Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 01, 2024 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
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(Registrant’s telephone number, including area code) | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001832511 | |
Entity Central Index Key | --12-31 | |
Current Fiscal Year End Date | 2024 | |
Document Fiscal Year Focus | Q1 | |
Document Fiscal Period Focus | 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 | 119,620,285 | |
Warrants | ||
Title of 12(b) Security | Warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50 | |
Trading Symbol | PIIIW | |
Security Exchange Name | NASDAQ | |
Class V Common Stock | ||
Entity Common Stock, Shares Outstanding | 196,494,420 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | |
CURRENT ASSETS: | |||
Cash | $ 27,300 | $ 36,320 | |
Restricted cash | 5,005 | 4,614 | |
Health plan receivable, net of allowance for credit losses of $150 | 143,695 | 118,497 | |
Clinic fees, insurance and other receivable | 48 | 2,973 | |
Prepaid expenses and other current assets | 6,909 | 3,613 | |
TOTAL CURRENT ASSETS | 182,957 | 166,017 | |
Property and equipment, net | 8,121 | 8,686 | |
Intangible assets, net | 645,703 | 666,733 | |
Other long-term assets | 19,144 | 19,531 | |
TOTAL ASSETS | [1] | 855,925 | 860,967 |
CURRENT LIABILITIES: | |||
Accounts payable | 11,603 | 8,663 | |
Accrued expenses and other current liabilities | 28,628 | 36,884 | |
Accrued payroll | 5,048 | 3,506 | |
Health plan settlements payable | 22,048 | 34,992 | |
Claims payable | 222,177 | 178,009 | |
Premium deficiency reserve | 14,670 | 13,670 | |
Accrued interest | 28,035 | 23,648 | |
Short-term debt | 1,441 | 0 | |
TOTAL CURRENT LIABILITIES | 333,650 | 299,372 | |
Operating lease liability | 12,944 | 13,622 | |
Warrant liabilities | 869 | 1,085 | |
Contingent consideration | 4,907 | 4,907 | |
Long-term debt, net | 118,123 | 108,319 | |
TOTAL LIABILITIES | [1] | 470,493 | 427,305 |
COMMITMENTS AND CONTINGENCIES (Note 12) | |||
MEZZANINE EQUITY: | |||
Redeemable non-controlling interest | 238,836 | 291,532 | |
STOCKHOLDERS’ EQUITY: | |||
Additional paid in capital | 532,608 | 509,442 | |
Accumulated deficit | (386,044) | (367,344) | |
TOTAL STOCKHOLDERS’ EQUITY | 146,596 | 142,130 | |
TOTAL LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ EQUITY | 855,925 | 860,967 | |
Class A Common Stock | |||
STOCKHOLDERS’ EQUITY: | |||
Common stock | 12 | 12 | |
Class V Common Stock | |||
STOCKHOLDERS’ EQUITY: | |||
Common stock | $ 20 | $ 20 | |
[1] The Company’s condensed consolidated balance sheets include the assets and liabilities of its consolidated variable interest entities (“VIEs”). As discussed in Note 13 “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 amounts below refer only to VIEs held at the P3 LLC level. The condensed consolidated balance sheets include total assets that can be used only to settle obligations of P3 LLC’s consolidated VIEs totaling $10.5 million and $8.6 million as of March 31, 2024 and December 31, 2023, 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 $14.9 million and $13.6 million as of March 31, 2024 and December 31, 2023, respectively. These VIE assets and liabilities do not include $44.6 million and $44.2 million of net amounts due to affiliates as of March 31, 2024 and December 31, 2023, respectively, as these are eliminated in consolidation and not presented within the condensed consolidated balance sheets. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Health plan receivable, allowance for credit loss | $ 150 | $ 150 |
Related Party | ||
Accounts payable, other | 44,600 | 44,200 |
VIE | ||
Assets to settle obligations | 10,500 | 8,600 |
Liabilities without recourse to company assets | $ 14,900 | $ 13,600 |
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) | 119,409,000 | 116,588,000 |
Common stock, shares outstanding (in shares) | 119,409,000 | 116,588,000 |
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) | 196,494,000 | 196,569,000 |
Common stock, shares outstanding (in shares) | 196,494,000 | 196,569,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
OPERATING REVENUE: | ||
TOTAL OPERATING REVENUE | $ 388,488 | $ 302,077 |
OPERATING EXPENSE: | ||
Medical expense | 382,057 | 285,570 |
Premium deficiency reserve | 1,000 | 5,140 |
Corporate, general and administrative expense | 27,401 | 37,643 |
Sales and marketing expense | 322 | 1,001 |
Depreciation and amortization | 21,539 | 21,540 |
TOTAL OPERATING EXPENSE | 432,319 | 350,894 |
OPERATING LOSS | (43,831) | (48,817) |
OTHER INCOME (EXPENSE): | ||
Interest expense, net | (4,256) | (4,086) |
Mark-to-market of stock warrants | 216 | 649 |
Other | 337 | 96 |
TOTAL OTHER EXPENSE | (3,703) | (3,341) |
LOSS BEFORE INCOME TAXES | (47,534) | (52,158) |
PROVISION FOR INCOME TAXES | (2,072) | (290) |
NET LOSS | (49,606) | (52,448) |
LESS: NET LOSS ATTRIBUTABLE TO REDEEMABLE NON-CONTROLLING INTEREST | (30,906) | (43,249) |
NET LOSS ATTRIBUTABLE TO CONTROLLING INTEREST | $ (18,700) | $ (9,199) |
NET LOSS PER SHARE (Note 9): | ||
Basic (in dollars per share) | $ (0.16) | $ (0.22) |
Diluted (in dollars per share) | $ (0.16) | $ (0.22) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Note 9): | ||
Basic (in shares) | 118,887 | 41,579 |
Diluted (in shares) | 118,887 | 41,579 |
Capitated revenue | ||
OPERATING REVENUE: | ||
TOTAL OPERATING REVENUE | $ 384,134 | $ 298,704 |
Other patient service revenue | ||
OPERATING REVENUE: | ||
TOTAL OPERATING REVENUE | $ 4,354 | $ 3,373 |
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 | $ 5,854 | $ 4 | $ 20 | $ 315,375 | $ (309,545) | |||||||
Beginning balance at Dec. 31, 2022 | 516,805 | |||||||||||
Increase (Decrease) in Temporary Equity | ||||||||||||
Temporary Equity, Stock Compensation | $ (291) | |||||||||||
Net loss | (43,249) | |||||||||||
Ending balance at Mar. 31, 2023 | 473,723 | $ (124) | ||||||||||
Beginning balance (in shares) at Dec. 31, 2022 | 41,579,000 | 201,592,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Vesting of Class V common stock awards (in shares) | 275,000 | |||||||||||
Equity-based compensation | 686 | 686 | ||||||||||
Net loss | (9,199) | (9,199) | ||||||||||
Ending balance (in shares) at Mar. 31, 2023 | 41,579,000 | 201,867,000 | ||||||||||
