Investments in Other Entities

3 Months Ended

Mar. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

Investments in Other Entities

Investments in Other Entities

Equity Method

Investments in other entities – equity method consisted of the following (in thousands):

	December 31, 2022		Initial Investment		Allocation of Income (Loss)		Funding		Distribution		March 31, 2023
LaSalle Medical Associates – IPA Line of Business	$	5,684	$	—	$	2,165	$	—	$	—	$	7,849
Pacific Medical Imaging & Oncology Center, Inc.	1,878		—		8		—		—		1,886
531 W. College, LLC	17,281		—		(90)		—		—		17,191
One MSO, LLC	2,718		—		115		—		—		2,833
CAIPA MSO, LLC	12,738		—		249		—		—		12,987
James Song, M.D., A Professional Corporation	—		325		37		—		—		362
	$	40,299	$	325	$	2,484	$	—	$	—	$	43,108

LaSalle Medical Associates — IPA Line of Business

LMA was founded by Dr. Albert Arteaga in 1996 and operates as an IPA delivering high-quality care. In September 2021, APC-LSMA sold 21.25% of its interest in LMA back to Dr. Arteaga for $6.4 million, which resulted in APC-LSMA owning a 25% interest in LMA as of March 31, 2023. The investment is deemed Excluded Assets that are solely for the benefit of APC and its shareholders.

APC accounts for its investment in LMA under the equity method as APC has the ability to exercise significant influence but not control over LMA’s operations. For the three months ended March 31, 2023 and 2022, APC recognized income from this investment of $2.2 million and $1.3 million, respectively, in the accompanying consolidated statements of income. The accompanying consolidated balance sheets include the related investment balances of $7.8 million and $5.7 million at March 31, 2023 and December 31, 2022, respectively.

LMA’s summarized balance sheets at March 31, 2023 and December 31, 2022, and summarized statements of income for the three months ended March 31, 2023 and 2022, with respect to its IPA line of business are as follows (in thousands):

Balance Sheets

	March 31, 2023		December 31, 2022
	(unaudited)		(unaudited)
Assets
Cash and cash equivalents	$	14,873	$	15,671
Receivables, net	12,526		5,064
Prepaid assets	6,952		5,032
Loan receivable	2,250		2,250
Restricted cash	703		700
Total assets	$	37,304	$	28,717
Liabilities and stockholders' equity
Current liabilities	$	30,260	$	30,331
Stockholders’ equity (deficit)	7,044		(1,614)
Total liabilities and stockholders’ equity	$	37,304	$	28,717

Statements of Income

	Three months ended March 31,
	2023		2022
	(unaudited)		(unaudited)
Revenues	$	67,619	$	67,566
Expenses	58,964		61,786
Income from operations	8,655		5,780
Other Income	3		—
Net income	$	8,658	$	5,780

Pacific Medical Imaging and Oncology Center, Inc.

APC-LSMA and PMIOC entered into a share purchase agreement whereby APC-LSMA purchased a 40% ownership interest in PMIOC. Incorporated in California in 2004, PMIOC provides comprehensive diagnostic imaging services using state-of-the-art technology. PMIOC offers high-quality diagnostic services, such as MRI/MRA, PET/CT, CT, nuclear medicine, ultrasound, digital X-rays, bone densitometry, and digital mammography, at its facilities. The investment is deemed Excluded Assets that are solely for the benefit of APC and its shareholders.

APC accounts for its investment in PMIOC under the equity method of accounting as APC has the ability to exercise significant influence, but not control over PMIOC’s operations. For the three months ended March 31, 2023 and 2022, APC recognized income from this investment of approximately $8,000 and $6,700, respectively, in the accompanying consolidated statements of income. The accompanying consolidated balance sheets had investment balances of $1.9 million and $1.9 million at March 31, 2023 and December 31, 2022, respectively.

