10-Q 1 prva-20220930.htm 10-Q prva-20220930
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 10-Q
_______________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from      to
Commission file number 001-40365
_________________________
Privia Health Group, Inc.
(Exact Name of Registrant as Specified in Its Charter)
_________________________
Delaware
81-3599420
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
950 N. Glebe Rd.,
Suite 700
Arlington,Virginia22203
(Address of Principal Executive Offices)
(Zip Code)
(571) 366-8850
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per sharePRVAThe Nasdaq Global Select Market
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  ☒   No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer¨
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒
As of November 4, 2022, the registrant had outstanding 114,298,546 shares of common stock.


TABLE OF CONTENTS
Page


INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include factors related to, among other things:
the heavily regulated industry in which we operate, and if we fail to comply with applicable healthcare laws and government regulations, we could incur financial penalties and become excluded from participating in government health care programs;
our dependence on relationships with Medical Groups (defined herein), some of which we do not own;
our growth strategy, which may not prove viable and we may not realize expected results;
difficulties implementing our proprietary end-to-end, cloud-based technology solution (the “Privia Technology Solution”) for Privia Physicians (defined herein) and new Medical Groups;
the high level of competition in our industry and our failure to compete and innovate;
challenges in successfully establishing a presence in new geographic markets;
our reliance on our electronic medical record (“EMR”) vendor, athenahealth, Inc., which the Privia Technology Solution is integrated with and built upon;
changes in the payer mix of patients and potential decreases in our reimbursement rates as a result of consolidation among commercial payers;
our use, disclosure, and other processing of personal information is subject to various federal and state privacy and security regulations and our use, disclosure, and other processing of protected health information is subject to the Health Insurance Portability and Accountability Act of 1996;
the continued availability of qualified workforce, including staff at our Medical Groups, and the continued upward pressure on compensation for such workforce; and
other risk factors described in our annual report on Form 10-K for the year ended December 31, 2021 and our other filings with the Securities and Exchange Commission (“SEC”).

You should read this quarterly report on Form 10-Q and the documents that we reference in this quarterly report on Form 10-Q and have filed as exhibits to this quarterly report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this quarterly report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this quarterly report on Form 10-Q, whether as a result of any new information, future events or otherwise.

1

Part I - Financial Information
ITEM 1. FINANCIAL STATEMENTS
Privia Health Group, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
September 30, 2022December 31, 2021
Assets(unaudited)
Current assets:
Cash and cash equivalents$316,896 $320,577 
Accounts receivable246,348 117,402 
Prepaid expenses and other current assets16,402 8,697 
Total current assets579,646 446,676 
Non-current assets:
Property and equipment, net3,663 4,502 
Right-of-use asset8,526 9,634 
Intangible assets, net58,229 59,738 
Goodwill126,938 127,938 
Deferred tax asset26,811 33,364 
Other non-current assets3,973 4,521 
Total non-current assets228,140 239,697 
Total assets$807,786 $686,373 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses$47,253 $45,985 
Provider liability254,278 140,708 
Current portion of note payable 875 
Operating lease liabilities, current2,998 2,893 
Total current liabilities304,529 190,461 
Non-current liabilities:
Note payable, net of current portion 31,688 
Operating lease liabilities, non-current9,188 11,043 
Other non-current liabilities3,000 3,000 
Total non-current liabilities12,188 45,731 
Total liabilities316,717 236,192 
Commitments and contingencies (Note 11)
Stockholders’ equity:
Common stock, $0.01 par value, 1,000,000,000 and 1,000,000,000 shares authorized; 113,796,678 and 107,837,741 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively
1,139 1,078 
Additional paid-in capital703,516 633,902 
Accumulated deficit(234,469)(208,108)
Total Privia Health Group, Inc. stockholders’ equity470,186 426,872 
Non-controlling interest20,883 23,309 
Total stockholders’ equity491,069 450,181 
Total liabilities and stockholders’ equity$807,786 $686,373 
The accompanying notes are an integral part of these condensed consolidated financial statements.
2

Privia Health Group, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share data)
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2022202120222021
Revenue$342,899 $251,524 $992,236 $690,887 
Operating expenses:
Provider expense265,174 190,055 766,672 521,105 
Cost of platform43,839 35,314 127,495 131,007 
Sales and marketing5,088 4,588 14,568 18,950 
General and administrative32,219 33,910 101,436 216,563 
Depreciation and amortization1,153 466 3,436 1,351 
Total operating expenses347,473 264,333 1,013,607 888,976 
Operating loss(4,574)(12,809)(21,371)(198,089)
Interest (income) expense, net(285)292 610 885 
Loss before (benefit from) provision for income taxes(4,289)(13,101)(21,981)(198,974)
(Benefit from) provision for income taxes(4,845)(2,210)6,931 (20,214)
Net income (loss)556 (10,891)(28,912)(178,760)
Less: loss attributable to non-controlling interests(1,068)(1,776)(2,551)(2,509)
Net income (loss) attributable to Privia Health Group, Inc. $1,624 $(9,115)$(26,361)$(176,251)
Net income (loss) per share attributable to Privia Health Group, Inc. stockholders – basic and diluted$0.01 $(0.09)$(0.24)$(1.74)
Weighted average common shares outstanding – basic111,592,834 105,896,622 109,458,855 101,576,775 
Weighted average common shares outstanding – diluted124,845,602 105,896,622 109,458,855 101,576,775 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3