Ending balance at Mar. 31, 2023 | (2,685) | $ (26) | $ 4 | $ 20 | 316,061 | (318,770) | $ (26) | |||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Beginning balance | (2,685) | $ (26) | 4 | 20 | 316,061 | (318,770) | $ (26) | |||||
Beginning balance | 142,130 | $ 12 | $ 20 | 509,442 | (367,344) | |||||||
Beginning balance at Dec. 31, 2023 | 291,532 | |||||||||||
Increase (Decrease) in Temporary Equity | ||||||||||||
Temporary Equity, Stock Compensation | 0 | |||||||||||
Remeasurement adjustment to redeemable non-controlling interest resulting from ownership changes | (1,211) | |||||||||||
Fair value adjustment to redeemable non-controlling interest | (20,579) | |||||||||||
Net loss | (30,906) | |||||||||||
Ending balance at Mar. 31, 2024 | $ 238,836 | |||||||||||
Beginning balance (in shares) at Dec. 31, 2023 | 116,588,000 | 196,569,000 | 116,588,000 | 196,569,000 | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Issuance of Class A common stock upon settlement of RSUs, net of shares withheld for tax (in shares) | 2,746,000 | |||||||||||
Issuance of Class A common stock upon settlement of restricted stock units, net of shares withheld for tax | (73) | (73) | ||||||||||
Equity-based compensation | 1,449 | 1,449 | ||||||||||
Exchanges of redeemable non-controlling interests for Class A common stock (in shares) | 75,000 | (75,000) | ||||||||||
Exchanges of redeemable non-controlling interest for Class A common stock | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||
Remeasurement adjustment to redeemable non-controlling interest resulting from ownership changes | 1,211 | 1,211 | ||||||||||
Fair value adjustment to redeemable non-controlling interest | 20,579 | 20,579 | ||||||||||
Net loss | (18,700) | (18,700) | ||||||||||
Ending balance (in shares) at Mar. 31, 2024 | 119,409,000 | 196,494,000 | 119,409,000 | 196,494,000 | ||||||||
Ending balance at Mar. 31, 2024 | 146,596 | $ 12 | $ 20 | 532,608 | (386,044) | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Beginning balance | $ 146,596 | $ 12 | $ 20 | $ 532,608 | $ (386,044) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (49,606) | $ (52,448) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 21,539 | 21,540 |
Equity-based compensation | 1,449 | 977 |
Amortization of original issue discount and debt issuance costs | (140) | 279 |
Accretion of contingent consideration | 0 | 113 |
Mark-to-market adjustment of stock warrants | (216) | (649) |
Premium deficiency reserve | 1,000 | 5,140 |
Changes in operating assets and liabilities: | ||
Health plan receivable | (25,198) | (21,273) |
Clinic fees, insurance, and other receivable | 2,892 | 2,542 |
Prepaid expenses and other current assets | (3,296) | (454) |
Other long-term assets | (17) | (1,364) |
Accounts payable, accrued expenses, and other current liabilities | (5,553) | 8,316 |
Accrued payroll | 1,542 | (823) |
Health plan settlements payable | (12,944) | (1,224) |
Claims payable | 44,168 | 13,690 |
Accrued interest | 4,387 | 2,275 |
Operating lease liability | (37) | (359) |
Net cash used in operating activities | (20,030) | (23,722) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | 0 | (464) |
Net cash used in investing activities | 0 | (464) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from long-term debt, net of original issue discount | 10,000 | 14,102 |
Proceeds from at-the-market sales, net of offering costs paid | 33 | 0 |
Payment of tax withholdings upon settlement of restricted stock unit awards | (73) | 0 |
Repayment of short-term and long-term debt | (430) | 0 |
Proceeds from short-term debt | 1,871 | |
Net cash provided by financing activities | 11,401 | 14,102 |
Net change in cash and restricted cash | (8,629) | (10,084) |
Cash and restricted cash, beginning of period | 40,934 | 18,457 |
Cash and restricted cash, end of period | 32,305 | 8,373 |
Reconciliation of cash and restricted cash: | ||
Cash | 27,300 | |
Restricted cash | 5,005 | |
Total cash and restricted cash | $ 32,305 | $ 8,373 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2024 | |
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 December 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 and P3’s only assets are equity interests in 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 | 3 Months Ended |
Mar. 31, 2024 | |
Going Concern and Liquidity | |
Going Concern and Liquidity | Note 2: Going Concern and Liquidity The accompanying unaudited condensed 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 $49.6 million and $52.4 million for the three months ended March 31, 2024 and 2023, respectively. Such losses were primarily the result of 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 as it continues to grow membership. As of March 31, 2024 and December 31, 2023, the Company had $27.3 million and $36.3 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 continues to explore raising additional capital through a combination of debt financing and equity issuances. 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 unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 3: Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of the U.S. Securities and Exchange Commission (“SEC”) Regulation S-X. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2023. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to SEC rules and regulations dealing with interim financial statements. Management believes the accompanying unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature necessary for a fair presentation of periods presented. The consolidated operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024, or for any other future annual or interim period. