shares of Class V common stock at the end of the period, including shares tied to unvested Common Units, are considered potentially dilutive shares of Class A common stock under application of the if-converted method. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Lessee Disclosure [Abstract] | |
Summary of Lease Terms and Discount Rates | Lease terms and discount rates consisted of the following as of: December 31, 2023 2022 Weighted average remaining lease term (years) 5.8 6.2 Weighted average discount rate 11.4 % 11.7 % |
Schedule of Reconciliation of Undiscounted Future Minimum Lease Payments | Maturities of operating lease liabilities as of December 31, 2023 are as follows (in thousands): Year Ending December 31, 2024 $ 4,625 2025 4,084 2026 3,549 2027 3,211 2028 3,007 Thereafter 5,244 Total undiscounted future cash flows 23,720 Less: interest (7,375) Present value of operating lease liabilities $ 16,345 |
Schedule of Supplemental Cash Flows and Other Information Related to Leases | Supplemental cash flows and other information related to leases are as follows: Year Ended December 31, 2023 2022 (in thousands) Operating cash flows paid for operating leases $ 4,204 $ 3,339 |
Redeemable Non-controlling In_2
Redeemable Non-controlling Interest (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Noncontrolling Interest [Abstract] | |
Schedule of Ownership of Common Units | The ownership of the Common Units is summarized as follows: December 31, 2023 December 31, 2022 Units (in thousands) Ownership % Units (in thousands) Ownership % P3 Health Partners Inc. ’ s ownership of Common Units 116,588 37.2 % 41,579 17.1 % Non-controlling interest holders ’ ownership of Common Units 196,569 62.8 201,592 82.9 Total Common Units 313,157 100.0 % 243,171 100.0 % |
Related Parties (Tables)
Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following tables summarize the Company’s transactions with Atrio: Year Ended December 31, 2023 2022 (in thousands) Capitated revenue $ 192,577 $ 158,941 Other patient service revenue $ 2,737 $ 2,286 Medical expense $ 197,641 $ 178,300 December 31, 2023 2022 (in thousands) Health plan receivable $ 5,290 $ 177 Claims payable $ 41,348 $ 27,838 Health plan settlements payable $ 4,176 $ 2,536 Deferred revenue (1) $ 12,700 $ — __________________ (1) Amount is included within accrued expenses and other current liabilities on the Company’s consolidated balance sheet. Year Ended December 31, 2023 2022 (in thousands) Interest expense, net $ 3,905 $ 105 December 31, 2023 2022 (in thousands) Long-term debt, net $ 28,319 $ 14,421 Accrued interest $ 4,010 $ 105 Accrued expenses $ 331 $ 225 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Variable Interest Entities | |
Summary of balance sheet and income statement of VIEs | Since P3 LLC represents substantially all the assets and liabilities of the Company, the following tables provide a summary of the assets, liabilities, and operating performance of only VIEs held at the P3 LLC level. December 31, 2023 2022 (in thousands) ASSETS Cash $ 6,491 $ 1,759 Clinic fees, insurance and other receivable 138 1,178 Health plan receivable 571 — Prepaid expenses and other current assets 1,261 121 Property and equipment, net 23 44 Other long-term assets 153 — Due from consolidated entities of P3 — 3,012 TOTAL ASSETS $ 8,637 $ 6,114 LIABILITIES AND MEMBERS’ DEFICIT Accounts payable $ 5,073 $ 7,800 Accrued expenses and other current liabilities 515 262 Accrued payroll 3,141 1,885 Claims payable 3,973 — Other long-term liabilities 946 — Due to consolidated entities of P3 44,200 36,025 TOTAL LIABILITIES 57,848 45,972 MEMBERS’ DEFICIT (49,211) (39,858) TOTAL LIABILITIES AND MEMBERS’ DEFICIT $ 8,637 $ 6,114 Year Ended December 31, 2023 2022 (in thousands) Revenue $ 39,551 $ 55,237 Expense 45,999 69,638 Net loss $ (6,448) $ (14,401) |
Going Concern and Liquidity (De
Going Concern and Liquidity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Going Concern and Liquidity | ||
Net loss | $ 186,426 | $ 1,561,557 |
Cash | $ 36,320 | $ 17,537 |
Significant Accounting Polici_4
Significant Accounting Policies - Consolidation, Cash and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Cash and Restricted Cash | ||
Unrestricted | $ 36,320 | $ 17,537 |
Restricted | $ 4,614 | $ 920 |
Significant Accounting Polici_5
Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Significant Accounting Policies | ||
Revenue | $ 1,266,375 | $ 1,049,471 |
Capitated revenue | ||
Significant Accounting Policies | ||
Revenue | $ 1,252,309 | $ 1,034,800 |
Capitated revenue | Revenue | Product Concentration Risk | ||
Significant Accounting Policies | ||
Percentage of total revenue (as a percent) | 99% | 99% |
Total other patient service revenue | ||
Significant Accounting Policies | ||
Revenue | $ 14,066 | $ 14,671 |
Total other patient service revenue | Revenue | Product Concentration Risk | ||
Significant Accounting Policies | ||
Percentage of total revenue (as a percent) | 1% | 1% |
Clinical fees & insurance revenue | ||
Significant Accounting Policies | ||
Revenue | $ 5,192 | $ 6,158 |
Clinical fees & insurance revenue | Revenue | Product Concentration Risk | ||
Significant Accounting Policies | ||
Percentage of total revenue (as a percent) | 0% | 0% |
Shared risk revenue | ||
Significant Accounting Policies | ||
Revenue | $ 0 | $ 351 |
Shared risk revenue | Revenue | Product Concentration Risk | ||
Significant Accounting Policies | ||
Percentage of total revenue (as a percent) | 0% | 0% |
Care coordination / management fees | ||
Significant Accounting Policies | ||
Revenue | $ 8,301 | $ 7,924 |
Care coordination / management fees | Revenue | Product Concentration Risk | ||
Significant Accounting Policies | ||
Percentage of total revenue (as a percent) | 1% | 1% |
Incentive fees | ||
