PACS Group, Inc. 10-K

Item 9A. CONTROLS AND PROCEDURES Inherent Limitations on Effectiveness of Controls In designing and evaluating our disclosure controls and procedures, management recognizes that there are inherent limitations in the effectiveness of any control system, including the potential for human error and the possible circumvention or overriding of controls and procedures. No matter how well designed and operated, an effective control system can provide only reasonable, not absolute, assurance that the control objectives of the system are adequately met. Accordingly, the management of the Company, including its Chief Executive Officer and Interim Chief Financial Officer, does not expect that the control system can prevent or detect all error or fraud. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Interim Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and 15(d)-15(e) under the Exchange Act, as of December 31, 2024. Based on that evaluation, our Chief Executive Officer and Interim Chief Financial Officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of December 31, 2024, due to the material weaknesses described below. Considering the material weaknesses described below, management performed additional analysis and other procedures to ensure that our combined/consolidated financial statements were prepared in accordance with U.S. GAAP. Accordingly, management believes that the combined/consolidated financial statements included in this Annual Report fairly present, in all material respects, our financial position, results of operations, and cash flows as of and for the periods presented, in accordance with U.S. GAAP. Material Weakness A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In connection with the preparation of our combined/consolidated financial statements for the year ended December 31, 2024, together with facts learned during the course of the Audit Committee’s independent investigation, our management identified control deficiencies that, individually or in the aggregate, constitute a material weakness in our internal control over financial reporting. The material weaknesses identified by management were: • We did not design and maintain an effective control environment commensurate with the financial reporting requirements of a public company. Specifically, we did not design and maintain sufficient processes to identify, assess, and communicate relevant risks to appropriate levels of the organization, including potential compliance issues received through the hotline process. • In addition, we did not design and maintain adequate controls within the revenue process to appropriately recognize revenue for new services in accordance with ASC 606. These material weaknesses led to errors in our previously issued interim condensed combined/consolidated financial statements for the three months ended March 31, 2024 and the three and six months ended June 30, 2024 (the “Prior Financial Statements”). As a result, we restated the Prior Financial Statements and included the restated financial statements in Part II, Item 8, of this Annual Report at Note 22 to our combined/consolidated financial statements for the year ended December 31, 2024. 143 Table of Contents Remediation Plan Our management is committed to maintaining a strong internal control environment. In response to the identified material weaknesses above, management with the oversight of the Audit Committee, is taking comprehensive actions to remediate the above material weaknesses. Specifically, we have made, and are continuing to advance, the following enhancements to our internal control over financial reporting: • We have retained an Interim Chief Compliance Officer (“CCO”) who has extensive healthcare regulatory experience and experience advising public companies, and who reports directly to our CEO accompanied by regular reporting and access to the Audit Committee. We we are in the process of hiring an experienced candidate, with both public company and post-acute healthcare experience, to serve as the permanent CCO. • We also are in the process of recruiting additional compliance, legal and internal audit personnel to enhance our risk assessment capabilities. • We have formed a Compliance Committee of senior management, chaired by the Interim CCO, with a detailed charter and oversight from the Audit Committee and Board of Directors. • We have developed and launched an enhanced compliance training program throughout the organization, and have upgraded our compliance hotline and process for investigating complaints, including elevating matters that may have a financial impact to the Chief Financial Officer, Chief Accounting Officer, and Board of Directors. • We are in the process of enhancing the controls related to revenue recognition, in which the Company’s compliance team will oversee a thorough review and approval process for new billing codes prior to billing. Once approved for use by the compliance team, these services will be reviewed in accordance with ASC 606, by the accounting function, prior to revenue recognition. • We enhanced our Disclosure Committee process by adding sub-certifications and key personnel to specifically address the evaluation and communication of compliance and other business activities as they inform financial reporting. In addition, we are including a broader group of internal stakeholders to certain other meetings to ensure timely information is being shared which impacts financial reporting. The material weaknesses will not be remediated until the necessary internal controls have been designed, implemented, tested and determined to be operating effectively. In addition, we may need to take additional measures to address the material weaknesses or modify the planned remediation steps, and we cannot be certain that the measures we have taken, and expect to take, to improve our internal controls will be sufficient to address the issues identified, to ensure that our internal controls are effective or to ensure that the identified material weaknesses will not result in a material misstatement of our combined/consolidated financial statements. Moreover, we cannot provide assurance that we will not identify additional material weaknesses in our internal control over financial reporting in the future. Until we remediate the material weaknesses, our ability to record, process and report financial information accurately, could be adversely affected. Management’s Annual Report on Internal Control Over Financial Reporting This Annual Report does not include a report of management’s assessment regarding our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) or an attestation report of our independent registered accounting firm due to a transition period established by rules of the SEC for newly public companies. Changes in Internal Control Over Financial Reporting Other than the ongoing remediation efforts described above, there have been no changes in our internal control over financial reporting during the period ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. OTHER INFORMATION During the three months ended December 31, 2024, none of our directors or officers (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended) adopted , modified or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement”, as each term is defined in Item 408(a) of Regulation S-K. Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 144 Table of Contents PART III Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Information about our Executive Officers. The following table presents information concerning our executive officers as of the date hereof. Name Age Position(s) Jason Murray 46 Director, Chairman and Chief Executive Officer Mark Hancock 50 Director, Executive Vice Chairman and Interim Chief Financial Officer Joshua Jergensen 41 President and Chief Operating Officer John Mitchell 50 Chief Legal Officer and Secretary Michelle Lewis 49 Chief Accounting Officer The following are brief biographies describing the backgrounds of our executive officers. Jason Murray has served as our Chief Executive Officer and a member of our board of directors since January 2013 and has served as Chairman since January 2024. Mr. Murray co‑founded our company and has worked in the post‑acute sector for more than 20 years. Prior to our founding, Mr. Murray was an Operations Officer for Intermountain Healthcare, Inc. a non‑profit healthcare system, from June 2011 to January 2013 where he was the interim Chief Executive Officer of Park City Medical Center from June 2012 to October 2012. From February 2009 to June 2011, Mr. Murray served as a nursing home administrator with Plum Healthcare Group, a skilled nursing facility operator. Mr. Murray received a B.A. in Healthcare Administration and a Master of Healthcare Administration from Weber State University. We believe Mr. Murray is qualified to serve on our board of directors because of his business acumen, executive leadership and extensive knowledge of our business. Mark Hancock has served as our Interim Chief Financial Officer since September 2025, Executive Vice Chairman since January 2024 and a member of our board of directors since January 2013 and previously served as our Chief Financial Officer and Secretary from January 2013 to January 2024. Mr. Hancock is also a co‑founder of our company. Prior to our founding, Mr. Hancock was Vice President of Finance and Treasurer of Farm Credit Mid‑America, a financial services provider, from 2010 to 2013 and served as a nursing home administrator at a facility affiliated with Plum Healthcare Group, a skilled nursing facility operator, from 2009 to 2010. From 2007 to 2009, Mr. Hancock was the Director of Corporate Finance for Steel Technologies Inc., a publicly traded steel processor, and served as a Finance Manager for Ford Motor Company, a publicly traded multinational automobile manufacturer, from 2000 to 2007. Mr. Hancock received a B.S. in Civil Engineering and a Master of Business Administration with a focus in Finance from Brigham Young University. We believe Mr. Hancock is qualified to serve on our board of directors because of his extensive leadership experience, financial expertise and strong understanding of our business. Joshua Jergensen has served as our President and Chief Operating Officer since January 2023. Prior to that, Mr. Jergensen served as our Executive Vice President of Operations from July 2014 to January 2023. From October 2009 to July 2014, Mr. Jergensen was a nursing home administrator at Balboa Nursing and Rehabilitation Center, one of our affiliated skilled nursing facilities. Mr. Jergensen received a B.S. in Business Management with an emphasis in Finance from Brigham Young University and a Master of Healthcare Administration from the University of Southern California. John Mitchell has served as our Chief Legal Officer since January 2023. Prior to that, Mr. Mitchell served as our Executive Vice President and General Counsel since joining our company in January 2017. From April 2016 to November 2016, Mr. Mitchell served as Vice President, Legal at HCP, a publicly traded REIT. Prior to that, Mr. Mitchell was Senior Vice President of Legal Affairs and Chief Compliance Officer of Skilled Healthcare Group, Inc., a publicly traded provider of post‑acute healthcare services, from January 2011 to May 2015. Mr. Mitchell received a B.A. in History and a J.D. from Brigham Young University. Michelle Lewis has served as our Chief Accounting Officer since January 2023. Prior to that, Ms. Lewis served in various roles of increasing responsibility, including as our Controller, since joining our company in July 2018. Prior to that, Ms. Lewis owned and operated Michelle Lewis Accounting Services, PLLC, a certified public accounting firm, and also 145 Table of Contents provided controller functions at a privately held healthcare organization, from January 2008 to May 2015. Ms. Lewis received a B.S. in Business Administration from the California State University, East Bay. Information about our Directors The following table presents information concerning our board of directors as of the date hereof. The biographies of Jason Murray and Mark Hancock are set forth under the section above “—Information about our Executve Officers.” Name Age Position(s) Evelyn Dilsaver 69 Director Taylor Leavitt 48 Director Jacqueline Millard 64 Director The following are brief biographies describing the backgrounds of our directors. Evelyn Dilsaver has served as a member of our board of directors since May 2024. Ms. Dilsaver has served on the board of directors of Tempur Sealy International, Inc., since 2014, QuidelOrtho Corporation, since 2022, and HealthEquity, Inc. since 2014. In the past five years, Ms. Dilsaver has also served as a director of Aéropostale Inc., HighMark Funds, Russell Exchange Traded Funds, Longs Drug Stores Corp. and Tamalpais Bancorp. She is also a member of the board of directors of a privately held corporation and real estate investment trust. Ms. Dilsaver was formerly a member of The Charles Schwab Corporation from 1991 until her retirement in 2007. During her tenure at The Charles Schwab Corporation, Ms. Dilsaver held various senior management positions within the organization, including Executive Vice President (The Charles Schwab Corporation) and President and Chief Executive Officer (Charles Schwab Investment Management). Prior to becoming President and Chief Executive Officer of Charles Schwab Investment Management, a position she held from 2003 to 2007, Ms. Dilsaver held the position of Senior Vice President, Asset Management Products and Services. Ms. Dilsaver holds a B.S. in Accounting from California State University, East Bay, and is a Certified Public Accountant. We believe that Ms. Dilsaver’s extensive financial industry experience and public company board experience qualifies her to serve as a member of our board of directors. Taylor Leavitt has served as a member of our board of directors since July 2023. Mr. Leavitt owns and has served as the Chief Executive Officer and Managing Partner of Leavitt Equity Partners, a healthcare‑focused private equity firm, since August 2014. Mr. Leavitt currently serves on the board of directors of several private entities that provide healthcare services. Previously, Mr. Leavitt was a co‑founder and Partner of Leavitt Partners, a healthcare strategy consulting firm, from June 2009 to December 2020. Mr. Leavitt received a B.S. in Finance and Economics from Utah State University and a Master of Business Administration from the UCLA Anderson School of Management. We believe Mr. Leavitt is qualified to serve on our board of directors because of his strong business acumen and extensive experience in finance and investing. Jacqueline Millard has served as a member of our board of directors since July 2023. Since January 2021, Ms. Millard has owned and operated a private investment advisory firm. Previously, Ms. Millard was the Vice President and Chief Investment Officer of Intermountain Healthcare, Inc., a non‑profit healthcare system, from June 1993 to January 2021. She also has over 20 years of experience serving on other non-profit company boards, as an advisory board member to private equity firms, and serving as an investment committee member for family offices. Ms. Millard received a B.S. in Finance from Weber State University and a Master of Business Administration from Westminster College. We believe Ms. Millard is qualified to serve on our board of directors because of her extensive financial and leadership experience. Family Relationships There are no family relationships among any of our directors or executive officers. Governance Documents We believe that good corporate governance is important to ensure that we are managed for the long‑term benefit of our stockholders. Our nominating and corporate governance committee periodically reviews and reassesses our Corporate Governance Guidelines, other governance documents and overall governance structure. Complete copies of our current committee charters, our Corporate Governance Guidelines and our Code of Business Conduct and Ethics are available on our Investor Relations website, https://ir.pacs.com/ , under the “Governance” section, or by writing to our Secretary at our 146 Table of Contents offices at 262 N. University Avenue, Farmington, Utah 84025. The information contained on our website is not incorporated by reference into this Annual Report on Form 10‑K. Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires our directors, executive officers, our principal accounting officer and persons who beneficially own more than 10% of our common stock to file with the SEC reports of their ownership and changes in their ownership of our common stock. To our knowledge, based solely on review of the copies of such reports and amendments to such reports with respect to the year ended December 31, 2024 filed with the SEC and on written representations by our directors and executive officers, all required Section 16 reports under the Exchange Act for our directors, executive officers, principal accounting officer and beneficial owners of greater than 10% of our common stock were filed on a timely basis during the year ended December 31, 2024 other than one Form 4 reporting one transaction for Jacqueline Millard. Board Composition Our Board of Directors currently consists of five members: Evelyn Dilsaver, Mark Hancock, Taylor Leavitt, Jacqueline Millard, and Jason Murray. As set forth in our Amended and Restated Charter, the Board is currently divided into three classes with staggered, three‑year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Our Amended and Restated Charter and Amended and Restated Bylaws provide that the authorized number of directors may be changed only by resolution of the Board ( provided that such number shall not be less than the aggregate number of directors that the parties to the Stockholders Agreement are entitled to designate from time to time). Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one third of the directors. The division of our Board into three classes with staggered three‑year terms may delay or prevent a change of our management or a change in control of our Company. Audit Committee Our Audit Committee consists of Evelyn Dilsaver, Taylor Leavitt, and Jacqueline Millard, with Ms. Millard serving as chair. Our board of directors has affirmatively determined that Ms. Millard, Mr. Leavitt and Ms. Dilsaver each meet the definition of “independent director” for purposes of serving on the Audit Committee under Rule 10A‑3 and the New York Stock Exchange rules. Each member of our Audit Committee meets the financial literacy requirements of the New York Stock Exchange listing standards. In addition, our board of directors has determined that Ms. Millard will qualify as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S‑K. Our Audit Committee is responsible for, among other things: • appointing, compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm; • discussing with our independent registered public accounting firm their independence from management; • reviewing with our independent registered public accounting firm the scope and results of their audit; • approving all audit and permissible non‑audit services to be performed by our independent registered public accounting firm; • overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC; • reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls, and compliance with legal and regulatory requirements; • reviewing our policies on risk assessment and risk strategy and management, including risk policies and risk mitigation strategies by management; • reviewing related party transactions; and 147 Table of Contents • establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls, or auditing matters. Compensation Committee Our Compensation Committee consists of Evelyn Dilsaver, Taylor Leavitt, and Jacqueline Millard, with Mr. Leavitt serving as chair. Our board has determined that Mr. Leavitt, Ms. Millard and Ms. Dilsaver are “non‑employee directors” as defined in Section 16b‑3 of the Exchange Act. The composition of our compensation committee meets the New York Stock Exchange requirements for independence under the current listing standards and SEC rules and regulations. Our Compensation Committee is responsible for, among other things: • reviewing and approving, or recommending that our board of directors approve, the compensation of our Chief Executive Officer, Executive Vice Chairman and other executive officers; • appointing and overseeing any compensation consultants; • reviewing and approving or making recommendations to our board of directors regarding our incentive compensation and equity‑based plans; • reviewing and making recommendations to our board of directors with respect to director compensation; • reviewing and discussing annually with management our “Compensation Discussion and Analysis” disclosure if and to the extent then required by SEC rules; and • preparing the compensation committee report if and to the extent then required by SEC rules. Nominating and Corporate Governance Committee Our Nominating and Corporate Governance Committee consists of Evelyn Dilsaver, Taylor Leavitt, and Jacqueline Millard, with Ms. Dilsaver serving as chair. The composition of our nominating and corporate governance committee meets the New York Stock Exchange requirements for independence under the current listing standards and SEC rules and regulations. Our Nominating and Corporate Governance Committee is responsible for, among other things: • identifying individuals qualified to become members of our board of directors, consistent with criteria approved by our board of directors; • reviewing and making recommendations to our board with respect to management succession planning; • evaluating the overall effectiveness of our board of directors and its committees; and • reviewing developments in corporate governance compliance and developing and recommending to our board of directors a set of corporate governance guidelines and principles. Code of Conduct and Business Ethics We have a written Code of Conduct and Business Ethics that applies to our directors, officers, and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We have posted a current copy of the Code of Conduct and Business Ethics on our website, https://ir.pacs.com/ , in the “Governance Documents” section under “Governance”. In addition, we intend to post on our website all disclosures that are required by law or the rules of the NYSE concerning any amendments to, or waivers from, any provision of the Code of Conduct and Business Ethics. 148 Table of Contents Board Leadership Structure and Role in Risk Oversight Our Amended and Restated Bylaws and Corporate Governance Guidelines provide our Board with flexibility to combine or separate the positions of Chairman of the Board and Chief Executive Officer in accordance with its determination that utilizing one or the other structure would be in the best interests of our Company. Currently, the roles are combined, with Jason Murray serving as Chairman of the Board and Chief Executive Officer. In addition, Mark Hancock serves as Vice Chairman and Chief Financial Officer. The primary responsibilities of our Chairman of the Board include helping to develop board meeting schedules and agendas; working with other directors to provide the senior leadership feedback on the quality, quantity and timeliness of the information provided to the Board; presiding over Board meetings; representing the Board in communications with stockholders; providing input on the structure and design of the Board; and performing other duties as the Board may determine from time to time. Our Board has determined that combining the roles of Chairman of the Board and Chief Executive Officer is best for our Company and its stockholders at this time because it promotes unified leadership by Mr. Murray given his deep knowledge of our business and strategy and ability to draw on that experience in order to provide the Board leadership to focus its discussions, review and oversight of the Company’s strategy, business and operating and financial performance and allows for a single, clear focus for management to execute such strategy, business and operating and financial performance goals. Our Board is comprised of individuals with extensive experience in finance, the payments industry and public company management. For these reasons and because of the strong leadership of Mr. Murray, our Board has concluded that our current leadership structure is appropriate at this time. However, our Board will continue to periodically review our leadership structure and may make such changes in the future as it deems appropriate. The Board recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure to provide robust oversight of management. The Board believes that, given the dynamic and competitive environment in which we operate, the optimal board leadership structure may vary as circumstances warrant. The Board periodically reviews its leadership structure to determine whether it continues to best serve the Company and its stockholders. From time to time, the Company proactively engages with stockholders throughout the year to learn their perspectives on significant issues, and intends to continue to do so, including with respect to gathering stockholder perspectives on the Board’s leadership structure. Our Corporate Governance Guidelines provide that whenever the Chairman of the Board is also a member of management or is a director that does not otherwise qualify as an independent director, the independent directors may in their discretion elect a lead independent director whose responsibilities include, but are not limited to, presiding over all meetings of the Board at which the Chairman of the Board is not present, including any executive sessions of the independent directors; approving Board meeting schedules and agendas; and acting as the liaison between the independent directors and the Chairman of the Board, as appropriate. Mr. Leavitt is our lead independent director. Risk assessment and oversight are an integral part of our governance and management processes. Our Board of Directors encourages management to promote a culture that incorporates risk management into our corporate strategy and day‑to‑day business operations. Management discusses strategic and operational risks at regular management meetings and conducts specific strategic planning and review sessions during the year that include a focused discussion and analysis of the risks facing us. Throughout the year, senior management reviews these risks with the Board of Directors at regular Board meetings as part of management presentations that focus on particular business functions, operations or strategies, and presents the steps taken by management to mitigate or eliminate such risks. Our Board of Directors is responsible for overseeing our risk management process. Our Board of Directors focuses on our general risk management strategy and the most significant risks facing us, and oversees the implementation of risk mitigation strategies by management. Our Audit Committee is responsible for discussing the Company’s policies with respect to risk assessment and risk management and overseeing the management of the Company’s financial risks and information technology risks, including cybersecurity and data privacy risks. The Committee is also responsible for discussing with management the steps management has taken to monitor and control these risks. Our Nominating and Corporate Governance oversees risks associated with environmental and social matters. Our Compensation Committee is responsible for overseeing the management of risks relating to the Company’s executive compensation plans and arrangements. Each of our Committees typically reports to the full Board at each quarterly Board meeting and also as appropriate on its risk oversight activities and on any matter that rises to the level of a material or enterprise level of risk. The Board does not believe that its role in the oversight of our risks affects the Board’s leadership structure. 