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and all significant intercompany transactions and balances 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 13 “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 unaudited condensed 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. Significant Accounting Policies A description of the Company’s significant accounting policies is included in the audited consolidated financial statements within Annual Report on Form 10-K for the year ended December 31, 2023. No changes to significant accounting policies have occurred since December 31, 2023. Revenue Recognition In the first quarter of 2024, the Company released a portion of the constraint applied in previous periods with respect to risk adjustment revenue for dates of service in 2023, which resulted in an increase to capitation revenue in the amount of $7.7 million for the three months ended March 31, 2024. The Company categorizes revenue based on various factors such as the nature of contracts as follows: Revenue Type Three Months Ended March 31, 2024 % of Total Three Months Ended March 31, 2023 % of Total (dollars in thousands) Capitated revenue $ 384,134 98.9 % $ 298,704 98.9 % Other patient service revenue: Clinical fees & insurance revenue 1,945 0.5 1,480 0.5 Care coordination / management fees 2,390 0.6 1,850 0.6 Incentive fees 19 0.0 43 0.0 Total other patient service revenue 4,354 1.1 3,373 1.1 Total revenue $ 388,488 100.0 % $ 302,077 100.0 % During each of the three months ended March 31, 2024 and 2023, four health plan customers each accounted for 10% or more of total revenue and collectively comprised 61% of the Company’s total revenue. Four and three health plan customers accounted for 10% or more of total health plan receivable as of March 31, 2024 and December 31, 2023, respectively. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2024 | |
Recent Accounting Pronouncements Adopted | |
Recent Accounting Pronouncements | Note 4: Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements (“ASU 2024-02”) Accounting Standards Update (“ASU”) 2024-02 removes references to various Financial Accounting Standards Board (“FASB”) Concepts Statements from the FASB accounting standards codification (the “Codification”) to simplify and clarify the accounting guidance. The ASU aims to distinguish between authoritative and nonauthoritative literature and to address unintended applications of guidance. The Company adopted ASU 2024-02 effective January 1, 2024. The guidance will be applied prospectively to all new transactions recognized on or after January 1, 2024. 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. The Company adopted ASU 2020-06 effective January 1, 2024 using the modified retrospective method. The Company’s liability-classified stock warrants remained classified as liabilities under the amended guidance. The adoption of this standard did not have a material impact 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 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. |
Fair Value Measurements and Hie
Fair Value Measurements and Hierarchy | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 $ 845 $ — $ 24 $ 869 Warrant liability as of December 31, 2023 $ 1,056 $ — $ 29 $ 1,085 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: March 31, 2024 December 31, 2023 Volatility 88 % 75 % Risk-free interest rate 4.50 % 4.01 % Exercise price $ 11.50 $ 11.50 Expected term 2.7 Years 2.9 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: Three Months Ended March 31, 2024 2023 (in thousands) Beginning balance $ 29 $ 40 Mark-to-market adjustment of stock warrants (5) (16) Ending balance $ 24 $ 24 The Company recorded gains on the changes in the fair value of public warrants of $0.2 million and $0.6 million during the three months ended March 31, 2024 and 2023, 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 | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 6: Property and Equipment The Company’s property and equipment balances consisted of the following as of: March 31, 2024 December 31, 2023 (in thousands) Leasehold improvements $ 2,935 $ 2,933 Furniture & fixtures 1,172 1,165 Computer equipment & software 7,086 3,699 Medical equipment 1,106 1,106 Software (development in process) 343 3,877 Vehicles 654 654 Other 34 33 13,330 13,467 Less: accumulated depreciation (5,209) (4,781) Property and equipment, net $ 8,121 $ 8,686 Total depreciation of property and equipment recognized on the condensed consolidated statements of operations was $0.5 million and $0.6 million for the three months ended March 31, 2024 and 2023, respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Intangible Assets [Abstract] | |
Intangible Assets | Note 7: Intangible Assets Intangible assets, net consisted of the following as of: March 31, 2024 December 31, 2023 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 (159,600) 524,400 684,000 (142,500) 541,500 Trademarks 148,635 (35,363) 113,272 148,635 (31,671) 116,964 Payor contracts 4,700 (1,058) 3,642 4,700 (940) 3,760 Provider network 4,800 (1,111) 3,689 4,800 (991) 3,809 Total $ 842,835 $ (197,132) $ 645,703 $ 842,835 $ (176,102) $ 666,733 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Short-term Debt In January 2024, the Company entered into a short-term financing agreement totaling $2.3 million for the funding of certain insurance policies. The term of the agreement is nine months and the annual interest rate is 8.25%. Remaining scheduled principal payments as of March 31, 2024 are as follows: Second quarter 2024 $ 645 Third quarter 2024 645 Fourth quarter 2024 151 Total $ 1,441 Long-term Debt Long-term debt consisted of the following: March 31, 2024 December 31, 2023 (in thousands) Repurchase promissory note, interest paid at 11.0%, due June 2026 $ 15,000 $ 15,000 Term loan facility, interest paid at 12.0%, due December 2025 65,000 65,000 Unsecured promissory note, interest paid at 14.0%, due May 2026 29,102 29,102 VGS 2 Promissory Note 10,375 — Long-term debt, gross 119,477 109,102 Less: unamortized debt issuance costs and original issue discount (1,354) (783) Long-term debt, net $ 118,123 $ 108,319 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 which was drawn on 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%. As of March 31, 2024, the Company had recorded debt issuance costs and original issue discount of $0.4 million related to this financing. 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 In connection with the transactions described above, P3 LLC entered into that certain (1) Fourth Amendment to Term Loan Agreement (the “Term Loan Amendment”), dated as of the March 22, 2024, by and among P3 LLC, as borrower, the subsidiary guarantors party thereto, the lenders from time to time party thereto and CRG, as administrative agent and collateral agent and (2) Consent (the “Consent”), dated as of the March 22, 2024, by and between P3 LLC, as borrower, and VBC Growth SPV, LLC, as holder. The Term Loan Amendment and Consent collectively permit the issuance of the VGS 2 Promissory Note and the entry into the 2024 Subordination Agreement. The Company was in compliance with its covenants under the term loan facility and the unsecured promissory notes as of March 31, 2024; 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 and the unsecured promissory notes or the lenders of any future indebtedness the Company may incur will grant any waiver or forbearance with respect to such covenants that we may request in the future. |
