P3 Health Partners Inc. Form 8-K Summary
Business context and reporting period
The company filed the Form 8-K on April 22, 2022, regarding accounting errors identified during the audit of its financial statements for the year ended December 31, 2021. The filing concerns the historical presentation of net losses attributable to non-controlling interests associated with certain medical practices consolidated as variable interest entities.
Financial impact and key metrics
- The company concluded that it should not have historically assigned the net losses of these medical practices to non-controlling interests.
- The correction is expected to decrease net loss attributable to non-controlling interests and increase net loss attributable to controlling interests.
- Retained loss attributable to non-controlling interests will decrease, while accumulated loss attributable to controlling interests will increase.
- The company did not provide a clear dollar amount for the anticipated adjustments.
- Management did not currently expect the restatement to affect historical revenue, EBITDA, cash from operations, cash position, or previously issued 2022 guidance.
Material changes versus prior reporting
- Financial statements for the affected periods should no longer be relied upon. The affected periods include certain 2018–2021 historical and interim financial statements and related pro forma information incorporated in prior SEC filings.
- The company is working to restate its audited consolidated financial statements for the years ended December 31, 2020 and 2019.
- The company delayed the planned release of fourth-quarter and full-year 2021 results and canceled the conference call previously scheduled for April 25, 2022.
- Use of the company’s Registration Statement on Form S-1 was suspended until the 2021 Form 10-K and the restated 2020 and 2019 financial statements are filed, a post-effective amendment is filed, and the amendment is declared effective by the SEC.
Guidance, outlook, risks, and unusual items
- The company anticipated filing its 2021 Form 10-K, including the restated financial statements, as soon as practicable, but did not provide a specific filing date.
- Management was assessing the effect of the restatement on internal control over financial reporting and disclosure controls and procedures. The company had previously reported material weaknesses and had not reached a final conclusion regarding the restatement’s effect.
- The Audit Committee considered the matter with management and the company’s independent auditors, KPMG LLP and BDO USA, LLP.
- The restatement process could result in additional adjustments. The timing, extent, and ultimate impact of the restatement remained uncertain.
Important facts for investors to verify
- Confirm the filing of the 2021 Form 10-K and the final restated financial statements for 2019 and 2020.
- Review the final dollar impact on controlling and non-controlling interests, accumulated losses, and any other affected accounts.
- Verify whether revenue, EBITDA, operating cash flow, cash balances, or 2022 guidance changed despite management’s initial expectation that they would not.
- Review any updated disclosures regarding material weaknesses and remediation of internal control deficiencies.
- Confirm when the Form S-1 registration statement is reinstated and declared effective by the SEC.