Annual report pursuant to Section 13 and 15(d)

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)
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 
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)
Year Ended December 31,
2023 2022
(in thousands)
Revenue $ 39,551  $ 55,237 
Expense 45,999  69,638 
Net loss $ (6,448) $ (14,401)