Privia Health Group, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(unaudited)
(in thousands except share amounts)
Common Stock SharesCommon StockAdditional Paid-in CapitalAccumulated DeficitTotal Stockholders’ Equity attributable to Privia Health Group, Inc.Non-controlling InterestTotal Stockholders’ Equity
Balance at December 31, 202095,985,817 $960 $165,666 $(19,878)$146,748 $(3,096)$143,652 
Stock-based compensation expense— — 101 — 101 — 101 
Net income— — — 5,398 5,398 218 5,616 
Balance at March 31, 202195,985,817 $960 $165,767 $(14,480)$152,247 $(2,878)$149,369 
Issuance of common stock upon closing of initial public offering9,725,000 97 210,897 — 210,994 — 210,994 
Issuance of common stock upon exercise of stock options and vesting of restricted stock units29,645  33 — 33 — 33 
Stock-based compensation expense— — 202,560 — 202,560 — 202,560 
Net loss— — — (172,534)(172,534)(951)(173,485)
Balance at June 30, 2021105,740,462 $1,057 $579,257 $(187,014)$393,300 $(3,829)$389,471 
Issuance of common stock upon exercise of stock options and vesting of restricted stock units494,330 5 610 — 615 — 615 
Stock-based compensation expense— — 25,800 — 25,800 — 25,800 
Net loss— — — (9,115)(9,115)(1,776)(10,891)
Balance at September 30, 2021106,234,792 $1,062 $605,667 $(196,129)$410,600 $(5,605)$404,995 
Balance at December 31, 2021107,837,741 $1,078 $633,902 $(208,108)$426,872 $23,309 $450,181 
Issuance of common stock upon exercise of stock options and vesting of restricted stock units435,030 5 794 — 799 — 799 
Stock-based compensation expense— — 24,881 — 24,881 — 24,881 
Contributed non-controlling interest— — — — — 125 125 
Net loss— — — (17,510)(17,510)(577)(18,087)
Balance at March 31, 2022108,272,771 $1,083 $659,577 $(225,618)$435,042 $22,857 $457,899 
Issuance of common stock upon exercise of stock options and vesting of restricted stock units1,309,963 13 2,105 — 2,118 — 2,118 
Stock-based compensation expense— — 18,470 — 18,470 — 18,470 
Net loss— — — (10,475)(10,475)(906)(11,381)
Balance at Balance at June 30, 2022109,582,734 $1,096 $680,152 $(236,093)$445,155 $21,951 $467,106 
Issuance of common stock upon exercise of stock options and vesting of restricted stock units
4,213,944 43 8,531 — 8,574 — 8,574 
Stock-based compensation expense— — 14,833 — 14,833 — 14,833 
Net income— — — 1,624 1,624 (1,068)556 
Balance at September 30, 2022113,796,678 $1,139 $703,516 $(234,469)$470,186 $20,883 $491,069 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4

Privia Health Group, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
For the Nine Months Ended September 30,
20222021
Cash flows from operating activities
Net loss$(28,912)$(178,760)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation 927 869 
Amortization of intangibles2,509 482 
Amortization of debt issuance costs687 120 
Stock-based compensation58,184 228,461 
Deferred tax expense6,553 (20,421)
Changes in asset and liabilities:
Accounts receivable(128,946)734 
Prepaid expenses and other current assets1,657 (2,595)
Other non-current assets and right-of-use asset(7,705)(4,286)
Accounts payable and accrued expenses1,268 (176)
Provider liability113,570 38,185 
Operating lease liabilities(1,750)10,027 
Other long-term liabilities (5,262)
Net cash provided by operating activities18,042 67,378 
Cash from investing activities
Purchases of property and equipment(89)(396)
Net cash used in investing activities(89)(396)
Cash flows from financing activities
Proceeds from initial public offering 223,686 
Payments of underwriting fees, net of discounts and offering costs (12,691)
Repayment of note payable(33,250)(656)
Proceeds from exercised stock options11,491 648 
Proceeds from non-controlling interest125  
Debt issuance costs (490)
Net cash (used in) provided by financing activities(21,634)210,497 
Net (decrease) increase in cash and cash equivalents(3,681)277,479 
Cash and cash equivalents at beginning of period320,577 84,633 
Cash and cash equivalents at end of period$316,896 $362,112 
Supplemental disclosure of cash flow information:
Interest paid$680 $855 
Income taxes paid$266 $451 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5

Privia Health Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
1.Organization and Summary of Significant Accounting Policies
Organization
Privia Health Group, Inc. (NASDAQ: PRVA) (“we”, “our” the “Company”), became the sole shareholder of PH Group Holdings Corp. (“PH Holdings”) (formerly Brighton Health Services Holding Corporation) effective August 11, 2016. At the time, the Company was a wholly owned subsidiary of Brighton Health Group Holdings, LLC (“BHG Holdings”) (formerly MC Acquisition Holdings I, LLC, HoldCo).
The Company uses the same operational and financial model in each market. As of September 30, 2022, Privia operates in nine markets: 1) the Mid-Atlantic Region (states of Virginia, Maryland and the District of Columbia); 2) the state of Georgia; 3) the Gulf Coast Region (Houston, Texas); 4) North Texas (Dallas/Fort Worth, Texas); 5) West Texas (Abilene, Texas); 6) Central Florida; 7) the state of Tennessee; 8) the state of California and 9) the state of Montana.
Medical groups are formed in each market with the primary purpose to operate as a physician group practice with healthcare services being furnished through physician members (“Privia Physicians”) and non-physician clinicians (together, “Privia Providers”) supervised by Privia Physicians.
The Company also forms local management companies to provide administrative and management services (“MSOs”) to the medical groups through a Management Services Agreement (“MSA”) in each market. The Company owns 100% of all MSOs, except four where the Company is at least the majority owner.
Basis of Presentation
The condensed consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (“GAAP”) and include the accounts of the Company and its subsidiaries. Amounts shown on the condensed consolidated statements of operations within the operating expense categories of provider expense, cost of platform, selling and marketing, and general and administrative are recorded exclusive of depreciation and amortization.
All significant intercompany transactions are eliminated in consolidation.
The results of operations for the three and nine months ended September 30, 2022, are not indicative of the results to be expected for the full fiscal year ending December 31, 2022. The condensed balance sheet at December 31, 2021, was derived from audited annual financial statements but does not contain all disclosures required by accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments (consisting of only normal and recurring adjustments) considered necessary for a fair statement have been included.
Variable Interest Entities
Management evaluates the Company’s ownership, contractual, and other interests in entities to determine if it has any variable interest in a variable interest entity (“VIE”). These evaluations are complex, involve judgment, and the use of estimates and assumptions based on available historical information, among other factors. If the Company determines that an entity in which it holds a contractual, or ownership, interest is a VIE and that the Company is the primary beneficiary, the Company consolidates such entity in its consolidated financial statements. The primary beneficiary of a VIE is the party that meets both of the following criteria: (i) has the power to make decisions that most significantly affect the economic performance of the VIE; and (ii) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Management performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change. Changes in consolidation status are applied prospectively.
The Company evaluated its relationship with (a) Non-Owned Medical Groups and their Affiliated Practices, (b) Friendly Medical Groups and their Affiliated Practices, and (c) Affiliated Practices associated with Owned Medical Groups to determine if any of these entities should be subject to consolidation. The Company does not have ownership interest in any Affiliated Practices (whether those of Owned Medical Groups, Non-Owned Medical Groups or Friendly Medical Groups); nor does the Company have an ownership in Non-Owned Medical Groups. The PMSA and support services agreement (“SSA”) entered by Non-Owned Medical Groups and Friendly Medical Groups with their Privia Physician members and the Affiliated Practices are not contractual relationships within Privia’s legal structure. The only contractual relationship between Privia and Non-Owned Medical Groups is established through the MSA. For Friendly Medical Groups, in addition to the MSA, the Company has a contractual relationship, evidenced by a restriction agreement (each a “Restriction Agreement”) with its Nominee Physicians and their respective Friendly Medical Groups. Management has determined, based on the provisions of the MSAs between the Company and Non-Owned Medical Groups, and after considering the requirements of Accounting Standards Codification (“ASC”) Topic 810, Consolidation (“ASC 810”), the Company is not required to consolidate the financial position or results of operations of the Affiliated Practices associated with Owned Medical Groups; nor is it required to consolidate the financial position or results of operations of Non-Owned Medical Groups (and, therefore, the Company is not required to consolidate the Affiliated Practices of the Non-Owned Medical Groups). However, management has determined, based
6