Net Loss per Share
Net Loss per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | The following table provides the computation of basic and diluted net loss per share: Three Months Ended March 31, 2024 2023 (in thousands, except per share data) Numerator–basic: Net loss attributable to Class A common stockholders–basic $ (18,700) $ (9,199) Numerator–diluted: Net loss attributable to Class A common stockholders–basic $ (18,700) $ (9,199) Effective of dilutive securities: Shares of Class V common stock — — Net loss attributable to Class A common stockholders–diluted $ (18,700) $ (9,199) Denominator–basic: Weighted average Class A common shares outstanding–basic 118,887 41,579 Net loss per share attributable to Class A common stockholders–basic $ (0.16) $ (0.22) Denominator–diluted: Weighted average Class A common shares outstanding–basic 118,887 41,579 Weighted average effect of dilutive securities: Shares of Class V common stock — — Weighted average shares outstanding–diluted 118,887 41,579 Net loss per share attributable to Class A common stockholders–diluted $ (0.16) $ (0.22) Shares of Class V common stock do not share in the earnings or losses of P3 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. Three Months Ended March 31, 2024 2023 (in thousands) Stock warrants (1) 81,938 11,248 Stock options (1) 5,547 5,487 RSUs (1) 4,657 — Shares of Class V common stock (2) 196,559 201,972 Total 288,701 218,707 __________________ (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. |
Redeemable Non-Controlling Inte
Redeemable Non-Controlling Interests | 3 Months Ended |
Mar. 31, 2023 | |
Noncontrolling Interest [Abstract] | |
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: March 31, 2024 December 31, 2023 Units (in thousands) Ownership % Units (in thousands) Ownership % P3 Health Partners Inc. ’ s ownership of Common Units 119,409 37.8 % 116,588 37.2 % Non-controlling interest holders ’ ownership of Common Units 196,494 62.2 196,569 62.8 Total Common Units 315,903 100.0 % 313,157 100.0 % During the three months ended March 31, 2024, there were an aggregate of 0.1 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 Amended and Restated Limited Liability Agreement (the “P3 LLC A&R LLC Agreement”). There was no Common Unit exchange or redemption activity during the three months ended March 31, 2023. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
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 | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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, which was settled in January 2023 and reflected within health plan settlements payable as of December 31, 2022. The remaining settlement balance within health plan settlements payable was $2.4 million and $3.0 million as of March 31, 2024 |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2024 | |
Variable Interest Entities | |
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. March 31, 2024 December 31, 2023 (in thousands) ASSETS Cash $ 7,547 $ 6,491 Clinic fees, insurance and other receivable 1,046 138 Health plan receivable 572 571 Prepaid expenses and other current assets 1,191 1,261 Property and equipment, net 33 23 Other long-term assets 140 153 TOTAL ASSETS $ 10,529 $ 8,637 LIABILITIES AND MEMBERS’ DEFICIT Accounts payable $ 4,946 $ 5,073 Accrued expenses and other current liabilities 746 515 Accrued payroll 3,508 3,141 Claims payable 4,767 3,973 Other long-term liabilities 939 946 Due to consolidated entities of P3 44,609 44,200 TOTAL LIABILITIES 59,515 57,848 MEMBERS’ DEFICIT (48,986) (49,211) TOTAL LIABILITIES AND MEMBERS’ DEFICIT $ 10,529 $ 8,637 Three Months Ended March 31, 2024 2023 (in thousands) Revenue $ 9,764 $ 10,839 Expense 9,897 13,675 Net loss $ (133) $ (2,836) |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14: Subsequent Events In April 2024, the Company borrowed the remaining availability on the VGS 2 Promissory Note of $15.0 million. On December 31, 2023, 1,500,000 restricted stock units (“RSU”), each RSU representing the right to receive one share of Class A common stock of the Company, previously granted to Sherif Abdou, M.D., its Chief Executive Officer, vested pursuant to the terms of a Restricted Stock Unit Agreement between the Company and Dr. Abdou. The Company timely paid $0.7 million in withholding taxes attributable to the vesting of the RSUs to the Internal Revenue Service on behalf of Dr. Abdou on January 10, 2024. Dr. Abdou repaid such sum to the Company on May 2, 2024. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) Attributable to Parent | $ (18,700) | $ (9,199) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
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) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of the U.S. Securities and Exchange Commission (“SEC”) Regulation S-X. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2023. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to SEC rules and regulations dealing with interim financial statements. Management believes the accompanying unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature necessary for a fair presentation of periods presented. The consolidated operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024, or for any other future annual or interim period. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and all significant intercompany transactions and balances 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 13 “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 unaudited condensed 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. |