Significant Accounting Policies | ||
Revenue | $ 573 | $ 238 |
Incentive fees | Revenue | Product Concentration Risk | ||
Significant Accounting Policies | ||
Percentage of total revenue (as a percent) | 0% | 0% |
Significant Accounting Polici_6
Significant Accounting Policies - Narratives (Details) - Four Health Plan Customer - Revenue - Customer Concentration - customer | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Concentration Risk | ||
Number of customers (customer) | 4 | 4 |
Percentage of total revenue (as a percent) | 60% | 66% |
Significant Accounting Polici_7
Significant Accounting Policies - Capitated Revenue (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) plan customer state | Dec. 31, 2022 USD ($) plan customer state | |
Significant Accounting Policies | ||
Premium risk adjustment | $ 20.3 | $ 3.3 |
Term of contract | 1 month | |
Number of health plan customers | customer | 3 | 3 |
Capitated revenue | ||
Significant Accounting Policies | ||
Number of health plans percentage of payment contracts entered (plan) | plan | 23 | 24 |
Number of states (states) | state | 5 | 5 |
Term for reconciliation and distribution of the reserve following end of each quarter | 120 days | |
Term for reconciliation and distribution of the reserve following each year-end | 21 months | |
Revenues | $ 27.7 |
Significant Accounting Polici_8
Significant Accounting Policies - Patient Fees Receivable (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Patient fees receivable | $ 0.7 | $ 0.8 |
Significant Accounting Polici_9
Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Significant Accounting Policies | ||
Capitalized software | $ 3.9 | $ 3.5 |
Capitalized costs placed into service | $ 0 | $ 0.7 |
Leasehold Improvements (Cycle: Lease Term) | Minimum | ||
Significant Accounting Policies | ||
Estimated useful lives (in years) | 1 year | |
Leasehold Improvements (Cycle: Lease Term) | Maximum | ||
Significant Accounting Policies | ||
Estimated useful lives (in years) | 10 years | |
Furniture & fixtures | ||
Significant Accounting Policies | ||
Estimated useful lives (in years) | 7 years | |
Vehicles | ||
Significant Accounting Policies | ||
Estimated useful lives (in years) | 5 years | |
Computer equipment & software | ||
Significant Accounting Policies | ||
Estimated useful lives (in years) | 3 years | |
Medical equipment | ||
Significant Accounting Policies | ||
Estimated useful lives (in years) | 7 years | |
Software | ||
Significant Accounting Policies | ||
Estimated useful lives (in years) | 3 years |
Significant Accounting Polic_10
Significant Accounting Policies - Business Combination (Details) - Medical practices $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) business | |
Business Combinations | |
Number of businesses acquired | business | 2 |
Consideration for acquisition of equity interests | $ | $ 5.5 |
Significant Accounting Polic_11
Significant Accounting Policies - PDR (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Premium Deficiency Reserve ("PDR") | ||
Premium deficiency reserve | $ 13,670 | $ 26,375 |
Significant Accounting Polic_12
Significant Accounting Policies - Advertising Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Sales and Marketing Expenses | ||
Advertising expense | $ 3.2 | $ 4.5 |
Fair Value Measurements and H_3
Fair Value Measurements and Hierarchy - Fair value Hierarchy for Financial Liabilities (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Warrant liability | $ 1,085 | $ 1,517 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Warrant liability | 1,056 | 1,477 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Warrant liability | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Warrant liability | $ 29 | $ 40 |
Fair Value Measurements and H_4
Fair Value Measurements and Hierarchy - Fair Value Measurement Inputs and Valuation Techniques (Details) - Private Placement Warrants - Level 3 | Dec. 31, 2023 yr $ / shares | Dec. 31, 2022 yr $ / shares |
Volatility | ||
Warrants | ||
Warrants, measurement input | 0.75 | 0.55 |
Risk-free interest rate | ||
Warrants | ||
Warrants, measurement input | 0.0401 | 0.0411 |
Exercise price | ||
Warrants | ||
Warrants, measurement input | $ / shares | 11.50 | 11.50 |
Expected term | ||
Warrants | ||
Warrants, measurement input | yr | 2.9 | 3.9 |
Fair Value Measurements and H_5
Fair Value Measurements and Hierarchy - Changes in Fair Value (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Beginning balance | $ 40 | |
Ending balance | 29 | $ 40 |
Gain from change in fair value of warrant liability | (433) | (9,865) |
Private Placement Warrants | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Beginning balance | 40 | 502 |
Mark-to-market adjustment of stock warrants | $ (11) | (462) |
Ending balance | $ 40 | |
Private Placement Warrants | Level 3 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Expense | Expense |
Public Warrants | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Gain from change in fair value of warrant liability | $ 400 | $ 9,400 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property and Equipment | ||
Property and equipment, gross | $ 13,467 | $ 11,460 |
Less: accumulated depreciation | (4,781) | (2,621) |
Property and equipment, net | 8,686 | 8,839 |
Leasehold improvements | ||
Property and Equipment | ||
Property and equipment, gross | 2,933 | 1,810 |
Furniture & fixtures | ||
Property and Equipment | ||
Property and equipment, gross | 1,165 | 1,262 |
Computer equipment & software | ||
Property and Equipment | ||
Property and equipment, gross | 3,699 | 3,206 |
Medical equipment | ||
Property and Equipment | ||
Property and equipment, gross | 1,106 | 1,067 |
Software (development in process) | ||
Property and Equipment | ||
Property and equipment, gross | 3,877 | 3,460 |
Vehicles | ||