on the provisions of the Restriction Agreement on the Nominee Physician (Friendly PC), the governing documents of the Friendly Medical Groups, and after considering the requirements of ASC 810, that the Company should consolidate the financial position or results of operations of the Friendly Medical Groups and the friendly PCs.
ASC 810 requires the Company to consolidate the financial position, results of operations and cash flows of a Non-Owned Medical Group affiliated by means of a service agreement if the Non-Owned Medical Group is a VIE and the Company is its primary beneficiary. An Affiliated Practice would be considered a VIE if (a) it is thinly capitalized (i.e., the equity is not sufficient to fund the Non-Owned Medical Group’s activities without additional subordinated financial support) or (b) the equity holders of the Non-Owned Medical Group as a group have one of the following four characteristics: (i) lack the power to direct the activities that most significantly affect the Non-Owned Medical Group’s economic performance, (ii) possess non-substantive voting rights, (iii) lack the obligation to absorb the Non-Owned Medical Group’s expected losses, or (iv) lack the right to receive the Non-Owned Medical Group’s expected residual returns.
The characteristics of both (a) and (b) do not exist and as such the Non-Owned Medical Groups do not represent VIEs. Accordingly, the Company has not consolidated the financial position, results of operations or cash flows of the Non-Owned Medical Groups that are affiliated with the Company by means of a service agreement for the three and nine months ended September 30, 2022 and 2021. Each time that it enters into a new service agreement or enters into a material amendment to an existing service agreement, the Company considers whether the terms of that agreement or amendment would change the elements it considers in accordance with the VIE guidance. The same analysis was performed for the Affiliated Practices of Owned Medical Groups, which have contractual relationships with Privia through the SSA, and the Company determined they do not represent VIEs as they do not meet the criteria in ASC 810 for similar reasons outlined above.
The Company, however, does meet the criteria for consolidation of the Friendly Medical Groups based on the discussion above.
During the fourth quarter of 2021, the Company launched Privia Medical Group – West Texas, PLLC, formerly known as Abilene Diagnostic Clinic (“PMG West Texas”). PMG West Texas is a physician-owned Medical Group, with PMG West Texas Holdings, PLLC (“Friendly WTX PC”), a Texas professional limited liability company entirely owned by a licensed physician with a leadership role in the Company, owning majority membership interests and having governance and control rights via the governing documents of PMG West Texas. The Company has a contractual relationship with Friendly WTX PC through a Restriction Agreement. The VIE analysis was performed, and the Company determined that characteristic (b) exists as a result of meeting (ii) and (iv) and as such, PMG West Texas and Friendly WTX PC do represent VIEs and are consolidated as they do meet the criteria in ASC 810.
Similarly, during the fourth quarter of 2021, the Company established a second Friendly Medical Group in the State of Tennessee - Privia Medical Group Tennessee, PLLC (“PMG-TN”). PMG-TN is a physician owned Medical Group, with PMG-TN Physicians, PLLC, a Tennessee professional limited liability company entirely owned by a licensed physician with a leadership role in the Company (“Friendly TN PC”), owning 51% of the membership interests therein and having governance and control rights via the governing documents of PMG-TN. Again, the same analysis was performed, and the Company determined that characteristic (b) exists as a result of meeting (ii) and (iv) and as such, PMG-TN and Friendly TN PC do represent VIEs as they do meet the criteria in ASC 810.
The aggregated carrying value of the Company’s VIE’s for both the current assets and liabilities included in the consolidated balance sheets after elimination of intercompany transactions were $1.6 million as of September 30, 2022 and $4.2 million as of December 31, 2021.
Emerging Growth Company Status
We are an emerging growth company under the Jumpstart Our Business Startups Act (the “JOBS Act”). The JOBS Act provides that an emerging growth company can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We elected to avail ourselves of this exemption and, therefore, we are currently not subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company”, we choose to rely on such exemptions, we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Sarbanes-Oxley Act of 2002, Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board (“PCAOB”) regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) hold non-binding advisory votes on executive compensation and obtain shareholder approval of any golden parachute payments not previously approved.
Based on the market value of the Company’s common equity held by non-affiliates as of June 30, 2022 (the last business day of the Company’s most recently completed second fiscal quarter), the Company will cease to qualify as an emerging growth company as of the end of the fiscal year ended December 31, 2022. As a result, we will no longer be able to take advantage of these exemptions.
7

Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosure. On an on-going basis we evaluate significant estimates and assumptions, including, but not limited to, revenue recognition, stock-based compensation, estimated useful lives of assets, intangible assets subject to amortization, and the computation of income taxes. Future events and their effects cannot be predicted with certainty; accordingly, the Company’s accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of the financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as the Company’s operating environment changes. Management evaluates and updates assumptions and estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.
Operating Segments
The Company determined in accordance with ASC 280, Segment Reporting (“ASC 280”) that the Company operates in and reports as a single operating segment, and therefore one reporting segment – Privia Health Group, Inc.
Coronavirus Aid, Relief and Economic Stimulus Act (“CARES Act”)
The COVID-19 pandemic has an impact and may continue to impact our results of operations, cash flow and financial position. We are closely monitoring the impact of the pandemic on all aspects of our business including impacts to employees, customers, patients, suppliers and vendors.
On March 27, 2020, the CARES Act was passed. It is intended to provide economic relief to individuals and businesses affected by the coronavirus pandemic. It also contains provisions related to healthcare providers’ operations and the issues caused by the coronavirus pandemic. Pursuant to the CARES Act the Company elected to defer its portion of Social Security taxes in 2020, which may be repaid over two years as follows: 50% by the end of 2021 and 50% by the end of 2022. During the year ended December 31, 2021, 50% of the Social Security taxes were repaid. Approximately $0.8 million is recorded in accounts payable and accrued expenses on the balance sheet as of September 30, 2022 related to this deferral and the Company intends to remit payment by the end of 2022.
Non-Controlling Interest
The non-controlling interest represents the equity interest of the non-controlling equity holders in results of operations of Complete MD Solutions, LLC, Privia Management Services Organization, LLC (“PMSO”), Privia Management Company Montana, LLC, BASS Privia Management Company of California, LLC, Privia Management Company West Texas, LLC and our Owned Medical Groups. The condensed consolidated financial statements include all assets, liabilities, revenues, and expenses of less-than-100%-owned affiliates where the Company has a controlling financial interest. The Company has separately reflected net income attributable to the non-controlling interests in net income in the condensed consolidated statements of operations.
Significant Accounting Policies
The Company described its significant accounting policies in Note 1 of the notes to consolidated financial statements for the year ended December 31, 2021 in the Annual Form 10-K. During the three and nine months ended September 30, 2022, there were no significant changes to those accounting policies and estimates, other than those policies impacted by the Florida and the Mid-Atlantic ACOs entering into Capitated revenue payer arrangements. These agreements cover healthcare services provided to approximately 23,000 Medicare Advantage beneficiaries effective January 1, 2022. The impacts to the financial statements and accounting policies of these new agreements are noted and further discussed below.
Provider Liability
Provider Liability, previously referred to as “Physician and Practice liability”, represents costs payable to physicians, hospitals and other ancillary providers, including both Privia physicians, their related practices, and providers the Company has contracted with through payer partners. Those costs include amounts that have not yet been paid for physician guaranteed payments and other required distributions pursuant to the service agreements as well as medical claims costs for services provided to attributed beneficiaries for which the Company is financially responsible under at-risk capitated revenue arrangements whether paid directly by the Company or indirectly by payers with whom the Company has contracted.
Value Based Care (“VBC”) Revenue
The Company’s VBC business consists of its clinically integrated network and ACOs which bring together independent physician practices within our medical groups to focus on sharing data, improving care coordination, and collaborating on initiatives to improve outcomes and lower healthcare spending. The Company has contracts with the U.S. federal government and large payer organizations that are multi-year in nature, typically ranging from three to five years, and revenue is earned as: (1) Capitated revenue (2) on a shared savings basis and (3) Care management fees on a per member per month basis.
8

Capitated Revenue
Capitated revenue consists of capitation fees earned under contracts with various Medicare Advantage payers (“payers”) in at-risk capitation arrangements. The Company is entitled to monthly fees to provide a defined range of healthcare services for Medicare Advantage health plan members (“attributed beneficiaries” or “attributed lives”) attributed to the Company’s contracted physicians (typically primary care). Monthly fees are determined as a percentage of the premium payers receive from the Centers for Medicare & Medicaid Services (“CMS”) for these attributed beneficiaries. In at-risk arrangements, the Company generally accepts financial risk for beneficiaries attributed to its contracted physicians and, therefore, is responsible for the cost of contracted healthcare services required by those beneficiaries in accordance with the terms of each agreement. Fees are recorded gross in revenue because the Company is acting as a principal in coordinating and controlling the range of services provided (other than clinical decisions) under its Capitated revenue contracts with payers. Capitated revenue contracts with payers are generally multi-year arrangements and have a single monthly stand ready performance obligation, as defined by ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), to provide all aspects of necessary medical care to members for the contracted period. The Company recognizes revenue in the month in which the eligible beneficiary is entitled to receive healthcare benefits during the contract term.
The transaction price for the Company’s capitation contracts is a fixed percentage of premium per attributed life with periodic adjustment, as the monthly fees to which the Company are entitled are subject to periodic adjustments under CMS’s risk adjustment payment methodology. CMS deploys a risk adjustment model that determines premiums paid to all payers according to each attributed life’s health status and certain demographic factors. Under this risk adjustment methodology, CMS calculates the risk adjusted premium payment using diagnosis data from various settings. The Company and healthcare providers collect and submit diagnosis data to payers (and ultimately to CMS) to be utilized in the determination of risk adjustments and such data is used by the Company to estimate any adjustments to the Capitated revenue earned that may increase or decrease revenue in subsequent periods pursuant to contractual terms. Such adjustments are estimated using the most likely amount methodology and amounts are only included in revenue to the extent that it is probable that a significant reversal of cumulative revenue will not occur once any uncertainty is resolved. Capitated revenue fees are also subject to adjustment for incentives or penalties based on the achievement of certain quality metrics defined in the Company’s contracts with payers. The Company recognizes incentive revenue as earned using the most likely amount methodology and only to the extent that it is probable that a significant reversal of cumulative revenue will not occur once any uncertainty is resolved.
Neither the Company nor any of its affiliates are a registered insurance company as state law in the states in which we operate do not require such registration for risk bearing providers.
Provider expense
Provider expense, previously referred to as “Physician and Practice expense”, are amounts accrued or payments made to physicians, hospitals and other service providers, including Privia physicians, their related physician practices, and providers the Company has contracted with through payer partners. Those costs include physician guaranteed payments and other required distributions pursuant to the service agreements as well as medical claims costs for services provided to attributed beneficiaries under at-risk Capitated revenue arrangements for which the Company is financially responsible whether paid directly by the Company or indirectly by payers with whom the Company has contracted. Provider expenses are recognized in the period in which services are provided.
Recently Adopted Accounting Pronouncements
None.
Recently Issued Accounting Pronouncements Pending Adoption
None.
9

