8 unchanged sentences
Our management has performed an analysis of our ability to continue as a going concern and has identified substantial doubt about our ability to continue as a going concern.
−Removed: As of December 31, 2023, we had $36.3 million in cash available to fund future operations.
−Removed: Without additional funding, management believes that our existing cash resources are not sufficient to support planned operations for at least the next year from the issuance of the consolidated financial statements contained elsewhere in this Form 10-K.
−Removed: Based on their assessment, our management has raised concerns about our ability to continue as a going concern.
−Removed: As substantial doubt about our ability to continue as a going concern exists, our ability to finance our operations through the sale and issuance of debt or equity securities or through bank or other financing could be impaired.
−Removed: Our ability to continue as a going concern may depend on our ability to obtain additional capital.
−Removed: Management continues to explore raising additional capital through a combination of debt financing, other non-dilutive financing, and/or equity financing to supplement the Company’s capitalization and liquidity.
−Removed: Our ability to obtain financing on reasonable terms is subject to factors beyond the Company’s control, including general economic, political, and financial market conditions.
−Removed: The capital markets have in the past experienced, are currently experiencing, and may in the future experience, periods of upheaval that could impact the availability and cost of equity and debt financing and there can be no assurance that such financing will be available on terms commercially acceptable to the Company or at all.
−Removed: If we are unable to raise additional capital or generate cash flows necessary to fund our operations, we may not be able to compete successfully and may need to scale back, discontinue, or cease certain operations, which would harm our business, financial condition, and results of operations.
−Removed: Risks Related to Our Operating History and Early Stage of Growth
+Added: As of December 31, 2024, we had $38.8 million of unrestricted cash and cash equivalents available to fund future operations, $154.8 million of outstanding indebtedness, of which $65.0 million is classified as current on our balance sheet, $31.5 million of paid in-kind interest, and $255.1 million of unpaid claims.
+Added: We expect to continue to incur operating losses and generate negative cash flows from operations for the foreseeable future.
+Added: Based on our currently available cash resources, including the aggregate proceeds of $30.0 million we received from a related party financing transaction in February and March 2025, and assuming no other financing transactions, we believe we will require additional funding in 2025.
+Added: As a result of these factors, management has concluded that there is substantial doubt about our ability to continue as a going concern within one year after the date the consolidated financial statements included elsewhere in this Form 10-K are issued.
+Added: In evaluating our ability to continue as a going concern and meet our obligations, management considered our current projections of future cash flows, current financial condition, sources of liquidity, and debt obligations for at least one year from the date of issuance of this Form 10-K.
+Added: We continue to explore raising additional capital through a combination of debt financing and equity issuances and sales of assets.
+Added: As substantial doubt about our ability to continue as a going concern exists, our ability to finance our operations through the sale and issuance of debt or equity securities or through bank or other financing could be impaired and there is no assurance that sources of financing will be available on a timely basis, or on satisfactory terms, or at all.
+Added: If we are unable to raise additional capital or generate cash flows necessary to fund our operations or refinance our indebtedness, we will need to curtail planned activities, discontinue certain operations, or sell certain assets, which could materially and adversely affect our business, financial condition, results of operations, and prospects.
+Added: Risks Related to Our Operating History
We have a history of net losses.
We expect to continue to incur losses for the foreseeable future and we may never achieve or maintain profitability.
+Added: We have experienced losses since our inception.
For the year ended December 31, 2024, we incurred net losses of $310.4 million.
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We expect that our operating expenses will continue to increase as we grow our business, build relationships with physician partners and payors, develop new services and comply with the requirements associated with being a public company.
−Removed: Since our inception, we have financed our operations primarily through cash we obtained as a result of the Business Combinations, private placements of equity securities, issuances of promissory notes, payments received from various payors and borrowings under the Term Loan Facility (as defined herein).
+Added: Since our inception, we have financed our operations primarily through cash we obtained as a result of the Business Combinations, private placements of equity securities, issuances of promissory notes, payments received from various payors, borrowings under the Term Loan Facility (as defined herein) and the disposition of certain of our Florida assets.
We may not succeed in sufficiently increasing our revenue to offset these expenses.
1 unchanged sentence
We may never be able to generate sufficient revenue to achieve or sustain profitability and our recent and historical growth should not be considered indicative of our future performance.
+Added: We may need to raise additional capital to fund our existing operations or develop and commercialize new services or expand our operations.
+Added: We may need to spend significant amounts to fund our existing operations, including expansion into new geographies, to improve our platform and to develop new services.
+Added: Based upon management’s assessment of the
P3 Health Partners Inc.
| 2024 Form 10-K | 17
−Removed: We may need to raise additional capital to fund our existing operations or develop and commercialize new services or expand our operations.
−Removed: We may need to spend significant amounts to expand our existing operations, including expansion into new geographies, to improve our platform and to develop new services.
−Removed: Based upon management’s assessment of the Company’s ability to continue as a going concern as described above in the risk factor entitled “ Our management has performed an analysis of our ability to continue as a going concern and has identified substantial doubt about our ability to continue as a going concern ,” we believe that our existing cash, cash equivalents and restricted cash may not be sufficient to fund our operating and capital needs for at least the next 12 months.
+Added: Company’s ability to continue as a going concern as described above in the risk factor entitled “ Our management has performed an analysis of our ability to continue as a going concern and has identified substantial doubt about our ability to continue as a going concern ,” absent additional funding, we believe that our existing cash, cash equivalents and restricted cash are not sufficient to fund our operating and capital needs for at least the next 12 months.
We maintain the majority of our cash, cash equivalents and restricted cash in accounts with major U.S.
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Any inability to access or delay in accessing these funds could adversely affect our business and financial position.
−Removed: Our expectation regarding the sufficiency of funds is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.
+Added: Our expectation regarding the sufficiency of funds is based on assumptions that may change as a result of many factors currently unknown to us.
Until such time, if ever, as we can generate sufficient revenue, we may finance our cash needs through a combination of equity offerings and debt financings or other sources.
7 unchanged sentences
To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a securityholder.
−Removed: For example, in April 2023, we sold an aggregate of approximately 69.2 million shares of our Class A common stock, warrants to purchase an aggregate of approximately 59.9 million shares of Class A common stock (the “Common Warrants”), and pre-funded warrants to purchase an aggregate of approximately 10.8 million shares of Class A common stock (the “Pre-Funded Warrants” and, together with the Common Warrants, the “Warrants”) in a private placement to certain purchasers, which included certain affiliated entities of Chicago Pacific Founders GP, L.P.
−Removed: (“CPF”) and our Chief Medical Officer and member of our board of directors.
−Removed: In addition, debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends and these forms of financing may have rights, preferences, and privileges senior to those of holders of our common stock.
−Removed: If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, intellectual property, or future revenue streams or grant licenses on terms that may not be favorable to us.
+Added: In addition, debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends and these forms of financing may have rights, preferences, and privileges senior to those of holders of our common stock and may involve restrictive covenants which could place significant restrictions on our operations.
+Added: For example, since December 2022, in various private placement transactions and in connection with the issuance of unsecured promissory notes (see Note 10 “Debt” to the consolidated financial statements included elsewhere in this Form 10-K), we have issued an aggregate of 110.8 million shares of Class A common stock and warrants and pre-funded warrants to purchase an aggregate of 307.1 million shares of Class A common stock.
+Added: See Part II, Item 7A.
+Added: “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources .” If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, intellectual property, or future revenue streams or grant licenses on terms that may not be favorable to us.
Furthermore, any capital raising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to advance development activities.
−Removed: If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate development efforts.
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 18
−Removed: Our business and the markets in which we operate are new and rapidly evolving, which makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.
−Removed: Our business and the markets in which we operate are new and rapidly evolving which make it difficult to evaluate and assess the success of our business to date, our future prospects and the risks and challenges that we may encounter.
+Added: If we are unable to raise additional funds when needed to fund our operations, we will need to curtail planned activities, discontinue certain operations, or sell certain assets, which could materially and adversely affect our business, financial condition, results of operations, and prospects.
+Added: Our business and the markets in which we operate are rapidly evolving, which makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.
+Added: Our business and the markets in which we operate are rapidly evolving which make it difficult to evaluate and assess the success of our business to date, our future prospects and the risks and challenges that we may encounter.
These risks and challenges include our ability to:
• attract new members and partner physicians to our platform and position our platform as a convenient and accepted way to access and deliver healthcare;
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 18
• retain our current members, affiliated professional entities and other physician partners and encourage them to continue to utilize our platform and services;
14 unchanged sentences
Consequently, predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history.
−Removed: If our growth strategy is not successful, we may not be able to continue to grow our revenue or operations.
Our relatively limited operating history, evolving business and rapid growth make it difficult to evaluate our future prospects and the risks and challenges we may encounter, and we may not continue to grow at or near historical rates.
+Added: If our growth strategy is not successful, we may not be able to continue to grow our revenue or operations.
In addition, as a business with a limited operating history, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown challenges.
1 unchanged sentence
We may not be successful in such a transition and, as a result, our business may be adversely affected.
+Added: We may not be able to maintain compliance with our debt covenants in the future which could result in an event of default.
+Added: Our Term Loan Facility (as defined herein) with CRG Partners (the “Lender”), the VGS Promissory Note, the VGS 2 Promissory Note and the VGS 3 Promissory Note (each as defined herein) contain affirmative and negative covenants which, among other things, require us to maintain minimum liquidity and annual minimum revenue levels that increase over time and restrict P3 LLC’s ability and the ability of its subsidiaries from, among other things, incurring certain indebtedness and liens, and making certain restricted payments.
+Added: If we breach these or other financial covenants and fail to secure a waiver or forbearance from the lenders, such breach or failure could result in an event of default and accelerate the repayment of the outstanding or the exercise of other rights or remedies that our lenders may have under
P3 Health Partners Inc.
| 2024 Form 10-K | 19
−Removed: We may not be able to maintain compliance with our debt covenants in the future which could result in an event of default.
−Removed: Our Term Loan Facility (as defined herein) with CRG Partners (the “Lender”), the VGS Promissory Note and the VGS 2 Promissory Note (each as defined herein) contain affirmative and negative covenants which, among other things, require us to maintain minimum liquidity and annual minimum revenue levels that increase over time and restrict P3 LLC’s ability and the ability of its subsidiaries from, among other things, incurring certain indebtedness and liens, and making certain restricted payments.
−Removed: If we breach these or other financial covenants and fail to secure a waiver or forbearance from the lenders, such breach or failure could result in an event of default and accelerate the repayment of the outstanding or the exercise of other rights or remedies that our lenders may have under applicable law.
−Removed: As of December 31, 2023, we were not in compliance with its Term Loan Facility and VGS Promissory Note covenants related to issuance of the 2023 financial statements with an audit opinion free of a “going concern” qualification.
−Removed: The Term Loan Facility and VGS Promissory Note lenders have granted us a waiver of the covenant under the Term Loan Facility related to the existence of a “going concern” qualification in the audit opinion for our audited financial statements for the fiscal year ended December 31, 2023.
−Removed: We were in compliance with all other covenants under the Term Loan Facility and VGS Promissory Note as of December 31, 2023;
−Removed: however, there can be no assurance that we will be able to maintain compliance with these covenants in the future or that the lenders under the Term Loan Facility, VGS Promissory Note or the lenders of any future indebtedness we may incur will grant any such waiver or forbearance in the future.
−Removed: We may not recognize the anticipated benefits of recent and future acquisitions and any such acquisitions could disrupt our operations and have a material adverse effect on our business, financial condition and results of operations.
−Removed: The anticipated benefits of the Company’s Business Combinations, other acquisitions, and any future acquisitions may not be realized fully, or at all, and may take longer to realize than expected.
+Added: applicable law.
+Added: As of December 31, 2024, we were not in compliance with its Term Loan Facility, VGS Promissory Note, VGS 2 Promissory Note and VGS 3 Promissory Note covenants related to issuance of the 2024 financial statements with an audit opinion free of a “going concern” explanatory paragraph.