Property and Equipment | ||
Property and equipment, gross | 654 | 618 |
Other | ||
Property and Equipment | ||
Property and equipment, gross | $ 33 | $ 37 |
Property and Equipment - Narrat
Property and Equipment - Narratives (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 2.3 | $ 2.4 |
Goodwill - (Details)
Goodwill - (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | |||||
Beginning balance, gross | $ 1,314,952 | $ 1,309,750 | |||
Beginning balance, net | 0 | 1,309,750 | |||
Accumulated goodwill impairment losses | $ (1,314,952) | (1,314,952) | $ 0 | ||
Acquisitions | 5,202 | ||||
Impairment losses | (463,500) | $ (851,500) | $ 0 | (1,314,952) | |
Ending balance, gross | 1,314,952 | 1,314,952 | |||
Ending balance, net | $ 0 | $ 0 |
Goodwill - Additional Informati
Goodwill - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Impairment charges | $ 463,500 | $ 851,500 | $ 0 | $ 1,314,952 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Definite lived intangible assets: | ||
Accumulated Amortization | $ (176,102) | $ (91,785) |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Intangible assets, gross (excluding goodwill) | 842,835 | 842,835 |
Intangible assets, net | 666,733 | 751,050 |
Customer relationships | ||
Definite lived intangible assets: | ||
Gross Carrying Amount | 684,000 | 684,000 |
Accumulated Amortization | (142,500) | (74,100) |
Net Carrying Amount | 541,500 | 609,900 |
Trademarks | ||
Definite lived intangible assets: | ||
Gross Carrying Amount | 148,635 | 148,635 |
Accumulated Amortization | (31,671) | (16,704) |
Net Carrying Amount | 116,964 | 131,931 |
Payor contracts | ||
Definite lived intangible assets: | ||
Gross Carrying Amount | 4,700 | 4,700 |
Accumulated Amortization | (940) | (470) |
Net Carrying Amount | 3,760 | 4,230 |
Provider network | ||
Definite lived intangible assets: | ||
Gross Carrying Amount | 4,800 | 4,800 |
Accumulated Amortization | (991) | (511) |
Net Carrying Amount | 3,809 | 4,289 |
Medical licenses | ||
Indefinite lived intangible assets: | ||
Indefinite-lived intangible assets | $ 700 | $ 700 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Intangible Assets | ||
Amortization of intangible assets | $ 84.3 | $ 84.8 |
Estimated future amortization of intangible assets for the year 2024 | 84.2 | |
Estimated future amortization of intangible assets for the year 2025 | 84.2 | |
Estimated future amortization of intangible assets for the year 2026 | 84.2 | |
Estimated future amortization of intangible assets for the year 2027 | 84.2 | |
Estimated future amortization of intangible assets for the year 2028 | $ 84.2 |
Warrants - Public and Private P
Warrants - Public and Private Placement Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Warrants | ||
Warrants outstanding (in shares) | 81,900,000 | 11,200,000 |
Gain (loss) from change in fair value of warrant liability | $ (433) | $ (9,865) |
Public and Private Placement Warrants | Class A Common Stock | ||
Warrants | ||
Number of warrants exercised (warrants) | 0 | 0 |
Number of shares issuable per warrant (warrants) | 1 | |
Exercise price (in dollars per share) | $ 11.50 | |
Expected term of warrants (in years) | 5 years | |
Threshold share price (in dollars per share) | $ 18 | |
Threshold trading days | 20 days | |
Trading period | 30 days | |
Warrants outstanding | $ 1,100 | $ 1,500 |
Gain (loss) from change in fair value of warrant liability | $ 400 | $ 9,900 |
Warrants - VGS Warrants (Detail
Warrants - VGS Warrants (Details) - VGS - Unsecured Promissory Note - VGS Warrant Agreement - Class A common stock - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Warrants | ||
Warrants to purchase common stock (in shares) | 0.4 | |
Exercise price (in dollars per share) | $ 4.26 | |
Voting power disposed percentage (as a percent) | 50% | |
Warrants fair value | $ 0.6 |
Warrants - Key Level 3 inputs i
Warrants - Key Level 3 inputs into the option pricing model related toVGS Warrants (Details) - VGS Warrant Agreement - Level 3 | Dec. 31, 2023 $ / shares yr |
Volatility | |
Warrants | |
Warrants, measurement input | 0.49 |
Risk-free interest rate | |
Warrants | |
Warrants, measurement input | 0.0380 |
Exercise price | |
Warrants | |
Warrants, measurement input | $ / shares | 4.26 |
Expected term | |
Warrants | |
Warrants, measurement input | yr | 5 |
Warrants - March 2023 Warrants
Warrants - March 2023 Warrants (Details) - Class A Common Stock - shares | Dec. 31, 2023 | Apr. 06, 2023 |
Securities Purchase Agreement | ||
Warrants | ||
Warrant issued for securities (in shares) | 59,900,000 | |
Securities Purchase Agreement | Pre-funded warrants | ||
Warrants | ||
Warrant issued for securities (in shares) | 10,800,000 | |
Unsecured Promissory Note | VGS | VGS Warrant Agreement | ||
Warrants | ||
Warrant issued for securities (in shares) | 400,000 | |
Voting power disposed percentage (as a percent) | 50% |
Claims Payable (Details)
Claims Payable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Unpaid Claims | ||
Claims unpaid, beginning of period | $ 151,207 | $ 101,958 |
Incurred, related to: | ||
Current period | 1,064,341 | 942,570 |
Prior period(s) | (2,617) | 882 |
Total incurred | 1,061,724 | 943,452 |
Paid, related to: | ||
Current period | 893,092 | 794,026 |
Prior period(s) | 141,830 | 100,177 |
Total paid | 1,034,922 | 894,203 |
Claims unpaid, end of period | $ 178,009 | $ 151,207 |
Debt - Schedule of Long-Term De
Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt | ||
Long-term debt, gross | $ 109,102 | $ 95,000 |
Less: unamortized debt issuance costs and original issue discount | (783) | (579) |
Long-term debt, net | 108,319 | 94,421 |
Repurchase Promissory Note | ||
Debt | ||
Long-term debt, gross | 15,000 | 15,000 |
Term Loan Facility | ||
Debt | ||
Long-term debt, gross | 65,000 | 65,000 |