149 Table of Contents Insider Trading Policy and Procedures We have adopted an insider trading policy and procedures that govern the purchase, sale and/or other disposition of the Company’s securities by our directors, officers, employees and other covered persons that we believe are reasonably designed to promote compliance with insider trading laws, rules and regulations, and the listing standards of the New York Stock Exchange. In addition, with regard to any trading by the Company in its own securities, it is the Company’s policy to comply with the federal securities laws and the applicable exchange listing requirements. A copy of our policy is filed with this Annual Report on Form 10-K as Exhibit 19.1. Item 11. EXECUTIVE COMPENSATION COMPENSATION DISCUSSION AND ANALYSIS This section provides an overview and analysis of the compensation awarded to or earned by our “named executive officers,” including the elements of our compensation program for our named executive officers, material compensation decisions made under that program for fiscal 2024 and the material factors considered in making those decisions. Although the SEC rules only require compensation disclosure for our “named executive officers” (which would include each person listed below except for Mark Hancock), we believe that it is important for our shareholders to understand the compensation arrangements for each of our co-founders, including Mr. Hancock. Unless otherwise noted, as used in this Annual Report on Form 10-K, the term “named executive officer” will refer to the following individuals: • Jason Murray, Director, Co‑Founder, Chief Executive Officer and Chairman; • Mark Hancock, Director, Co‑Founder, Executive Vice Chairman; • Derick Apt, Chief Financial Officer; • Josh Jergensen, President and Chief Operating Officer; • John Mitchell, Chief Legal Officer and Secretary; and • Peter (P.J.) Sanford, President of Providence Administrative Consulting Services, Inc. The positions list above reflect the executives’ positions in 2024. Effective January 1, 2024, Mark Hancock resigned as our Chief Financial Officer and Secretary and was appointed as our Executive Vice Chairman. In connection with Mr. Hancock’s resignation as Chief Financial Officer, Derick Apt, previously our EVP, Chief Investment Officer and Treasurer, was appointed as our Chief Financial Officer. P.J. Sanford separated from the Company and stepped down as our President of Providence Administrative Consulting Services, Inc. and Mr. Apt separated from the Company and stepped down as our Chief Financial Officer, in August 2025 and September 2025, respectively. Mark Hancock was appointed to serve as our Interim Chief Financial Officer in September 2025. 2024 Compensation Key Developments Key compensation decisions for 2024 included the following: • Base Salaries . In connection with the completion of our IPO in April 2024, the 2024 base salaries for our named executive officers were adjusted to better align the executive’s base salary with similar positions in our peer group. • Management Bonus Program . In 2024, after our IPO, we adopted a management bonus program (the “2024 Management Bonus Program”) which established a bonus pool based on a percentage of the Company’s Adjusted EBITDA for the 2024 fiscal year, with each named executive officer’s target payout based on a percentage of the bonus pool. Bonuses were further adjusted based on the achievement of guidance and quality metrics. For additional information about these bonuses, see “—Elements of Compensation—2024 Bonuses” below. • Equity-Based Long-Term Incentives . Prior to our IPO, we did not grant equity awards. In 2024, we transitioned to granting equity awards to our executive officers, including our named executive officers, which we believe aligns with market practice, aligns the interest of executives with those of stockholders and drives retention of our 150 Table of Contents executive officers through long-term vesting. As part of this transition, in April 2024, we granted restricted stock unit (RSU) awards to each of our named executive officers, which vest over a five-year period, subject to continued service through the applicable vesting date. For additional information about these awards, see “—Elements of Compensation—Equity Compensation” below. • Severance Plan . We also did not maintain any severance arrangements prior to our IPO. In 2024, we adopted a market standard severance plan that provides our executive officers with severance payments and benefits in connection with a qualifying involuntary termination of employment. These severance arrangements are designed to retain certain of our executives in these key positions as we compete for talented executives in the marketplace where such protections are commonly offered. For additional information about the severance plan, see the section titled “Potential Payments Upon Termination or Change in Control” below. Compensation Governance and Best Practices We are committed to having strong governance standards with respect to our compensation programs, procedures and practices. Our key compensation practices include the following: What We Do What We Do Not Do ✓ Emphasize performance-based, at risk compensation. X Do not provide significant perquisites. ✓ Emphasize the use of equity compensation to promote executive retention and reward long-term value creation. X Do not provide tax gross-ups in connection with severance and/or change in control payments. ✓ Weight the overall pay mix towards incentive compensation for senior executives. X Do not have defined benefit pension plans or supplemental executive retirement plans. ✓ Maintain a clawback policy for recovery of erroneously awarded incentive compensation from executive officers. X Do not allow hedging or pledging of stock. X Do not pay dividends on unvested shares. Executive Compensation Philosophy and Objectives We believe that for us to be successful we must hire and retain people who can continue to develop our strategy and innovate our services. To achieve these objectives, our executive compensation program has been designed to motivate, reward, attract and retain high caliber management and to align compensation with our short‑ and long‑term business objectives, business strategy and financial performance. Our compensation programs for our named executive officers are built to support the following objectives: • attract the top talent in our leadership positions and motivate our executives to deliver the highest level of individual and team impact and results; and • reward high levels of performance with commensurate levels of compensation. Determination of Compensation Prior to the completion of our IPO in April 2024, our board of directors was responsible for overseeing all aspects of our executive compensation programs, including executive salaries, performance-based incentives and any executive perquisites for our named executive officers. Our board of directors had the authority to engage its own advisors to assist in carrying out its responsibilities. For fiscal 2024, in preparation for our IPO, management engaged Pearl Meyer, an outside compensation advisor, for purposes of setting executive or director compensation. With respect to the portion of the 2024 151 Table of Contents fiscal year prior to the completion of our IPO in April 2024, Messrs. Murray and Hancock were the sole members of our board of directors at the time our 2024 compensation program was established. No other executive officer participated directly in the final deliberations or determinations regarding his own compensation package. Role of Compensation Committee Following the completion of our IPO, our compensation committee administers the executive compensation program for our executive officers. The compensation committee may delegate its authority under its charter to one or more subcommittees as it deems appropriate from time to time. The compensation committee may also delegate to an officer the authority to grant equity awards to certain employees, as further described in its charter and subject to the terms of our equity plans. In setting executive compensation, the compensation committee will consider a number of factors, including the recommendations of our Chief Executive Officer and Executive Vice Chairman (other than with respect to the Chief Executive Officer or Executive Vice Chairman’s own compensation) and our human resources team, current and past total compensation, competitive market data and analysis provided by the compensation committee’s independent compensation consultant, equity dilution and burn rate, retention needs, Company performance and each executive’s impact on performance, relative scope of responsibility, individual performance, potential and demonstrated leadership, and internal equity pay considerations. The recommendations of our Chief Executive Officer and Executive Vice Chairman are based on each executive’s evaluation of each other executive officer’s individual performance and contributions, of which our Chief Executive Officer and Executive Vice Chairman have direct knowledge. Role of Compensation Consultant In September 2023, in connection with our IPO, our Chief Executive Officer and Executive Vice Chairman, who were the only members of our board of directors at such time, engaged Pearl Meyer on behalf of Company management to provide executive compensation advisory services, help evaluate our compensation philosophy and objectives, and provide guidance in administering our executive compensation program and selecting our compensation peer group composition. Pearl Meyer did not provide any other services to the Company in 2024 for which the amount exceeds $120,000. Our board of directors reviewed benchmarking information provided by Pearl Meyer that was representative of a group of similarly situated peer companies. Recognizing that we have few direct competitors, we aimed to select peers that meet some or all of the following criteria: • Similar in size, primarily revenue and Adjusted EBITDA • Similar headcount and number of facilities • Operating in healthcare facilities and healthcare services industries With these criteria in mind, we decided to refer to the following 11 companies to review our executive compensation program designs and pay levels for 2024: Acadia Healthcare Company, Inc. Brookdale Senior Living LHC Group Addus HomeCare Corporation Chemed National HealthCare Amedisys Encompass Health Oak Street Health ATI Physical Therapy Ensign Group In making compensation decisions for the named executive officers, the board of directors reviewed the analysis of data derived from members of our peer group and also utilized survey data provided by Pearl Meyer. For 2024, the board of directors used these analyses to help ensure that our executive compensation program is competitive, by considering market data and using comparable positions at companies with which we compete for talent as a reference point for individual compensation decisions. While our board of directors did not establish compensation levels solely based on a review of competitive data or benchmark to any particular level, it believed such data is a useful tool in its deliberations as our compensation policies and practices must be competitive in the marketplace for us to be able to attract, motivate and retain qualified executive officers. 152 Table of Contents Elements of Our Executive Compensation Program The primary elements of our named executive officers’ compensation and the main objectives of each are: • Base Salary : Base salary attracts and retains talented executives, recognizes individual roles and responsibilities and provides stable income. • Performance‑Based Bonuses : Performance‑based bonuses promote short‑term performance objectives and reward executives for their contributions toward achieving those objectives. • Equity-Based Long-Term Incentive Compensation : Equity compensation, provided in the form of RSUs, aligns executives’ interests with our stockholders’ interests, emphasizes long-term financial performance and helps retain executive talent. • Other Benefits and Perquisites : In addition, our named executive officers are eligible to participate in our health and welfare programs and our retirement programs. We also provide certain perquisites which aid in attracting and retaining executive talent. Each of these elements of compensation are described further below. Base Salaries The base salary of each named executive officer is an important part of the officer’s total compensation package, and is intended to reflect the officer’s respective position, duties and responsibilities. Base salaries provide our named executive officers with a reasonable degree of financial certainty and stability. Prior to the closing of our IPO in April 2024, the base salaries of our named executive officers were $5,000,000 for each of Messrs. Murray and Hancock, $400,000 for Mr. Apt and $200,000 for each of Messrs. Jergensen, Mitchell, and Sanford. Effective as of April 11, 2024, the base salaries of Messrs. Murray, Hancock and Jergensen were changed to $500,000 and the base salaries for Messrs. Mitchell and Sanford were increased to $400,000. The actual base salaries paid to all of our named executive officers with respect to fiscal 2024 are set forth in the “2024 Summary Compensation Table” below. 2024 Bonuses In addition to base salaries, our named executive officers are eligible to receive performance‑based cash bonuses, which are designed to provide appropriate incentives by aligning compensation with financial and operational achievements, and incentivizing our named executive officers and other bonus-eligible employees to drive operating performance that is aligned with stockholder value creation. Prior to our IPO in April 2024, Messrs. Apt, Jergensen, Mitchell and Sanford were each eligible to receive a performance‑based bonus equal to a percentage of the monthly net operating income of our operating subsidiaries in the following amounts: 2.0%, 3.0%, 1.25%, and 2.0% respectively. For the first fiscal quarter of 2024, which ended prior to the consummation of our IPO in April 2024, Messrs. Apt, Jergensen, Mitchell, and Sanford’s aggregate performance‑based bonuses earned based on the aggregate net operating income of our operating subsidiaries of $85,308,716 was $1,706,174, $2,559,262, $1,066,359 and $1,706,174, respectively. Messrs. Murray and Hancock were not eligible to receive performance-based bonuses prior to our IPO. After the completion of our IPO, our compensation committee adopted the 2024 Management Bonus Program, which superseded the prior bonus programs established by our board of directors. Each of our named executive officers was eligible to participate in the 2024 Management Bonus Program for the second, third and fourth quarters of fiscal 2024. 