+Added: The Term Loan Facility, VGS Promissory Note, VGS 2 Promissory Note and VGS 3 Promissory Note lenders have granted us a waiver of the covenant under the Term Loan Facility related to the existence of a “going concern” explanatory paragraph in the audit opinion for our audited financial statements for the fiscal year ended December 31, 2024.
+Added: We were in material compliance with all other covenants under the Term Loan Facility, VGS Promissory Note, VGS 2 Promissory Note and VGS 3 Promissory Note as of December 31, 2024;
+Added: however, there can be no assurance that we will be able to maintain compliance with these covenants in the future or that the lenders under the Term Loan Facility, VGS Promissory Note, VGS 2 Promissory Note and VGS 3 Promissory Note or the lenders of any future indebtedness we may incur will grant any such waiver or forbearance in the future.
+Added: We may not recognize the anticipated benefits of recent and future acquisitions or dispositions and any such transactions could disrupt our operations and have a material adverse effect on our business, financial condition and results of operations.
+Added: The anticipated benefits of any future acquisitions or dispositions may not be realized fully, or at all, and may take longer to realize than expected.
Anticipated benefits of any acquisition may be affected by, among other things, competition and our ability to grow and manage growth profitably.
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Definite-lived intangible assets totaling $573.7 million are amortized over 10 years.
−Removed: Due to the decrease in the share price over the second and fourth quarters of 2022, the Company recorded a significant goodwill impairment charge of $1,315.0 million during the year ended December 31, 2022.
−Removed: If future operating performance were to fall below current projections or if there are material changes to management’s assumptions, we could be required to recognize additional non-cash charges to operating earnings for other intangible asset impairment, which could be significant.
+Added: If our operating performance falls below our then current projections or if there are material changes to management’s assumptions, we have in the past and could in the future be required to recognize additional non-cash charges to operating earnings for other intangible asset impairment, which could be significant.
+Added: For example, due to the decrease in the share price over the second and fourth quarters of 2022, the Company recorded a significant goodwill impairment charge of $1,315.0 million during the year ended December 31, 2022.
+Added: Goodwill or intangible asset impairments have had, and any future impairments may have, a material adverse effect on our results of operations.
Risks Related to Our Business and Industry
−Removed: COVID-19 has impacted, and may, along with future pandemics or epidemics, continue to impact, our operations and may materially and adversely affect our business and financial results.
−Removed: There is continued uncertainty about the scope, duration, severity, trajectory, and lasting impact of COVID-19.
−Removed: We continue to monitor the impact of COVID-19 on our business.
−Removed: The extent to which COVID-19 or a new pandemic, epidemic, or outbreak of an infectious disease may directly or indirectly impact our operations and results of operations will depend on multiple factors, including, but not limited to the ultimate geographic spread of the disease, the duration and scope of the outbreak, the emergence of variants, the availability and efficacy of vaccines, and government, social, business and other actions that are taken in response to the pandemic or outbreak.
+Added: Pandemics or epidemics have impacted, and may in the future impact, our operations and may materially and adversely affect our business and financial results.
+Added: The extent to which any pandemic, epidemic, or outbreak of an infectious disease may directly or indirectly impact our operations and results of operations will depend on multiple factors, including, but not limited to the ultimate geographic spread of the disease, the duration and scope of the outbreak, the emergence of variants, the availability and efficacy of vaccines, and government, social, business and other actions that are taken in response to the pandemic or outbreak.
We may be unable to properly anticipate or prepare for these events and, as a result, our business may be materially adversely impacted.
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 20
−Removed: Due to COVID-19 or another pandemic or public health emergency, we have not been able to and in the future may not be able to document the health conditions of our members as completely as we have in the past.
−Removed: Medicare pays capitation using a “risk adjustment model,” which compensates providers based on the health status (acuity) of each individual member.
−Removed: Payers with higher acuity members receive more, and those with lower acuity members receive less.
−Removed: Medicare requires that a patient’s health issues be documented annually regardless of the permanence of the underlying causes.
−Removed: Historically, this documentation was required to be completed during an in-person visit with a patient.
−Removed: As part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), Medicare is now allowing documentation for conditions identified during video visits with patients.
−Removed: However, given the disruption caused by COVID-19, it is unclear whether we will be able to document the health conditions of our members as comprehensively as we did before COVID-19, which may adversely impact our revenue in future periods.
−Removed: Due to our recurring contracted revenue model, COVID-19 has not historically had a material impact on our revenue.
−Removed: Nearly 99% of our total revenue during the years ended December 31, 2023 and 2022 is recurring, consisting of fixed per member per month capitation payments received from MA health plans.
−Removed: Because of the nature of capitation arrangements, the full impact of the COVID-19 may not be fully reflected in our results of operations and overall financial condition until future periods.
−Removed: To the extent COVID-19 adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, including but not limited to the fact that our platform and the other systems or networks used in our business may experience an increase in attempted cyberattacks or targeted intrusion, ransomware, and phishing campaigns seeking to take advantage of shifts to employees working remotely using their household or personal internet networks.
−Removed: The success of any of these unauthorized attempts could substantially impact our platform, the proprietary and other confidential data contained therein or otherwise stored or processed in our operations, and ultimately our business, including but not limited to increased expenses incurred to improve our security controls and to remediate security vulnerabilities.
We rely on our management team and key employees and our business, financial condition, cash flows and results of operations could be harmed if we are unable to retain qualified personnel.
3 unchanged sentences
From time to time, there may be changes in our management team resulting from the hiring or departure of executives, which could disrupt our business.
−Removed: The replacement of one or more of our executive officers or other key employees would likely involve significant time and costs and may significantly delay or prevent the achievement of our business objectives.
+Added: The replacement of one or more of our executive officers or
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 20
+Added: other key employees would likely involve significant time and costs and may significantly delay or prevent the achievement of our business objectives.
Our business would also be adversely affected if we fail to adequately plan for succession of our leadership or if we fail to effectively recruit, integrate, retain and develop key talent and/or align our talent with our business needs, in light of the current rapidly changing environment.
3 unchanged sentences
We continued to experience labor shortages in 2024.
−Removed: A number of factors have and may in the future adversely affect the labor force available to us or increase labor costs, including high employment levels, federal unemployment subsidies, increased wages offered by other employers, vaccine mandates and other government regulations.
+Added: A number of factors have and may in the future adversely affect the labor force available to us or increase labor costs, including high employment levels, federal unemployment subsidies, increased wages offered by other employers, and other government regulations.
In addition, we have experienced high employee turnover and expect to continue to experience high employee turnover in the future.
1 unchanged sentence
New employees may not become as productive as we expect, and we may be unable to hire or retain sufficient numbers of qualified individuals.
−Removed: If our retention efforts are not successful or our employee turnover rate increases in the future, our business, financial condition, cash flows and results of operations will be harmed.
+Added: If our retention efforts are not successful or our employee turnover rate increases in the future, we may not be able to effectively pursue our business plan which could harm our business, financial condition, cash flows and results of operations.
Finally, as job candidates often consider the value of the stock options or other equity instruments they are to receive in connection with their employment, the volatility in the price of our stock may adversely affect our ability to attract or retain highly skilled personnel.
1 unchanged sentence
Failure to attract new personnel or failure to retain and motivate our current personnel could have a material adverse effect on our business, financial condition and results of operations.
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 21
Our growth depends in part on our ability to identify and develop successful new geographies, physician partners, payors and patients.
3 unchanged sentences
We contract with a limited number of affiliated professional entities and other physician partners and rely on such physicians within each geography.
+Added: In addition, certain of our providers are permitted to provide services on other platforms.
Our growth initiatives in our existing geographies depend, in part, on our physician partners’ ability to increase their capacity to service Medicare patients, and to effectively meet increased patient demand.
5 unchanged sentences
Likewise, new geographies into which we seek to expand may have laws and regulations that differ from those applicable to our current operations.
−Removed: As an immature and rapidly growing company, we may be unfamiliar with the regulatory requirements in each geography that we enter, and we may be forced to incur significant expenditures to ensure compliance with requirements to which we are subject.
+Added: We may be unfamiliar with the regulatory requirements in each geography that we enter, and we may be forced to incur significant expenditures to ensure compliance with requirements to which we are subject.
If we are unable or unwilling to incur such costs, our growth in new geographies may be less successful than in our current geographies.
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 21
Further, our growth to date has increased the significant demands on our management, operational and financial systems, infrastructure and human and capital resources.
We must continue to improve our existing systems for operational and financial management, including our reporting systems, procedures and controls.
−Removed: These improvements could require significant capital expenditures and place increasing demands on our management.
+Added: These improvements have and could require significant capital expenditures and place increasing demands on our management.
We may not be successful in managing or expanding our operations or in maintaining adequate financial and operating systems and controls.
If we do not successfully manage these processes, our business, financial condition, cash flows and results of operations could be harmed.
−Removed: If growth in the number of patients and physician partners on our platform decreases, or the number of services that we are able to provide to physician partners and members decreases, due to legal, economic or business developments, our business, financial condition and results of operations will be harmed.
+Added: If growth in the number of patients and physician partners on our platform decreases, or the number of services that we are able to provide to physician partners and members decreases, due to legal, regulatory, economic or business developments, our business, financial condition and results of operations will be harmed.
Substantially all of our total revenue relates to federal government healthcare programs.
−Removed: The policies and decisions made by the federal government regarding these programs have a substantial impact on our profitability.
+Added: The policies and decisions made by the federal government regarding these programs have a substantial impact on the size of our membership base, the reimbursement rates among members, and our network of providers and therefore, our results of operation.
Additionally, our future results of operations depend, in part, on our ability to expand our services and offerings, including broadening our continuum of care.
−Removed: As we grow our member base, we will need to maintain and grow our network of providers.
−Removed: Certain of our providers are permitted to provide services on other platforms, and therefore, our success will be dependent on our ability to retain and recruit highly trained and licensed physicians and other providers to our platform.
There are sometimes wide variations in the established per member reimbursement rates as a result of, among other things, members’ risk status, acuity levels and age, plan benefit design and geography.
As the composition of our membership base changes, due to programmatic, competitive, regulatory, benefit design, economic or other changes, there is a corresponding change to our premium revenue, costs and margins, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 22
Additional factors that could affect our ability to sell products and services include, but are not limited to:
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Principal assumptions relating to our market opportunity include estimates of the total number and average length of relationships between MA patients and their physicians, historical MA patient growth rates, amount of revenue and medical expenses associated with MA members expected to be attributed to our affiliated professional entities and other physician partners and historical experience that such physician partners have with a similar platform.
−Removed: Our opportunity is based on the assumption that our platform, partnership and network model will be more attractive to potential physician partners than competing options.
+Added: Our market opportunity is based on the assumption that our platform, partnership and network model will be more attractive to potential physician partners than competing options.
However, potential physician partners may elect to pursue a different strategic option.
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 22
Changes in our anticipated ratio of medical expense to revenue can significantly impact our financial results.
11 unchanged sentences
• contractual or claims disputes with providers, hospitals or other service providers within and outside a health plan’s network;
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 23
−Removed: • the occurrence of catastrophes, major epidemics or pandemics, including COVID-19 and any variants thereof, or acts of terrorism;
+Added: • the occurrence of catastrophes, major epidemics or pandemics, or acts of terrorism;
• the reduction of health plan premiums.
3 unchanged sentences
The reimbursement process is complex and can involve lengthy delays.
−Removed: Although we recognize revenue when we provide services to patients, we may from time to time experience delays in receiving the associated capitation payments or, for patients on fee-for-service arrangements, the reimbursement for the service provided.
+Added: Although we recognize revenue when we provide services to patients, we have experienced and may from time to time experience delays in receiving the associated capitation payments or, for patients on fee-for-service arrangements, the reimbursement for the service provided.
In addition, third-party payors may disallow, in whole or in part, requests for reimbursement based on determinations that the patient is not eligible for coverage, certain amounts are not reimbursable under plan coverage, were for services provided that were not medically necessary, or additional supporting documentation is necessary.
7 unchanged sentences
Delays, uncertainties and disagreements regarding the reimbursement process may adversely affect accounts receivable, increase the overall costs of collection and cause us to incur additional borrowing and other costs related to resolving disagreements or uncertainties.