VGS Promissory Note | ||
Debt | ||
Long-term debt, gross | $ 29,102 | $ 15,000 |
Debt - Repurchase Promissory No
Debt - Repurchase Promissory Note (Details) - Repurchase Promissory Note - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2019 |
Debt | |||
Debt face amount | $ 15 | ||
Interest rate | 11% | ||
Balance due maturity | $ 0.6 | ||
Accrued interest | $ 11.7 | $ 9 |
Debt - Term Loan Facility (Deta
Debt - Term Loan Facility (Details) - Term Loan Facility | 1 Months Ended | 12 Months Ended | |||
Nov. 30, 2020 USD ($) payment | Dec. 31, 2025 USD ($) | Dec. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Debt | |||||
Funding provided | $ 100,000,000 | ||||
Amount drawn | $ 65,000,000 | $ 65,000,000 | |||
Percentage of pledged stock, Its subsidiaries and bank accounts | 100% | ||||
Interest rate | 12% | ||||
Paid in cash interest, percentage | 8% | ||||
Partially paid in kind interest, percentage | 4% | ||||
Interest payment term | 3 years | ||||
Number of payments | payment | 12 | ||||
Accrued interest | 7,900,000 | $ 5,000,000 | |||
Minimum liquidity | $ 5,000,000 | ||||
Minimum annual revenue | $ 525,000,000 | ||||
Forecast | |||||
Debt | |||||
Minimum annual revenue | $ 650,000,000 | $ 585,000,000 |
Debt - VGS Promissory Note (Det
Debt - VGS Promissory Note (Details) - VGS Promissory Note - USD ($) $ / shares in Units, shares in Millions | 1 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2023 | |
Debt | ||
Warrant issued for securities (in shares) | 0.4 | |
Exercise price (in dollars per share) | $ 4.26 | |
Funding provided | $ 40,000,000 | |
Percentage of upfront-fee | 1.50% | |
Amount drawn | $ 15,000,000 | 29,100,000 |
Debt issuance costs | 800,000 | |
Original issue discount | $ 600,000 | |
Interest rate | 14% | |
Paid in kind interest, percentage | 6% | |
Paid in cash interest, percentage | 8% | |
Accrued interest | $ 100,000 | $ 4,000,000 |
Percentage of back-end fee | 9% | |
Minimum amount of prepayment at increment | $ 2,000,000 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Principal | ||
2024 | $ 0 | |
2025 | 65,000 | |
2026 | 44,102 | |
Total | 109,102 | $ 95,000 |
Less: unamortized debt issuance costs and original issue discount | (783) | (579) |
Long-term debt, net | $ 108,319 | $ 94,421 |
Income Taxes- Components of Los
Income Taxes- Components of Loss Before Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ (183,731) | $ (1,559,695) |
Foreign | 0 | 0 |
LOSS BEFORE INCOME TAXES | $ (183,731) | $ (1,559,695) |
Income Taxes- Components of inc
Income Taxes- Components of income tax expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current income taxes: | ||
Federal | $ 170 | $ 111 |
State | 2,525 | 1,751 |
Total current income taxes | 2,695 | 1,862 |
Deferred income taxes: | ||
Federal | 0 | 0 |
State | 0 | 0 |
Total deferred income taxes | 0 | 0 |
Total income tax expense | $ 2,695 | $ 1,862 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of income tax provision (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Tax at federal statutory rate | $ (38,584) | $ (327,536) |
Non-controlling interest and nontaxable income | 24,486 | 260,020 |
Change in valuation allowance | 29,781 | 33,961 |
Investment in P3 LLC | (20,420) | 35,147 |
Return to provision | 4,134 | 0 |
Deferred tax adjustments | 1,754 | 0 |
Other reconciling items | 1,544 | 270 |
Total income tax expense | $ 2,695 | $ 1,862 |
Effective tax rate (as a percent) | (1.50%) | (0.10%) |
Income Taxes - Deferred income
Income Taxes - Deferred income taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Investment in P3 LLC | $ 19,709 | $ 20,684 |
Net operating loss carryforwards | 21,525 | 17,601 |
Accrued liabilities | 221 | 2,764 |
Goodwill and identifiable intangible assets | 1,923 | 589 |
Section 163j interest limitation | 3,031 | 1,995 |
Other deferred tax assets | 632 | 94 |
Total deferred tax assets | 47,041 | 43,727 |
Less: valuation allowance | (46,370) | (43,558) |
Net deferred tax assets | 671 | 169 |
Deferred tax liabilities: | ||
Operating lease, right-of-use assets | (338) | (19) |
Other deferred tax liabilities | (333) | (150) |
Total deferred tax liabilities | (671) | (169) |
Net deferred tax asset | $ 0 | $ 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Taxes | ||
Net operating loss carryforwards | $ 21,525 | $ 17,601 |
Operating loss carryforwards, not subject to expiration | 13,000 | |
Tax benefit | 2,695 | 1,862 |
P3 LLC | ||
Income Taxes | ||
TRA liability | $ 0 | 0 |
Tax Receivable Agreement with Selling Equity Holders of P3 LLC | ||
Income Taxes | ||
Percentage of estimated future tax benefits that may realize | 85% | |
Retained percentage of cash savings | 15% | |
Tax Receivable Agreement with Selling Equity Holders of P3 LLC | P3 LLC | ||
Income Taxes | ||
TRA liability | $ 11,000 | 4,600 |
Tax benefit | 0 | $ 0 |
Domestic Tax Authority | ||
Income Taxes | ||
Net operating loss carryforwards | 94,700 | |
State and Local Jurisdiction | ||
Income Taxes | ||
Net operating loss carryforwards | 33,900 | |
State and Local Jurisdiction | Period One | ||
Income Taxes | ||
Net operating loss carryforwards expiration | 1,500 | |
State and Local Jurisdiction | Period Two | ||
Income Taxes | ||
Net operating loss carryforwards expiration | 4,500 | |
State and Local Jurisdiction | Period Three | ||
Income Taxes | ||
Net operating loss carryforwards expiration | 6,500 | |
State and Local Jurisdiction | Period Four | ||
Income Taxes | ||
Net operating loss carryforwards expiration | 5,500 | |
State and Local Jurisdiction | Period Five | ||
Income Taxes | ||
Net operating loss carryforwards expiration | 100 | |
State and Local Jurisdiction | Period Six | ||
Income Taxes | ||
Net operating loss carryforwards expiration | 2,300 | |
State and Local Jurisdiction | Period Seven | ||
Income Taxes | ||