153 Table of Contents The 2024 Management Bonus Program established an aggregate bonus pool equal to 8% of Company’s Adjusted EBITDA for each quarter of the 2024 fiscal year commencing April 1, 2024. Each of our named executive officers were allocated the following percentages of the bonus pool: Named Executive Officer 2024 Management Bonus Program Bonus Pool Percentage Jason Murray 15% Mark Hancock 15% Derick Apt 13.5% Josh Jergensen 15% John Mitchell 8% PJ Sanford 13.5% Bonuses are paid quarterly and may be increased by an aggregate of 10% of the executive officer’s target bonus opportunity based on the achievement of certain financial guidance metrics related to annual revenue and Adjusted EBITDA, and may be further increased by an aggregate of 10% of the executive officer’s target bonus opportunity based on the achievement of certain quality metrics. In 2024, the Company’s Adjusted EBITDA for the second, third and fourth quarters of fiscal 2024 was $62,326,000, $49,082,000 and $93,979,000, respectively. In addition, pursuant to the 2024 Management Bonus Program, a positive adjustment of an aggregate of 10% was earned for the second, third and fourth quarters of fiscal 2024 based on the achievement of certain quality metrics. The financial guidance metrics were not achieved for the second, third and fourth quarters of fiscal 2024 and accordingly no further adjustment was made with respect to those quarters. As a result, Messrs. Murray, Hancock, Apt, Jergensen, Mitchell, and Sanford earned aggregate bonus amounts as shown in the table below. Named Executive Officer Bonus Amount Earned under 2024 Management Bonus Program Based on Adjusted EBITDA (Following Restatement) (1) Bonus Amount Earned under 2024 Management Bonus Program Based on +10% Financial Guidance Adjustment (Following Restatement) (1) Bonus Amount Earned under 2024 Management Bonus Program Based on +10% Quality Metric Adjustment (Following Restatement) (1) Total Bonus Amount Earned under 2024 Management Bonus Program (Following Restatement) (1) Jason Murray $2,464,644 $— $246,464 $2,711,108 Mark Hancock $2,464,644 $— $246,464 $2,711,108 Derick Apt $2,218,180 $— $221,818 $2,439,998 Josh Jergensen $2,464,644 $— $246,464 $2,711,108 John Mitchell $1,314,477 $— $131,447 $1,445,924 PJ Sanford $2,218,180 $— $221,818 $2,439,998 (1) Amounts in these columns reflect bonuses actually earned under our 2024 Management Bonus Program, after taking into account the Restatement. As mentioned elsewhere in this Annual Report on Form 10-K, the Company has recouped from each executive officer other than Messrs. Murray and Hancock the full amount of the erroneously awarded compensation paid to each of them under the 2024 Management Bonus Program. As of the date of this Annual Report on Form 10-K, the amount of erroneously award compensation that remains outstanding and unpaid by Messrs. Murray and Hancock is $613,510 each. The amounts reported in this column for Messrs. Murray and Hancock do not include this erroneously awarded compensation and therefore differ from the reported values in the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table, which includes the unrecouped erroneously awarded compensation in (accordance with SEC rules). The achieved Adjusted EBITDA set forth above with respect to the second quarter of fiscal 2024 reflects an adjustment based on the impact of the “Restatement”, and the bonus amounts earned by our named executive officers in the table above reflect the amount actually earned by each named executive officer under the 2024 Management Bonus Program after taking into account the Restatement. Adjusted EBITDA is a non-GAAP financial measure. For more information regarding the Company’s use of non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures, see “Non-GAAP Financial Measures” in the “Management’s Discussion and Analysis” Section of this Annual Report on Form 10-K. 154 Table of Contents Equity Compensation Prior to our IPO in 2024, we did not issue equity awards to our employees and executives, including our named executive officers. However, we view equity‑based compensation as a critical component of our balanced total compensation program going forward as a public company. Equity‑based compensation creates an ownership culture among our employees that provides an incentive to contribute to the continued growth and development of our business and aligns interest of our employees, including our named executive officers, with those of our stockholders. In April 2024, in connection with our IPO, our board of directors approved the grant of RSU awards pursuant to our 2024 Incentive Award Plan, or the 2024 Plan, to certain of our employees, including Messrs. Apt, Jergensen, Mitchell, and Sanford. The number of RSUs granted to each of Messrs. Apt, Jergensen, Mitchell, and Sanford was intended to equal approximately 0.875%, 2.00%, 0.750%, and 1.00%, respectively, of the number of shares of our common stock outstanding as of the closing of our IPO (disregarding the shares issuable under the 2024 Plan). The following table sets forth the number of RSUs granted to each named executive officer. Due to their significant equity ownership in our Company, Messrs. Murray and Hancock did not receive an RSU award. Named Executive Officer Number of RSUs Derick Apt 1,313,830 Josh Jergensen 3,003,039 John Mitchell 1,126,140 PJ Sanford 1,501,520 25% of the RSUs subject to each award vested on the grant date (April 11, 2024), and the remaining 75% of the RSUs subject to each award vests and will continue to vest in substantially equal annual installments on each of the first, second, third, fourth, and fifth anniversaries of April 15, 2024, which was the closing date of our IPO, subject to the executive’s continued service with us through the applicable vesting date. If the executive experiences a termination of service by us without cause, by the executive for good reason, or due to death or disability, a portion of the RSUs subject to these awards will vest in the amount that would have vested during the 12‑month period following the date of termination (had the executive remained in continued service with us during such period and assuming that the shares vest in equal monthly installments, rather than annual installments, over the vesting period). If such termination occurs on or within 24 months after a change in control, then all of the executive’s remaining unvested RSUs subject to these awards will vest. This accelerated vesting treatment will be subject to the executive’s execution and, as applicable, non‑revocation of a general release of claims in our favor, and continued compliance with any applicable restrictive covenants. Deferred Compensation Plan We currently maintain the Providence Administrative Consulting Services, Inc. Nonqualified Deferred Compensation Plan (Deferred Compensation Plan) for certain of our employees, including our named executive officers. Participating employees may defer up to 100% of their bonus compensation per plan year. The Deferred Compensation Plan provides our employees an opportunity to elect to defer a portion of their bonus compensation and to provide a deferred compensation vehicle to which we may credit discretionary contributions and matching contributions pursuant to the terms of the plan. Discretionary and matching contributions, if any, are 100% vested after participants complete three years and five years of service as our full‑time employee, respectively. We have not historically made any matching or discretionary contributions under the Deferred Compensation Plan. Participants have an opportunity to earn returns (positive or negative) based on investment options as determined by us. Typically, participants elect a level of risk tolerance for their deferred compensation at the beginning of each fiscal year and the plan administrator invests and manages the asset mix accordingly. In the event of a “separation from service” (as defined in the Deferred Compensation Plan and determined pursuant to Section 409A of the Code), a participant will be paid his or her account balance in two annual installments. In 2024, Messrs. Apt, Jergensen, Mitchell, and Sanford were the only named executive officers to participate in our Deferred Compensation Plan and each elected to defer up to $240,000, $180,000, $180,000, and $60,000, respectively, of their aggregate 2024 bonus compensation. The “Executive Contributions in Last FY” column of the Non‑Qualified 155 Table of Contents Deferred Compensation for 2024 table below shows the actual amounts deferred pursuant to the Deferred Compensation Plan for Messrs. Apt, Jergensen, Mitchell, and Sanford with respect to 2024 compensation. Executive Severance Plan In connection with our IPO in 2024, we adopted an Executive Severance Plan pursuant to which our named executive officers are eligible to receive severance payments upon a qualifying involuntary termination of employment, including in connection with a change in control of our company. These severance arrangements are designed to retain certain of our executives in these key positions as we compete for talented executives in the marketplace where such protections are commonly offered. For a detailed description of the severance provisions contained in our Executive Severance Plan, see the section titled “Potential Payments Upon Termination or Change in Control” below. Employee Benefits and Perquisites All of our full‑time employees are eligible to participate in our health and welfare plans, including medical, dental and vision benefits, medical and dependent care flexible spending accounts, short‑term and long‑term disability insurance, and life and accidental death and disability insurance. Our named executive officers are eligible to participate in health and welfare plans on the same basis as other similarly‑situated executive officers. Certain of our named executive officers participate in a 401(k) retirement savings plan. The Internal Revenue Code allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre‑tax basis through contributions to the 401(k) plan. In 2024, we matched a portion of the contributions to the 401(k) plan on behalf of eligible employees. The discretionary employer match for 2024 was 25% of the participant’s contribution to the plan up to a max of 4% of their eligible compensation. We believe that providing a vehicle for tax‑deferred retirement savings though our 401(k) plan adds to the overall desirability of our executive compensation package and further incentivizes our employees, including our named executive officers, in accordance with our compensation policies. In addition, as noted above, we maintain a non‑qualified deferred compensation plan for the benefit of certain officers and employees who qualify for participation in the plan, including our named executive officers. See the section titled “‑Compensation Discussion and Analysis‑Elements of Our Executive Compensation Program-Deferred Compensation Plan” for a description of the Deferred Compensation Plan. Clawback Policy We believe in maintaining best practices for our executive compensation program, and as part of that our board of directors adopted a Policy for Recovery of Erroneously Awarded Compensation (Clawback Policy) that is compliant with the listing rules of the national securities exchange or association on which our securities are listed, as required by the Dodd-Frank Act. Please see the section below titled “Recovery of Erroneously Awarded Compensation” for information regarding the application of our Clawback Policy to the annual bonuses paid under our 2024 Management Bonus Program (with respect to the second quarter of 2024) to our named executive officers. Accounting for Share‑Based Compensation We follow Financial Accounting Standard Board Accounting Standards Codification Topic 718, Compensation – Stock Compensation (ASC Topic 718), for our share-based compensation awards. ASC Topic 718 requires companies to measure the compensation expense for all share‑based awards made to employees and directors, including RSUs, based on the grant‑date fair value of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below, even though our named executive officers may never realize any value from their awards. Equity Award Timing Policies and Practices We do not grant equity awards in anticipation of the release of material nonpublic information and we do not time the release of material nonpublic information for the purpose of affecting the value of executive compensation. In the event material nonpublic information becomes known to the compensation committee before granting an equity award, the compensation committee will consider such information and use its business judgment to determine whether to delay the 156 Table of Contents grant of equity to avoid any appearance of impropriety. In 2024, we did not grant awards of stock options, stock appreciation rights, or similar option-like instruments to our named executive officers or our employees. 157 Table of Contents COMPENSATION COMMITTEE REPORT The compensation committee of the board of directors of PACS Group, Inc. has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the compensation committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K. Taylor Leavitt, Chairperson Evelyn Dilsaver, Committee Member Jacqueline Millard, Committee Member The foregoing Compensation Committee Report is not soliciting material, is not deemed filed with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. 