−Removed: For example, in July 2021, a discrepancy was identified in the service agreement with one of our health plans in the way the revenue of Medicare Part C and Medicare Part D was being calculated compared to the definitions of “revenue” under the service agreement.
+Added: For example, in July 2021, a discrepancy was identified in the service agreement with one of our health plans in the way the revenue of Medicare Part C
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 23
+Added: and Medicare Part D was being calculated compared to the definitions of “revenue” under the service agreement.
This discrepancy resulted in a contract dispute and a renegotiation of the service agreement.
1 unchanged sentence
The remaining settlement balance of $3.0 million is recorded within health plan settlements payable on our consolidated balance sheet as of December 31, 2024.
−Removed: See Note 20 “Commitments and Contingencies” to the consolidated financial statements included elsewhere in this Form 10-K for additional information on the impact of this discrepancy.
In addition, certain of our patients are covered under health plans that require the patient to cover a portion of their own healthcare expenses through the payment of copayments or deductibles.
6 unchanged sentences
If regulations change to restrict our ability to or prohibit us from delivering care through telehealth modalities, our financial condition and results of operations may be adversely affected.
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 24
The termination or non-renewal of the Medicare Advantage contracts held by the health plans with which we contract, or the termination or nonrenewal of our contracts with those plans, could have a material adverse effect on our revenue and operations.
6 unchanged sentences
Moreover, our inability to maintain our agreements with health plans, in particular with key payors such as Centene Corporation, Atrio Health Plans, United Healthcare and Aetna, with respect to their MA members or to negotiate favorable terms for those agreements in the future, could result in the loss of patients and could have a material adverse effect on our profitability and business.
−Removed: The healthcare industry has also experienced a trend of consolidation, resulting in fewer but larger payors that have significant bargaining power, given their market share.
+Added: The healthcare industry has also experienced and continues to experience a trend of consolidation, resulting in fewer but larger payors that have significant bargaining power, given their market share.
Payments from payors are the result of negotiated rates.
2 unchanged sentences
We are dependent on our affiliated professional entities and other physician partners and other providers to effectively manage the quality and cost of care and perform obligations under payor contracts.
−Removed: Our success depends upon our continued ability to collaborate with and expand a network of high-caliber affiliated professional entities and other physician partners who can provide high quality of care, improve clinical outcomes and effectively manage healthcare costs, which are key drivers of our profitability.
+Added: Our success depends upon our continued ability to collaborate with and expand a network of high-caliber affiliated professional entities and other physician partners who can provide high quality of care, improve clinical outcomes and effectively manage healthcare costs, which are key drivers of our results of operations.
Our physician partners could demand an increased payment arrangement or take other actions, or fail to take actions, that could result in higher medical costs, lower quality of care for our members, harm to our reputation or create difficulty meeting regulatory or other requirements.
Likewise, our physician partners could take actions contrary to our instructions, requests, policies or objectives or applicable law, or could have economic or business interests or goals that are or become inconsistent with our own.
−Removed: Further, our physician partners may not engage with our platform to assist in improving overall quality of care and management of healthcare costs, which could produce results that are inconsistent with our estimates and financial models and negatively impact our growth.
+Added: Further, our physician partners may not engage with our platform to assist in improving overall quality of care and
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 24
+Added: management of healthcare costs, which could produce results that are inconsistent with our estimates and financial models and negatively impact our growth.
In addition to receiving care from our affiliated professional entities and other physician partners, our members also receive care from an array of hospitals, specialists and ancillary providers who typically contract directly with our payors.
5 unchanged sentences
To manage total medical services expense, we rely on our affiliated professional entities’ and other physician partners’ ability to improve clinical outcomes, implement clinical initiatives to provide a better healthcare experience for our members and accurately and sufficiently document the risk profile of our members.
−Removed: While our contracts vary, generally, if the cost of medical care provided exceeds the corresponding capitation revenue we receive, we may realize operating deficits, which are typically not capped, and could lead to substantial losses.
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 25
+Added: While our contracts vary, generally, if the cost of medical care provided exceeds the corresponding capitated revenue we receive, we may realize operating deficits, which are typically not capped, and could lead to substantial losses.
Reductions in the quality ratings of the health plans we serve could have a material adverse effect on our business, results of operations, financial condition and cash flows.
7 unchanged sentences
We operate in a competitive industry, and if we are not able to compete effectively, our business, financial condition and results of operations will be harmed.
−Removed: Our industry is competitive and we expect it to attract increased competition, which could make it difficult for us to succeed.
+Added: Our industry is competitive and we expect it to continue to attract increased competition, which could make it difficult for us to succeed.
We currently face competition in various aspects of our business, including in offering a favorable reimbursement structure for physician partners and potential physician partners and attracting payors and physician partners who are not contracted with us, from a range of companies that provide similar services under different care models that could attract patients, providers and payors, including hospitals, managed service organizations and provider networks and data analysis consultants.
1 unchanged sentence
Competition from hospitals, managed service organizations and provider networks and data analysis consultants, payors and other parties could result in payors changing the benefit structure that is offered to our members, which could negatively impact our profitability and market share.
−Removed: Our primary competitors include Oak Street Health, Inc., Cano Health, Inc.
+Added: Our primary competitors include Oak Street Health, Inc., Astrana Health, Inc.
and agilon health, inc., in addition to numerous local provider networks, hospitals and health systems.
Moreover, large, well-financed payors have in some cases developed their own managed services tools and may provide these services to their physicians and patients at discounted prices, or may seek to expand their relationships with additional competing physicians or physician networks, including in geographic areas we serve.
−Removed: This may result in a more competitive environment and increased challenges to grow at the rates we have projected.
+Added: This may result in a more competitive environment and increased challenges to
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 25
+Added: grow at the rates we have projected.
We expect that competition will continue to increase as a result of consolidation in the healthcare industry and increased demand for its services.
6 unchanged sentences
If we are unable to successfully compete, our business, financial condition, cash flows and results of operations could be materially adversely affected.
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 26
−Removed: Our future growth and the profitability of our business will depend in large part upon the effectiveness and efficiency of our marketing efforts, and our ability to develop brand awareness cost-effectively.
+Added: Our future growth and the success of our business will depend in large part upon the effectiveness and efficiency of our marketing efforts, and our ability to develop brand awareness cost-effectively.
Our business success depends on our ability to attract and retain members, which significantly depends on our marketing practices.
−Removed: Our future growth and profitability will depend in large part upon the effectiveness and efficiency of our marketing efforts, including our ability to:
+Added: Our future growth and ability to achieve profitability will depend in large part upon the effectiveness and efficiency of our marketing efforts, including our ability to:
• create greater awareness of our brand;
8 unchanged sentences
Developments affecting spending by the healthcare industry could adversely affect our business.
−Removed: healthcare industry has changed significantly in recent years, and we expect that significant changes will continue to occur.
+Added: healthcare industry has changed significantly in recent years, and we expect that significant changes will continue to occur, including as a result the recent change in U.S.
+Added: Presidential administration.
General reductions in expenditures by healthcare industry participants could result from, among other things:
1 unchanged sentence
• consolidation of healthcare industry participants;
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 26
• reductions in government funding for healthcare;
2 unchanged sentences
Even if general expenditures by industry participants remain the same or increase, developments in the healthcare industry may result in reduced spending in some or all of the specific markets that we serve now or in the future.
−Removed: However, the timing and impact of developments in the healthcare industry are difficult to predict.
+Added: The timing and impact of developments in the healthcare industry are difficult to predict.
We cannot assure you that the demand for our solutions and services will continue to exist at current levels or that we will have adequate technical, financial, and marketing resources to react to changes in the healthcare industry.
2 unchanged sentences
Successful medical liability claims could result in substantial damage awards that exceed the limits of our and those affiliated professionals’ insurance coverage.
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 27
−Removed: will carry professional liability insurance for the Company and each of our healthcare professionals.
+Added: We carry or will carry professional liability insurance for the Company and each of our healthcare professionals.
Additionally, all of the network providers that contract or will contract with us separately carry or will carry professional liability insurance for themselves and their healthcare professionals.
5 unchanged sentences
The 21st Century Cures Act (the “Cures Act”), which was passed and signed into law in December 2016, includes provisions related to data interoperability, information blocking and patient access.
−Removed: In March 2020, the HHS, Office of the National Coordinator for Health Information Technology, (“ONC”), and CMS finalized and issued complementary rules that are intended to clarify provisions of the Cures Act regarding interoperability and information blocking, and include, among other things, requirements surrounding information blocking, changes to ONC’s health IT certification program and requirements that CMS regulated payors make relevant claims/care data and provider directory information available through standardized patient access and provider directory application programming interfaces that connect to provider electronic health record systems.
+Added: In March 2020, the HHS, Office of the National Coordinator for Health Information Technology, which is now known as the Office of the Assistant Secretary for Technology Policy and Office of the National Coordinator for Health Information Technology (“ASTP/ONC”), and CMS finalized and issued complementary rules that are intended to clarify provisions of the Cures Act regarding interoperability and information blocking, and include, among other things, requirements surrounding information blocking, changes to ASTP/ONC’s health IT certification program and requirements that CMS regulated payors make relevant claims/care data and provider directory information available through standardized patient access and provider directory application programming interfaces that connect to provider electronic health record systems.
The companion rules will transform the way in which healthcare providers, health IT developers, health information exchanges/health information networks (“HIEs/HINs”), and health plans share patient information, and create significant new requirements for healthcare industry participants.
−Removed: For example, the ONC rule, which went into effect on April 5, 2021, prohibits healthcare providers, health IT developers of certified health IT, and HIEs/HINs from engaging in practices that are likely to interfere with, prevent, materially discourage, or otherwise inhibit the access, exchange or use of electronic health information (“EHI”), also known as “information blocking.” To further support access and exchange of EHI, the ONC rule identifies eight “reasonable and necessary activities” as exceptions to information blocking activities, as long as specific conditions are met.
+Added: For example, the ASTP/ONC rule, which went into effect on April 5, 2021, prohibits healthcare providers, health IT developers of certified health IT, and HIEs/HINs from engaging in practices that are likely to interfere with, prevent, materially discourage, or otherwise inhibit the access, exchange or use of electronic health information (“EHI”), also known as “information blocking.” To further support access and exchange of EHI, the ASTP/ONC rule identifies eight “reasonable and necessary activities” as exceptions to information blocking activities, as long as specific conditions are met.
In June 2023, the HHS Office of Inspector General (“OIG”) published its final rule implementing the statutory penalties for information blocking, which are up to $1 million per violation.
Enforcement of information blocking penalties began on September 1, 2023.
−Removed: Further, in December 2023, ONC finalized its rule titled Health Data, Technology, and Interoperability:
+Added: Further, in December 2023, ASTP/ONC finalized its rule titled Health Data, Technology, and Interoperability:
Certification Program Updates, Algorithm Transparency, and Information Sharing (“HTI-1 Final Rule”).
Among other things, the HTI-1 Final Rule narrows the scope of entities that qualify as certified health IT developers, makes updates to its Health IT Certification Program requirements, a voluntary program for certifying health IT, and modifies the information blocking exceptions.
+Added: In addition, in December 2024, ASTP/ONC issued the HTI-2 Final Rule, which among other things, finalizes certain Trusted Exchange Framework and Common Agreement (“TEFCA”)-related
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 27
+Added: proposals, and amends the information blocking regulations by including definitions related to the TEFCA Manner Exception.
+Added: In December 2024, ASTP/ONC also released the final HTI-3 Final Rule, which among other things, finalizes the addition of a definition of “reproductive health care,” creates a new Protecting Care Access Exception and finalizes revisions to the Privacy and Infeasibility Exceptions.
Any failure to comply with these rules could have a material adverse effect on our business, results of operations and financial condition.
1 unchanged sentence
Our information technology systems facilitate our ability to conduct our business.
−Removed: While we have disaster recovery systems and business continuity plans in place, any disruptions in our disaster recovery systems or the failure of these systems to operate as expected could, depending on the magnitude of the problem, adversely affect our operating results by limiting our capacity to effectively monitor and control our operations.
+Added: While we have disaster recovery systems and business continuity plans in place, any disruptions in our disaster recovery systems or the failure of these systems to operate as expected could, depending on the magnitude of the problem, materially adversely affect our operating results by limiting our capacity to effectively monitor and control our operations.