Net operating loss carryforwards expiration | $ 500 |
Capitalization (Details)
Capitalization (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Nov. 09, 2023 USD ($) $ / shares | Apr. 06, 2023 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) vote $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | |
Subsidiary, Sale of Stock | ||||
Preferred stock, shares authorized (in shares) | 10,000,000 | |||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||
Preferred stock, shares issued (in shares) | 0 | 0 | ||
Preferred stock, shares outstanding (in shares) | 0 | 0 | ||
Aggregate gross proceeds | $ | $ 86,595 | $ 0 | ||
Maximum amount of shares allowed to be owned by related party (as a percent) | 49.99% | |||
Securities Purchase Agreement | ||||
Subsidiary, Sale of Stock | ||||
Class of warrants issued (in dollars per share) | $ / shares | $ 0.75 | |||
Shares issued (in shares) | 79,900,000 | |||
Sales of stock (in dollars per share) | $ / shares | $ 1.12 | |||
Securities Purchase Agreement | Employees and consultants | ||||
Subsidiary, Sale of Stock | ||||
Sales of stock (in dollars per share) | $ / shares | $ 1.19 | |||
Private Placement | ||||
Subsidiary, Sale of Stock | ||||
Shares issued (in shares) | 69,200,000 | |||
Shelf Registration | ||||
Subsidiary, Sale of Stock | ||||
Sale of stock, number of shares authorized For issuance, value | $ | $ 250,000 | |||
Class A Common Stock | ||||
Subsidiary, Sale of Stock | ||||
Common stock, shares authorized (in shares) | 800,000,000 | 800,000,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Number of votes per share (vote) | vote | 1 | |||
Class A Common Stock | Securities Purchase Agreement | ||||
Subsidiary, Sale of Stock | ||||
Shares issued (in shares) | 69,200,000 | |||
Shares issued per transaction (in shares) | 1 | |||
Number of shares issuable per warrant (warrants) | 1 | |||
Exercise price (in dollars per share) | $ / shares | $ 1.13 | |||
Warrant issued for securities (in shares) | 59,900,000 | |||
Class A Common Stock | Securities Purchase Agreement | Pre-funded warrants | ||||
Subsidiary, Sale of Stock | ||||
Warrant issued for securities (in shares) | 10,800,000 | |||
Class A Common Stock | Private Placement | Pre-funded warrants | ||||
Subsidiary, Sale of Stock | ||||
Aggregate gross proceeds | $ | $ 86,600 | |||
Net of offering costs | $ | $ 2,900 | |||
Class A Common Stock | Shelf Registration | ||||
Subsidiary, Sale of Stock | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||
Sale of stock, number of shares authorized For issuance, value | $ | $ 75,000 | |||
Class V Common Stock | ||||
Subsidiary, Sale of Stock | ||||
Common stock, shares authorized (in shares) | 205,000,000 | 205,000,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Number of votes per share (vote) | vote | 1 |
Equity-Based Compensation - Com
Equity-Based Compensation - Common Units Awards (Details) - Common Unit award - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Weighted Average Grant-Date Fair Value | ||
Non-vested, beginning balance (in dollars per share) | $ 9.20 | |
Granted (in dollars per share) | 0 | |
Vested (in dollars per share) | 9.20 | |
Forfeited (in dollars per share) | 9.20 | |
Non-vested, ending balance (in dollars per share) | $ 9.20 | |
Number of Stock Options | ||
Non-vested, beginning balance (in shares) | 380 | |
Granted (in shares) | 0 | |
Vested (in shares) | (349) | |
Forfeited (in shares) | (31) | |
Non-vested, ending balance (in shares) | 0 | 380 |
Fair value of awards vested | $ 0.5 | $ 17.6 |
Minimum | ||
Number of Stock Options | ||
Vesting period | 1 month | |
Maximum | ||
Number of Stock Options | ||
Vesting period | 2 years |
Equity-Based Compensation - 202
Equity-Based Compensation - 2021 Incentive Award Plan (Details) - 2021 Plan - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2023 | Jan. 01, 2022 | |
Equity-Based Compensation | |||
Aggregate number of shares reserved and available for issuance | 14.6 | 4.9 | |
Annual increase, as percent of outstanding shares | 1% | ||
Ratio of common units owned to Class A common stock to be maintained by P3 LLC | 1 | ||
Stock options | |||
Equity-Based Compensation | |||
Option term | 10 years | ||
Class A Common Stock | |||
Equity-Based Compensation | |||
Aggregate number of shares reserved and available for issuance | 5.9 |
Equity-Based Compensation - Opt
Equity-Based Compensation - Options (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Time-based stock option | ||
Number of Stock Options | ||
Outstanding, beginning (in shares) | 3,402,000 | |
Granted (in shares) | 1,663,000 | |
Forfeited (in shares) | (978,000) | |
Outstanding, ending (in shares) | 4,087,000 | 3,402,000 |
Fully vested and expected to vest (in shares) | 4,087,000 | |
Exercisable (in shares) | 1,102,000 | |
Weighted Average Exercise Price | ||
Outstanding, beginning (in dollars per share) | $ 5.60 | |
Granted (in dollars per share) | 1.35 | |
Forfeited (in dollars per share) | 3.79 | |
Outstanding, ending (in dollars per share) | 4.24 | $ 5.60 |
Fully vested and expected to vest (in dollars per share) | 4.24 | |
Exercisable (in dollars per share) | $ 5.78 | |
Weighted Aggregate Contractual Life (in years) | ||
Outstanding and non-vested | 8 years 9 months 7 days | 9 years 7 months 13 days |
Fully vested and expected to vest | 8 years 9 months 7 days | |
Exercisable | 8 years 4 months 20 days | |
Aggregate Intrinsic Value (in thousands) | ||
Outstanding | $ 140,000 | |
Fully vested and expected to vest | 140,000 | |
Exercisable | $ 13,000 | |
Performance-based stock option | ||
Number of Stock Options | ||
Outstanding, beginning (in shares) | 1,500,000 | |
Granted (in shares) | 150,000 | |
Outstanding, ending (in shares) | 1,650,000 | 1,500,000 |
Fully vested and expected to vest (in shares) | 1,650,000 | |