2. Revenue Recognition
The following table presents our revenues disaggregated by source:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
(Dollars in Thousands)2022202120222021
FFS-patient care $221,911 $200,208 $637,540 $550,607 
FFS-administrative services 25,270 16,407 71,911 47,162 
Capitated revenue54,708  160,776  
Shared savings 30,243 25,333 90,296 62,045 
Care management fees9,239 9,376 27,519 27,321 
Other revenue 1,528 200 4,194 3,752 
Total revenue $342,899 $251,524 $992,236 $690,887 
Fee-for-service (“FFS”) patient care is primarily generated from third-party payers with which the Company has established contractual billing arrangements. The following table presents the approximate percentages by source of net operating revenue received for healthcare services we provided for the periods indicated:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2022202120222021
Commercial insurers 70 %70 %70 %69 %
Government payers 16 %17 %15 %16 %
Patient 14 %13 %15 %15 %
100 %100 %100 %100 %
FFS-administrative services revenue is earned through the Company’s MSA with Non-Owned Medical Groups primarily based on a fixed percentage of net collections on patient care generated by those medical groups.
VBC revenue is primarily earned through contracts for Capitated revenue, Shared savings and Care management fees. Capitated revenue is generated through what is typically known as an “at-risk contract.” At-risk capitation refers to a model in which the Company receives a fixed monthly payment from the third-party payer in exchange for providing healthcare services to attributed beneficiaries. The Company is responsible for providing or paying for the cost of healthcare services required by those attributed beneficiaries for a set of services. At-risk Capitated revenue is recorded at the total amount gross in revenues because the Company is acting as a principal in arranging for, providing, and controlling the managed healthcare services provided to the attributed lives. Shared savings revenue and Care management fees are generated through contracts with large commercial payer organizations and the U.S. Federal Government.
Contract Asset
The Company has the following contract assets and unearned revenue:
(Dollars in Thousands)September 30, 2022December 31, 2021
Balances for contracts with customers
Accounts receivable $246,348 $117,402 
Unearned revenue $367 $404 
Remaining Performance Obligations
As our performance obligations relate to contracts with a duration of one year or less, the Company elected the optional exemption in ASC 606-10-50-14(a). Therefore, the Company is not required to disclose the transaction price for the remaining performance obligations at the end of the reporting period or when the Company expects to recognize revenue. The Company has minimal unsatisfied performance obligations at the end of the reporting period as our patients typically are under no obligation to continue receiving services at our facilities.
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3. Goodwill and Intangible Assets, Net
For the purposes of the goodwill impairment assessment, the Company as a whole is considered to be a reporting unit. The Company recognizes the excess of the purchase price, plus the fair value of any non-controlling interests in the acquiree, over the fair value of identifiable net assets acquired as goodwill. The Company performs a qualitative assessment on goodwill at least annually or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. If it is determined in the qualitative assessment that the fair value of a reporting unit is more likely than not below its carrying amount, then the Company will perform a quantitative impairment test. The quantitative goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. Any excess in the carrying value of a reporting unit’s goodwill over its fair value is recognized as an impairment loss, limited to the total amount of goodwill allocated to that reporting unit. The Company’s carrying value of goodwill at September 30, 2022 and December 31, 2021 is approximately $126.9 million and $127.9 million, respectively. The most recently completed annual impairment test of goodwill was performed as of October 1, 2021 and it was determined that no impairment existed. No indicators of impairment were identified during the nine months ended September 30, 2022 and 2021.
On October 13, 2021,the Company entered the California market through an affiliation with BASS Medical Group, one of the Greater San Francisco Bay Area’s leading healthcare multi-specialty groups with more than 400 providers spanning 42 specialties caring for patients at over 125 locations. Privia acquired a majority interest in BASS Management Services Organization, LLC, now BASS Privia Management Company of California, LLC (“BPMC”), which is the exclusive provider of management services to BASS Medical Group. BPMC provides management and other administrative services, as well as various other services to medical practices and others. The Company acquired a 51% interest in BPMC.
A summary of the Company’s intangible assets is as follows:
September 30, 2022December 31, 2021
(Dollars in thousands)Intangible
Assets
Accumulated
Amortization
Intangible
Assets
Accumulated
Amortization
Trade names $4,600 $1,859 $4,600 $1,689 
Consumer customer relationships 2,500 2,021 2,500 1,835 
PMG customer relationships 600 202 600 184 
Management Service Agreement (Complete MD) 2,200 963 2,200 860 
Physician network1,520 101 1,520 26 
Payer contracts2,750 131 2,750 33 
MSO Service Agreement (BPMC)51,800 2,464 50,800 605 
65,970 $7,741 64,970 $5,232 
Less accumulated amortization (7,741)(5,232)
Intangible assets, net $58,229 $59,738 
The remaining weighted average life of all amortizable intangible assets is approximately 18.3 years at September 30, 2022.
Amortization expense for intangible assets was approximately $0.8 million and $0.2 million for the three months ended September 30, 2022 and 2021, respectively, and $2.5 million and $0.5 million for the nine months ended September 30, 2022 and 2021, respectively.
Estimated amortization expense for the Company’s intangible assets for the following five years is as follows:
(Dollars in Thousands)
Remainder of 2022$835 
20233,341 
20243,258 
20253,091 
20263,091 
Thereafter44,613 
Total$58,229 
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4. Leases
The Company leases office space under various operating lease agreements. The initial terms of these leases range from 2 to 9 years and generally provide for periodic rent increases and renewal options.
The components of lease expense were as follows (in thousands):