158 Table of Contents EXECUTIVE COMPENSATION TABLES 2024 Summary Compensation Table The following table contains information about the compensation earned by each of our named executive officers for fiscal years ended December 31, 2024 and December 31, 2023. Name and Principal Position Year Salary ($) Stock Awards ($) (1) Non‑Equity Incentive Plan Compensation ($) (2) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (3) All Other Compensation ($) (4) Total ($) Jason Murray 2024 1,673,077 — 3,324,618 — 41,390 5,039,085 Co‑Founder, Chief Executive Officer and Chairman 2023 3,000,000 — — — 2,056,976 5,056,976 Mark Hancock 2024 1,673,077 — 3,324,618 — 41,390 5,039,085 Co‑Founder, Executive Vice Chairman, and interim Chief Financial Officer 2023 3,000,000 — — — 2,056,976 5,056,976 Derick Apt 2024 396,155 27,590,430 4,146,172 52,646 47,775 32,233,178 Former Chief Financial Officer 2023 200,000 — 5,625,580 23,314 47,722 5,896,616 Josh Jergensen 2024 419,231 63,063,819 5,270,370 97,600 35,008 68,886,028 President and Chief Operating Officer 2023 200,000 — 8,063,813 61,808 31,208 8,356,829 John Mitchell 2024 352,885 23,648,940 2,512,283 57,568 53,362 26,625,038 Chief Legal Officer and Secretary PJ Sanford 2024 346,154 31,531,920 4,146,172 33,831 36,027 36,094,104 Former President of Providence Administrative Consulting Services, Inc. and former Chief Administrative Officer 2023 200,000 — 5,378,513 18,917 32,299 5,629,729 (1) Amounts reflect the full grant date fair value of RSUs granted during 2024 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named executive officer. We provide information regarding the assumptions used to calculate the value of all stock awards made to our named executive officers in 2024 in Note 21 to the consolidated financial statements included in this Annual Report on Form 10-K. (2) Amounts reflect cumulative payouts pursuant to our performance-based bonus programs maintained in 2024, including amounts that were deferred pursuant to our Deferred Compensation Plan, as described below. See the section titled “Elements of Our Executive Compensation Program—2024 Bonuses” above for additional information about our 2024 performance-based bonus programs. For Messrs. Apt, Jergensen, Mitchell, and Sanford, amounts represent aggregate bonus amounts earned in 2024 under our executive bonus program in effect prior to our initial public offing based on the monthly net income of our operating subsidiaries ($1,706,174 for Mr. Apt, $2,559,262 for Mr. Jergensen, $1,066,359 for Mr. Mitchell, and $1,706,174 for Mr. Sanford). Amounts also represent aggregate bonus amounts paid pursuant to the 2024 Management Bonus Program, which went into effect in connection with our IPO. As discussed in more detail below under the section titled “Recovery of Erroneously Awarded Compensation,” in connection with the Restatement, certain compensation paid to our executive officers, including each of our named executive officers, under the 2024 Management Bonus Program is subject to recoupment in accordance with our Clawback Policy. As of the date of this Annual Report on Form 10-K, the Company has recouped from each of Messrs. Apt, Jergensen, Mitchell, and Sanford an amount equal to the erroneously awarded compensation paid to each of them under the 2024 Management Bonus Program, which was: $552,159 for Mr. Apt, $613,510 for Mr. Jergensen, $327,205 for Mr. Mitchell and $552,159 for Mr. Sanford. Amounts in this column for 2024 for Messrs. Apt, Jergensen, Mitchell, and Sanford have been reduced by the amount of erroneously awarded compensation recovered by the Company pursuant to the Clawback Policy. For Messrs. Murray and Hancock, the Company will recoup from each an amount equal to the erroneously awarded compensation paid to them under the 2024 Management Bonus Program ($613,510 each). For Messrs. Murray and Hancock, amounts in this column for 2024 include the erroneously awarded compensation that was paid but has not yet been recovered by the Company as of the date of this Annual Report on Form 10-K. For additional information regarding the application of the Clawback Policy, please see the section below titled “Recovery of Erroneously Awarded Compensation.” (3) Represents the above‑market earnings on deferred compensation that is not tax‑qualified, which is calculated as the excess of the earnings credited on deferred amounts under our Deferred Compensation Plan that were deemed invested in the investment vehicles under such plan over the amount that would have been earned had the deferred amounts been credited with a return equal to 120% of the applicable federal rate in effect for 2024. For more information, see “Nonqualified Deferred Compensation for 2024” table below. (4) Amounts reported in this column represent our contributions towards our named executive officers’ medical insurance premiums ($15,604 for Messrs. Murray and Hancock, $29,780 for Mr. Apt and $32,789 for Messrs. Jergensen, Mitchell, and Sanford), life insurance premiums ($25,786 for Messrs. Murray and Hancock), life and disability insurance premiums ($14,544 for Mr. Apt, $2,219 for Mr. Jergensen, $20,573 for Mr. Mitchell, and $3,238 for Mr. Sanford) and for Mr. Apt $3,450 for our 401(k) match. 159 Table of Contents Grants of Plan-Based Awards in 2024 The following table provides information relating to grants of plan‑based awards made to our named executive officers during fiscal 2024. Name Board Approval Date Grant Date Estimated Future Payouts Under Non‑Equity Incentive Plan Awards (1) All Other Stock Awards: Number of Shares of Stock or Units (#) Grant Date Fair Value of Stock and Option Awards ($) (2) Threshold ($) Target ($) Maximum ($) Jason Murray — — — 1,787,760 2,145,312 — — Mark Hancock — — — 1,787,760 2,145,312 — — Derick Apt — — — 2,360,944 2,682,741 — — 03/31/2024 04/11/2024 — — — 1,313,830 (3) 27,590,430 Josh Jergensen — — — 2,915,700 3,273,252 — — 03/31/2024 04/11/2024 — — — 3,003,039 (3) 63,063,819 John Mitchell — — — 1,423,447 1,614,141 — — 03/31/2024 04/11/2024 — — — 1,126,140 (3) 23,648,940 PJ Sanford — — — 2,360,944 2,682,741 — — 03/31/2024 04/11/2024 — — — 1,501,520 (3) 31,531,920 (1) Amounts shown in these columns represent each named executive officer’s annual cash bonus opportunity under our 2024 performance‑based bonus programs. There are no threshold, target or maximum payouts under these bonus programs given the final payments in respect of such awards are based on a percentage of the monthly net income of our operating subsidiaries (with respect to our performance-based bonus program in place prior our IPO) and a percentage of a bonus pool that is based on Adjusted EBITDA (with respect to the 2024 Management Bonus Program). Because the target amounts of the annual cash bonus opportunity are not determinable, the amounts reported are representative “target” amounts based on the monthly net income of our operating subsidiaries and Adjusted EBITDA for 2023 in accordance with SEC rules, and the maximum amounts reported reflect the potential bonus opportunities taking into account the positive adjustments based on the achievement of certain financial guidance and quality metrics. For additional detail on these awards, please see the description of such awards under “Elements of Our Executive Officer Compensation program—2024 Bonuses” above. The amounts paid to our named executive officers under our bonus programs are reflected in the Summary Compensation Table above. (2) Amounts reflect the grant-date fair value in accordance with ASC Topic 718. We provide information regarding the assumptions used to calculate these values in Note 21 to the consolidated financial statements included in this Annual Report on Form 10-K. (3) Represents awards of RSUs that vested and will continued to vest as follows: (i) 25% of the RSUs subject to the award vested on the grant date, and (ii) 75% of the RSUs subject to the award vest in substantially equal annual installments on each of the first, second, third, fourth, and fifth anniversaries of April 15, 2024, which was the closing date of our IPO, subject to the executive’s continued service with us through the applicable vesting date. Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table Employment Arrangements with Our Executive Officers Apt Offer Letter On December 19, 2023, we entered into an employment offer letter with Mr. Apt in connection with his appointment as our Chief Financial Officer, effective January 1, 2024 (Apt Offer Letter). The Apt Offer Letter provided for an annual base salary of $400,000 and an annual cash bonus opportunity equal to 2% of our monthly net operating income. Our bonus programs in place during the first quarter of 2024 were terminated in connection with our IPO and replaced with the 2024 Management Bonus Program. We do not have any other existing employment arrangements with our executive officers. 160 Table of Contents Outstanding Equity Awards at Year‑End The following table provides information relating to the outstanding equity awards held by our named executive officers as of December 31, 2024. Stock awards were granted pursuant to our 2024 Plan. Stock Awards Name Number of Shares or Units of Stock that Have Not Vested (#) (1) Market Value of Shares or Units of Stock that Have Not Vested ($) (2) Jason Murray — — Mark Hancock — — Derick Apt 985,372 12,918,227 Josh Jergensen 2,252,279 29,527,378 John Mitchell 844,605 11,072,772 PJ Sanford 1,126,140 14,763,695 (1) Represents awards of RSUs granted on April 11, 2024 that vest as follows: 25% of the RSUs subject to each award vested on the grant date (April 11, 2024), and the remaining 75% of the RSUs subject to each award vests and will continue to vest in substantially equal annual installments on each of the first, second, third, fourth, and fifth anniversaries of April 15, 2024, which was the closing date of our IPO, subject to the executive’s continued service with us through the applicable vesting date. In addition to any accelerated vesting pursuant to the terms of our 2024 Plan, the RSUs are subject to accelerated vesting as described above under the section titled “Equity Compensation”. (2) The market value of the RSUs that have not vested is calculated by multiplying the number of unvested RSUs outstanding under the award by $13.11, which is the closing price per share of our common stock on December 31, 2024 (the last trading day of the year). Option Exercises and Stock Vested in 2024 The following table shows the number of shares of common stock subject to RSUs that vested during 2024. None of our named executive officers held options in 2024. Stock Awards Name Number of Shares Acquired on Vesting (#) (1) Value Realized on Vesting ($) (2) Jason Murray — — Mark Hancock — — Derick Apt 328,458 7,554,534 Josh Jergensen 750,760 17,267,480 John Mitchell 281,535 6,475,305 PJ Sanford 375,380 8,633,740 (1) Represents the gross number of shares acquired upon vesting of RSUs, without taking into account any shares withheld or sold to satisfy applicable tax obligations. (2) Amounts shown are calculated by multiplying the fair market value of our common stock on the applicable vesting date by the number of RSUs that vested on such date. Non‑Qualified Deferred Compensation for 2024 The following table sets forth information regarding our Deferred Compensation Plan that provides for the deferral of bonus compensation for certain of our employees, including our named executive officers, on a basis that is not tax‑qualified, as described further under “Compensation Discussion and Analysis‑ Elements of Our Executive Compensation Program-Deferred Compensation Plan” above. 161 Table of Contents Name Executive Contributions in Last FY ($) (1) Registrant Contributions in Last FY ($) Aggregate Earnings in Last FY ($) (2) Aggregate Withdrawals / Distributions ($) Aggregate Balance at Last FYE ($) Jason Murray — — — — — Mark Hancock — — — — — Derick Apt 240,000 — 74,945 — 586,434 Josh Jergensen 180,000 — 135,813 — 915,098 John Mitchell 180,000 — 80,968 — 587,384 PJ Sanford 60,000 — 53,470 — 440,754 (1) Represents amounts the named executive officer elected to defer in 2024, which are deferred from bonus compensation earned in 2024 and therefore reported in the appropriate column in the Summary Compensation Table. (2) Represents net amounts credited to the named executive officers’ accounts as a result of performance of the investment vehicle in which their accounts were deemed invested. These amounts include above‑market earnings, which are reported in the appropriate column in the Summary Compensation Table. Potential Payments Upon Termination or Change in Control Prior to our IPO, we maintained a long‑term incentive compensation program (LTIP) that was intended to provide cash payments to certain of our executives, including Messrs. Apt, Jergensen, and Sanford, in connection with a “qualifying sale” of our Company. A “qualifying sale” included a sale, whether through merger, consolidation, combination, the sale of all or substantially all of the Company’s assets, or otherwise, of the Company to a third party such that the then‑current shareholders of the Company, as measured immediately prior to the closing of the transaction, sold at least 50% of the Company. Any cash payments that could have become payable pursuant to the LTIP would have been based on the participant’s individual participation percentage multiplied by the total net cash proceeds that we received in the qualifying sale. We terminated the LTIP in April 2024 connection with our IPO. Executive Severance Plan In connection with our IPO, in April 2024, we adopted the Executive Severance Plan, which provides for the payment of certain cash severance and other benefits to participants, including each of our named executive officers, in the event of a qualifying termination of employment with us. Under the Executive Severance Plan, in the event of a termination of the executive’s employment by us without cause or by the executive for good reason, in either case, outside of the 24‑month period commencing on a change in control, the executive will be eligible to receive the following payments and benefits: • cash payments equal to 100% of the executive’s then‑current annual base salary, paid in substantially equal installments over the 12‑month period following the termination date; and • company‑paid COBRA premium payments for the executive and the executive’s eligible dependents for up to 12 months. In the event of a termination of the executive’s employment by us without cause or by the executive for good reason, in either case, within the 24‑month period commencing on a change in control, the executive will be eligible to receive the following payments and benefits: • cash payments equal to 200% of the executive’s then‑current annual base salary, paid in substantially equal installments over the 24‑month period following the termination date; and • company‑paid COBRA premium payments for the executive and the executive’s eligible dependents for up to 24 months. An executive’s right to receive the severance payments and benefits described above is subject to the execution and, as applicable, non‑revocation of a general release of claims in our favor, and continued compliance with any applicable restrictive covenants. In addition, in the event that any payment under the Executive Severance Plan, together with any other amounts paid to the executive by us, would subject such executive to an excise tax under Section 4999 of the Internal Revenue Code, such payments will be reduced to the extent that such reduction would produce a better net after‑tax result for the executive. 