Exercisable (in shares) | 0 | |
Weighted Average Exercise Price | ||
Outstanding, beginning (in dollars per share) | $ 4.95 | |
Granted (in dollars per share) | 1.07 | |
Outstanding, ending (in dollars per share) | 4.60 | $ 4.95 |
Fully vested and expected to vest (in dollars per share) | 4.60 | |
Exercisable (in dollars per share) | $ 0 | |
Weighted Aggregate Contractual Life (in years) | ||
Outstanding and non-vested | 9 years | 9 years 9 months 29 days |
Fully vested and expected to vest | 9 years | |
Aggregate Intrinsic Value (in thousands) | ||
Outstanding | $ 51,000 | |
Fully vested and expected to vest | 51,000 | |
Exercisable | 0 | |
Number of options for which vesting criteria not achieved | 100,000 | |
Compensation expense | $ 0 | |
Exercised (in shares) | 0 | 0 |
Equity-Based Compensation - Fai
Equity-Based Compensation - Fair Value of Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Time-based stock option | ||
Equity-Based Compensation | ||
Weighted average grant date fair value (in dollars per share) | $ 0.81 | $ 2.58 |
Performance-based stock option | ||
Equity-Based Compensation | ||
Weighted average grant date fair value (in dollars per share) | 0.77 | $ 3.34 |
RSUs | ||
Equity-Based Compensation | ||
Weighted average grant date fair value (in dollars per share) | $ 1.80 | |
Total fair value of shares vested | $ 5,826 | |
RSAs | ||
Equity-Based Compensation | ||
Weighted average grant date fair value (in dollars per share) | $ 1.82 | |
Total fair value of shares vested | $ 598 |
Equity-Based Compensation - Sto
Equity-Based Compensation - Stock Option Valuation Assumptions (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Stock options | ||
Equity-Based Compensation | ||
Expected volatility | 60.20% | 51% |
Risk-free interest rate | 3.80% | 3.20% |
Expected term | 6 years 7 months 6 days | 7 years 3 months 18 days |
Dividend rate | 0% | 0% |
Time-based stock option | ||
Equity-Based Compensation | ||
Unrecognized equity-based compensation cost | $ 4.2 | |
Weighted-average period to recognize unrecognized compensation expense (in years) | 9 years | |
Time-based stock option | Minimum | ||
Equity-Based Compensation | ||
Vesting period | 2 years | |
Time-based stock option | Maximum | ||
Equity-Based Compensation | ||
Vesting period | 5 years | |
Performance-based stock option | ||
Equity-Based Compensation | ||
Unrecognized equity-based compensation cost | $ 4.8 | |
Weighted-average period to recognize unrecognized compensation expense (in years) | 2 years 10 months 24 days |
Equity-Based Compensation - RSU
Equity-Based Compensation - RSU & RSA Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Second Bonus | Class A Common Stock | |||
Number of Units (in thousands) | |||
Fair value of RSUs granted | $ 5.6 | ||
RSUs | |||
Weighted Average Grant Date Fair Value | |||
Nonvested, beginning (in dollars per share) | $ 0 | ||
Granted (in dollars per share) | 1.80 | ||
Vested (in dollars per share) | 2.15 | ||
Nonvested, ending (in dollars per share) | $ 1.60 | $ 0 | |
Number of Units (in thousands) | |||
Non-vested, beginning (in shares) | 0 | ||
Granted (in shares) | 7,548 | ||
Vested (in shares) | (2,713) | ||
Non-vested, ending (in shares) | 4,835 | 0 | |
Share-based payment arrangement, nonvested award | $ 6.8 | ||
Weighted-average period to recognize unrecognized compensation expense (in years) | 2 years 9 months 21 days | ||
RSUs | Minimum | |||
Number of Units (in thousands) | |||
Vesting period | 2 years | ||
RSUs | Maximum | |||
Number of Units (in thousands) | |||
Vesting period | 4 years | ||
RSUs | Second Bonus | |||
Number of Units (in thousands) | |||
Granted (in shares) | 2,500 | ||
Restricted stock units transaction bonus | $ 5 | ||
Equity-based compensation | $ 0.6 | ||
RSAs | |||
Weighted Average Grant Date Fair Value | |||
Nonvested, beginning (in dollars per share) | $ 0 | ||
Granted (in dollars per share) | 1.82 | ||
Vested (in dollars per share) | 1.82 | ||
Nonvested, ending (in dollars per share) | $ 0 | ||
Number of Units (in thousands) | |||
Non-vested, beginning (in shares) | 0 | ||
Granted (in shares) | 250 | ||
Vested (in shares) | (250) | ||
Non-vested, ending (in shares) | 0 | 0 |
Equity-Based Compensation - C_2
Equity-Based Compensation - Compensation Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Equity-Based Compensation | ||
Tax benefits recognized related to stock-based compensation | $ 0 | $ 0 |
General and Administrative Expenses | ||
Equity-Based Compensation | ||
Compensation expense | $ 6,000,000 | $ 19,400,000 |
Net Loss per Share - Schedule o
Net Loss per Share - Schedule of Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Denominator–basic: | ||
Weighted average Class A common shares outstanding–basic (in shares) | 94,889 | 41,579 |
Net loss per share attributable to Class A common stockholders–basic (in dollars per share) | $ (0.61) | $ (6.50) |
Weighted average shares outstanding–diluted (in shares) | 294,590 | 41,579 |
Net loss per share attributable to Class A common stockholders– diluted (in dollars per share) | $ (0.63) | $ (6.50) |
Class A Common Stock | ||
Numerator–basic: | ||
Net loss attributable to Class A common stockholders–basic | $ (57,773) | $ (270,127) |
Net loss attributable to Class A common stockholders–diluted | $ (186,426) | $ (270,127) |
Denominator–basic: | ||
Weighted average Class A common shares outstanding–basic (in shares) | 94,889 | 41,579 |
Net loss per share attributable to Class A common stockholders–basic (in dollars per share) | $ (0.61) | $ (6.50) |
Net loss per share attributable to Class A common stockholders– diluted (in dollars per share) | $ (0.63) | $ (6.50) |
Class V Common Stock | ||
Numerator–basic: | ||
Shares of Class V common stock | $ (128,653) | $ 0 |
Denominator–basic: | ||
Shares of Class V common stock (in shares) | 199,701 | 0 |