531 W. College LLC

APC has a 50% ownership in 531 W. College LLC and accounts for its investment in 531 W. College, LLC under the equity method of accounting as APC has the ability to exercise significant influence, but not control over the operations of this joint venture. 531 W. College, LLC owns a former hospital campus in Los Angeles that is now leased to tenants. The investment is deemed Excluded Assets that are solely for the benefit of APC and its shareholders.

For the three months ended March 31, 2023 and 2022, APC recognized a loss from this investment of $90,000 and $0.2 million, respectively, in the accompanying consolidated statements of income. The accompanying consolidated balance sheets include the related investment balances of $17.2 million and $17.3 million at March 31, 2023 and December 31, 2022, respectively.

One MSO, LLC

APC has a 50% interest in One MSO. One MSO owns an office building in Monterey Park, California that is leased to tenants, including NMM. For the three months ended March 31, 2023 and 2022, APC recognized income of $0.1 million and $0.1 million, respectively, in the accompanying consolidated statements of income. The accompanying consolidated balance sheets include the related investment balances of $2.8 million and $2.7 million at March 31, 2023 and December 31, 2022, respectively.

CAIPA MSO, LLC

In August 2021, ApolloMed purchased a 30% interest in CAIPA MSO, LLC for $11.7 million. CAIPA MSO is a New York-based management services organization affiliated with Chinese-American IPA d/b/a Coalition of Asian-American IPA (“CAIPA”), a leading independent practice association serving the greater New York City area.

ApolloMed accounts for its investment in CAIPA MSO under the equity method of accounting as ApolloMed has the ability to exercise significant influence, but not control over CAIPA MSO’s operations. For the three months ended March 31, 2023 and 2022, ApolloMed recognized income from investment of $0.2 million and $0.1 million, respectively, in the accompanying consolidated statements of income. The accompanying consolidated balance sheets include the related investment balances of $13.0 million and $12.7 million as of March 31, 2023 and December 31, 2022, respectively.

James Song, M.D., A Professional Corporation

In January 2023, AP-AMH 2 purchased a 25% interest in James Song, M.D., a Professional Corporation (“Song PC”), a medical corporation located in Hacienda Heights, California.

AP-AMH 2 accounts for its investment in Song PC under the equity method of accounting as AP-AMH 2 has the ability to exercise significant influence, but not control over Song PC’s operations. For the three months ended March 31, 2023, AP-AMH 2 recognized income of $37,000 in the accompanying consolidated statements of income. The accompanying consolidated balance sheets include the related investment balances of $0.4 million as of March 31, 2023.

Investments in privately held entities that do not report net asset value

MediPortal, LLC

In May 2018, APC purchased 270,000 membership interests of MediPortal LLC, a New York limited liability company, for $0.4 million or $1.50 per membership interest, which represented an approximately 2.8% ownership interest. In connection with the initial purchase, APC received a five-year warrant to purchase an additional 270,000 membership interests. A five-year option to purchase an additional 380,000 membership interests and a five-year warrant to purchase 480,000 membership interests were contingent upon the portal completion date. However, APC did not exercise the option after completion of the portal. As APC does not have the ability to exercise significant influence, and lacks control over the investee, this investment is accounted for using a measurement alternative, which allows the investment to be measured at cost, adjusted for observable price changes and impairments, with changes recognized in net income.

AchievaMed

In July 2019, NMM and AchievaMed, Inc., a California corporation (“AchievaMed”), entered into an agreement in which NMM would purchase 50% of the aggregate shares of capital stock of AchievaMed over a period of time not to exceed five years. As a result of this transaction, NMM invested $0.5 million for a 10% interest. The related investment balance of $0.5 million is included in investments in privately held entities in the accompanying consolidated balance sheets as of March 31, 2023. As NMM does not have the ability to exercise significant influence, and lacks control, over the investee, this investment is accounted for using a measurement alternative, which allows the investment to be measured at cost, adjusted for observable price changes and impairments, with changes recognized in net income.