162 Table of Contents Equity Awards Under our 2024 Plan, all equity awards granted to our named executive officers under the plan will only accelerate and vest in full upon a change in control of the Company if the surviving entity does not assume or replace such outstanding awards with economically equivalent awards (as opposed to accelerating in full upon a “single-trigger” change in control). Additionally, as referenced above, the 2024 RSUs awarded to the named executive officers provide that if the executive experiences a termination of service by us without cause, by the executive for good reason, or due to death or disability, a portion of the RSUs subject to these awards will vest in the amount that would have vested during the 12‑month period following the date of termination (had the executive remained in continued service with us during such period and assuming that the shares vest in equal monthly installments, rather than annual installments, over the vesting period). If such termination occurs on or within 24 months after a change in control, then all of the executive’s remaining unvested RSUs subject to these awards will vest. This accelerated vesting treatment will be subject to the executive’s execution and, as applicable, non‑revocation of a general release of claims in our favor, and continued compliance with any applicable restrictive covenants. Derick Apt Separation Agreement Effective September 2, 2025, Mr. Apt separated from the Company and stepped down as our Chief Financial Officer. In connection with Mr. Apt’s separation, the Company and Mr. Apt entered into a separation agreement pursuant to which Mr. Apt signed a general release of all claims in favor of the Company and its affiliates, and reaffirmed his obligation to continued compliance with certain restrictive covenants, including non-solicitation, non-disparagement and confidential information covenants. In exchange for his timely execution and non-revocation of the general release, the Company agreed to accelerate the vesting of 82,116 restricted stock units; Mr. Apt forfeited the remainder of his restricted stock units that had not yet vested. The Company also agreed to waive Mr. Apt’s obligation to comply with a one-year post-termination non-competition covenant in favor of the Company. P.J. Sanford Separation Agreement and Consulting Agreement Effective August 15, 2025, Mr. Sanford separated as an employee and executive officer of the Company and stepped down as our President of Providence Administrative Consulting Services, Inc. In connection with Mr. Sanford’s separation, the Company and Mr. Sanford negotiated a separation agreement pursuant to which Mr. Sanford agreed to sign a general release of all claims in favor of the Company and reaffirmed his obligation to continued compliance with certain restrictive covenants. In exchange for the release, the Company agreed to subsidize 12 months of Mr. Sanford’s COBRA premiums and entered into a consulting agreement pursuant to which Mr. Sanford will remain available to provide consulting services to the Company for up to 12 months at a rate of $16,666 per month. Mr. Sanford’s outstanding equity awards will continue to vest pursuant to their terms over the term of the consulting agreement. Summary of Potential Payments Upon Termination or Change in Control The table below quantifies certain compensation and benefits that would have become payable to each of our named executive officers if his employment had terminated on December 31, 2024, as a result of each of the termination scenarios described below, including in the event of a change in control (CIC) of the Company on December 31, 2024. Except as described in the footnotes below, the value of the accelerated vesting of the RSU awards was computed using $13.11, which was the price of our common stock on December 31, 2024 (the last trading day of the year). As described above, Messrs. Apt and Sanford separated from the Company in 2025 and received the aforementioned Compensation payments and benefits. The amounts shown in the table below represent compensation and benefits that Messrs. Apt and Sanford would have become payable upon a termination on December 31, 2024, as a result of each of the termination scenarios described below, and does not represent the compensation and benefits actually received by the named executive officer upon his separation from the Company. 163 Table of Contents Named Executive Officer Triggering Event Cash Severance ($) (1) Accelerated Equity Awards ($) (2) Health Benefits ($) (3) Total ($) Jason Murray Termination without Cause or Resignation for Good Reason Apart from a CIC 500,000 — 15,604 515,604 Termination without Cause or Resignation for Good Reason in Connection with a CIC 1,000,000 — 31,209 1,031,209 Termination due to Death or Disability — — — — Mark Hancock Termination without Cause or Resignation for Good Reason Apart from a CIC 500,000 — 15,604 515,604 Termination without Cause or Resignation for Good Reason in Connection with a CIC 1,000,000 — 31,209 1,031,209 Termination due to Death or Disability — — — — Derick Apt Termination without Cause or Resignation for Good Reason Apart from a CIC 400,000 2,583,640 29,780 3,013,420 Termination without Cause or Resignation for Good Reason in Connection with a CIC 800,000 12,918,227 59,561 13,777,788 Termination due to Death or Disability — 2,583,640 — 2,583,640 Josh Jergensen Termination without Cause or Resignation for Good Reason Apart from a CIC 500,000 5,905,465 32,789 6,438,254 Termination without Cause or Resignation for Good Reason in Connection with a CIC 1,000,000 29,527,378 65,578 30,592,956 Termination due to Death or Disability — 5,905,465 — 5,905,465 John Mitchell Termination without Cause or Resignation for Good Reason Apart from a CIC 400,000 2,214,554 32,789 2,647,343 Termination without Cause or Resignation for Good Reason in Connection with a CIC 800,000 11,072,772 65,578 11,938,350 Termination due to Death or Disability — 2,214,554 — 2,214,554 PJ Sanford Termination without Cause or Resignation for Good Reason Apart from a CIC 400,000 2,952,739 32,789 3,385,528 Termination without Cause or Resignation for Good Reason in Connection with a CIC 800,000 14,763,695 65,578 15,629,273 Termination due to Death or Disability — 2,952,739 — 2,952,739 (1) Represents cash severance payable upon a termination without cause or a resignation for good reason (Involuntary Termination) pursuant to the Executive Severance Plan. In the event the Involuntary Termination occurs outside of the 24-month period commencing on a change in control (Change in Control Period), the executive will be entitled to receive 100% of his then-current annual base salary. In the event that the Involuntary Termination occurs within the Change in Control Period, the executive will be entitled to receive 200% of his then-current annual base salary. See the section titled “Employment Arrangements with Our Executive Officers—Executive Severance Plan” above for additional information about the Executive Severance Plan. (2) Represents the applicable number of shares of our common stock underlying the unvested RSUs, multiplied by the fair market value described above, the vesting of which accelerates in connection with the triggering event pursuant to the award agreements under which the RSUs were granted. If the executive experiences an Involuntary Termination or is terminated due to death or disability outside of the Change in Control Period, a portion of the executive’s outstanding RSUs will vest in the amount that would have vested during the 12-month period following the date of termination (had the executive remained in continuous service with us during such period and assuming that the shares vest in equal monthly installments, rather than annual installments, over the vesting period). If such termination occurs within the Change in Control Period, all of executive’s remaining unvested RSUs will vest. See the section titled “Elements of Our Executive Compensation Program—Equity Compensation” above for additional information about these RSU awards. (3) Represents the value of company-paid healthcare premiums for the executive and his eligible dependents pursuant to the Executive Severance Plan for (i) 12 months, if the Involuntary Termination occurs outside of the Change in Control Period, and (ii) 24 months, if the Involuntary Termination occurs within the Change in Control Period. See the section titled “Employment Arrangements with Our Executive Officers—Executive Severance Plan” above for additional information about the Executive Severance Plan. Recovery of Erroneously Awarded Compensation Restatement of Financial Statements . As disclosed in more detail elsewhere in this Annual Report on Form 10-K, with the assistance of external legal counsel, the Audit Committee conducted an independent internal investigation of third-party allegations contained in a short seller report published in November 2024. In connection with facts learned during the Audit Committee’s independent investigation, and after considering the recommendations of management, on June 12, 2025 the Audit Committee determined that (i) our condensed combined/consolidated financial statements as of March 31, 2024, and for the three months then ended, included in our Quarterly Report on Form 10-Q filed with the SEC on May 13, 2024 (as amended on May 21, 2024) and (ii) our condensed combined/consolidated financial statements as of June 30, 2024, should no longer be relied upon and would need to be restated. We restate the foregoing condensed combined/consolidated financial statements in this Annual Report on Form 10-K. 164 Table of Contents As previously described above, the identified errors to our financial statements primarily impacted revenue, and as a result, Adjusted EBITDA. Adjusted EBITDA was the metric used for purposes of determining 2024 annual bonuses for our named executive officers under the 2024 Management Bonus Program. Dodd-Frank Clawback Policy . The revisions to correct the identified errors to our financial statements required a recovery analysis of incentive-based compensation under our Clawback Policy. Our Clawback Policy applies to incentive-based compensation earned based on the attainment of financial performance measures received on or after April 11, 2024 (the first date on which our securities were listed on the New York Stock Exchange), which is the effective date of the Clawback Policy (the “Clawback Policy Effective Date”). Our Clawback Policy requires us to recoup erroneously awarded incentive-based compensation received on or after the Clawback Policy Effective Date. For purposes of the Clawback Policy, incentive-based compensation is “received” in the fiscal period during which the applicable financial reporting measure is attained, even if the payment or grant of the incentive-based compensation occurs after the end of that period. Clawback Policy Recovery Analysis . Incentive-Based Compensation . The only incentive-based compensation received by our executive officers (“Covered Officers”) that required a recovery analysis under the Clawback Policy in connection with the Restatement is the portion of the cash incentive bonuses paid to our Covered Officers under the 2024 Management Bonus Program with respect to the second quarter of fiscal 2024. Although the Restatement impacted our consolidated financial statements for the first quarter of fiscal 2024, those cash incentive bonuses were received by our Covered Officers prior to the Clawback Policy Effective Date and therefore are not subject to the Clawback Policy. Additionally, the Restatement did not impact our consolidated financial statements for the third and fourth quarters of fiscal 2024; as such, the cash incentive bonuses paid to our Covered Officers with respect to those quarters are not subject to the Clawback Policy. Application of the Clawback Policy . The 2024 Management Bonus Program established an aggregate bonus pool equal to 8% of Company’s Adjusted EBITDA for each quarter of fiscal 2024 commencing April 1, 2024. Each Covered Officer’s target bonus opportunity was equal to a specified percentage of the bonus pool. Bonuses were earned quarterly, and could be increased by an aggregate of 10% of the Covered Officer’s target bonus opportunity based on the achievement of certain financial guidance metrics related to annual revenue and Adjusted EBITDA, and could be further increased by an aggregate of 10% of the Covered Officer’s target bonus opportunity based on the achievement of certain quality metrics. Prior to the Restatement, the Company’s Adjusted EBITDA for the second quarter of fiscal 2024 was $99,737,000. In connection with preparing this Annual Report, the Audit Committee determined that Adjusted EBITDA for the second quarter of fiscal 2024 was overstated by $37,411,000 when taking into account the Restatement, thus reducing Adjusted EBITDA for the second quarter of fiscal 2024 to $62,326,000. This adjustment reduced the aggregate bonus pool under the 2024 Management Bonus Program for the second quarter of fiscal 2024 from $7,978,960 to $4,986,080, which reduced the bonuses earned by the Covered Officers for the second quarter of fiscal 2024 by an aggregate of $3,844,660. This amount reflects (i) a decrease based on the revised Adjusted EBITDA for the second quarter as a result of the Restatement and (ii) the loss of the upward adjustment in connection with the achievement of financial guidance metrics (which were ultimately not achieved as a result of the Restatement). Since the additional 10% upward adjustment to the bonuses that was based on the achievement of quality metrics was not impacted by the Restatement, that upward adjustment remained 10%, but was applied to the reduced target bonus opportunity. Payment and Recovery . As noted, the aggregate dollar amount of erroneously awarded compensation attributable to the Covered Officers as a result of the Restatement was $ 3,844,660 . This amount was paid to the Covered Officers in cash on August 7, 2024. The amount of erroneously awarded compensation was calculated on November 17. 2025 . As of the date of this Annual Report on Form 10-K, the Company has recouped from each executive officer (via deduction from bonus compensation otherwise payable to them), other than Messrs. Murray and Hancock (who voluntarily elected to delay their respective bonus payments, and thus have not yet been paid any such bonus compensation to deduct from), the full amount of the erroneously awarded compensation paid to each of them under the 2024 Management Bonus Program, and the aggregate amount that remains outstanding is $ 1,227,019 . There is no amount of erroneously awarded compensation that has not yet been determined or, as of the end of the last completed fiscal year, had been outstanding for 180 days or longer since the date the Compensation Committee determined the amount owed by each Covered Officer. The Compensation Committee will seek to recover the remaining amount of the erroneously awarded compensation from each of Messrs. Murray and Hancock in accordance with the Clawback Policy. 165 Table of Contents DIRECTOR COMPENSATION The following table sets forth information for the year ended December 31, 2024 regarding the compensation awarded to, earned by or paid to our non‑employee directors who served on our board of directors during 2024. Messrs. Murray and Hancock do not receive any additional compensation for their board service and therefore are not included in the Director Compensation table below. All compensation paid to Messrs. Murray and Hancock is reported above in the “2024 Summary Compensation Table.” Name Fees Earned or Paid in Cash ($) (1) Stock Awards ($) (2) Total ($) Evelyn Dilsaver (3) .................... 70,968 147,288 218,256 Jacqueline Millard........................ 158,377 160,000 318,377 Taylor Leavitt......................... 