Recently Adopted Accounting Pronouncements/ Recent Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements (“ASU 2024-02”) Accounting Standards Update (“ASU”) 2024-02 removes references to various Financial Accounting Standards Board (“FASB”) Concepts Statements from the FASB accounting standards codification (the “Codification”) to simplify and clarify the accounting guidance. The ASU aims to distinguish between authoritative and nonauthoritative literature and to address unintended applications of guidance. The Company adopted ASU 2024-02 effective January 1, 2024. The guidance will be applied prospectively to all new transactions recognized on or after January 1, 2024. 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. The Company adopted ASU 2020-06 effective January 1, 2024 using the modified retrospective method. The Company’s liability-classified stock warrants remained classified as liabilities under the amended guidance. The adoption of this standard did not have a material impact 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 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. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 Three Months Ended March 31, 2024 % of Total Three Months Ended March 31, 2023 % of Total (dollars in thousands) Capitated revenue $ 384,134 98.9 % $ 298,704 98.9 % Other patient service revenue: Clinical fees & insurance revenue 1,945 0.5 1,480 0.5 Care coordination / management fees 2,390 0.6 1,850 0.6 Incentive fees 19 0.0 43 0.0 Total other patient service revenue 4,354 1.1 3,373 1.1 Total revenue $ 388,488 100.0 % $ 302,077 100.0 % |
Fair Value Measurements and H_2
Fair Value Measurements and Hierarchy (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 $ 845 $ — $ 24 $ 869 Warrant liability as of December 31, 2023 $ 1,056 $ — $ 29 $ 1,085 |
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: March 31, 2024 December 31, 2023 Volatility 88 % 75 % Risk-free interest rate 4.50 % 4.01 % Exercise price $ 11.50 $ 11.50 Expected term 2.7 Years 2.9 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: Three Months Ended March 31, 2024 2023 (in thousands) Beginning balance $ 29 $ 40 Mark-to-market adjustment of stock warrants (5) (16) Ending balance $ 24 $ 24 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | The Company’s property and equipment balances consisted of the following as of: March 31, 2024 December 31, 2023 (in thousands) Leasehold improvements $ 2,935 $ 2,933 Furniture & fixtures 1,172 1,165 Computer equipment & software 7,086 3,699 Medical equipment 1,106 1,106 Software (development in process) 343 3,877 Vehicles 654 654 Other 34 33 13,330 13,467 Less: accumulated depreciation (5,209) (4,781) Property and equipment, net $ 8,121 $ 8,686 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Intangible Assets [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net consisted of the following as of: March 31, 2024 December 31, 2023 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 (159,600) 524,400 684,000 (142,500) 541,500 Trademarks 148,635 (35,363) 113,272 148,635 (31,671) 116,964 Payor contracts 4,700 (1,058) 3,642 4,700 (940) 3,760 Provider network 4,800 (1,111) 3,689 4,800 (991) 3,809 Total $ 842,835 $ (197,132) $ 645,703 $ 842,835 $ (176,102) $ 666,733 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets, net consisted of the following as of: March 31, 2024 December 31, 2023 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 (159,600) 524,400 684,000 (142,500) 541,500 Trademarks 148,635 (35,363) 113,272 148,635 (31,671) 116,964 Payor contracts 4,700 (1,058) 3,642 4,700 (940) 3,760 Provider network 4,800 (1,111) 3,689 4,800 (991) 3,809 Total $ 842,835 $ (197,132) $ 645,703 $ 842,835 $ (176,102) $ 666,733 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | he term of the agreement is nine months and the annual interest rate is 8.25%. Remaining scheduled principal payments as of March 31, 2024 are as follows: Long-term debt consisted of the following: March 31, 2024 December 31, 2023 (in thousands) Repurchase promissory note, interest paid at 11.0%, due June 2026 $ 15,000 $ 15,000 Term loan facility, interest paid at 12.0%, due December 2025 65,000 65,000 Unsecured promissory note, interest paid at 14.0%, due May 2026 29,102 29,102 VGS 2 Promissory Note 10,375 — Long-term debt, gross 119,477 109,102 Less: unamortized debt issuance costs and original issue discount (1,354) (783) Long-term debt, net $ 118,123 $ 108,319 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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: Three Months Ended March 31, 2024 2023 (in thousands, except per share data) Numerator–basic: Net loss attributable to Class A common stockholders–basic $ (18,700) $ (9,199) Numerator–diluted: Net loss attributable to Class A common stockholders–basic $ (18,700) $ (9,199) Effective of dilutive securities: Shares of Class V common stock — — Net loss attributable to Class A common stockholders–diluted $ (18,700) $ (9,199) Denominator–basic: Weighted average Class A common shares outstanding–basic 118,887 41,579 Net loss per share attributable to Class A common stockholders–basic $ (0.16) $ (0.22) Denominator–diluted: Weighted average Class A common shares outstanding–basic 118,887 41,579 Weighted average effect of dilutive securities: Shares of Class V common stock — — Weighted average shares outstanding–diluted 118,887 41,579 Net loss per share attributable to Class A common stockholders–diluted $ (0.16) $ (0.22) |
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. Three Months Ended March 31, 2024 2023 (in thousands) Stock warrants (1) 81,938 11,248 Stock options (1) 5,547 5,487 RSUs (1) 4,657 — Shares of Class V common stock (2) 196,559 201,972 Total 288,701 218,707 __________________ (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. |
Redeemable Non-controlling In_2
Redeemable Non-controlling Interest (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Noncontrolling Interest [Abstract] | |