Net Loss per Share - Schedule_2
Net Loss per Share - Schedule of Potentially Dilutive Securities Excluded from the Computation of Diluted Net Loss Per Share (Details) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Potentially dilutive securities excluded from the computation of diluted net loss per share (in shares) | 92,610 | 216,622 |
Stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Potentially dilutive securities excluded from the computation of diluted net loss per share (in shares) | 81,938 | 11,248 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Potentially dilutive securities excluded from the computation of diluted net loss per share (in shares) | 5,837 | 3,402 |
RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Potentially dilutive securities excluded from the computation of diluted net loss per share (in shares) | 4,835 | 0 |
Shares of Class V common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Potentially dilutive securities excluded from the computation of diluted net loss per share (in shares) | 0 | 201,972 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) Option | Dec. 31, 2022 USD ($) | |
Leases | ||
Operating lease, right-of-use assets | $ | $ 15.3 | $ 11.7 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other long-term assets | Other long-term assets |
Operating expenses | ||
Leases | ||
Operating lease costs | $ | $ 4.5 | $ 3.1 |
Real estate on lease | Minimum | ||
Leases | ||
Number of options to renew | Option | 1 | |
Extension term of lease (in years) | 5 years | |
Real estate on lease | Maximum | ||
Leases | ||
Number of options to renew | Option | 2 | |
Extension term of lease (in years) | 10 years |
Leases - Lease Terms And Discou
Leases - Lease Terms And Discount Rates (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Lessee Disclosure [Abstract] | ||
Weighted average remaining lease term (years) | 5 years 9 months 18 days | 6 years 2 months 12 days |
Weighted average discount rate | 11.40% | 11.70% |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Lessee Disclosure [Abstract] | |
2024 | $ 4,625 |
2025 | 4,084 |
2026 | 3,549 |
2027 | 3,211 |
2028 | 3,007 |
Thereafter | 5,244 |
Total undiscounted future cash flows | 23,720 |
Less: interest | (7,375) |
Present value of operating lease liabilities | $ 16,345 |
Leases - Current Portions Of RO
Leases - Current Portions Of ROU Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Lessee Disclosure [Abstract] | ||
Right-of-use liabilities | $ 2.7 | $ 1.6 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flows And Other Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Lessee Disclosure [Abstract] | ||
Operating cash flows paid for operating leases | $ 4,204 | $ 3,339 |
Retirement Plan (Details)
Retirement Plan (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Retirement Benefits [Abstract] | ||
Employer contribution | $ 1.2 | $ 0.8 |
Redeemable Non-controlling In_3
Redeemable Non-controlling Interest - Ownership of Common Units (Details) - shares shares in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
P3 Health Group, LLC | ||
Noncontrolling Interest | ||
Common unit outstanding (in shares) | 313,157 | 243,171 |
P3 Health Group, LLC | ||
Noncontrolling Interest | ||
Common unit outstanding (in shares) | 116,588 | 41,579 |
Non-controlling interests, ownership percentage by noncontrolling owners (as a percent) | 37.20% | 17.10% |
P3 Health Group, LLC | Non Controlling Interest Holders | ||
Noncontrolling Interest | ||
Common unit outstanding (in shares) | 196,569 | 201,592 |
Non-controlling interests, ownership percentage by noncontrolling owners (as a percent) | 62.80% | 82.90% |
Redeemable Non-controlling In_4
Redeemable Non-controlling Interest - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) shares | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 | |
Noncontrolling Interest | |||
Re-measurement adjustment recorded against fair value of redeemable noncontrolling interest | $ | $ 20,600 | $ 0 | |
Common unit exchange or redemption (in shares) | 5,400,000 | 0 | |
Private Placement | |||
Noncontrolling Interest | |||
Shares issued (in shares) | 69,200,000 | ||
2021 Plan | |||
Noncontrolling Interest | |||
Ratio of common units owned to Class A common stock to be maintained by P3 LLC | 1 | ||
P3 Health Partners Inc. | Class V Common Stock | Non Controlling Interest Holders | |||
Noncontrolling Interest | |||
Non-controlling interests, ownership percentage by noncontrolling owners (as a percent) | 83% | ||
P3 Health Group, LLC | |||
Noncontrolling Interest | |||
Non-controlling interests, ownership percentage by noncontrolling owners (as a percent) | 37.20% | 17.10% | |
Trading period of shares to determine air value of non-controlling interest | 5 days | ||
P3 Health Group, LLC | Non Controlling Interest Holders | |||
Noncontrolling Interest | |||
Non-controlling interests, ownership percentage by noncontrolling owners (as a percent) | 62.80% | 82.90% |
Segment Reporting (Details)
Segment Reporting (Details) | 12 Months Ended |
Dec. 31, 2023 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments (segment) | 1 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 plan | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Loss Contingencies | |||
Number of health plans results in renegotiation | plan | 1 | ||
Renegotiation of Health Plan Agreement Due to Discrepancy | |||
Loss Contingencies | |||
Settlement amount | $ | $ 3 | $ 5 |
Related Parties - Atrio Health
Related Parties - Atrio Health Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Related Parties | ||
Revenue | $ 1,266,375 | $ 1,049,471 |
Medical expense | 1,234,740 | 1,057,224 |
Health plan receivable | 118,497 | 72,092 |
Claims payable | 178,009 | 151,207 |
Health plan settlements payable | 34,992 | 13,608 |
