General form of registration statement for all companies including face-amount certificate companies

Variable Interest Entities

v3.21.4
Variable Interest Entities
9 Months Ended 12 Months Ended
Sep. 30, 2021
Dec. 31, 2020
Variable Interest Entities    
Variable Interest Entities

Note 18: Variable Interest Entities

Management accounts for Variable Interest Entity (“VIE”) transactions utilizing an ongoing interest assessment in accordance with ASC 810, Variable Interest Entities and Principles of Consolidation.

In 2017, Holdings, by way of one of its wholly-owned subsidiaries (P3-NV) entered a collective Stock Transfer Restriction Agreement with the three shareholders of two medical practices, Bacchus Wakefield Kahan, PC (“BACC”) and Kahan Wakefield Abdou, PLLC (“KWA”). The Transfer Restriction Agreement, by way of a Call Option, unequivocally permits P3-NV to select and appoint Successor Physicians to these medical practices if a shareholder vacates their ownership position.

Pursuant to ASC 810, both the “power of control” and “economics” criterion were reviewed for VIE consideration. P3-NV is a single member limited liability company, controlled by Holdings. Holdings’ debt and equity holders collectively represent a “single decision maker” for Holdings and its investment in P3-NV. As to P3-NV’s ability to appoint Successor Physicians to these medical practices, this demonstrates “power of control”. Also, the Deficit Funding Agreement in place between P3-NV and BACC/KWA (see “Related Parties”) states P3-NV will advance BACC/KWA funds, as needed, to support BACC’s/KWA’s working capital needs to the extent operating expenses exceed gross revenue. This funding arrangement further illustrates and fulfills the economic criteria for VIE consolidation.

Management concluded BACC and KWA are VIEs and P3 is the primary beneficiary. Therefore, both practices are consolidated as VIEs. KWA had no financial activity for Management to consider for the periods ended September 30, 2021 nor December 31, 2020. Therefore, the following exhibits include the balance sheets and statement of operations only for BACC:

​

​

​

​

​

​

​

​

​

    

Unaudited

    

​

    

​

 

September 30, 2021

 

December 31, 2020

ASSETS

 

​

  

 

​

  

Cash

​

$

113,265

​

$

183,836

Client Fees and Insurance Receivable, Net

​

 

307,622

​

 

335,358

Prepaid Expenses and Other Current Assets

​

 

357,222

​

 

285,363

Property, Plant and Equipment, Net

​

 

37,057

​

 

22,309

TOTAL ASSETS

​

$

815,167

​

$

826,866

​

​

​

​

​

​

​

LIABILITIES AND MEMBERS’ DEFICIT

​

 

  

​

 

  

Accounts Payable and Accrued Expenses

​

$

886,072

​

$

686,680

Accrued Payroll

​

 

1,304,083

​

 

1,019,940

Due to Consolidated Entities of P3

​

 

24,856,071

​

 

17,307,627

TOTAL LIABILITIES

​

 

27,046,226

​

 

19,014,247

​

​

​

​

​

​

​

MEMBERS’ DEFICIT

​

 

(26,231,059)

​

 

(18,187,381)

TOTAL LIABILITIES AND MEMBERS’ DEFICIT

​

$

815,167

​

$

826,866

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Unaudited

​

 

Three Months Ended September 30, 

​

Nine Months Ended September 30, 

​

    

2021

    

2020

    

2021

    

2020

Revenue

​

$

2,239,704

​

$

2,286,505

​

$

6,924,861

​

$

5,235,351

Expenses

​

 

5,041,669

​

 

1,410,945

​

 

14,968,539

​

 

8,685,811

Net Loss

​

$

(2,801,965)

​

$

875,560

​

$

(8,043,678)

​

$

(3,450,460)

​

Note 21: Variable Interest Entities

Management accounts for Variable Interest Entity (“VIE”) transactions utilizing an ongoing interest assessment in accordance with ASC 810, Variable Interest Entities and Principles of Consolidation.

In 2017, Holdings, by way of one of its wholly-owned subsidiaries (P3-NV) entered a collective Stock Transfer Restriction Agreement with the three shareholders of two medical practices, Bacchus Wakefield Kahan, PC (“BACC”) and Kahan Wakefield Abdou, PLLC (“KWA”). The Transfer Restriction Agreement, by way of a Call Option, unequivocally permits P3-NV to select and appoint Successor Physicians to these medical practices if a shareholder vacates their ownership position.

Pursuant to ASC 810, both the “power of control” and “economics” criterion were reviewed for VIE consideration. P3-NV is a single member limited liability company, controlled by Holdings. Holdings’ debt and equity holders collectively represent a “single decision maker” for Holdings and its investment in P3-NV. As to P3-NV’s ability to appoint Successor Physicians to these medical practices, this demonstrates “power of control”. Also, the Deficit Funding Agreement in place between P3-NV and BACC/KWA (see “Related Parties”) states P3-NV will advance BACC/KWA funds, as needed, to support BACC’s/KWA’s working capital needs to the extent operating expenses exceed gross revenue. This funding arrangement further illustrates and fulfills the economic criteria for VIE consolidation.

Management concluded BACC and KWA are VIEs and P3 is the primary beneficiary. Therefore, both practices are consolidated as VIEs. KWA had no financial activity for Management to consider for the years ended December 31, 2019 nor December 31, 2020. Therefore, the following exhibits include the balance sheet and income statement only for BACC for the periods presented:

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​

​

​

​

​

​

​

​

    

2019

    

2020

ASSETS

​

​

​

​

​

​

Cash

​

$

350,446

​

$

183,836

Client Fees and Insurance Receivable, net

​

 

510,487

​

 

335,358

Prepaid Expenses and Other Current Assets

​

 

107,020

​

 

285,363

Property, Plant and Equipment, net

​

 

13,109

​

 

22,309

TOTAL ASSETS

​

$

981,062

​

$

826,866

LIABILITIES AND MEMBERS’ DEFICIT

​

 

  

​

 

  

Accounts Payable and Accrued Expenses

​

$

317,158

​

$

686,680

Accrued Payroll

​

 

1,009,161

​

 

1,019,940

Due to Consolidated Entities of P3

​

 

13,535,053

​

 

17,307,627

TOTAL LIABILITIES

​

 

14,861,372

​

 

19,014,247

MEMBERS’ DEFICIT

​

 

(13,880,310)

​

 

(18,187,381)

TOTAL LIABILITIES AND MEMBERS’ DEFICIT

​

$

981,062

​

$

826,866

​

​

​

​

​

​

​

​

​

​

​

​

    

2018

    

2019

    

2020

Revenue

​

$

639,635

​

$

4,389,688

​

$

7,611,427

Expenses

 

​

6,612,353

 

​

12,297,280

 

​

11,918,498

Net Loss

​

$

(5,972,718)

​

$

(7,907,592)

​

$

(4,307,071)

​