Schedule of Ownership of Common Units | The ownership of the Common Units is summarized as follows: March 31, 2024 December 31, 2023 Units (in thousands) Ownership % Units (in thousands) Ownership % P3 Health Partners Inc. ’ s ownership of Common Units 119,409 37.8 % 116,588 37.2 % Non-controlling interest holders ’ ownership of Common Units 196,494 62.2 196,569 62.8 Total Common Units 315,903 100.0 % 313,157 100.0 % |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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. March 31, 2024 December 31, 2023 (in thousands) ASSETS Cash $ 7,547 $ 6,491 Clinic fees, insurance and other receivable 1,046 138 Health plan receivable 572 571 Prepaid expenses and other current assets 1,191 1,261 Property and equipment, net 33 23 Other long-term assets 140 153 TOTAL ASSETS $ 10,529 $ 8,637 LIABILITIES AND MEMBERS’ DEFICIT Accounts payable $ 4,946 $ 5,073 Accrued expenses and other current liabilities 746 515 Accrued payroll 3,508 3,141 Claims payable 4,767 3,973 Other long-term liabilities 939 946 Due to consolidated entities of P3 44,609 44,200 TOTAL LIABILITIES 59,515 57,848 MEMBERS’ DEFICIT (48,986) (49,211) TOTAL LIABILITIES AND MEMBERS’ DEFICIT $ 10,529 $ 8,637 Three Months Ended March 31, 2024 2023 (in thousands) Revenue $ 9,764 $ 10,839 Expense 9,897 13,675 Net loss $ (133) $ (2,836) |
Going Concern and Liquidity (De
Going Concern and Liquidity (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Going Concern and Liquidity | |||
Net loss | $ 49,606 | $ 52,448 | |
Cash | $ 27,300 | $ 36,320 |
Significant Accounting Polici_4
Significant Accounting Policies - Consolidation, Cash and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Cash and Restricted Cash | ||
Unrestricted | $ 27,300 | $ 36,320 |
Restricted | $ 5,005 | $ 4,614 |
Significant Accounting Polici_5
Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Significant Accounting Policies | ||
Revenue | $ 388,488 | $ 302,077 |
Capitated revenue | ||
Significant Accounting Policies | ||
Revenue | $ 384,134 | $ 298,704 |
Capitated revenue | Revenue | Product Concentration Risk | ||
Significant Accounting Policies | ||
Percentage of total revenue (as a percent) | 98.90% | 98.90% |
Total other patient service revenue | ||
Significant Accounting Policies | ||
Revenue | $ 4,354 | $ 3,373 |
Total other patient service revenue | Revenue | Product Concentration Risk | ||
Significant Accounting Policies | ||
Percentage of total revenue (as a percent) | 1.10% | 1.10% |
Clinical fees & insurance revenue | ||
Significant Accounting Policies | ||
Revenue | $ 1,945 | $ 1,480 |
Clinical fees & insurance revenue | Revenue | Product Concentration Risk | ||
Significant Accounting Policies | ||
Percentage of total revenue (as a percent) | 0.50% | 0.50% |
Care coordination / management fees | ||
Significant Accounting Policies | ||
Revenue | $ 2,390 | $ 1,850 |
Care coordination / management fees | Revenue | Product Concentration Risk | ||
Significant Accounting Policies | ||
Percentage of total revenue (as a percent) | 0.60% | 0.60% |
Incentive fees | ||
Significant Accounting Policies | ||
Revenue | $ 19 | $ 43 |
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) - customer | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Concentration Risk | |||
Number of customers (customer) | 4 | 3 | |
Four Health Plan Customer | Revenue | Customer Concentration | |||
Concentration Risk | |||
Number of customers (customer) | 4 | 4 | |
Percentage of total revenue (as a percent) | 61% | 61% |
Significant Accounting Polici_7
Significant Accounting Policies - Capitated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Significant Accounting Policies | ||
TOTAL OPERATING REVENUE | $ 388,488 | $ 302,077 |
Capitated revenue | ||
Significant Accounting Policies | ||
TOTAL OPERATING REVENUE | 384,134 | $ 298,704 |
Capitated revenue | Scenario, Adjustment | ||
Significant Accounting Policies | ||
TOTAL OPERATING REVENUE | $ 7,700 |
Significant Accounting Polici_8
Significant Accounting Policies - PDR (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Premium Deficiency Reserve ("PDR") | ||
Premium deficiency reserve | $ 14,670 | $ 13,670 |
Fair Value Measurements and H_3
Fair Value Measurements and Hierarchy - Fair value Hierarchy for Financial Liabilities (Details) - Recurring - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Warrant liability | $ 869 | $ 1,085 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Warrant liability | 845 | 1,056 |
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 | $ 24 | $ 29 |
Fair Value Measurements and H_4
Fair Value Measurements and Hierarchy - Fair Value Measurement Inputs and Valuation Techniques (Details) - Private Placement Warrants - Level 3 | Mar. 31, 2024 yr $ / shares | Dec. 31, 2023 $ / shares yr |
Volatility | ||
Warrants | ||
Warrants, measurement input | 0.88 | 0.75 |
Risk-free interest rate | ||
Warrants | ||
Warrants, measurement input | 0.0450 | 0.0401 |
Exercise price | ||
Warrants | ||
Warrants, measurement input | $ / shares | 11.50 | 11.50 |
Expected term | ||
Warrants | ||
Warrants, measurement input | yr | 2.7 | 2.9 |
Fair Value Measurements and H_5
Fair Value Measurements and Hierarchy - Changes in Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Ending balance | $ 24 | $ 24 |
Gain from change in fair value of warrant liability | (216) | (649) |
Private Placement Warrants | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Mark-to-market adjustment of stock warrants | (5) | (16) |
Ending balance | $ 29 | $ 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 | $ 200 | $ 600 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property and Equipment | ||
Property and equipment, gross | $ 13,330 | $ 13,467 |
Less: accumulated depreciation | (5,209) | (4,781) |
Property and equipment, net | 8,121 | 8,686 |
Leasehold improvements | ||
Property and Equipment | ||
Property and equipment, gross | 2,935 | 2,933 |
Furniture & fixtures | ||
Property and Equipment | ||
Property and equipment, gross | 1,172 | 1,165 |
Computer equipment & software | ||
Property and Equipment | ||
Property and equipment, gross | 7,086 | 3,699 |
Medical equipment | ||
Property and Equipment | ||
Property and equipment, gross | 1,106 | 1,106 |
Software (development in process) | ||
Property and Equipment | ||
Property and equipment, gross | 343 | 3,877 |
Vehicles | ||
Property and Equipment | ||
Property and equipment, gross | 654 | 654 |
Other | ||
Property and Equipment | ||
Property and equipment, gross | $ 34 | $ 33 |
Property and Equipment - Narrat
Property and Equipment - Narratives (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 0.5 | $ 0.6 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Definite lived intangible assets: | ||
Accumulated Amortization | $ (197,132) | $ (176,102) |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Intangible assets, gross (excluding goodwill) | 842,835 | 842,835 |
Intangible assets, net | 645,703 | 666,733 |
Customer relationships | ||