Despite our implementation of a variety of security measures, our information technology systems could be subject to physical or electronic break-ins, and similar disruptions from unauthorized tampering or any weather-related disruptions where our headquarters is located.
3 unchanged sentences
We utilize external security and infrastructure vendors to provide and manage parts of our information technology systems, including our data centers.
−Removed: These applications and data encompass a wide variety of business-critical information, including research and development information, customer information, commercial
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 28
−Removed: information and business and financial information.
+Added: These applications and data encompass a wide variety of business-critical information, including research and development information, customer information, commercial information and business and financial information.
We face a number of risks with respect to the protection of this Confidential Information, including loss of access, inappropriate use or disclosure, unauthorized access, inappropriate modification and the risk of being unable to adequately monitor and audit and modify our controls over our Confidential Information.
7 unchanged sentences
BEC scams involve using social engineering to cause employees to wire funds to the perpetrators in the mistaken belief that the requests were made by a company executive or established vendor.
−Removed: While this fraud did not cause material losses to us, it reflects that we, like any company, are always at risk of being targeted for a cyberattack.
+Added: While this fraud did not cause material losses to us, it reflects that we are continually susceptible to the risk of being targeted for a cyberattack.
Attacks upon information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise.
2 unchanged sentences
Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 28
Any such breach or interruption could compromise our networks and the Confidential Information stored there could be accessed by unauthorized parties, publicly disclosed, lost or stolen.
11 unchanged sentences
Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, financial condition and results of operations.
−Removed: Numerous state and federal laws, regulations, standards and other legal obligations, including consumer protection laws and regulations, which govern the collection, dissemination, use, access to, confidentiality, security and processing of
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 29
−Removed: personal information, including health-related information, could apply to our operations or the operations of our partners.
+Added: Numerous state and federal laws, regulations, standards and other legal obligations, including consumer protection laws and regulations, which govern the collection, dissemination, use, access to, confidentiality, security and processing of personal information, including health-related information, could apply to our operations or the operations of our partners.
For example, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and regulations implemented thereunder (collectively, “HIPAA”), imposes privacy, security and breach notification obligations on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their business associates that perform certain services that involve creating, receiving, maintaining or transmitting individually identifiable health information for or on behalf of such covered entities, and their covered subcontractors.
9 unchanged sentences
The Federal Trade Commission (the “FTC”) also has authority to initiate enforcement actions against entities that mislead customers about HIPAA compliance, make deceptive statements about privacy and data sharing in privacy policies, fail to limit third-party use of personal health information, fail to implement policies to protect personal health information or engage in other unfair practices that harm customers or that may violate Section 5(a) of the FTC Act.
−Removed: Even when HIPAA does not apply, according to the FTC, violating consumers’ privacy rights or failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair and/or deceptive acts or practices in violation of Section 5(a) of the Federal Trade Commission Act.
+Added: Even when HIPAA does not apply, according to the FTC, violating consumers’ privacy rights or failing to take appropriate steps
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 29
+Added: to keep consumers’ personal information secure may constitute unfair and/or deceptive acts or practices in violation of Section 5(a) of the Federal Trade Commission Act.
The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.
9 unchanged sentences
Violations of the CMIA can result in criminal, civil and administrative sanctions, and the CMIA also provides individuals a private right of action with respect to disclosures of their health information that violate CMIA.
−Removed: In the event that we are subject to
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 30
−Removed: or affected by HIPAA, the CCPA, or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
+Added: In the event that we are subject to or affected by HIPAA, the CCPA, or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
Washington State also enacted a broadly applicable law to protect the privacy of personal health information known as the “My Health My Data Act,” which generally requires affirmative consent for the collection, use, or sharing of any “consumer health data.” Consumer health data is defined to include personal information that is linked or reasonably linkable to a consumer and that identifies a consumer’s past, present, or future physical or mental health status;
1 unchanged sentence
Nevada has also passed a similar consumer health data law, and given the increased focus on the use of health data by entities that are not subject to HIPAA, additional states are expected to pass consumer health privacy laws.
+Added: In addition, we use artificial intelligence (“AI”), machine learning, and automated decision-making technologies (collectively, “AI Technologies”) in our business.
+Added: The regulatory framework for AI Technologies is rapidly evolving as many federal, state, and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations.
+Added: Additionally, existing laws and regulations may be interpreted in ways that would affect the operation of AI Technologies.
+Added: As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or market perception of their requirements may have on our business and may not always be able to anticipate how to respond to these laws or regulations.
+Added: It is possible that new laws and regulations will be adopted in the United States, or that existing laws and regulations, including competition and antitrust laws, may be interpreted in ways that would limit our ability to use AI Technologies for our business, or require us to change the way we use AI Technologies in a manner that negatively affects the performance of our products, services, and business and the way in which we use AI Technologies.
+Added: We may need to expend resources to adjust our products or services in certain jurisdictions if the laws, regulations, or decisions are not consistent across jurisdictions.
+Added: Further, the cost to comply with such laws, regulations, or decisions and/or guidance interpreting existing laws, could be significant and would increase our operating expenses (such as by imposing additional reporting obligations regarding our use of AI Technologies).
Although we work to comply with applicable laws, regulations and standards, our contractual obligations and other legal obligations, these requirements are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another or other legal obligations with which we must comply.
−Removed: Any failure or perceived failure by us or our employees, representatives, contractors, consultants, collaborators, or other third parties to comply with such requirements or adequately address privacy and security concerns, even if unfounded, could result in additional cost and liability to us, damage our reputation, and adversely affect our business and results of operations.
−Removed: Legal proceedings in connection with the Business Combinations, the outcome of which is uncertain, could draw the attention of our management team away from the operation of our business.
−Removed: Prior to execution of the definitive agreements for the Business Combinations, Hudson Vegas Investment SPV, LLC, (“Hudson”), one of our existing equity holders, asserted that it had an option to purchase additional equity interests in P3 Health Group Holdings, LLC (“Legacy P3”) in connection with the pending transaction with Foresight (the “Purchase Option”).
−Removed: We do not agree that the Purchase Option applies to the Business Combinations.
−Removed: On June 11, 2021, Hudson filed an action in the Delaware Court of Chancery (the “Hudson Action”), in which it challenged the Business Combinations.
−Removed: Specifically, Hudson purports to assert claims against Legacy P3, the members of the Legacy P3 Board of Managers, certain of the Legacy P3 officers and Chicago Pacific Founders Fund, L.P.
−Removed: (“CPF”), for breach of the Third Amended and Restated Limited Liability Company Agreement of Legacy P3, dated as of April 16, 2020 (the “Legacy P3 LLC Agreement”), (against Legacy P3 and CPF), breach of fiduciary duty (against certain of Legacy P3’s officers) and breach of alleged contractual standards of conduct (against the Legacy P3 Board of Managers) in connection with the process leading up to, and approval of, the Business Combinations.
−Removed: In the Hudson Action, Hudson sought to enjoin the consummation of the Business Combinations, and seeks a declaration that the Business Combinations violate its rights under the Legacy P3 LLC Agreement, a declaration that the members of the Legacy P3 Board of Managers and certain of Legacy P3’s officers breached their fiduciary duties, and money damages including attorneys’ fees.
−Removed: See “ Item 3.
−Removed: Legal Proceedings ” for a description of the Hudson Class D Dispute proceedings.
−Removed: Defending or settling this lawsuit could draw the attention of our management team away from the operation of our business and while we are indemnified by the P3 Equityholders for costs in connection with this lawsuit, it is possible that we could nonetheless incur financial losses if disputes arise with respect to the extent of the indemnification obligations.
+Added: Any failure or perceived failure by us or our employees, representatives, contractors, consultants, collaborators, or other third parties to comply with such requirements or adequately address privacy and security concerns, even if
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 30
+Added: unfounded, could result in additional cost and liability to us, damage our reputation, and adversely affect our business and results of operations.
Any future litigation against us could be costly and time-consuming to defend.
−Removed: We may become subject, from time to time, to legal proceedings, federal and state audits, government investigations, and payor audits, investigations, overpayments, and claims that arise in the ordinary course of business such as claims brought by our clients in connection with commercial disputes or employment claims made by our current or former associates.
+Added: We may become subject, from time to time, to legal proceedings, federal and state audits, government investigations, and payor audits, investigations, civil investigative demands, overpayments, and claims that arise in the ordinary course of business such as claims brought by our clients in connection with commercial disputes or employment claims made by our current or former associates.
Litigation and audits may result in substantial costs and may divert management’s attention and resources, which may substantially harm our business, financial condition and results of operations.
1 unchanged sentence
A claim brought against us that is uninsured or underinsured could result in unanticipated costs, thereby reducing our earnings and leading analysts or potential investors to reduce their expectations of our performance, which could reduce the market price of our Class A common stock or publicly traded warrants.
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 31
Changes in U.S.
2 unchanged sentences
Tax laws, regulations, and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political, and other conditions, and significant judgment is required in evaluating and estimating these taxes.
+Added: In particular, changes in presidential, congressional, state and local administrations in the United States could result in significant changes in, and uncertainty with respect to, tax legislation, regulation and government policy directly affecting our business or indirectly affecting us because of impacts on our members, providers and vendors.
Our effective tax rates could be affected by numerous factors, such as entry into new businesses and geographies, changes to our existing business and operations, acquisitions and investments and how they are financed, changes in our stock price, changes in our deferred tax assets and liabilities and their valuation, and changes in the relevant tax, accounting, and other laws, regulations, administrative practices, principles and interpretations.
1 unchanged sentence
Our quarterly results may fluctuate significantly, which could adversely impact the value of our Class A common stock and publicly traded warrants.
−Removed: Our quarterly results of operations, including our revenue, net loss and cash flows, has varied and may vary significantly in the future, and period-to-period comparisons of our results of operations may not be meaningful.
+Added: Our quarterly results of operations, including our revenue, net loss and cash flows, have varied and may vary significantly in the future, and period-to-period comparisons of our results of operations may not be meaningful.
Accordingly, our quarterly results should not be relied upon as an indication of future performance.
3 unchanged sentences
• the timing of recognition of revenue, including possible delays in the recognition of revenue due to sometimes unpredictable implementation timelines;
+Added: • the timing of cash sweeps for prior rendered services;
• the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure;
• our ability to effectively manage the size and composition of our network of healthcare providers relative to the level of demand for services from our members and our clients’ members and patients;
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 31
• our ability to respond to competitive developments, including pricing changes and the introduction of new products and services by our competitors;
4 unchanged sentences
• security or data privacy breaches and associated remediation costs;
+Added: • impairment charges;
• the timing of expenses related to the development or acquisition of technologies or businesses;
−Removed: • the COVID-19 pandemic or other pandemics.
+Added: • pandemic or epidemics.
Any fluctuation in our quarterly results may not accurately reflect the underlying performance of our business and could cause a decline in the trading price of our Class A common stock and publicly traded warrants.
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 32
Our only significant asset is the ownership of a minority of the economic interest in P3 LLC, and such ownership may not be sufficient to generate the funds necessary to meet our financial obligations or to pay any dividends on our Class A common stock.
2 unchanged sentences
We depend on P3 LLC and its subsidiaries for distributions, loans and other payments to generate the funds necessary to meet our financial obligations, including to satisfy our obligations under the Tax Receivable Agreement, or to pay any dividends with respect to our Class A Common Stock.
−Removed: Legal and contractual restrictions in agreements governing the indebtedness of P3 LLC and its subsidiaries may limit our ability to obtain cash from P3 LLC.
+Added: Legal and contractual restrictions in agreements governing the indebtedness of P3 LLC and its subsidiaries limit our ability to obtain cash from P3 LLC.
The earnings from, or other available assets of, P3 LLC and its subsidiaries may not be sufficient to enable us to satisfy our financial obligations, including our obligations under the Tax Receivable Agreement, or pay any dividends on our Class A common stock should we decide to do so.
−Removed: P3 LLC will be classified as a partnership for U.S.
−Removed: federal income tax purposes and, as such, will generally not be subject to entity level U.S.