For the Three Months Ended September 30,For the Nine Months Ended September 30,
(Dollars in Thousands)2022202120222021
Operating lease cost$683 $475 $2,013 $1,406 
Cash paid for amounts included in the measurement of lease liabilities - operating leases$2,198 $1,629 
Weighted-average remaining lease term - operating leases4.6 Years4.8 Years
Weighted-average discount rate - operating leases3.0 %3.5 %
The aggregate future lease payments for operating leases in the years subsequent to September 30, 2022 are as follows:

(Dollars in Thousands)
Remainder of 2022$561 
20233,013 
20243,047 
20253,010 
20262,173 
Thereafter1,227 
Total future lease payments13,031 
Imputed interest(845)
Total$12,186 
5.Property and Equipment, Net
A summary of the Company’s property and equipment, net is as follows:
(Dollars in Thousands)September 30, 2022December 31, 2021
Furniture and fixtures $1,402 $1,110 
Computer equipment 1,641 1,864 
Leasehold improvements 4,855 4,827 
7,898 7,801 
Less accumulated depreciation and amortization (4,235)(3,299)
Property and equipment, net $3,663 $4,502 
6.Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consisted of the following:
(Dollars in Thousands)September 30, 2022December 31, 2021
Accounts payable$5,208 $2,973 
Accrued employee compensation and benefits 7,342 7,491 
Bonuses payable 10,209 12,292 
Other accrued expenses 24,494 23,229 
Total accounts payable and accrued expenses $47,253 $45,985 
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7. Provider Liability
Provider liability, previously referred to as “Physician and Practice liability”, represents costs payable to physicians, hospitals and other ancillary providers, including both Privia physicians, their related physician practices, and providers the Company has contracted with through payer partners. Those costs include amounts that have not yet been paid for physician guaranteed payments and other required distributions pursuant to the service agreements as well as medical claims costs for services provided to attributed beneficiaries for which the Company is financially responsible under at-risk Capitated revenue arrangements whether paid directly by the Company or indirectly by payers with whom the Company has contracted. Provider expenses are recognized in the period in which services are provided and include estimates of claims that have been incurred but have either not yet been received, processed, or paid and as such, not reported.
Provider liability estimates are developed using actuarial methods commonly used by health insurance actuaries that include a number of factors and assumptions including medical service utilization trends, changes in membership, observed medical cost trends, historical claim payment patterns and other factors.
Each period, the Company re-examines previously established provider liability estimates based on actual claim submissions and other changes in facts and circumstances. As more complete claims information becomes available, the Company adjusts its estimates and recognizes those changes in estimates in the period in which the change is identified. The difference between the estimated liability and the actual settlements of claims is recognized in the period in which the claims are settled. The Company’s physician and practice liability balance represents management’s best estimate of its liability for unpaid Provider expenses as of September 30, 2022. The Company uses judgment to determine the appropriate assumptions for developing the required estimates.
The Company’s liabilities for unpaid medical claims under at-risk capitation arrangements, which are included in Provider liability in the Company’s condensed consolidated balance sheets, were as follows:
(Dollars in Thousands)
Balance at December 31, 2021$ 
Incurred health care costs:
Current year160,607 
Prior years 
Total claim incurred160,607 
Claims paid:
Current year(124,385)
Prior year 
Total claims paid(124,385)
Adjustments to other claims-related liabilities 
Balance at September 30, 2022
$36,222 
8. Note Payable
The Company’s Credit Facilities consists of the following:
(Dollars in Thousands)September 30, 2022December 31, 2021
Note payable $ $33,250 
Less debt issuance costs  (687)
Less current portion  (875)
Note payable, net $ $31,688 
On November 15, 2019, the Company entered into a Credit Agreement (the “Original Credit Agreement”) by and among Privia Health, LLC, as the borrower, PH Group Holdings Corp., as a guarantor, certain subsidiaries of Privia Health, LLC, as guarantors, Silicon Valley Bank, as administrative agent and collateral agent (the “Administrative Agent”), and the several lenders from time to time party thereto. The Original Credit Agreement provided for up to $35.0 million in term loans (the “Term Loan Facility”) that mature on November 15, 2024 with interest payable monthly at the lesser of LIBOR plus 2.0% or Alternate Base Rate (“ABR”) plus 1.0% payable monthly (3.0% at September 30, 2022), plus up to an additional $10.0 million of financing (which was increased to $15.0 million in connection with the first amendment) in the form of a revolving loan (the “Revolving Loan Facility” and together with the Term Loan Facility, the “Credit Facilities”). The Revolving Loan Facility also includes a letter of credit sub-facility in the aggregate availability amount of $2.0 million and a swingline sub-facility in the aggregate availability amount of $2.0 million. The Company borrowed $35.0 million in term loans on November 15, 2019.
On August 27, 2021, the Company and certain of its subsidiaries entered into an assumption agreement and third amendment (the “Third Amendment”) to the Original Credit Agreement (as amended by the Third Amendment, the “Credit Agreement”). Pursuant to
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the Third Amendment, the Company became the parent guarantor under the Credit Agreement and granted the Administrative Agent a first-priority security interest on substantially all of its real and personal property, subject to permitted liens.
The Third Amendment increased the size of the Revolving Loan Facility to $65.0 million, increased the letter of credit sub-facility to $5.0 million and extended the maturity date of the Credit Agreement to August 27, 2026. As amended, borrowings under the Credit Agreement bear interest at a rate equal to (i) in the case of eurodollar loans, LIBOR plus an applicable margin, subject to a 0.5% floor, and (ii) in the case of ABR loans, an ABR rate plus an applicable margin, subject to a floor of 1.5%. In addition, the Amendment, among other things, (i) changed the Term Loan Facility amortization schedule to 0.625% of the original principal amount of term loans for the fiscal quarters ending September 30, 2021 through and including June 30, 2024 and 1.25% of the original principal amount of term loans for the fiscal quarters ending thereafter and (ii) added a 1.0% prepayment premium for any term loans prepaid within six months of the effective date of the Third Amendment. The Third Amendment converted the financial covenants in the Original Credit Agreement to “springing” financial covenants, so that at any time the Company’s cash is less than 125% of the outstanding borrowings under the Credit Facilities, or at least $15.0 million of borrowings are outstanding under the Revolving Loan, the Company will be required to maintain (i) a consolidated fixed charge coverage ratio of not less than 1.25 to 1.0, and (ii) a consolidated leverage ratio of no more than 3.0 to 1.0.
On June 24, 2022, the Company voluntarily prepaid the outstanding indebtedness under the Term Loan Facility. The Company’s prepayment to the lenders was approximately $33.1 million, including accrued interest. The Company did not incur any prepayment penalties in connection with the repayment of the term loan, which had a scheduled maturity of August 27, 2026. The prepayment was made with cash on hand. Pursuant to this repayment, the Company accelerated recognition of $0.6 million of expense related to the remaining unamortized debt issuance costs. Including this accelerated expense, amortization expense of approximately $0.7 million and $0.1 million was recorded for the nine months ended September 30, 2022 and 2021, respectively. The Revolving Loan Facility remains in place and available to the Company. As of September 30, 2022 and December 31, 2021 there were no amounts outstanding under the Revolving Loan Facility.