Capitated revenue | ||
Related Parties | ||
Revenue | 1,252,309 | 1,034,800 |
Other patient service revenue | ||
Related Parties | ||
Revenue | 14,066 | 14,671 |
Related Party | Atrio | ||
Related Parties | ||
Medical expense | 197,641 | 178,300 |
Health plan receivable | 5,290 | 177 |
Claims payable | 41,348 | 27,838 |
Health plan settlements payable | 4,176 | 2,536 |
Deferred revenue | 12,700 | 0 |
Related Party | Atrio | Capitated revenue | ||
Related Parties | ||
Revenue | 192,577 | 158,941 |
Related Party | Atrio | Other patient service revenue | ||
Related Parties | ||
Revenue | $ 2,737 | $ 2,286 |
Related Parties - VGS Promissor
Related Parties - VGS Promissory Note (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) director | |
Related Parties | ||
The number of board directors holding equity in a related party | director | 2 | |
Interest expense, net | $ 15,985 | $ 11,404 |
Long-term debt, net | 108,319 | 94,421 |
Accrued interest | 23,648 | 14,061 |
Accrued expenses | 8,663 | 11,542 |
Related Party | ||
Related Parties | ||
Interest expense, net | 3,905 | 105 |
Related Party | VGS | ||
Related Parties | ||
Long-term debt, net | 28,319 | 14,421 |
Accrued interest | 4,010 | 105 |
Accrued expenses | $ 331 | $ 225 |
Variable Interest Entities - Na
Variable Interest Entities - Narratives (Details) | Dec. 31, 2023 |
Prime Rate | |
Variable Interest Entity | |
Management service fee (as a percent) | 2% |
Variable Interest Entities - Ba
Variable Interest Entities - Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | |
ASSETS | |||
Cash | $ 36,320 | $ 17,537 | |
Health plan receivable | 118,497 | 72,092 | |
Prepaid expenses and other current assets | 3,613 | 2,643 | |
Property and equipment, net | 8,686 | 8,839 | |
Other long-term assets | 19,531 | 15,990 | |
TOTAL ASSETS | [1] | 860,967 | 876,571 |
LIABILITIES AND MEMBERS’ DEFICIT | |||
Accounts payable | 8,663 | 11,542 | |
Accrued expenses and other current liabilities | 36,884 | 16,647 | |
Accrued payroll | 3,506 | 8,224 | |
Claims payable | 178,009 | 151,207 | |
TOTAL LIABILITIES | [1] | 427,305 | 353,912 |
TOTAL LIABILITIES, MEZZANINE EQUITY, and STOCKHOLDERS’ EQUITY | $ 860,967 | $ 876,571 | |
Accounts Payable, Noncurrent, Related Party, Type [Extensible Enumeration] | Affiliated Entity [Member] | Affiliated Entity [Member] | |
VIE | |||
ASSETS | |||
Cash | $ 6,491 | $ 1,759 | |
Clinic fees, insurance and other receivable | 138 | 1,178 | |
Health plan receivable | 571 | 0 | |
Prepaid expenses and other current assets | 1,261 | 121 | |
Property and equipment, net | 23 | 44 | |
Other long-term assets | 153 | 0 | |
Due from consolidated entities of P3 | 0 | 3,012 | |
TOTAL ASSETS | 8,637 | 6,114 | |
LIABILITIES AND MEMBERS’ DEFICIT | |||
Accounts payable | 5,073 | 7,800 | |
Accrued expenses and other current liabilities | 515 | 262 | |
Accrued payroll | 3,141 | 1,885 | |
Claims payable | 3,973 | 0 | |
Other long-term liabilities | 946 | 0 | |
Due to consolidated entities of P3 | 44,200 | 36,025 | |
TOTAL LIABILITIES | 57,848 | 45,972 | |
MEMBERS’ DEFICIT | (49,211) | (39,858) | |
TOTAL LIABILITIES, MEZZANINE EQUITY, and STOCKHOLDERS’ EQUITY | $ 8,637 | $ 6,114 | |
[1] The Company’s consolidated balance sheets include the assets and liabilities of its consolidated variable interest entities (“VIEs”). As discussed in Note 22: Variable Interest Entities, P3 LLC is itself a VIE. P3 LLC represents substantially all the assets and liabilities of the Company. As a result, the language and numbers below refer only to VIEs held at the P3 LLC level. The consolidated balance sheets include total assets that can be used only to settle obligations of P3 LLC’s consolidated VIEs totaling $8.6 million and $3.1 million as of December 31, 2023 and 2022, respectively, and total liabilities of P3 LLC’s consolidated VIEs for which creditors do not have recourse to the general credit of the Company totaled $13.6 million and $9.9 million as of December 31, 2023 and 2022, respectively. These VIE assets and liabilities do not include $44.2 million and $33.0 million of net amounts due to affiliates as of December 31, 2023 and 2022, respectively, as these are eliminated in consolidation and not presented within the consolidated balance sheets. |
Variable Interest Entities - In
Variable Interest Entities - Income Statement (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Variable Interest Entity | ||
Revenue | $ 1,266,375 | $ 1,049,471 |
Expense | 1,434,305 | 2,610,384 |
Net loss | (186,426) | (1,561,557) |
VIE | ||
Variable Interest Entity | ||
Revenue | 39,551 | 55,237 |
Expense | 45,999 | 69,638 |
Net loss | $ (6,448) | $ (14,401) |
Subsequent Events (Details)
Subsequent Events (Details) - VGS 2 Promissory Note - Subsequent Event - Line of Credit | Jun. 30, 2024 | Mar. 29, 2024 USD ($) | Mar. 22, 2024 USD ($) tranche |
Subsequent Events | |||
Borrowing capacity | $ 25,000,000 | ||
Number of tranches (tranche) | tranche | 2 | ||
Percentage of upfront-fee | 1.50% | ||
Paid Before June 2024 | |||
Subsequent Events | |||
Debt Instrument, Back End Fee | 2.25% | ||
Paid between Jun. 2024 and Sep. 2024 | |||
Subsequent Events | |||
Debt Instrument, Back End Fee | 4.50% | ||
Paid between Sep. 2024 and Dec. 2024 | |||
Subsequent Events | |||
Debt Instrument, Back End Fee | 6.75% | ||
Paid after Dec. 2024 | |||
Subsequent Events | |||
Debt Instrument, Back End Fee | 9% | ||
Option One | |||
Subsequent Events | |||
Interest rate | 17.50% | ||
Paid in cash interest, percentage | 8% | ||
Paid in kind interest, percentage | 9.50% | ||
Option Two | |||
Subsequent Events | |||
Paid in kind interest, percentage | 17.50% | ||
First tranche | |||
Subsequent Events | |||
Borrowing capacity | $ 10,000,000 | ||
Second tranche | |||
Subsequent Events | |||
Borrowing capacity | $ 15,000,000 |