154,246 160,000 314,246 (1) Amounts reflect quarterly fees of $62,500 fees paid to each of Ms. Millard and Mr. Leavitt for their service on our board of directors prior to the completion of our IPO, as well as fees paid to each of Mses. Dilsaver and Millard, and Mr. Leavitt pursuant to our Director Compensation Program, as described below, which became effective in April 2024 upon the completion of our IPO. (2) Amounts reflect the full grant date fair value of RSUs granted during 2024 computed in accordance with ASC Topic 718. On May 9, 2024, each of Mses. Dilsaver and Millard, and Mr. Leavitt were granted 5,927 RSUs, 6,438 RSUs and 6,438 RSUs, respectively, in connection with our IPO, which vest in full on May 9, 2025, subject to continued service through such vesting date. We provide information regarding the assumptions used to calculate the value of the RSUs granted to our non-employee directors in Note 21 to the financial statements for the fiscal year ended December 31, 2024, included in this Annual Report on Form 10-K. As of December 31, 2024, Mses. Dilsaver and Millard and Mr. Leavitt each held 5,927 RSUs, 6,438 RSUs and 6,438 RSUs, respectively. (3) Ms. Dilsaver was appointed as a member of our board of directors on May 9, 2024. Director Compensation Program In connection with our IPO, our board of directors adopted and our stockholders approved a compensation program for our non-employee directors (Director Compensation Program), which became effective upon the closing of our IPO in April 2024. The Director Compensation Program provides for annual retainer fees and equity awards for our non‑employee directors, who we refer to as eligible directors. The material terms of the Director Compensation Program are summarized below. The Director Compensation Program consists of the following components: Cash Compensation • Annual Retainer: $80,000 • Annual Committee Chair Retainers: • Audit Chair: $25,000 • Compensation Chair: $17,500 • Nominating and Governance Chair: $15,000 • Annual Committee Member Retainers: • Audit Member: $12,500 • Compensation Member: $8,750 • Nominating and Governance Member: $7,500 Annual cash retainers will be paid in quarterly installments in arrears and will be pro‑rated for any partial calendar quarter of service. 166 Table of Contents Equity Compensation Each eligible director who is initially elected or appointed to serve on our board of directors automatically shall be granted, on the date on which such eligible director is appointed or elected to serve on the board of directors, an RSU award with an aggregate value of $160,000, pro‑rated to reflect the partial period serving on our board of directors until the next occurring annual meeting. An eligible director who is serving on our board of directors as of the date of the annual meeting of our stockholders each calendar year (beginning with calendar year 2025) will be granted, on such annual meeting date, an RSU award with a value of approximately $160,000. Each initial grant and annual grant will vest in full on the earlier to occur of (i) the first anniversary of the applicable grant date and (ii) the date of the next annual meeting following the grant date, subject to such eligible director’s continued service through the applicable vesting date. In addition, each initial award and annual award will vest in full upon a change in control of us (as defined in the 2024 Plan) if the eligible director will not become a member of our board or our ultimate parent as of immediately following such change in control. Compensation under our Director Compensation Program is subject to the annual limits on non-employee director compensation set forth in the 2024 Plan. 167 Table of Contents Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Certain Beneficial Owners and Management The following table sets forth information with respect to the beneficial ownership of our common stock as of September 30, 2025 by: • each of our directors; • each of our named executive officers; • all of our directors and executive officers as a group; and • each person or group of affiliated persons known by us to beneficially own more than 5% of our outstanding shares of common stock. The number of shares beneficially owned by each stockholder is determined under rules issued by the SEC. Under these rules, a person is deemed to be a “beneficial” owner of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. Except as indicated in the footnotes below, we believe, based on the information furnished to us, that the individuals and entities named in the table below have sole voting and investment power with respect to all shares beneficially owned by them, subject to any applicable community property laws. We have based percentage ownership of our common stock on 156,615,144 shares of our common stock outstanding as of September 30, 2025. Each of the stockholders listed has sole voting and investment power with respect to the shares beneficially owned by the stockholder unless noted otherwise, subject to community property laws where applicable. Unless otherwise indicated, the address of each beneficial owner in the table below is c/o PACS Group, Inc., 262 N. University Ave., Farmington, Utah 84025. EQUITY COMPENSATION PLAN INFORMATION The following table provides information, as of December 31, 2024, about our compensation plans under which shares of our common stock may be issued. Plan Category Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in the Second Column) Equity compensation plans approved by security holders (1) 12,592,205 (2) — 3,082,505 (3) Equity compensation plans not approved by security holders — — — Total 12,592,205 — 3,082,505 (1) Includes the 2024 Plan and the Company’s 2024 Employee Stock Purchase Plan (“ESPP”). (2) The amount reported consists of shares of our common stock subject to outstanding RSUs under the 2024 Plan. (3) Includes shares of our common stock available for issuance under our 2024 Plan and the ESPP. The number of shares authorized under our 2024 Plan increases on the first day of each calendar year beginning on January 1, 2025 and ending on and including January 1, 2034, equal to the lesser of (i) a number of shares equal to 2% of the aggregate number of shares outstanding on the final day of the immediately preceding calendar year, or (ii) such smaller number of shares as determined by our board of directors. The number of shares authorized under our ESPP increases on the first day of each calendar year beginning on January 1, 2025 and ending on and including January 1, 2034, equal to the lesser of (a) 1% of the aggregate number of shares outstanding on the final day of the immediately preceding calendar year, or (b) such small number of shares as determined by our board of directors. Our ESPP became effective in April 2024 in connection with our IPO, but no offering periods were in effect as of December 31, 2024. 168 Table of Contents SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Number of Shares Percentage of Shares 5% or Greater Stockholders Funds affiliated with Cohen & Steers. (1) 9,638,455 6.2% Named Executive Officers and Directors: Jason Murray 54,626,199 34.9% Mark Hancock 54,626,199 34.9% Josh Jergensen 707,838 * John Mitchell 239,708 * Peter (P.J.) Sanford (2) 379,960 * Derick Apt (2) 368,781 * Jacqueline Millard 6,871 * Taylor Leavitt 6,438 * Evelyn Dilsaver 6,015 * All Executive Officers and Directors as a Group (8 individuals) 110,320,631 70.4% __________________ * Less than 1% (1) Based on a Schedule 13G filed with the SEC on November 14, 2024. Cohen & Steers Inc. has sole voting and dispositive power over 8,424,695 and 9,638,455 shares of common stock, respectively. Cohen & Steers Capital Management Inc. has sole voting and dispositive power over 8,397,718 and 9,611,478 shares of common stock, respectively. Cohen & Steers UK Limited has sole voting power and sole dispositive power over 20,157 shares of common stock. Cohen & Steers Ireland Limited has sole voting power and sole dispositive power over 6,820 shares of common stock. The principal address for Cohen & Steers, Inc. and Cohen & Steers Capital Management, Inc. is 1166 Avenue of the Americas, 30th Floor New York, NY 10036; the principal address for Cohen & Steers UK Ltd. is The Burlian, 2nd Floor3 Dering Street, London W1S 1AA United Kingdom; the principal address for Cohen & Steers Ireland Ltd. Is 77 Sir John Rogerson's Quay Block C, Grand Canal Docklands Dublin 2, D02 VK60. (2) Based on most recent Form 4 for each of Messrs. Sanford and Apt filed in April 2025 and, in the case of Mr. Apt, additional information known to us. Messrs. Sanford and Apt are included in this table because they were named executive officers for the fiscal year ended December 31, 2024, although they were not serving as executive officers of the Company as of September 30, 2025. The totals presented for ‘all executive officers and directors as a group’ reflect only individuals serving as executive officers and directors as of September 30, 2025 and therefore exclude Messrs. Sanford and Apt. 169 Table of Contents Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Policies and Procedures for Related Person Transactions Our Board of Directors has adopted a written Related Person Transaction Policy, setting forth the policies and procedures for the review and approval of related person transactions. Under the policy, our legal department is primarily responsible for developing and implementing processes and procedures to obtain information regarding related persons with respect to potential related person transactions and then determining, based on the facts and circumstances, whether such potential related person transactions do, in fact, constitute related person transactions requiring compliance with the policy. If our legal department determines that a transaction or relationship is a related person transaction requiring compliance with the policy, our legal department is required to present to the Audit Committee all relevant known facts and circumstances relating to the related person transaction. Our Audit Committee must review the relevant facts and circumstances of each related person transaction, including if the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party, whether the transaction is inconsistent with the interest of the Company and its stockholders, and the extent of the related person’s interest in the transaction, take into account the conflicts of interest and corporate opportunity provisions of our Code of Business Conduct and Ethics, and either approve or disapprove the related person transaction. If a transaction was not initially recognized as a related person, then upon such recognition the transaction will be presented to the Audit Committee for ratification at the Audit Committee’s next regularly scheduled meeting; provided, that if ratification is not forthcoming, management will make all reasonable efforts to cancel or annul the transaction. Our management will update the Audit Committee as to any material changes to any approved or ratified related person transaction and will provide a status report at least annually of all then current related person transactions. No director may participate in approval of a related person transaction for which he or she is a related person. The following are certain transactions, arrangements and relationships with our directors, executive officers and stockholders owning 5% or more of our outstanding common stock, or any member of the immediate family of any of the foregoing persons, since January 1, 2024, other than equity and other compensation, termination, change in control and other arrangements, which are described under “Executive Compensation.” Relationships and Transactions with Directors, Executive Officers and Significant Stockholders Stockholders Agreement On April 10, 2024, we entered into a stockholders agreement (Stockholders Agreement) with Messrs. Murray and Hancock. The Stockholders Agreement affirms the board designation rights granted to each of Messrs. Murray and Hancock pursuant to our Amended and Restated Charter, subject to certain limitations and exceptions. Pursuant to the terms of our Amended and Restated Charter and the Stockholders Agreement, we agree to include in our slate of director nominees certain individuals designated by each of Messrs. Murray and Hancock: Mr. Murray has the right, but not the obligation, to designate (i) up to two individuals for inclusion in our slate of director nominees if he beneficially owns at least 20% of the aggregate number of shares of common stock outstanding immediately following the completion of our IPO or (ii) one individual for inclusion in our slate of director nominees if he beneficially owns less than 20% but at least 10% of the aggregate number of shares of common stock outstanding immediately following the completion of our IPO. Mr. Hancock has the right, but not the obligation, to designate (i) up to two individuals for inclusion in our slate of director nominees if he beneficially owns at least 20% of the aggregate number of shares of common stock outstanding immediately following the completion of our IPO or (ii) one individual for inclusion in our slate of director nominees if he beneficially owns less than 20% but at least 10% of the aggregate number of shares of common stock outstanding immediately following the completion of our IPO. Accordingly, Messrs. Murray and Hancock each have the right to designate two directors for nomination to our board of directors, and collectively have the right to designate four directors, which represents four out of our current five member board of directors. Subject to certain limitations, each of Messrs. Murray and Hancock also have the right to replace their respective designees and fill any vacancies created by reason of death, resignation, disqualification or removal of their respective designees. If the number of individuals that Messrs. Murray and Hancock have the right to designate is decreased because of a decrease in their respective ownership or upon termination of the Stockholders Agreement, then the corresponding designee (if such designee is serving on our board of directors) may remain on our board of directors 170 Table of Contents through the end of his or her then current term; provided, that a director may resign at any time regardless of the period of time left in his or her then current term. Pursuant to the Stockholders Agreement, each of Messrs. Murray and Hancock also agree to vote, or cause to vote, all of their outstanding shares of our common stock at any annual or special meeting of stockholders in which directors are