P3 Health Partners(PIII) - 2021 Q3 - Quarterly Report

Part I Financial Information This section presents Foresight Acquisition Corp.'s unaudited condensed consolidated financial statements, along with management's discussion and analysis, market risk disclosures, and controls and procedures Financial Statements This section presents Foresight Acquisition Corp.'s unaudited condensed consolidated financial statements, detailing its SPAC formation, IPO, financial restatement, and proposed business combination Condensed Consolidated Balance Sheets As of September 30, 2021, the company reported $316.3 million in its Trust Account, $10.6 million in total liabilities, and a $10.2 million stockholders' deficit, primarily due to warrant liabilities and redeemable Class A common stock Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | Sep 30, 2021 (USD) | Dec 31, 2020 (USD) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $97,290 | $179,512 | | Cash and securities held in Trust Account | $316,264,504 | $0 | | Total Assets | $316,617,754 | $394,960 | | Liabilities & Equity | | | | Warrant liabilities | $10,216,242 | $0 | | Total Liabilities | $10,606,594 | $372,246 | | Class A common stock subject to possible redemption | $316,250,000 | $0 | | Total Stockholders' Equity (Deficit) | $(10,238,840) | $22,714 | Condensed Consolidated Statements of Operations For the three months ended September 30, 2021, the company reported a net income of $4.85 million, driven by warrant liability fair value changes, while the nine-month period saw a net loss of $0.85 million Statement of Operations Summary (Unaudited) | Metric | Three Months Ended Sep 30, 2021 (USD) | Nine Months Ended Sep 30, 2021 (USD) | | :--- | :--- | :--- | | General and administrative expenses | $(669,547) | $(1,791,292) | | Change in fair value of warrant liabilities | $5,516,175 | $922,550 | | Net Income (Loss) | $4,850,707 | $(854,214) | | Basic and diluted net income (loss) per share | $0.12 | $(0.02) | Condensed Consolidated Statement of Cash Flows For the nine months ended September 30, 2021, the company used $1.44 million in operating cash, invested $316.25 million into the Trust Account, and generated $317.6 million from financing activities - Key cash flow activities for the nine months ended September 30, 2021 include: - Operating: Net cash used of $1.44 million - Investing: $316.25 million invested into the Trust Account - Financing: $317.6 million net cash provided, mainly from the IPO and private placement proceeds[21] Notes to Unaudited Condensed Consolidated Financial Statements These notes detail the company's SPAC nature, its February 2021 IPO, the restatement of prior financials to reclassify redeemable stock, and the definitive merger agreement with P3 Health Group Holdings, LLC - The company is a special purpose acquisition company (SPAC) formed to effect a business combination, completing its Initial Public Offering on February 12, 2021, and placing $316.25 million of proceeds into a trust account[24][28][31] - The company identified errors in its historical financial statements, revising them to reclassify all public shares as temporary equity, which did not impact total assets, liabilities, or net income, but affected equity classification[47][48] - On May 25, 2021, the company entered into a definitive merger agreement with P3 Health Group Holdings, LLC, valued at approximately $2.126 billion, consisting of cash and equity, resulting in an "Up-C" structure[110][112] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's status as a blank-check company, its proposed business combination with P3 Health Group Holdings, LLC, and financial results primarily driven by non-cash changes in warrant liabilities - The company is a blank check company formed for the purpose of effectuating a business combination and has not generated any operating revenues to date[137][142] - A definitive agreement for a business combination with P3 Health Group Holdings, LLC was signed on May 25, 2021[139] Results of Operations Summary | Period | Net Income / (Loss) (USD) | Key Drivers | | :--- | :--- | :--- | | Q3 2021 | $4,850,707 | Positive change in fair value of warrant liabilities ($5.5M) | | Nine Months 2021 | $(854,214) | Operational costs ($1.8M) offset by positive change in fair value of warrant liabilities ($0.9M) | - As of September 30, 2021, the company had $97,290 in cash outside the trust account and access to working capital loans from its sponsor to fund operations prior to a business combination[36][152] - The MD&A has been restated to reflect the reclassification of Class A common stock subject to possible redemption to temporary equity, correcting a historical valuation error[136] Quantitative and Qualitative Disclosures Regarding Market Risk The company has minimal market or interest rate risk, as IPO proceeds in the Trust Account are invested in short-term U.S. government obligations or money market funds - The company has minimal exposure to market and interest rate risk as funds in the Trust Account are held in short-term U.S. government securities or money market funds[164] Controls and Procedures Management concluded that disclosure controls and procedures were ineffective as of September 30, 2021, due to a material weakness in accounting for complex financial instruments, with remediation plans underway - Disclosure controls and procedures were determined to be ineffective as of September 30, 2021[166] - A material weakness was identified in internal control over financial reporting concerning the accounting for complex financial instruments[166][167] - Remediation plans include enhancing access to accounting literature and increasing communication with personnel and third-party professionals[167] Part II Other Information This section covers legal proceedings, risk factors, unregistered sales of equity securities, defaults, mine safety disclosures, and exhibits Legal Proceedings The company reports no legal proceedings - The company has no legal proceedings to report[169] Risk Factors This section highlights a material change to risk factors, specifically the identified material weakness in internal control over financial reporting, which could impact investor confidence and lead to litigation - A material weakness in internal control over financial reporting has been identified, which could prevent the company from accurately reporting financial results in a timely manner[170][171] - The identified material weakness could lead to a loss of investor confidence, a decline in stock price, and potential litigation[172][173] Unregistered Sales of Equity Securities and Use of Proceeds This section details the use of proceeds from the February 12, 2021 IPO, which generated $316.25 million in gross proceeds, with the same amount placed into the trust account - The IPO on February 12, 2021, generated gross proceeds of $316,250,000[174] - Of the gross proceeds, $316,250,000 was placed in the company's trust account[175] - Total underwriting discounts and offering costs amounted to $6,827,967[176] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None reported[177] Mine Safety Disclosures The company reports no mine safety disclosures - None reported[177] Other Information The company reports no other information - None reported[177] Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including officer certifications and XBRL data files - Exhibits filed include certifications from the Principal Executive Officer and Principal Financial Officer, as well as XBRL interactive data files[178]