+Added: P3 LLC is classified as a partnership for U.S.
+Added: federal income tax purposes and, as such, is generally not be subject to entity level U.S.
federal income tax.
−Removed: Instead, taxable income will be allocated to holders of P3 LLC units, including us.
+Added: Instead, taxable income is allocated to holders of P3 LLC units, including us.
As a result, we generally will incur taxes on our allocable share of any net taxable income generated by P3 LLC.
−Removed: Under the terms of the P3 LLC Amended and Restated Limited Liability Agreement (the “P3 LLC A&R LLC Agreement”), and the Tax Receivable Agreement, P3 LLC will be obligated to make tax distributions or payments to holders of its P3 LLC units, including us, except to the extent such distributions or payments would render P3 LLC insolvent or are otherwise prohibited by law or the terms of any credit facility.
−Removed: In addition to our tax payment obligations, we will also incur expenses related to our operations and our interests in P3 LLC, including costs and expenses of being a publicly traded company, all of which could be significant.
+Added: Under the terms of the P3 LLC Amended and Restated Limited Liability Agreement (the “P3 LLC A&R LLC Agreement”), and the Tax Receivable Agreement, P3 LLC is obligated to make tax distributions or payments to holders of its P3 LLC units, including us, except to the extent such distributions or payments would render P3 LLC insolvent or are otherwise prohibited by law or the terms of any credit facility.
+Added: In addition to our tax payment obligations, we also incur expenses related to our operations and our interests in P3 LLC, including costs and expenses of being a publicly traded company, all of which could be significant.
To the extent that we require funds and P3 LLC or its subsidiaries are restricted from making distributions under applicable law or regulation or under the terms of their financing arrangements, or are otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition, including our ability to pay our income taxes when due.
2 unchanged sentences
There is increasing concern that a gradual increase in global average temperatures due to increased concentration of carbon dioxide and other greenhouse gases in the atmosphere are causing significant changes in weather patterns around the globe and an increase in the frequency and severity of natural disasters.
−Removed: Changes in weather patterns and an increased frequency, intensity and duration of extreme weather events (such as floods, droughts, wildfires and severe storms), whether as a result of climate change or otherwise, could, among other things, disrupt our operations or damage or destroy our headquarters or owned or managed clinics, which may cause us to suffer losses and additional costs to maintain or resume operations, which could have an adverse impact on our business and results of operations.
−Removed: In addition, implementing changes to mitigate risks associated with such events may result in substantial short- and long-term additional operational expenses, which may materially affect our profitability.
+Added: Changes in weather patterns and an increased frequency, intensity and duration of extreme weather events (such as floods, droughts, hurricanes, wildfires and severe storms), whether as a result of climate change or otherwise, could, among other things, disrupt our operations or damage or destroy our headquarters or owned or managed clinics, which may cause us to suffer losses and additional costs to maintain or resume operations, which could have an adverse impact on our business and results of operations.
+Added: Public health crises arising from such extreme weather events and natural disasters or
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 32
+Added: effects of climate change could also impact our business operations and result in increased medical care costs.
+Added: For example, natural disasters, such as a major hurricane affecting Florida or wildfire affecting California, could have significant impacts on the health of a large number of our members.
+Added: In addition, implementing changes to mitigate risks associated with such events may result in substantial short- and long-term additional operational expenses, which could have a material adverse effect on our business, results of operations or financial condition.
Risks Related to Our Legal and Regulatory Environment
5 unchanged sentences
Although there are several statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution, the exceptions and safe harbors are drawn narrowly.
−Removed: By way of example, the AKS safe harbor for value-based arrangements requires,
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 33
−Removed: among other things, that the arrangement does not induce a person or entity to reduce or limit medically necessary items or services furnished to any patient.
+Added: By way of example, the AKS safe harbor for value-based arrangements requires, among other things, that the arrangement does not induce a person or entity to reduce or limit medically necessary items or services furnished to any patient.
Failure to meet the requirements of a safe harbor, however, does not render an arrangement illegal, although such arrangements may be subject to greater scrutiny by government authorities.
9 unchanged sentences
• the Civil Monetary Penalties Statute, which prohibits, among other things, an individual or entity from offering remuneration to a federal healthcare program beneficiary that the individual or entity knows or should know is likely to influence the beneficiary to order or receive healthcare items or services from a particular provider;
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 33
• the criminal healthcare fraud provisions of HIPAA and related rules that prohibit knowingly and willfully executing a scheme or artifice to defraud any healthcare benefit program or falsifying, concealing or covering up a material fact or making any material false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
6 unchanged sentences
• federal and state laws pertaining to the provision of services by nurse practitioners and physician assistants in certain settings, physician supervision of those services, and reimbursement requirements that depend on the types of services provided and documented and relationships between physician supervisors and nurse practitioners and physician assistants.
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 34
The laws and regulations in these areas are complex, changing and often subject to varying interpretations.
1 unchanged sentence
Further, because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of the business activities undertaken by us or our affiliated professional entities or other physician partners could be subject to challenge under one or more of these laws, including, without limitation, our patient assistance programs that waive or reduce the patient’s obligation to pay copayments, coinsurance or deductible amounts owed for the services we provide to them if they meet certain financial need criteria.
+Added: After recent settlements by the U.S.
+Added: Department of Justice (“DOJ”), in December 2024, the OIG issued a special fraud alert concerning certain marketing arrangements between healthcare professionals (“HCPs”) and MA brokers and agents, as well as MA organizations.
+Added: The OIG stated that certain payments from MA organizations to HCPs or their staff relating to MA plan marketing and enrollment, as well as payments from HCPs to agents, brokers and others in exchange for referring Medicare enrollees to a particular HCP, can result in abusive arrangements that could lead to improper steering, anticompetitive conduct and other harms to enrollees and to the Medicare program.
+Added: In June 2024, we received a civil investigative demand (“CID”) from the DOJ pursuant to the False Claims Act in the course of the government’s investigation concerning our arrangements with insurance agents and brokers.
+Added: The CID requests documentation and information relating to the marketing of our broker programs and our arrangements with, and remuneration paid to, MA brokers, agents and agencies, as well as our arrangements with third parties relating to these programs.
+Added: We are cooperating with the investigation and providing the requested information.
+Added: No assurance can be given as to the timing or outcome of the government’s investigation.
If our operations are found to be in violation of any of such laws or any other governmental regulations that apply, we may be subject to significant penalties, including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, the curtailment or restructuring of operations, integrity oversight and reporting obligations, exclusion from participation in federal and state healthcare programs and imprisonment.
In addition, any action against us or our affiliated professional entities or other physician partners for violation of these laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses, divert our management’s attention from the operation of our business and result in adverse publicity, or otherwise experience a material adverse impact on our business, results of operations, financial condition, cash flows, reputation as a result.
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 34
If any of our affiliated professional entities, other physician partners or owned or managed clinics lose their regulatory licenses, permits, accreditations and/or registrations, as applicable, or become ineligible to receive reimbursement under Medicare, Medicaid or other third-party payors, there may be a material adverse effect on our business, financial condition, cash flows, or results of operations.
4 unchanged sentences
Should any of our owned or managed clinics or affiliated professional entities be found to be noncompliant with these requirements, we could be assessed fines and penalties, could be required to refund reimbursement amounts or could lose our licensure or Medicare and/or Medicaid certification so that we or our affiliated professional entities and other physician partners are unable to receive reimbursement from such programs and possibly from other third-party payors, any of which could materially adversely affect our business, financial condition, cash flows or results of operations.
+Added: See “— The evolving regulation of value-based reimbursement models and regulation, licensure and oversight by state regulatory authorities as a risk-bearing entity may have a material adverse effect on our operations.
If our arrangements with our affiliated professional entities and other physician partners are found to constitute the improper rendering of medical services or fee splitting under applicable state laws, our business, financial condition and our ability to operate in those states could be adversely impacted.
4 unchanged sentences
If a jurisdiction’s prohibition on the corporate practice of medicine or fee-splitting is interpreted in a manner that is inconsistent with our practices, we would be required to restructure or terminate our arrangements with our affiliated professional entities and other physician partners to bring our activities into compliance with such laws.
−Removed: A determination of non-compliance, or the termination of or failure to successfully restructure these relationships could result in disciplinary action, penalties,
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 35
−Removed: damages, fines, and/or a loss of revenue, any of which could have a material and adverse effect on our business, financial condition and results of operations.
+Added: A determination of non-compliance, or the termination of or failure to successfully restructure these relationships could result in disciplinary action, penalties, damages, fines, and/or a loss of revenue, any of which could have a material and adverse effect on our business, financial condition and results of operations.
State corporate practice and fee-splitting prohibitions also often impose penalties on healthcare professionals for aiding in the improper rendering of professional services, which could discourage physicians and other healthcare professionals from providing clinical services to members of the health plans with whom we contract.
6 unchanged sentences
• refunding amounts we have been paid pursuant to the Medicare or Medicaid programs or from payors;
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 35
• state or federal agencies imposing fines, penalties and other sanctions on us;
19 unchanged sentences
We might also need to refund a portion of the revenue that we received, which refund, depending on its magnitude, could damage our relationship with the applicable health plan and could have an adverse effect on our business, results of operations, financial condition and cash flows.
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 36
Additionally, CMS audits MA plans for documentation to support RAF-related payments for members chosen at random.
5 unchanged sentences
CMS has indicated that payment adjustments will not be limited to RAF scores for the specific MA enrollees for which errors are found but may also be extrapolated to the entire MA plan subject to a particular CMS contract.
−Removed: Based on a recent final rule issued by CMS in January 2023, although 2011 to 2017 plan years are still subject to audit, overpayments to MA plans that are identified as a result of a Risk Adjustment Data Validation (“RADV”), audit will only be subject to extrapolation for plan year 2018 and any subsequent plan year.
−Removed: In addition, CMS will not apply an adjustment factor, known as a FFS Adjuster, in RADV audits to account for potential differences in diagnostic coding between the MA program and Medicare FFS program.
+Added: Based on a final rule issued by CMS in January 2023, overpayments to MA plans that are identified as a result of a Risk Adjustment Data Validation (“RADV”) audit will be subject to extrapolation for plan year 2018 and any subsequent plan year.
+Added: On November 14, 2024, CMS initiated the payment year 2018 MA RADV audits and expects to begin issuing payment year
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 36
+Added: 2018 audit findings in mid-calendar year 2026.
+Added: In addition, CMS will not apply an adjustment factor, known as an FFS Adjuster, in RADV audits to account for potential differences in diagnostic coding between the MA program and Medicare FFS program.
We are continuing to assess the potential impact this final rule may have on our business and operations.
1 unchanged sentence
Under the new risk adjustment model that was implemented in 2024, CMS has changed the manner by which over 2,000 diagnosis codes, across a range of disease and condition categories, are considered for purposes of patient risk scoring, with certain of these codes no longer impacting risk scoring.
+Added: On April 1, 2024, CMS released the 2025 Medicare Advantage Rate Announcement, which continues the three-year phase in by blending 67% of the risk score calculated using the updated 2024 MA risk adjustment model with 33% of the risk score calculated using the 2020 MA risk adjustment model.
While the codes subject to changes represent only a fraction of the total number of conditions considered for purposes of risk adjustment, this change and any future changes to CMS’s risk adjustment methodology could impact the revenue we record from Medicare Advantage plans.
There can be no assurance that a health plan will not be randomly selected or targeted for review by CMS or that the outcome of such a review will not result in a material adjustment in our revenue and profitability, even if the information we submitted to the plan is accurate and supportable.
−Removed: The impact on us of recent healthcare legislation and other changes in the healthcare industry and in healthcare spending is currently unknown, but may adversely affect our business, financial condition and results of operations.
−Removed: The impact on us of healthcare reform legislation and other changes in the healthcare industry and in healthcare spending is currently unknown, but may adversely affect our business, financial condition and results of operations.
+Added: The impact of recent healthcare legislation and other changes in the healthcare industry and in healthcare spending is currently unknown, but may adversely affect our business, financial condition and results of operations.
+Added: The impact of healthcare reform legislation and other changes in the healthcare industry and in healthcare spending is currently unknown, but may adversely affect our business, financial condition and results of operations.
