What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-26 compared with 2025-03-28 · 164 added, 124 removed, 511 unchanged (36% of the section changed)

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Our actual results may differ materially from those anticipated in any forward-looking statements as a result of many factors, including those set forth under “ Cautionary Statement Regarding Forward-Looking Statements ,” “Item 1A.

Risk Factors ” and elsewhere in this Form 10-K.

Risk Factors.” “Item 3.

Legal Proceedings.” and elsewhere in this Form 10-K.

Our historical results are not necessarily indicative of the results that may be expected for any periods in the future.

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We believe that a platform such as ours, which helps to realign incentives and focuses on treating the full patient, is uniquely positioned to address these healthcare challenges.

We have leveraged the expertise of our management team’s more than 20 years of experience in population health management, to build our “P3 Care Model.” The key attributes that differentiate P3 include:

We have leveraged the expertise of our management team’s substantial experience in population health management, to build our “P3 Care Model.” The key attributes that differentiate P3 include:

1) patient-focused model, 2) physician-led model, and 3) our broad delegated model.

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In our model, physicians are able to retain their independence and entrepreneurial spirit, while gaining access to the tools, teams and technologies that are key to success in a VBC model, all while sharing in the savings from successfully improving the quality of patient care and reducing costs.

We operate in the $1,030 billion Medicare market, which covers approximately 68 million eligible lives as of November 2024.

Our core focus is the MA market, which makes up approximately 54% of the overall Medicare market, or nearly 33 million Medicare eligible lives in 2024.

We operate in the $1,118 billion Medicare market, which covers approximately 68 million eligible lives as of July 2025.

Our core focus is the MA market, which covers approximately 34 million Medicare eligible lives in 2025.

Medicare beneficiaries may enroll in an MA plan, under which payors contract with the CMS to provide a defined range of healthcare services that are comparable to Medicare FFS (which is also referred to as “traditional Medicare”).

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Our company was formed in 2017 and our first at-risk contract became effective on January 1, 2018.

We have demonstrated an ability to rapidly scale, primarily entering markets with our affiliate physician model, and expanding to a PCP network of approximately 3,100 physicians, in 27 markets (counties) across five states in over six full years of operations as of December 31, 2024.

We have demonstrated an ability to rapidly scale, primarily entering markets with our affiliate physician model, and expanding to a PCP network of approximately 2,400 physicians, in 23 markets (counties) across four states in over eight full years of operations as of December 31, 2025.

Our platform has enabled us to grow our revenue by an average of 26% annually from December 31, 2020 to December 31, 2025.

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| 2025 Form 10-K | 56

Reverse Stock Split

On April 11, 2025, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation (the "Charter Amendment") with the Secretary of State of Delaware to effect a 1-for-50 reverse stock split (the "Reverse Stock Split") of the Company's outstanding Class A common stock, $0.0001 par value per share, and Class V common stock, $0.0001 par value per share, as of that date.

The Reverse Stock Split resulted in 163,159,548 shares of Class A common stock being converted to 3,263,093 shares of Class A common stock and 195,956,984 shares of Class V common stock being converted to 3,919,124 shares of Class V common stock.

The Board of Directors of the Company approved the Charter Amendment to meet the share bid price requirements of the Nasdaq Capital Market.

The Company’s stockholders approved the Charter Amendment at a special meeting held on March 31, 2025.

No fractional shares were issued as a result of the Reverse Stock Split.

Each stockholder was entitled to receive a cash payment equal to the fraction of a share to which such stockholder would otherwise have been entitled multiplied by the closing price per share of the Class A common stock as reported by The Nasdaq Capital Market (as adjusted to give effect to the Reverse Stock Split) on the effective date of the Reverse Stock Split.

Proportional adjustments were made to the number of shares of Class A common stock underlying the Company’s outstanding equity awards and warrants, as well as the exercise or conversion price, as applicable, and to the number of shares issuable under the Company’s equity incentive plans and other existing agreements.

All options and restricted stock awards of the Company outstanding immediately prior to the Reverse Stock Split have been adjusted in accordance with the terms of the plans, agreements or arrangements governing such options and restricted stock awards.

Each stockholder’s percentage ownership interest in the Company and proportional voting power remained unchanged by the Reverse Stock Split, except for minor changes and adjustments that resulted from the treatment of fractional shares.

The rights and privileges of the holders of shares of the Company’s common stock were substantially unaffected.

Unless otherwise noted, all references in the consolidated financial statements and notes to consolidated financial statements to the number of shares, per share data, restricted stock and stock option data have been retroactively adjusted to give effect to the Reverse Stock Split.

P3 Commonwealth Innovation MSO, LLC

In November 2025, the Company, through its subsidiary, P3 Health Partners REACH ACO, LLC (“P3 ACO”), entered into an agreement with Commonwealth Primary Care ACO, LLC (“CPC ACO”) which resulted in the formation of P3 Commonwealth Innovation MSO, LLC (the “MSO”).