Definite lived intangible assets: | ||
Gross Carrying Amount | 684,000 | 684,000 |
Accumulated Amortization | (159,600) | (142,500) |
Net Carrying Amount | 524,400 | 541,500 |
Trademarks | ||
Definite lived intangible assets: | ||
Gross Carrying Amount | 148,635 | 148,635 |
Accumulated Amortization | (35,363) | (31,671) |
Net Carrying Amount | 113,272 | 116,964 |
Payor contracts | ||
Definite lived intangible assets: | ||
Gross Carrying Amount | 4,700 | 4,700 |
Accumulated Amortization | (1,058) | (940) |
Net Carrying Amount | 3,642 | 3,760 |
Provider network | ||
Definite lived intangible assets: | ||
Gross Carrying Amount | 4,800 | 4,800 |
Accumulated Amortization | (1,111) | (991) |
Net Carrying Amount | 3,689 | 3,809 |
Medical licenses | ||
Indefinite lived intangible assets: | ||
Indefinite-lived intangible assets | $ 700 | $ 700 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Intangible Assets | ||
Amortization of intangible assets | $ 21 | $ 20.9 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt | ||
Amount drawn | $ 119,477 | $ 109,102 |
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 1,354 | 783 |
Long-term debt, net | 118,123 | |
Long-term debt, net | $ 118,123 | 108,319 |
Repurchase Promissory Note Due June 2026 [Member] | ||
Debt | ||
Interest rate | 11% | |
Amount drawn | $ 15,000 | 15,000 |
Term loan facility, interest paid at 12.0%, due December 2025 | ||
Debt | ||
Interest rate | 12% | |
Amount drawn | $ 65,000 | 65,000 |
VGS Promissory Note [Member] | ||
Debt | ||
Interest rate | 14% | |
Amount drawn | $ 29,102 | $ 29,102 |
VGS 2 Promissory Note | ||
Debt | ||
Amount drawn | $ 10,375 |
Debt - Short Term Debt Narrativ
Debt - Short Term Debt Narratives (Details) - Line of Credit $ in Millions | 1 Months Ended |
Jan. 31, 2024 USD ($) | |
Debt | |
Funding provided | $ 2.3 |
Debt Instrument, Term | 9 months |
Weighted average interest rate | 8.25% |
Debt - Short Term Debt Payment
Debt - Short Term Debt Payment Schedule (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt | ||
Second quarter 2024 | $ 645 | |
Third quarter 2024 | 645 | |
Fourth quarter 2024 | 151 | |
Short-term debt | $ 1,441 | $ 0 |
Debt - VGS Promissory Note (Det
Debt - VGS Promissory Note (Details) | Mar. 22, 2024 USD ($) tranche | Mar. 31, 2024 USD ($) | Mar. 29, 2024 USD ($) |
Line of Credit | VGS 2 Promissory Note | |||
Debt | |||
Funding provided | $ 25,000,000 | ||
Percentage of upfront-fee | 1.50% | ||
Debt issuance costs | $ 400,000 | ||
Number of tranches (tranche) | tranche | 2 | ||
Line of Credit | VGS 2 Promissory Note | Option One | |||
Debt | |||
Interest rate | 17.50% | ||
Paid in kind interest, percentage | 9.50% | ||
Paid in cash interest, percentage | 8% | ||
Line of Credit | VGS 2 Promissory Note | Option Two | |||
Debt | |||
Paid in kind interest, percentage | 17.50% | ||
Line of Credit | VGS 2 Promissory Note | First tranche | |||
Debt | |||
Funding provided | $ 10,000,000 | ||
Line of Credit | VGS 2 Promissory Note | Second tranche | |||
Debt | |||
Funding provided | $ 15,000,000 | ||
Period Four | Line of Credit | VGS 2 Promissory Note | |||
Debt | |||
Debt Instrument, Back End Fee | 9% | ||
Period Three | Line of Credit | VGS 2 Promissory Note | |||
Debt | |||
Debt Instrument, Back End Fee | 6.75% | ||
Period One | Line of Credit | VGS 2 Promissory Note | |||
Debt | |||
Debt Instrument, Back End Fee | 2.25% | ||
Period Two | Line of Credit | VGS 2 Promissory Note | |||
Debt | |||
Debt Instrument, Back End Fee | 4.50% | ||
VGS Promissory Note [Member] | |||
Debt | |||
Interest rate | 14% |
Capitalization (Details)
Capitalization (Details) | Mar. 22, 2024 USD ($) tranche | Mar. 31, 2024 $ / shares shares | Mar. 29, 2024 USD ($) | Dec. 31, 2023 $ / shares shares |
Class A Common Stock | ||||
Subsidiary, Sale of Stock | ||||
Common stock, shares authorized (in shares) | shares | 800,000,000 | 800,000,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Class V Common Stock | ||||
Subsidiary, Sale of Stock | ||||
Common stock, shares authorized (in shares) | shares | 205,000,000 | 205,000,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Line of Credit | VGS 2 Promissory Note | ||||
Subsidiary, Sale of Stock | ||||
Funding provided | $ 25,000,000 | |||
Number of tranches (tranche) | tranche | 2 | |||
Percentage of upfront-fee | 1.50% | |||
Line of Credit | Period One | VGS 2 Promissory Note | ||||
Subsidiary, Sale of Stock | ||||
Debt Instrument, Back End Fee | 2.25% | |||
Line of Credit | Period Two | VGS 2 Promissory Note | ||||
Subsidiary, Sale of Stock | ||||
Debt Instrument, Back End Fee | 4.50% | |||
Line of Credit | Period Four | VGS 2 Promissory Note | ||||
Subsidiary, Sale of Stock | ||||
Debt Instrument, Back End Fee | 9% | |||
Line of Credit | Period Three | VGS 2 Promissory Note | ||||
Subsidiary, Sale of Stock | ||||
Debt Instrument, Back End Fee | 6.75% | |||
Line of Credit | Option One | VGS 2 Promissory Note | ||||
Subsidiary, Sale of Stock | ||||
Interest rate | 17.50% | |||
Paid in cash interest, percentage | 8% | |||
Paid in kind interest, percentage | 9.50% | |||
Line of Credit | Option Two | VGS 2 Promissory Note | ||||
Subsidiary, Sale of Stock | ||||
Paid in kind interest, percentage | 17.50% | |||
Line of Credit | First tranche | VGS 2 Promissory Note | ||||
Subsidiary, Sale of Stock | ||||
Funding provided | $ 10,000,000 | |||
Line of Credit | Second tranche | VGS 2 Promissory Note | ||||
Subsidiary, Sale of Stock | ||||
Funding provided | $ 15,000,000 |
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 | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Denominator–basic: | ||
Weighted average Class A common shares outstanding–basic (in shares) | 118,887 | 41,579 |
Net loss per share attributable to Class A common stockholders–basic (in dollars per share) | $ (0.16) | $ (0.22) |
Weighted average shares outstanding–diluted (in shares) | 118,887 | 41,579 |
Net loss per share attributable to Class A common stockholders– diluted (in dollars per share) | $ (0.16) | $ (0.22) |
Class A Common Stock | ||
Numerator–basic: | ||
Net loss attributable to Class A common stockholders–basic | $ (18,700) | $ (9,199) |
Net loss attributable to Class A common stockholders–diluted | $ (18,700) | $ (9,199) |
Denominator–basic: | ||
Weighted average Class A common shares outstanding–basic (in shares) | 118,887 | 41,579 |