Our revenue is dependent on the healthcare industry and could be affected by changes in healthcare spending, reimbursement and policy.
10 unchanged sentences
At this time, it is unclear how the introduction of the Medicare quality payment program will impact overall physician reimbursement.
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 37
Such changes in the regulatory environment may also result in changes to our payer mix that may affect our operations and revenue.
3 unchanged sentences
We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments and other third-party payers will pay for healthcare products and services, which could adversely affect our business, financial condition and results of operations.
−Removed: The evolving regulation of value-based reimbursement models may have a material adverse effect on our operations.
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 37
+Added: The evolving regulation of value-based reimbursement models and regulation, licensure and oversight by state regulatory authorities as a risk-bearing entity may have a material adverse effect on our operations.
Regulation of downstream risk-sharing arrangements, including, but not limited to, global risk and other value-based arrangements, varies significantly from state to state.
8 unchanged sentences
As a result, new and existing laws, regulations or guidance could have a material adverse effect on our operations and could subject us to the risk of restructuring or terminating our arrangements with our affiliated professional entities or other physician partners, as well as the risk of regulatory enforcement, penalties and sanctions, if state and federal enforcement agencies disagree with our interpretation of these laws.
−Removed: While these regulations have not had a material impact on our business to date, as we continue to expand, these rules may require additional resources and capitalization and add complexity to our business.
+Added: In addition, Medcore HP, which we acquired in 2021, is a licensed health plan under California’s Knox Keene Act, which subjects the entity to certain capital requirements, licensing or certification, governance controls, utilization review and grievance procedures, among others.
+Added: Non-compliance with the Knox-Keene Act may result in an enforcement action, fines and penalties, and, in egregious cases, limitations on or revocation of the Knox-Keene license.
+Added: In August 2024, the Office of Enforcement for the California Department of Managed Health Care conducted an investigation of Medcore HP and imposed an administrative penalty of $150,000 and a corrective action plan based on Medcore HP’s failure to meet minimum levels of tangible net equity and for untimely filing of certain annual reports and monthly financial statements.
+Added: Although these penalties have not had a material impact on our business to date, as we continue to expand, these rules may require additional resources and capitalization and add complexity to our business.
Regulatory proposals directed at containing or lowering the cost of healthcare, including the Direct Contracting Model, and our participation, voluntary or otherwise, in such proposed models, could impact our business, financial condition, cash flows and operations.
6 unchanged sentences
Additionally, the CMS Innovation Center continues to test an array of value-based alternative payment models, including the Accountable Care Organization Realizing Equity, Access, and Community Health (“ACO REACH”) Model (formerly known as the Global and Professional Direct Contracting Model) to allow REACH ACOs to negotiate directly with the government to manage traditional Medicare beneficiaries and share in the savings and risks generated from managing such beneficiaries.
−Removed: Although we currently do not participate in these pilot payment models, we may choose to do so in the future.
−Removed: Additional changes that may affect our business include the expansion of new programs such as Medicare
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 38
−Removed: payment for performance initiatives for physicians under the MACRA, which first affected physician payment in 2019.
+Added: Additional changes that may affect our business include the expansion of new programs such as Medicare payment for performance initiatives for physicians under the MACRA, which first affected physician payment in 2019.
At this time, it is unclear how the introduction of the Medicare quality payment program will impact overall physician reimbursement.
In addition, there likely will continue to be regulatory proposals directed at containing or lowering the cost of healthcare, as government healthcare programs and other third-party payors transition from FFS to value-based reimbursement models, which can include risk-sharing, bundled payment and other innovative approaches.
−Removed: It is possible that the federal or state governments will implement additional reductions, increases, or changes in reimbursement in the future under government programs that may adversely affect us or increase the cost of providing our services.
−Removed: The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue or attain growth, any of which could have a material impact on our business.
−Removed: Risks Related to Ownership of Our Common Stock
−Removed: We have identified material weaknesses in our internal control over financial reporting.
−Removed: If we fail to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act, we may not be able to accurately report our financial results or file our periodic reports in a timely manner, which may cause adverse effects on our business and may cause investors to lose confidence in our reported financial information and may lead to a decline in the price of our Class A common stock.
−Removed: The Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
−Removed: We are required to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting pursuant to Section 404(a) of the Sarbanes-Oxley Act in our annual reports.
−Removed: This assessment must include disclosure of any material weaknesses identified by our management in our internal control over financial reporting.
−Removed: As a result of no longer qualifying as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, we are also required to comply with, among other requirements, the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act.
−Removed: Effective internal control over financial reporting is necessary for us to provide reliable financial reports in a timely manner.
−Removed: When evaluating our internal control over financial reporting, we have identified, and we may in the future identify additional, material weaknesses that we may not be able to remediate in a timely manner.
−Removed: In connection with the audits of our consolidated financial statements for the years ended December 31, 2018, 2019, 2020 and 2021, and, as previously reported, the restatement of our consolidated financial statements for the years ended December 31, 2020 and 2019, we concluded that there were material weaknesses in our internal control over financial reporting, which continued to exist as of December 31, 2023.
−Removed: 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 the annual or interim financial statements will not be prevented or detected on a timely basis.
−Removed: These material weaknesses are specifically attributed to the following:
−Removed: (i) we did not have adequate policies and procedures or sufficient qualified resources with appropriate technical knowledge to maintain effective internal controls over the accounting related to significant accounts and related financial statement disclosures;
−Removed: (ii) we did not design and implement a sufficient risk assessment process to identify and assess risks impacting internal control over financial reporting;
−Removed: (iii) we had ineffective evaluation and determination as to whether the components of internal control were present and functioning;
−Removed: (iv) we did not design and implement effective information technology general controls in the areas of user access related to certain information technology systems that support our financial reporting process, (v) we did not maintain sufficient segregation of duties over the performance of control activities for financial close and reporting, including over the review of account reconciliations and journal entries;
−Removed: (vi) we did not design and maintain effective management review controls at a sufficient level of precision over all financial statement areas.
−Removed: This material weakness resulted in certain material corrections to the financial statements;
−Removed: and (vii) we did not design and maintain effective controls at a sufficient level of precision over the estimation of claims expense and payable including controls over the review of historical claims data, including the completeness and accuracy of data used to determine the financial statement amounts.
−Removed: We have taken and are taking steps discussed under the heading “Remediation Activities” in Part II, Item 9A, “Controls and Procedures” to remediate these material weaknesses.
−Removed: However, we are still in the process of implementing these steps and cannot assure investors that these measures will significantly improve or remediate the material weaknesses described above.
−Removed: We have identified other deficiencies in our internal control over financial reporting that have not risen to the level of a material weakness, which we are in the process of remediating.
−Removed: Our failure to successfully remediate the material weaknesses and to implement and maintain effective internal control over financial reporting could cause us to be unable to maintain compliance with securities law requirements
+Added: It is possible that the federal or state governments will implement additional reductions, increases, or changes in
P3 Health Partners Inc.
| 2024 Form 10-K | 38
−Removed: regarding timely filing of periodic reports, could expose us to an increased risk of financial reporting fraud and the misappropriation of assets, could result in errors or misstatements in our financial statements that could result in loss of investor confidence in the accuracy and completeness of our financial reports and a decline in our stock price, and we could be subject to potential delisting from Nasdaq or to other regulatory investigations and civil or criminal sanctions or investigations by the SEC or other regulatory authorities.
−Removed: In addition, even if we remediate the material weaknesses, we will be required to expend significant time and resources to further improve our internal controls over financial reporting, including by further expanding our finance and accounting staff to meet the demands placed upon us as a public company, including the requirements of the Sarbanes-Oxley Act.
−Removed: If we fail to adequately staff our accounting and finance function to remediate our material weaknesses or fail to maintain adequate internal control over financial reporting, any new or recurring material weaknesses could prevent our management from concluding that our internal control over financial reporting is effective and impair our ability to prevent material misstatements in our financial statements, which could cause our business to suffer.
+Added: reimbursement in the future under government programs that may adversely affect us or increase the cost of providing our services.
+Added: The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue or attain growth, any of which could have a material impact on our business.
+Added: Risks Related to Ownership of Our Common Stock
+Added: Failure to maintain effective internal control over financial reporting could have a material adverse effect on our business, financial condition, results of operations, and stock price and may adversely affect investor confidence in our company and, as a result, the value of our Class A common stock and your investment.
+Added: Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) requires us to evaluate the effectiveness of our internal controls over financial reporting as of the end of each fiscal year, including a management report assessing the effectiveness of our internal controls over financial reporting.
+Added: For as long as we are a “non-accelerated filer,” our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404.
+Added: An independent assessment of the effectiveness of our internal controls could detect problems that our management’s assessment might not.
+Added: Our ability to comply with the annual internal control reporting requirements will depend on the effectiveness of our financial reporting and data systems and controls across our company.
+Added: We expect these systems and controls to require additional investment as we become increasingly more complex and our business grows.
+Added: To effectively manage this complexity, we will need to continue to maintain and revise our operational, financial and management controls, and our reporting systems and procedures.
+Added: Certain weaknesses or deficiencies or failures to implement required new or improved controls, or difficulties encountered in the implementation or operation of these controls, could harm our operating results and cause us to fail to meet our financial reporting obligations, or result in material misstatements in our financial statements, which could adversely affect our business and reduce our stock price.
+Added: In connection with the audits of our consolidated financial statements for the years ended December 31, 2018, 2019, 2020 and 2021, and, as previously reported, the restatement of our consolidated financial statements for the years ended December 31, 2020 and 2019, we previously identified material weaknesses in our internal control over financial reporting.
+Added: In response to these material weaknesses, we implemented a comprehensive remediation plan as discussed under the heading “Remediation Activities” in Part II, Item 9A, “ Controls and Procedures .” Based on these remediation efforts, our management has concluded the material weaknesses have been remediated as of December 31, 2024.
+Added: However, we cannot assure you that there will not be material weaknesses in our internal control over financial reporting in the future and that the measures we have taken to date, and actions we may take in the future, will be sufficient to prevent or avoid potential future material weaknesses.
+Added: A material weakness in our internal control over financial reporting could result in an increased probability of fraud, financial statement restatements, the potential loss of customers, litigation from our stockholders, reduction in our ability to obtain financing, and require additional expenditures to remediate.
+Added: Our failure to implement and maintain effective internal control over financial reporting could result in errors in our financial statements that could result in loss of investor confidence in the accuracy and completeness of our financial reports and a decline in our stock price, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities.
We cannot predict the impact our dual-class structure may have on the stock price of our Class A common stock.
6 unchanged sentences
As a result, the market price of our Class A common stock could be materially adversely affected.
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 39
Delaware law and our certificate of incorporation and bylaws contain certain provisions, including anti-takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.
7 unchanged sentences
• regarding the limitation of the liability of, and the indemnification of, directors and officers;
−Removed: • providing that certain transactions are not “corporate opportunities” and that, subject to certain exceptions, Foresight Sponsor Group, LLC, (the “Sponsor”) or the Chicago Pacific Founders funds or their respective affiliates and any of their respective principals, members, directors, partners, stockholders, officers, employees or other representatives, or any director or stockholder who is not employed by us or our subsidiaries, are not subject to the doctrine of corporate opportunity and such persons do not have any
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 40
−Removed: fiduciary duty to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us or any of our subsidiaries;
+Added: • providing that certain transactions are not “corporate opportunities” and that, subject to certain exceptions, Foresight Sponsor Group, LLC, (the “Sponsor”) or its affiliates and any of their respective principals, members, directors, partners, stockholders, officers, employees or other representatives, or any director or stockholder who is not employed by us or our subsidiaries, are not subject to the doctrine of corporate opportunity and such persons do not have any fiduciary duty to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us or any of our subsidiaries;
• regarding the ability of the board of directors to amend the bylaws, which may allow the board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquiror to amend the bylaws to facilitate an unsolicited takeover attempt;
1 unchanged sentence
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our board of directors or management.
−Removed: The Sponsor and the Chicago Pacific Founders funds, and their respective affiliates and representatives, non-employee directors and other non-employee stockholders are not limited in their ability to compete with us, and the corporate opportunity provisions in our certificate of incorporation could enable such persons to benefit from corporate opportunities that might otherwise be available to us, which presents potential conflicts of interest.