Interest expense relating to the Credit Facilities, inclusive of amortization of deferred financing costs, was de minimis for the three months ended September 30, 2022 and $0.3 million for the same period in 2021 and $0.6 million and $0.9 million for the nine months ended September 30, 2022 and 2021, respectively.
Substantially all of the Company’s real and personal property serve as collateral under the above debt arrangements.
9. Income Taxes
The Company recorded a (benefit from) provision for income tax of $(4.8) million and $(2.2) million for the three months ended September 30, 2022 and 2021, respectively, and $6.9 million and $(20.2) million for the nine months ended September 30, 2022 and 2021, respectively. This represents an annual effective tax rate of (74.6)% and 9.7% as of September 30, 2022 and 2021, respectively. The effective tax rate for the three and nine month periods ended September 30, 2022 were impacted by the non-deductible stock-based compensation expense related to the Company’s IPO and its effect on the pre-tax loss. The effective tax rate for the three and nine month periods ended September 30, 2021 was lower than the statutory rate due to the effect on the pre-tax loss of the non-deductible stock-based compensation expense related to the Company’s IPO.
Management considers both positive and negative evidence when evaluating the recoverability of our DTAs. The assessment is required to determine whether, based on all available evidence, it is more likely than not (i.e., greater than a 50% probability) that all or some portion of the DTAs will be realized in the future. As of September 30, 2022 and 2021, the weight of all available positive evidence was greater than the weight of all negative evidence, so a valuation allowance against the deferred tax asset was not recorded.
10. Stockholders’ Equity
Elevance Health Inc.f.k.a. Anthem, Inc. (“Elevance Health”) Private Placement
On May 3, 2021, concurrent with the closing of its IPO, the Company issued and sold, 4,000,000 shares of common stock, par value $0.01 per share, of the Company for an aggregate purchase price of $92 million (the “Private Placement”), or $23.00 per share, in a private placement to an affiliate of Elevance Health. As of May 3, 2021, Elevance Health held approximately 3.9% of the issued and outstanding common stock of the Company. The securities issued to the Investor in the Private Placement were issued pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933.
Stock option plan
The PH Group Holdings Corp. Stock Option Plan (the “PH Group Option Plan”) was created on January 17, 2014. The employees of the Company and its subsidiaries, consultants of the Company and the employees of Brighton Health Plan Services Holdings Corp. (BHPS) (a wholly-owned subsidiary of BHG Holdings) and its subsidiaries who have performed services for the Company were the participants of the PH Group Option Plan. The aggregate number of shares of common stock for which options may be granted under the PH Group Option Plan shall not exceed 4,229,850 shares.
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Effective August 11, 2016, the PH Group Option Plan was transferred to its parent and became the PH Group Parent Corp. Stock Option Plan (the “PH Parent Option Plan”). All other terms in the PH Group Option Plan remained unchanged in the PH Parent Option Plan at the effective date of the transfer.
Effective August 28, 2018, the PH Parent Option Plan was amended and restated to increase the aggregate number of shares of common stock for which options may be granted from 4,229,850 shares to 18,985,846 shares.
On April 1, 2021, contingent on the consummation of the IPO, the Board of Directors approved a modification to the PH Group Parent Corp. Stock Option Plan of the vesting conditions of certain outstanding stock option grants to certain employees and consultants. The modification accelerated by one year any time vested options that were not previously 100% vested and modified the vesting condition of the performance based options to vest 60% at IPO, 20% 12 months after IPO and 20% 18 months after the IPO. The modification also accelerated the CEO’s time based options by an additional four months such that 100% of his time based options are vested. We recognized stock-based compensation of $195.1 million in the second quarter of 2021 related to these modifications and recognized an additional $89.9 million of additional stock compensation expense over the eighteen months following the completion of the IPO.
2021 Omnibus Incentive Plan
On April 6, 2021, the Company approved the Privia Health Group, Inc. 2021 Omnibus Incentive Plan (the “Plan”) which permits awards up to 10,278,581 shares of the Company’s common stock. The Plan also allows for an automatic increase on the first day of each fiscal year following the effective date of the Plan by an amount equal to the lesser of (i) 5% of outstanding shares on December 31 of the immediately preceding fiscal year or (ii) such number of shares as determined by the Company’s Compensation Committee in its discretion. The Plan provides for the granting of stock options at a price equal to at least 100% of the fair market value of the Company’s common stock as of the date of grant. The Plan also provides for the granting of Stock Appreciation Rights, Restricted Stock, Restricted Stock Units (“RSUs”), Performance Awards and other cash-based or other stock-based awards, all which must be granted at not less than the fair market value of the Company’s common stock as of the date of grant. Participants in the Plan may include employees, consultants, other service providers and non-employee directors. On the effective date of the IPO, the Company issued 1,183,871 restricted stock units at the offering price and 3,683,217 options, with an exercise price equal to the offering price. These issuances are expected to generate stock-based compensation expense of $62.3 million to be recognized over the next four years starting on the effective date of the IPO as both the restricted stock units and stock options vest. The 2021 Plan is intended as the successor to and continuation of the PH Parent Option Plan. No additional stock awards will be granted under the PH Parent Option Plan.
2021 Employee Stock Purchase Plan
In April 2021, the Company’s Board of Directors approved the Company’s 2021 Employee Stock Purchase Plan (“2021 ESPP”). The 2021 ESPP became effective upon the execution of the underwriting agreement for the Company’s IPO in April 2021. Per the Plan, shares may be newly issued shares, treasury shares or shares acquired on the open market. The Compensation Committee may elect to increase the total number of Shares available for purchase under the Plan as of the first day of each Company fiscal year following the Effective Date in an amount equal to up to one percent (1%) of the shares issued and outstanding on the immediately preceding December 31; provided that the maximum number of shares that may be issued under the Plan in any event shall be 10,278,581 shares. As of September 30, 2022, the Company has reserved 1,027,858 shares of common stock for issuance under the 2021 ESPP.
Stock option activity
The following table summarizes stock option activity under the PH Parent Option Plan and 2021 Plan:
Number of SharesWeighted-
Average
 Exercise Price
Weighted-
Average
Remaining
Contractual
Life
Aggregate Intrinsic
Value
(in thousands)
Balance at December 31, 202119,916,202 $5.90 9.36$398,117 
Granted93,793 26.35 
Exercised(5,855,236)2.01 
Forfeited(151,392)19.99 
Balance at September 30, 202214,003,367 $7.51 9.15$371,851 
Exercisable September 30, 20227,623,620 $2.07 9.39$243,946 