The MSO was created to engage in the management, administration, and coordination of activities on behalf of accountable care organizations intended to improve the performance and quality of the parties’ respective ACO programs.

To this end, the MSO entered into a Management Services Agreement (“MSA”) with the ACOs that is effective January 1, 2026 that will govern the MSO’s oversight of clinical integration, provider management, data analytics, financial management, strategic planning, shared services, compliance operations, and related administrative and operational support for the benefit of the ACOs.

The management fee to be paid by each ACO to the MSO for its services under the MSA is equal to the amount of liabilities incurred by such ACO in connection with its participation in any accountable care organization governmental program assumed and satisfied by the MSO during the term of the MSA plus a margin on such assumed liabilities.

Beginning in 2026 and for each year thereafter, the MSO will also be entitled to receive from each ACO a portion of each ACO’s net shared savings as determined under the MSA.

The MSA may be terminated after three years without cause.

Distributions from the MSO of available net cash flow will be in accordance with the members’ respective percentage interests, with P3 ACO holding an 80% membership interest and CPC ACO holding a 20% membership interest.

P3 also controls the board of the MSO.

Following the three-year anniversary of the MSO’s formation, or upon termination of the MSA for cause, P3 ACO has the right to cause the MSO to redeem CPC ACO’s membership interests in the MSO.

If P3 ACO does not exercise its redemption right within 90 days following the date such right is exercisable, CPC ACO has the right to cause the MSO to redeem its membership interests in the MSO.

P3 Health Partners Inc.

| 2025 Form 10-K | 57

Key Factors Affecting our Performance

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(1) partnering with payors and (2) partnering with providers.

Because our model honors the existing patient-provider relationship, we are able to deploy our care model around existing physicians in a given a market.

Because our model honors the existing patient-provider relationship, we are able to deploy our care model around existing physicians in a given market.

By utilizing the local healthcare infrastructure, we can quickly build a network of PCPs to serve the healthcare needs of contracted members.

We maintain an active pipeline of new partnership opportunities for both providers and payors.

These potential opportunities are developed through significant inbound interest and the deep relationships our team has developed with their more than 20 years of experience in the VBC space and our proactive assessment of expansion markets.

These potential opportunities are developed through significant inbound interest and the deep relationships our team has developed with their substantial experience in the VBC space and our proactive assessment of expansion markets.

When choosing a market to enter, we make our decision on a county-by-county basis across the United States.

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Because of the benefits, we have also historically experienced high retention with our affiliate providers.

From 2018 through December 31, 2024, we experienced a 95% physician retention rate in our affiliate provider network.

For the year ended December 31, 2025, we experienced a physician retention rate of over 88% in our affiliate provider network.

By expanding our affiliate provider network and adding new physicians to the P3 network, we can quickly increase the number of contracted at-risk members under our existing health plan arrangements.

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Payors with higher acuity members receive a higher payment and those with lower acuity members receive a lower payment.

Moreover, some of our capitated revenue also includes adjustments for performance incentives or penalties based on the achievement of certain clinical quality metrics as contracted with payors.

Moreover, some of our capitated revenue also includes adjustments, which may increase or decrease revenue, for performance incentives or penalties based on the achievement of certain clinical quality metrics as contracted with payors.

Given the prevalence of FFS arrangements, our patients often have historically not participated in a VBC model, and therefore their health conditions are poorly documented.

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As a result of our affiliate model and ability to leverage our existing local and national infrastructure, we aim to generate operating efficiencies at both the market and enterprise level.

Our local corporate, general and administrative expense, which includes our local leadership, care management teams and other operating costs to support our markets, are expected to decrease over time as a percentage of revenue as we add members to our existing contracts, grow membership with new payor and physician contracts, and our revenue subsequently increases.

Our local corporate, general and administrative expense, which includes our local leadership, care management teams and other operating costs to support our markets, is expected to decrease over time as a percentage of revenue as we add members to our existing contracts, grow membership with new payor and physician contracts, and our revenue subsequently increases.

Our corporate general and administrative expenses at the enterprise level include resources and technology to support payor contracting, quality, data management, delegated services, finance and legal functions.

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Depreciation and amortization 84,163 86,058

Income tax provision 4,387 2,695

Income tax provision (benefit) 2,025 4,387

Mark-to-market of stock warrants (7,850) (22,114)

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4,108 (6,775)

Transaction and other related costs (2)

Adjusted EBITDA loss $ (161,276) $ (167,199)

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(1) Other during the year ended December 31, 2025 consisted of (i) interest income, (ii) loss on disposal of certain property and equipment, (iii) severance expense in connection with reorganization of workforce and (iv) legal settlements and valuation allowance on our notes receivable.