−Removed: Our certificate of incorporation provides that subject to certain exceptions, the Sponsor and the Chicago Pacific Founders funds and their respective affiliates and any of their respective principals, members, directors, partners, stockholders, officers, employees or other representatives, or any director or stockholder who is not employed by us or our subsidiaries, would not be restricted from owning assets or engaging in businesses that compete directly or indirectly with us or any of our subsidiaries.
+Added: The Sponsor, its affiliates and representatives, non-employee directors and other non-employee stockholders of the Company are not limited in their ability to compete with us, and the corporate opportunity provisions in our certificate of incorporation could enable such persons to benefit from corporate opportunities that might otherwise be available to us, which presents potential conflicts of interest.
+Added: Our certificate of incorporation provides that subject to certain exceptions, the Sponsor and its affiliates and any of their respective principals, members, directors, partners, stockholders, officers, employees or other representatives, or any director or stockholder of the Company who is not employed by us or our subsidiaries, would not be restricted from
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 40
+Added: owning assets or engaging in businesses that compete directly or indirectly with us or any of our subsidiaries.
In particular, subject to the limitations of applicable law and the certificate of incorporation, these persons may among other things:
8 unchanged sentences
The foregoing provision will not apply to claims seeking to enforce any liability or duty created by the Exchange Act.
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 41
Additionally, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
4 unchanged sentences
If an active market for our Class A common stock is not maintained, or if we fail to satisfy the continued listing standards of Nasdaq for any reason and our Class A common stock is delisted, it may be difficult for our stockholders to sell their Class A common stock without depressing the market price for our Class A common stock, or at all.
+Added: See “ Our failure to meet the continued listing requirements of The Nasdaq Capital Market could result in a delisting of our securities ,” below.
An inactive trading market may also impair our ability to both raise capital by selling shares of capital stock, attract and motivate employees through equity incentive awards and acquire other companies, products, or technologies by using shares of capital stock as consideration.
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 41
There may be sales of a substantial amount of our Class A common stock in future by our stockholders, and these sales could cause the price of our Class A common stock to fall.
2 unchanged sentences
As of December 31, 2024, approximately 58.7% of the outstanding shares of Class A common stock (on an as-converted and as-exchanged basis) were held by entities affiliated with us and our executive officers and directors.
−Removed: In addition, pursuant to the Amended and Restated Registration Rights Agreement, as further amended, that we entered into with certain of our stockholders, we are obligated to register the resale of shares of Class A common stock held by such stockholders and issuable upon the exercise or exchange of securities held by such stockholders.
−Removed: In addition, these stockholders are entitled to demand the registration of such shares of Class A common stock subject to certain minimum requirements and also have certain “piggyback” registration rights with respect to registration statements we file.
−Removed: Upon effectiveness of any registration statement we file for the resale of shares held by such stockholders, and upon the expiration of the lock-up periods applicable to such stockholders, these stockholders may sell large amounts of our Class A common stock in the open market or in privately negotiated transactions, which could have the effect of increasing the volatility in the share price of our Class A common stock or putting significant downward pressure on the price of our Class A common stock.
+Added: In addition, pursuant to certain registration rights agreements that we have entered into with certain of our stockholders, we are obligated to register the resale of shares of Class A common stock held by such stockholders and issuable upon the exercise or exchange of securities held by such stockholders.
+Added: In addition, certain of these stockholders are entitled to demand the registration of such shares of Class A common stock subject to certain minimum requirements and also have certain “piggyback” registration rights with respect to registration statements we file.
+Added: Upon effectiveness of any registration statement we file for the resale of shares held by such stockholders, and upon the expiration of any applicable lock-up periods applicable to such stockholders, these stockholders may sell large amounts of our Class A common stock in the open market or in privately negotiated transactions, which could have the effect of increasing the volatility in the share price of our Class A common stock or putting significant downward pressure on the price of our Class A common stock.
Sales of substantial amounts of our Class A common stock in the public market, or the perception that such sales will occur, could adversely affect the market price of our Class A common stock and make it difficult for us to raise funds through securities offerings in the future.
−Removed: There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.
−Removed: If Nasdaq delists our securities from trading on its exchange for failure to meet the listing standards, we could face significant material adverse consequences including:
−Removed: • a limited availability of market quotations for our securities;
−Removed: • reduced liquidity for our securities;
+Added: Our failure to meet the continued listing requirements of The Nasdaq Capital Market could result in a delisting of our securities.
+Added: We are required to meet the continued listing requirements of the Nasdaq Capital Market and if we fail to satisfy such continued listing requirements, Nasdaq may take steps to delist our securities.
+Added: For example, on May 15, 2024, we received a deficiency letter (the “Deficiency Letter”) from the listing qualifications department of Nasdaq indicating that, for the prior thirty-one consecutive business days, the bid price for our Class A common stock had closed below the minimum $1.00 per share requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”).
+Added: In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were granted an initial period of 180 calendar days, or until November 11, 2024, to regain compliance with the Bid Price Rule.
+Added: We did not regain compliance with the Bid Price Rule prior to this time.
+Added: On November 12, 2024, Nasdaq granted us an additional 180 calendar day period to regain compliance with the Bid Price Rule.
+Added: On March 3, 2025, we filed a definitive proxy statement with the SEC to seek stockholder approval to amend our certificate of incorporation to effect a reverse stock split at a special meeting of stockholders to be held on March 31, 2025.
+Added: However, there can be no assurance that any such reverse stock split will be approved by the stockholders and implemented, and, even if implemented, would increase the market price of our Class A common stock in proportion to the reverse split ratio or result in a sustained increase in the market price of our Class A common stock.
+Added: In addition, it is possible that the reduced number of issued shares of Class A common stock resulting from such a reverse stock split could adversely affect the liquidity of our Class A common stock.
+Added: There can also be no assurance that any actions that we take will be successful in restoring our compliance with the Bid Price Rule or will prevent future non-compliance therewith.
+Added: There is also no assurance that we will maintain compliance with the other listing requirements of The Nasdaq Capital Market or that we will be successful in appealing any delisting determination.
+Added: Delisting from the Nasdaq Capital Market would cause us to pursue eligibility for trading of our securities on other markets or exchanges, or on the “pink sheets.” In such case, our stockholders’ ability to trade, or obtain quotations of the market value of our Class A common stock would be severely limited because of lower trading volumes and transaction delays.
+Added: These factors could contribute to lower prices and larger spreads in the bid and ask prices of our Class A common stock.
+Added: There can be no assurance that our securities, if delisted from the Nasdaq Capital Market in the future, would be listed on a national securities exchange, a national quotation service, the over-the-counter markets or the pink sheets.
+Added: Delisting from the Nasdaq Capital Market, or even the issuance of a notice of potential delisting, would also result in
P3 Health Partners Inc.
| 2024 Form 10-K | 42
−Removed: • a determination that our Class A common stock is a “penny stock,” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
−Removed: • a limited amount of news and analyst coverage;
−Removed: • a decreased ability to issue additional securities or obtain additional financing in the future.
−Removed: For example, in each of May 2022 and August 2022, we received notifications from the listing qualifications department of Nasdaq indicating that as a result of our delinquency in the filing of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2022 and June 30, 2022, respectively, we were not in compliance with the requirements for continued listing under Listing Rule 5250(c)(1) (the “Listing Rule”), which requires listed companies to timely file all required periodic financial reports with the SEC.
−Removed: In October 2022, we regained compliance with the Listing Rule following the filing of our three delinquent periodic reports with the SEC;
−Removed: however, there is no assurance that we will remain in compliance with the listing requirements of Nasdaq in the future.
−Removed: We cannot guarantee that any actions we take to prevent future non-compliance or to regain compliance with Nasdaq’s listing requirements in the future will be successful.
+Added: negative publicity, make it more difficult for us to raise additional capital, adversely affect the market liquidity of our securities, decrease securities analysts’ coverage of us or diminish investor confidence.
+Added: Moreover, there is no assurance that any actions that we take will be successful in restoring our compliance with the Bid Price Rule or will prevent future non-compliance therewith.
+Added: There is also no assurance that we will maintain compliance with the other listing requirements of The Nasdaq Capital Market.
Risks Related to Our Warrants
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Foresight issued 10.8 million warrants to purchase shares of our Class A common stock (the “Public Warrants”) as part of the units offered in its initial public offering and, simultaneously with the closing of its initial public offering, Foresight issued in a private placement an aggregate of 0.8 million units, including (i) an aggregate of 0.3 million private placement warrants, each exercisable to purchase one share of Class A common stock at $11.50 per share, subject to adjustment (the “Private Placement Warrants”), and (ii) an aggregate of 0.8 million shares of Class A common stock.
−Removed: In addition, on December 13, 2022, in connection with our issuance of the VGS Promissory Note (see Note 11 “Debt” to the consolidated financial statements included elsewhere in this Form 10-K), we issued to VGS warrants to purchase 0.4 million shares of Class A common stock.
−Removed: Furthermore, in the March 2023 Private Placement (as defined herein), we issued Common Warrants to purchase an aggregate of 59.9 million shares of Class A common stock and Pre-Funded Warrants to purchase an aggregate of 10.8 million shares of Class A common stock.
+Added: Since December 2022, in various private placement transactions and in connection with our issuance of our outstanding promissory notes (see Note 10 “Debt” to the consolidated financial statements included elsewhere in this Form 10-K), we have issued warrants and pre-funded warrants to purchase an aggregate of 307.1 million shares of Class A common stock.
To the extent such warrants are exercised, additional shares of our Class A common stock will be issued, which will result in dilution to our stockholders and increase the number of shares of Class A common stock eligible for resale in the public market.
Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of our Class A common stock.
−Removed: We may redeem your unexpired Public Warrants prior to their exercise at a time that is disadvantageous to you, thereby making your Public Warrants worthless.
+Added: We may redeem unexpired Public Warrants prior to their exercise at a time that is disadvantageous to our stockholders, thereby making the Public Warrants worthless to our stockholders.
We have the ability to redeem outstanding Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per Public Warrant if, among other things, the last reported sales price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of such redemption to the Public Warrant holders.
If and when the Public Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
−Removed: Redemption of the outstanding Public Warrants could force you (i) to exercise your Public Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your Public Warrants at the then-current market price when you might otherwise wish to hold your Public Warrants or (iii) to accept the nominal redemption price which, at the time the outstanding Public Warrants are called for redemption, is likely to be substantially less than the market value of your Public Warrants.
−Removed: In addition, we may redeem your Public Warrants commencing 90 days after they become exercisable and prior to their expiration, at a price of $0.10 per Public Warrant if, among other things, the last reported sale price of our Class A
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 43
−Removed: common stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which we send the notice of redemption to the Public Warrant holders.
+Added: Redemption of the outstanding Public Warrants could force our stockholders (i) to exercise their Public Warrants and pay the exercise price therefor at a time when it may be disadvantageous for them to do so, (ii) to sell their Public Warrants at the then-current market price when you might otherwise wish to hold your Public Warrants or (iii) to accept the nominal redemption price which, at the time the outstanding Public Warrants are called for redemption, is likely to be substantially less than the market value of your Public Warrants.
+Added: In addition, we may redeem the Public Warrants commencing 90 days after they become exercisable and prior to their expiration, at a price of $0.10 per Public Warrant if, among other things, the last reported sale price of our Class A common stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which we send the notice of redemption to the Public Warrant holders.
In such a case, the holders will be able to exercise their Public Warrants for cash or on a cashless basis prior to redemption and receive that number of shares of Class A common stock determined based on the redemption date and the fair market value of our Class A common stock.
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None of the Private Placement Warrants will be redeemable by us so long as they are held by the Sponsor or its permitted transferees.
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 43
Certain of our warrants are accounted for as liabilities and the changes in value of these warrants could have a material effect on our financial results.
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The credit agreement governing P3 LLC’s credit facilities restrict its ability to make distributions to the Company, and future debt instruments or other agreements may restrict the ability of P3 LLC to make distributions to the Company or of P3 LLC’s subsidiaries to make distributions to P3 LLC.