elected, so as to cause the election of their respective designees, in each case to the extent that each or any of Messrs. Murray and Hancock have exercised their right to designate individuals for nomination to the board of directors. The Stockholders Agreement terminates upon the earlier of (i) a change in control or (ii) written agreement of each of Messrs. Murray and Hancock. Following the termination of the Stockholders Agreement, the designation rights granted to each of Messrs. Murray and Hancock pursuant to our Amended and Restated Charter will no longer be exercisable. Registration Rights Agreement On April 10, 2024, we entered into a registration rights agreement (Registration Rights Agreement) with Messrs. Murray and Hancock. The Registration Rights Agreement provides Messrs. Murray and Hancock, under certain circumstances and subject to certain restrictions, with certain rights with respect to the registration of their shares of common stock under the Securities Act, including customary demand and piggyback registration rights. Lease Guarantees Certain of our operating leases for our facilities include personal guarantees by Messrs. Murray and Hancock and their respective spouses. We have agreed to indemnify Messrs. Murray and Hancock and their respective spouses on account of any damage, loss and/or expense that they may incur in connection with the obligations made by them in respect of these lease guarantees. Company Pledge Acknowledgments and Consents Mr. Murray entered into a margin loan with UBS AG Stamford Branch (“UBS”), as agent, and certain lenders party thereto, pursuant to which he has pledged 9,500,000 shares of common stock as collateral to secure such margin loan, and which was subsequently terminated in November 2024. In connection with this margin loan, we executed a pledge acknowledgement and consent together with UBS, certain lenders party thereto and Mr. Murray, in which we, among other matters, provided for certain confirmations and agreements relating to the enforcement of the rights and remedies under the margin loan documents. Mr. Hancock entered into a margin loan with UBS, as agent, and certain lenders party thereto, pursuant to which he has pledged 9,500,000 shares of common stock as collateral to secure such margin loan, and which was subsequently terminated in November 2024. In connection with this margin loan, we executed a pledge acknowledgement and consent together with UBS, certain lenders party thereto and Mr. Hancock, in which we, among other matters, provided for certain confirmations and agreements relating to the enforcement of the rights and remedies under the margin loan documents. Director and Officer Indemnification and Insurance We entered into separate indemnification agreements with each of our directors and executive officers. We have also purchased directors’ and officers’ liability insurance. Director Independence The rules of the New York Stock Exchange define a “controlled company” as a company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company. Messrs. Murray and Hancock collectively own approximately more than 50% of the voting power of our common stock. As such, we are a “controlled company” under the rules of the New York Stock Exchange. As a result, we qualify for exemptions from certain corporate governance requirements under the rules. If we cease to be a controlled company and our common stock continues to be listed on the New York Stock Exchange, we will be required to take all action necessary to comply with applicable rules, subject to specified transition periods applicable to certain requirements, as the case may be. 171 Table of Contents Our Board of Directors has determined that Evelyn Dilsaver, Taylor Leavitt and Jacqueline Millard each qualify as “independent” in accordance with the listing requirements of the New York Stock Exchange. In making these determinations, our Board of Directors reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management. Based on his relationship with the Company, each of Messrs. Murray and Hancock do not qualify as independent under NYSE Rules. 172 Table of Contents Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Our principal accountant is Ernst & Young LLP (PCAOB ID No. 42 ). The following table summarizes the fees of Ernst & Young LLP, our independent registered public accounting firm, billed to us for each of the last two fiscal years for audit services and billed to us in each of the last two fiscal years for other services: Fee Category (in thousands) 2024 2023 Audit Fees $9,161 $3,778 Audit Related Fees — — Tax Fees — — All Other Fees — — Total Fees $9,161 $3,778 Audit Fees Audit fees for the fiscal years ended December 31, 2024 and 2023 include fees for audit work performed on our consolidated financial statements, review of the quarterly financial statements, statutory financial statements of subsidiaries, other required audits, comfort letter procedures, review of periodic reports filed with the SEC and other accounting and reporting consultations, as well as review of our registration statements for our initial public offering in 2024 and subsequent secondary offering. Audit Related Fees Audit related fees for the fiscal years ended December 31, 2024 and 2023 include fees relating to services that were reasonably related to the audit of annual financial statements and reviews of quarterly financial statements and statutory financial statements of subsidiaries, as applicable, but not reported under Audit Fees. Audit Committee Pre‑Approval Policy and Procedures The Audit Committee has adopted a policy (the “Pre‑Approval Policy”) that sets forth the procedures and conditions pursuant to which audit and non‑audit services proposed to be performed by the independent auditor may be pre‑approved. The Pre‑Approval Policy generally provides that we will not engage Ernst & Young LLP to render any audit, audit‑related, tax or permissible non‑audit service unless the service is either (i) explicitly approved by the Audit Committee (“specific pre‑approval”) or (ii) entered into pursuant to the pre‑approval policies and procedures described in the Pre‑Approval Policy (“general pre‑approval”). Unless a type of service to be provided by Ernst & Young LLP has received general pre‑approval under the Pre‑Approval Policy, it requires specific pre‑approval by the Audit Committee or by a designated member of the Audit Committee to whom the committee has delegated the authority to grant pre‑approvals. Any proposed services exceeding pre‑approved cost levels or budgeted amounts will also require specific pre‑approval. For both types of pre‑approval, the Audit Committee will consider whether such services are consistent with the SEC’s rules on auditor independence. The Audit Committee will also consider whether the independent auditor is best positioned to provide the most effective and efficient service, for reasons such as its familiarity with the Company’s business, people, culture, accounting systems, risk profile and other factors, and whether the service might enhance the Company’s ability to manage or control risk or improve audit quality. All such factors will be considered as a whole, and no one factor should necessarily be determinative. The Audit Committee may, on a periodic basis, review and generally pre‑approve the services (and related fee levels or budgeted amounts) that may be provided by Ernst & Young LLP without first obtaining specific pre‑approval from the Audit Committee. The Audit Committee may revise the list of general pre‑approved services from time to time, based on subsequent determinations. The Audit Committee pre‑approved all services performed since the Pre‑Approval Policy was adopted. 173 Table of Contents PART IV Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a)(1) For a list of the financial statements included herein, see Index to the Combined/Consolidated Financial Statements on page 95 of this Annual Report on Form 10-K, incorporated into this Item by reference. (a)(2) Financial statement schedules have been omitted because they are either not required or not applicable or the information is included in the combined/consolidated financial statements or the notes thereto. (a)(3) Exhibits: The exhibits listed below are filed as part of this Annual Report on Form 10-K or are incorporated herein by reference, in each case as indicated below. Incorporated by Reference Exhibit Number Exhibit Description Form File No. Exhibit Filing Date Filed/Furnished Herewith 3.1 Amended and Restated Certificate of Incorporation of PACS Group, Inc. 8-K 001-42011 3.1 4/15/2024 3.2 Amended and Restated Bylaws of PACS Group, Inc. 8-K 001-42011 3.2 4/15/2024 4.1 Form of Certificate of Common Stock S‑1/A 333-277893 4.1 4/8/2024 4.2 Registration Rights Agreement by and between PACS Group, Inc. and certain securityholders of PACS Group, Inc., dated as of April 10, 2024 8-K 001-42011 10.1 4/15/2024 4.3 Stockholders Agreement by and between PACS Group, Inc. and certain securityholders of PACS Group, Inc., dated as of April 10, 2024 8-K 001-42011 10.2 4/15/2024 10.1 Form of Indemnification Agreement between PACS Group, Inc. and its directors and officers S-1 333-277893 10.2 3/13/2024 10.2# PACS Group, Inc. Non-Employee Director Compensation Program S-1/A 333-277893 10.3 4/1/2024 10.3# PACS Group, Inc. 2024 Incentive Award Plan S‑8 333-277893 99.1 4/11/2024 10.4# Form of Stock Option Agreement under PACS Group, Inc. 2024 Incentive Award Plan S‑8 333-277893 99.2 4/11/2024 10.5# Form of Restricted Stock Unit Agreement under PACS Group, Inc. 2024 Incentive Award Plan S‑8 333-277893 99.3 4/11/2024 10.6# Form of Restricted Stock Unit Award Agreement (Executive IPO Awards) under PACS Group, Inc. 2024 Incentive Award Plan S‑8 333-277893 99.4 4/11/2024 10.7# PACS Group, Inc. 2024 Employee Stock Purchase Plan S‑8 333-277893 99.5 4/11/2024 10.8# Providence Administrative Consulting Services, Inc. Nonqualified Deferred Compensation Plan 10-Q 001-42011 10.10 5/13/2024 10.9# Employment Offer Letter, dated as of December 19, 2023, by and between PACS Group, Inc. and Derick Apt S-1 333-277893 10.10 3/13/2024 174 Table of Contents Incorporated by Reference Exhibit Number Exhibit Description Form File No. Exhibit Filing Date Filed/Furnished Herewith 10.10# PACS Group, Inc. Executive Severance Plan 10-Q 001-42011 10.11 5/13/2024 1 0.11# S eparation and Consulting Agreement with PACS Group, I nc. and Peter ( P J ) Sanford, eac h dated August 15, 2025 * 10.1 2 ^ Amended and Restated Credit Agreement, dated as of December 7, 2023, by and among PACS Group, Inc., PACS Holdings, LLC, Truist Bank and the lenders party thereto S-1 333-277893 10.1 3/13/2024 10.13 First Amendment to Amended and Restated Credit Agreement, dated as of May 16 , 2024 by and among PACS Group, Inc., PACS Holdings, LLC, Truist Bank and the lenders party thereto * 10.1 4 Second Amendment to Amended and Restated Credit Agreement, dated as of November 14, 2024 by and among PACS Group, Inc., PACS Holdings, LLC, Truist Bank and the lenders party thereto 8-K 001-42011 10.1 11/15/2024 10.15 Third Amendment to Amended and Restated Credit Agreement, dated as of March 27, 2025 by and among PACS Group, Inc., PACS Holdings, LLC, Truist Bank and the lenders party thereto * 10.16 Fourth Amendment to Amended and Restated Credit Agreement, dated as of May 29, 2025 by and among PACS Group, Inc., PACS Holdings, LLC, Truist Bank and the lenders party thereto * 10.17 Forbearance Agreement , dated as of July 24 , 2025 by and among PACS Group, Inc., PACS Holdings, LLC, Truist Bank, the lenders party thereto and the other loan parties thereto * 10.18 For be a rance Agreement and Fifth Amendment to Amended and Restated Credit Agreement, dated as of August 13, 2025 by and among PACS Group, Inc., PACS Holdings, LLC, Truist Bank , the lenders party thereto and the other loan parties thereto * 10.19 # Separation Agreement with PACS Group, Inc. and Derick Apt, dated September 2, 2025 * 175 Table of Contents Incorporated by Reference Exhibit Number Exhibit Description Form File No. Exhibit Filing Date Filed/Furnished Herewith 10.2 0 Forbearance Agreement, dated as of October 21, 2025 by and among PACS Group, Inc., PACS Holdings, LLC, Truist Bank, the lenders party thereto and the other loan parties thereto * 19.1 PACS Group, Inc. I nsider Trading Policy and Procedures * 21.1 List of subsidiaries of PACS Group, Inc. * 23.1 Consent of Ernst & Young LLP, independent registered public accounting firm * 31.1 Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer * 31.2 Rule 13a-14(a) / 15d-14(a) Certification of Prin cipal Financial Officer * 32.1 Section 1350 Certification of Principal Executive Officer ** 32.2 Section 1350 Certification of Principal Financial Officer ** 97.1 PACS Group, Inc. Policy for Recovery of Erroneously Awarded Compensation * 101.INS XBRL Instance Document. * 101.SCH XBRL Taxonomy Extension Schema Document. * 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. * 101.DEF XBRL Taxonomy Extension Definition Linkbase Document * 101.LAB XBRL Taxonomy Extension Label Linkbase Document * 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document * 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * __________________ * Filed herewith. ** The certifications attached as Exhibit 32.1 and 32.2 that accompany this Annual Report on Form 10-K are deemed furnished and not filed with the U.S. Securities and Exchange Commission and are not to be incorporated by reference into any filing of PACS Group, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing. # Indicates management contract or compensatory plan. ^ Registrant has omitted schedules and exhibits pursuant to Item 601(a)(5) of Regulation S-K. The Registrant agrees to furnish supplementally a copy of the omitted schedules and exhibits to the SEC upon request. Item 16. FORM 10-K SUMMARY Not applicable. 176 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PACS GROUP, INC. Date: November 19, 2025 By: /s/ Jason Murray Jason Murray Director, Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated. Signature Title Date /s/ Jason Murray Director, Chairman and Chief Executive Officer ( Principal Executive Officer ) November 19, 2025 Jason Murray /s/ Mark Hancock Director, Executive Vice Chairman, and Interim Chief Financial Officer ( Principal Financial Officer ) November 19, 2025 Mark Hancock /s/ Michelle Lewis Chief Accounting Officer (Principal Accounting Officer) November 19, 2025 Michelle Lewis /s/ Jacqueline Millard Director November 19, 2025 Jacqueline Millard /s/ Taylor Leavitt Director November 19, 2025 Taylor Leavitt /s/ Evelyn Dilsaver Director November 19, 2025 Evelyn Dilsaver 177