Quarterly report pursuant to Section 13 or 15(d)

Variable Interest Entities

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Variable Interest Entities
6 Months Ended
Jun. 30, 2024
Variable Interest Entities  
Variable Interest Entities
Note 13: 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.
June 30, 2024 December 31, 2023
(in thousands)
ASSETS
Cash $ 7,865  $ 6,491 
Clinic fees, insurance and other receivable 1,557  138 
Health plan receivable 576  571 
Prepaid expenses and other current assets 931  1,261 
Property and equipment, net 46  23 
Other long-term assets 129  153 
TOTAL ASSETS $ 11,104  $ 8,637 
LIABILITIES AND MEMBERS’ DEFICIT
Accounts payable $ 4,393  $ 5,073 
Accrued expenses and other current liabilities 955  515 
Accrued payroll 3,433  3,141 
Claims payable 4,600  3,973 
Other long-term liabilities 934  946 
Due to consolidated entities of P3 47,018  44,200 
TOTAL LIABILITIES 61,333  57,848
MEMBERS’ DEFICIT (50,229) (49,211)
TOTAL LIABILITIES AND MEMBERS’ DEFICIT $ 11,104  $ 8,637 
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
(in thousands)
Revenue $ 9,354  $ 9,511  $ 19,118  $ 20,350 
Expense 9,803  11,847  19,700  25,522 
Net loss $ (449) $ (2,336) $ (582) $ (5,172)