−Removed: P3 LLC will continue to be treated as a partnership for U.S.
+Added: P3 LLC is treated as a partnership for U.S.
federal income tax purposes and, as such, generally will not be subject to any entity-level U.S.
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Accordingly, we will incur income taxes on our allocable share of any net taxable income of P3 LLC.
−Removed: Under the terms of the P3 LLC A&R LLC Agreement, P3 LLC will be obligated, subject to various limitations and restrictions, including with respect to any debt agreements, to make tax distributions to holders of P3 LLC Units, including
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 44
+Added: Under the terms of the P3 LLC A&R LLC Agreement, P3 LLC will be obligated, subject to various limitations and restrictions, including with respect to any debt agreements, to make tax distributions to holders of P3 LLC Units, including us.
In addition to tax expenses, we will also incur expenses related to our operations, including payments under the Tax Receivable Agreement, which could be substantial.
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To the extent that we are unable to make timely payments under the Tax Receivable Agreement for any reason, the unpaid amounts will be deferred and will accrue interest until paid.
−Removed: Our failure to make any payment required under the Tax Receivable Agreement (including any accrued and unpaid interest) within 90 calendar days of the date on which the payment is required to be made will constitute a material breach of a material obligation under the Tax Receivable Agreement, which will terminate the Tax Receivable Agreement and accelerate future payments thereunder, unless the applicable payment is not made because (i) P3 LLC is prohibited from making such payment under the terms of the Tax Receivable Agreement or the terms governing certain of its indebtedness or (ii) P3 LLC does not have, and despite using commercially reasonable efforts cannot obtain, sufficient funds to make such payment.
+Added: Our failure to make any payment required under the Tax Receivable Agreement (including any accrued and unpaid interest) within 90 calendar days of the date on which the payment is required to be made will constitute a material breach of a material obligation under the Tax Receivable Agreement, which will terminate the Tax Receivable Agreement and accelerate future payments thereunder, unless the applicable payment is not made because (i)
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 44
+Added: P3 LLC is prohibited from making such payment under the terms of the Tax Receivable Agreement or the terms governing certain of its indebtedness or (ii) P3 LLC does not have, and despite using commercially reasonable efforts cannot obtain, sufficient funds to make such payment.
In addition, if P3 LLC does not have sufficient funds to make distributions, its ability to declare and pay cash dividends will also be restricted or impaired.
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federal income tax rate then applicable and the portion of our payments under the Tax Receivable Agreement that constitute interest or give rise to depreciable or amortizable tax basis.
−Removed: Moreover, payments under the Tax Receivable Agreement will be based on the tax reporting positions that we determine, which tax reporting positions are
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 45
−Removed: subject to challenge by taxing authorities.
+Added: Moreover, payments under the Tax Receivable Agreement will be based on the tax reporting positions that we determine, which tax reporting positions are subject to challenge by taxing authorities.
We will be dependent on distributions from P3 LLC to make payments under the Tax Receivable Agreement, and we cannot guarantee that such distributions will be made in sufficient amounts or at the times needed to enable us to make our required payments under the Tax Receivable Agreement, or at all.
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The Tax Receivable Agreement provides that if we breach any of our material obligations under the Tax Receivable Agreement, if we undergo a change of control or if, at any time, we elect an early termination of the Tax Receivable Agreement, then the Tax Receivable Agreement will terminate and our obligations, or our successor’s obligations, to make payments under the Tax Receivable Agreement would accelerate and become immediately due and payable.
−Removed: The amount due and payable in those circumstances is determined based on certain assumptions, including an assumption that we would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the Tax Receivable Agreement.
+Added: The amount due and payable in those circumstances is determined based on certain assumptions, including an
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 45
+Added: assumption that we would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the Tax Receivable Agreement.
We may need to incur debt to finance payments under the Tax Receivable Agreement to the extent our cash resources are insufficient to meet our obligations under the Tax Receivable Agreement as a result of timing discrepancies or otherwise.
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The applicable U.S.
−Removed: federal income tax rules are complex and factual in nature, and there can be no assurance that the Internal Revenue Service or a court will not disagree with our tax reporting positions.
+Added: federal income tax rules are complex and factual in nature, and there can be no assurance that the Internal Revenue Service or a court will agree with our tax reporting positions.
As a result, it is possible that we could make cash payments under the Tax Receivable Agreement that are substantially greater than our actual cash tax savings.
4 unchanged sentences
In addition, the structuring of future transactions may take into consideration tax or other considerations of P3 Equityholders even in situations where no similar considerations are relevant to us.
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 46
General Risk Factors
We may be subject to securities litigation, which is expensive and could divert management attention.
−Removed: The market price of our securities may be volatile and, in the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation.
+Added: The market price of our securities has experienced and may experience volatility and, in the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation.
We may be the target of this type of litigation in the future.
−Removed: Securities litigation against us could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm its business.
+Added: Securities litigation against us could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm our business.
Because we have no current plans to pay cash dividends on our Class A common stock for the foreseeable future, you may not receive any return on investment unless you sell your Class A common stock for a price greater than that which you paid for it.
We may retain future earnings, if any, for future operations, expansion and debt repayment and have no current plans to pay any cash dividends for the foreseeable future.
−Removed: Any decision to declare and pay dividends will be made at the discretion of our board of directors and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that our board of directors may deem relevant.
+Added: Any decision to declare and pay dividends will be made at the
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 46
+Added: discretion of our board of directors and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that our board of directors may deem relevant.
In addition, our ability to declare dividends may be limited by restrictive covenants contained in any existing or future indebtedness.
6 unchanged sentences
• actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;
+Added: • the public’s reaction to our press releases, other public announcements and filings with the SEC;
• changes in the market’s expectations about our operating results;
2 unchanged sentences
• changes in financial estimates and recommendations by securities analysts concerning us or the health population management industry in general;
+Added: • short sales of our stock or trading phenomena such as “short squeezes;”
• operating and stock price performance of other companies that investors deem comparable to us;
4 unchanged sentences
• changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;
−Removed: P3 Health Partners Inc.
−Removed: | 2023 Form 10-K | 47
• the volume of shares of our Class A common stock available for public sale;
2 unchanged sentences
• general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations, public health crises, and acts of war or terrorism.
+Added: P3 Health Partners Inc.
+Added: | 2024 Form 10-K | 47
A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to us could depress our stock price regardless of our business, prospects, financial condition or results of operations.
8 unchanged sentences
We are subject to the reporting requirements of the Exchange Act and are required to comply with the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules and regulations of the SEC and Nasdaq, including the establishment and maintenance of effective disclosure and financial controls, corporate governance requirements and required filings of annual, quarterly and current reports with respect to our business and results of operations.
−Removed: Stockholder activism and the level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional significant compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.
−Removed: We expect that continued compliance with these requirements will increase our legal and financial compliance costs and will make some activities more time-consuming and costly.
+Added: New or changing laws, regulations and standards are subject to varying interpretations, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.
+Added: As a result, our efforts to comply with evolving laws, regulations and standards of a U.S.
+Added: public company are likely to continue to result in increased general and administrative expenses.
In addition, we expect that our management and other personnel will need to continue to divert attention from operational and other business matters to devote substantial time to these public company requirements.
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Generally accepted accounting principles in the U.S.
−Removed: are subject to interpretation by the Financial Accounting Standards Board, the American Institute of Certified Public
+Added: are subject to interpretation by the Financial Accounting Standards Board, the American Institute of Certified Public Accountants, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles.
+Added: A change in these principles or interpretations could have a significant effect on our reported financial results, and could affect the reporting of transactions completed before the announcement of a change.
+Added: Scrutiny of, and evolving expectations regarding, sustainability and environmental, social, and governance (“ESG”) matters could increase our costs, harm our reputation and adversely impact our financial results.
+Added: We, as with other companies, are facing scrutiny related to our sustainability and ESG practices and disclosures from certain investors, capital providers, shareholder advocacy groups, other market participants, government entities,
P3 Health Partners Inc.
| 2024 Form 10-K | 48
−Removed: Accountants, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles.
−Removed: A change in these principles or interpretations could have a significant effect on our reported financial results, and could affect the reporting of transactions completed before the announcement of a change.
−Removed: Increased scrutiny of, and evolving expectations regarding, sustainability and environmental, social, and governance (“ESG”) matters could increase our costs, harm our reputation and adversely impact our financial results.
−Removed: We, as with other companies, are facing increasing scrutiny related to our ESG practices and disclosures from certain investors, capital providers, shareholder advocacy groups, other market participants, government entities, customers, and other stakeholder groups or third parties.
+Added: customers, and other stakeholder groups.
For example, certain institutional and individual investors have requested various ESG-related information and disclosures as they increasingly incorporate ESG criteria in making investment and voting decisions.
−Removed: With this increased focus, public reporting regarding ESG practices is becoming more broadly expected, which could lead to increased scrutiny of our ESG practices or lack thereof.
−Removed: Such increased scrutiny may result in increased costs, increased risk of litigation or reputational damage relating to our ESG practices or performance, changes in demands for certain products, enhanced compliance or disclosure obligations, or other adverse impacts on our business, financial condition or results of operations.
+Added: With this focus, public reporting regarding sustainability and ESG practices is becoming broadly expected and standardized, which could lead to scrutiny of our ESG practices or lack thereof.
+Added: While there are some other governments and actors taking different approaches, such scrutiny may result in increased costs, increased risk of litigation or reputational damage relating to our ESG practices or performance, changes in demands for certain products, enhanced compliance or disclosure obligations, or other adverse impacts on our business, financial condition or results of operations.
While we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others), such initiatives may be costly and may not have the desired effect.
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Even if this is not the case, our current actions may subsequently be determined to be insufficient by various stakeholders.
−Removed: If our ESG practices and reporting do not meet investor, consumer, employee, regulator, or other stakeholder or third party expectations, which continue to evolve, our brand, reputation and customer retention may be negatively impacted, and we may be subject to investor or regulator engagement regarding such matters, even if they are currently voluntary.
+Added: If our ESG practices and reporting do not meet investor, consumer, employee, regulator, or other stakeholder expectations, which continue to evolve, our brand, reputation and customer retention may be negatively impacted, and we may be subject to investor or regulator engagement regarding such matters.
Certain market participants, including major institutional investors, use third-party benchmarks, ratings or scores to measure our ESG practices in making investment and voting decisions.
−Removed: Unfavorable ratings or scores of us or our industry may lead to negative investor sentiment and the diversion of investment to other companies or industries, which could have a negative impact on our stock price and our access to and cost of capital.
+Added: Unfavorable ratings or scores of us or our industry may lead to negative investor sentiment, the exclusion of our stock into ESG-oriented investment funds, and the diversion of investment to other companies or industries, which could have a negative impact on our stock price and our access to and cost of capital.
As ESG best practices, reporting standards and disclosure requirements continue to develop, we may incur increasing costs related to ESG monitoring and reporting.
−Removed: In addition, new sustainability rules and regulations have been adopted and may continue to be introduced in various states and other jurisdictions.
−Removed: For example, we expect to be subject to the requirements of the State of California’s Climate Corporate Data Accountability Act and Climate Related Financial Risk Act as well as the SEC’s climate disclosure proposal, if finalized.
+Added: In addition, we operate in various jurisdictions where new ESG and sustainability-related rules and regulations have been adopted and may continue to be introduced.
+Added: For example, we may be subject to the requirements of the State of California’s Climate Corporate Data Accountability Act and Climate Related Financial Risk Act, if they survive their current federal court challenge as well as the SEC’s climate disclosure proposal, if it is enforced by the Trump Administration and survives its current federal court challenge.
Operating in more than one jurisdiction is likely to make our compliance with ESG and sustainability-related rules more complex and expensive, and potentially expose us to greater levels of legal risks associated with our compliance.
+Added: We are currently assessing the potential impacts of such adopted or proposed rules and regulations, as well as other sustainability and climate-related disclosure obligations and evolving legal and regulatory requirements, to which we may be subject.
Our failure to comply with any applicable rules or regulations could lead to penalties and adversely impact our reputation, customer attraction and retention, access to capital and employee retention.
1 unchanged sentence
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.