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RSU Activity
The following table summarizes the RSU activity under the 2021 Plan:
Number of SharesGrant Date Fair Value
Unvested and outstanding at December 31, 2021984,901 $23.23 
Granted1,136,607 24.43 
Vested(110,082)24.09 
Forfeited(72,674)24.26 
Unvested and outstanding at September 30, 20221,938,752 $23.85 
Stock-based compensation expense
Total stock-based compensation expense for the three months ended September 30, 2022 and 2021, was approximately $14.8 million and $25.8 million, respectively, and $58.2 million and $228.5 million for the nine months ended September 30, 2022 and 2021, respectively. At September 30, 2022, there was approximately $63.7 million of unrecognized stock-based compensation expense related to unvested options and RSUs, net of forfeitures, that is expected to be recognized over a weighted-average period of 1.3 years.
Stock-based compensation expense was classified in the condensed consolidated statements of operations as follows:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
(Dollars in Thousands)2022202120222021
Cost of platform$3,095 $4,947 $11,382 $40,987 
Sales and marketing672 1,028 2,202 8,723 
General and administrative11,066 19,825 44,600 178,751 
Total stock-based compensation$14,833 $25,800 $58,184 $228,461 
11. Commitments and Contingencies
There are no material commitments and contingencies as of September 30, 2022.
12. Concentrations of Credit Risk
Our financial instruments that are potentially subject to concentrations of credit risk consist primarily of cash, cash equivalents, and accounts receivable. While our cash and cash equivalents are managed by reputable financial institutions, the Company’s cash balances with the individual institutions may at times exceed the federally insured limits. At September 30, 2022, substantially all of the Company’s cash and cash equivalents were held at two financial institutions. The Company believes these financial institutions are financially sound and that minimal credit risk exists.
The Company receives payment for medical services provided to patients by its physicians through contracts with payers. Six payers within the network accounted for approximately 75% and 76% of such payments for the three month periods ended September 30, 2022 and 2021, respectively, and 74% for both the nine month periods ended September 30, 2022 and 2021, respectively. The Company evaluates accounts receivable to determine if they will ultimately be collected. In performing this evaluation, significant judgments and estimates are involved, such as past experience, credit quality, age of the receivable balance and current economic conditions that may affect ability to pay. As of September 30, 2022 and December 31, 2021, the Company had six payers within the network that made up approximately 71% and 68% of accounts receivable, respectively.
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13. Net Income (Loss) Per Share
A reconciliation of net loss available to common shareholders and the number of shares in the calculation of basic and diluted earnings loss per share was calculated as follows:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
(in thousands, except for share and per share amounts)2022202120222021
Net income (loss) attributable to Privia Health Group, Inc. common stockholders $1,624 $(9,115)$(26,361)$(176,251)
Weighted average common shares outstanding - basic111,592,834 105,896,622 109,458,855 101,576,775 
Weighted average common share outstanding - diluted 124,845,602 105,896,622 109,458,855 101,576,775 
Earnings per share attributable to Privia Health Group, Inc. common stockholders – basic and diluted$0.01 $(0.09)$(0.24)$(1.74)
The treasury stock method is used to consider the effect of the potentially dilutive stock options. The following outstanding shares of potentially dilutive securities were excluded from computation of diluted loss per share attributable to common stockholders for the period presented because including them would have been antidilutive:
Nine Months Ended September 30,
20222021
Potentially dilutive stock options to purchase common stock and RSUs 15,942,119 22,520,458 
Total potentially dilutive shares 15,942,119 22,520,458 
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