Net loss per share attributable to Class A common stockholders–basic (in dollars per share) | $ (0.16) | $ (0.22) |
Net loss per share attributable to Class A common stockholders– diluted (in dollars per share) | $ (0.16) | $ (0.22) |
Class V Common Stock | ||
Numerator–basic: | ||
Shares of Class V common stock | $ 0 | $ 0 |
Denominator–basic: | ||
Shares of Class V common stock (in shares) | 0 | 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 | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Potentially dilutive securities excluded from the computation of diluted net loss per share (in shares) | 288,701 | 218,707 |
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) | 5,547 | 5,487 |
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) | 4,657 | 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) | 196,559 | 201,972 |
Redeemable Non-controlling In_3
Redeemable Non-controlling Interest - Ownership of Common Units (Details) - shares shares in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
P3 Health Group, LLC | ||
Noncontrolling Interest | ||
Common unit outstanding (in shares) | 315,903 | 313,157 |
P3 Health Group, LLC | ||
Noncontrolling Interest | ||
Common unit outstanding (in shares) | 119,409 | 116,588 |
Non-controlling interests, ownership percentage by noncontrolling owners (as a percent) | 37.80% | 37.20% |
P3 Health Group, LLC | Non Controlling Interest Holders | ||
Noncontrolling Interest | ||
Common unit outstanding (in shares) | 196,494 | 196,569 |
Non-controlling interests, ownership percentage by noncontrolling owners (as a percent) | 62.20% | 62.80% |
Redeemable Non-controlling In_4
Redeemable Non-controlling Interest - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Noncontrolling Interest | |||
Re-measurement adjustment recorded against fair value of redeemable noncontrolling interest | $ (20,600) | $ 0 | |
Common unit exchange or redemption (in shares) | 100,000 | 0 | |
P3 Health Group, LLC | |||
Noncontrolling Interest | |||
Non-controlling interests, ownership percentage by noncontrolling owners (as a percent) | 37.80% | 37.20% | |
P3 Health Group, LLC | Non Controlling Interest Holders | |||
Noncontrolling Interest | |||
Non-controlling interests, ownership percentage by noncontrolling owners (as a percent) | 62.20% | 62.80% |
Segment Reporting (Details)
Segment Reporting (Details) | 3 Months Ended |
Mar. 31, 2024 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments (segment) | 1 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 plan | Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | |
Loss Contingencies | |||
Number of health plans results in renegotiation | plan | 1 | ||
Renegotiation of Health Plan Agreement Due to Discrepancy | |||
Loss Contingencies | |||
Settlement amount | $ | $ 2.4 | $ 3 |
Variable Interest Entities - Na
Variable Interest Entities - Narratives (Details) | Mar. 31, 2024 |
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 | Mar. 31, 2024 | Dec. 31, 2023 | |
ASSETS | |||
Cash | $ 27,300 | $ 36,320 | |
Health plan receivable | 143,695 | 118,497 | |
Prepaid expenses and other current assets | 6,909 | 3,613 | |
Property and equipment, net | 8,121 | 8,686 | |
Other long-term assets | 19,144 | 19,531 | |
TOTAL ASSETS | [1] | 855,925 | 860,967 |
LIABILITIES AND MEMBERS’ DEFICIT | |||
Accounts payable | 11,603 | 8,663 | |
Accrued expenses and other current liabilities | 28,628 | 36,884 | |
Accrued payroll | 5,048 | 3,506 | |
Claims payable | 222,177 | 178,009 | |
TOTAL LIABILITIES | [1] | 470,493 | 427,305 |
TOTAL LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ EQUITY | $ 855,925 | $ 860,967 | |
Accounts Payable, Noncurrent, Related Party, Type [Extensible Enumeration] | Affiliated Entity [Member] | Affiliated Entity [Member] | |
VIE | |||
ASSETS | |||
Cash | $ 7,547 | $ 6,491 | |
Clinic fees, insurance and other receivable | 1,046 | 138 | |
Health plan receivable | 572 | 571 | |
Prepaid expenses and other current assets | 1,191 | 1,261 | |
Property and equipment, net | 33 | 23 | |
Other long-term assets | 140 | 153 | |
TOTAL ASSETS | 10,529 | 8,637 | |
LIABILITIES AND MEMBERS’ DEFICIT | |||
Accounts payable | 4,946 | 5,073 | |
Accrued expenses and other current liabilities | 746 | 515 | |
Accrued payroll | 3,508 | 3,141 | |
Claims payable | 4,767 | 3,973 | |
Other long-term liabilities | 939 | 946 | |
Due to consolidated entities of P3 | 44,609 | 44,200 | |
TOTAL LIABILITIES | 59,515 | 57,848 | |
MEMBERS’ DEFICIT | (48,986) | (49,211) | |
TOTAL LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ EQUITY | $ 10,529 | $ 8,637 | |
[1] The Company’s condensed consolidated balance sheets include the assets and liabilities of its consolidated variable interest entities (“VIEs”). As discussed in Note 13 “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 amounts below refer only to VIEs held at the P3 LLC level. The condensed consolidated balance sheets include total assets that can be used only to settle obligations of P3 LLC’s consolidated VIEs totaling $10.5 million and $8.6 million as of March 31, 2024 and December 31, 2023, 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 $14.9 million and $13.6 million as of March 31, 2024 and December 31, 2023, respectively. These VIE assets and liabilities do not include $44.6 million and $44.2 million of net amounts due to affiliates as of March 31, 2024 and December 31, 2023, respectively, as these are eliminated in consolidation and not presented within the condensed consolidated balance sheets. |
Variable Interest Entities - In
Variable Interest Entities - Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Variable Interest Entity | ||
Revenue | $ 388,488 | $ 302,077 |
Expense | 432,319 | 350,894 |
Net loss | (49,606) | (52,448) |
VIE | ||
Variable Interest Entity | ||
Revenue | 9,764 | 10,839 |
Expense | 9,897 | 13,675 |
Net loss | $ (133) | $ (2,836) |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | 1 Months Ended | ||
Jan. 10, 2024 | Dec. 31, 2023 | Apr. 30, 2024 | |
Chief Executive Officer | Withholding Taxes Paid | |||
Subsequent Events | |||
Transaction amount | $ 0.7 | ||
Restricted stock units | Chief Executive Officer | |||
Subsequent Events | |||
Vested (in shares) | 1,500,000 | ||
VGS 2 Promissory Note | Subsequent Event | Line of Credit | |||
Subsequent Events | |||
Proceeds from Lines of Credit | $ 15 |