Other during the year ended December 31, 2024 consisted of (i) interest income, (ii) gain recognized upon the settlement and write-off of contingent consideration related to an acquisition completed in a prior year and (iii) gain recognized on asset sale partially offset by (iv) severance and related expense in connection with our chief executive officer transition, (v) loss on impairment on assets held for sale, and (vi) valuation allowance on our notes receivable.

Other during the year ended December 31, 2023 consisted of (i) interest income offset by (ii) cybersecurity incident loss, (iii) restructuring and other charges, including severance and benefits paid to employees pursuant to workforce reduction plans, (iv) the disposition of our Pahrump operations, (v) expenses for third-party consultants to assist us with the development, implementation, and documentation of new and enhanced internal controls and processes for compliance with Sarbanes-Oxley Section 404(b), (vi) a legal settlement outside of the ordinary course of business, and (vii) valuation allowance on our notes receivable.

(2) Transaction and other related costs during the year ended December 31, 2023 consisted of legal fees incurred related to acquisition-related litigation.

Medical Margin

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(in thousands)

Gross profit (loss) $ (58,917) $ 31,635

Other patient service revenue (16,853) (14,066)

Gross profit (1)

$ (60,160) $ (58,917)

Other revenue (30,101) (16,853)

Other medical expense 113,789 161,229

Medical margin $ 23,528 $ 85,459

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(1) Gross profit is defined as total revenues less medical services expense and other medical expenses.

Key Performance Metrics

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Other medical expenses are largely variable and proportionate to the level of surplus in each respective market, among other cost factors.

The following table presents our gross profit (loss):

The following table presents our gross profit:

Year Ended December 31,

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other medical expense $ (113,789) $ (161,229)

Gross profit (loss) $ (58,917) $ 31,635

Gross profit $ (60,160) $ (58,917)

At-Risk Membership

At-risk membership represents the approximate number of Medicare members for whom we receive a fixed percentage of premium under capitation arrangements as of the end of the reporting period.

We had 123,800 and 108,900 at-risk members as of December 31, 2024 and 2023, respectively.

We had 116,100 and 126,000 average at-risk members for the years ended December 31, 2025 and 2024, respectively.

Affiliate Primary Care Physicians

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Our platform support costs, which include regionally-based support personnel and other operating costs to support our markets, are expected to decrease over time as a percentage of revenue as our physician partners add members and our revenue grows.

Our operating expenses at the enterprise level include resources and technology to support payor contracting, clinical program development, quality, data management, finance, and legal functions.

We exclude costs related to the operations of our owned medical clinics and wellness centers.

Our operating expenses at the enterprise level include resources and technology to support payor

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| 2025 Form 10-K | 62

contracting, clinical program development, quality, data management, finance, and legal functions.

We exclude costs related to the operations of our owned medical clinics and wellness centers.

The table below represents costs to support our markets and enterprise functions, which are included in corporate, general and administrative expenses:

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Through this capitation arrangement, we stand ready to provide assigned MA members all their medical care via our directly employed and affiliated physician/specialist network.

The premiums health plans receive are determined via a competitive bidding process with CMS and are based on the costs of care in local markets and the average utilization of services by patients enrolled.

The premiums that health plans receive are determined via a competitive bidding process with CMS and are based on the costs of care in local markets and the average utilization of services by enrolled patients.

Medicare pays capitation using a “risk adjustment model,” which compensates providers based on the health status (acuity) of each individual patient.

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The capitation amount is subject to possible retroactive premium risk adjustments based on the member’s individual acuity.

Other patient service revenue.

Other patient service revenue is comprised primarily of encounter-related fees to treat patients outside of our at-risk arrangements at company owned clinics.

Other patient service revenue also includes ancillary fees earned under contracts with certain payors for the provision of certain care coordination and other care management services.

Other revenue.

Other revenue is comprised primarily of encounter-related fees to treat patients outside of our at-risk arrangements at company owned clinics.

Other revenue also includes ancillary fees earned under contracts with certain payors for the provision of certain care coordination and other care management services.

These services are provided to patients covered by these payors regardless of whether those patients receive their care from our directly employed or affiliated medical groups.

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To the extent we revise our estimates of incurred but not reported claims for prior periods up or down, there would be a correspondingly favorable or unfavorable effect on our current period results that may or may not reflect changes in long term trends in our performance.

Premium deficiency reserve.

Premium deficiency reserves (“PDR”) are recognized when it is probable that expected future health care costs and maintenance costs under a group of existing contracts will exceed anticipated future

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| 2025 Form 10-K | 63

premiums and stop-loss insurance recoveries on those contracts.

Premium deficiency reserve.

PDR represents the advance recognition of a probable future loss in the current period’s financial statements.

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Depreciation and amortization expense.

Depreciation expense is associated with our property and equipment, including leasehold improvements, computer equipment and software, furniture and fixtures, and internally developed software.

Depreciation expense is associated with our property and equipment, including leasehold improvements, computer equipment and software, furniture and fixtures, medical equipment, and internally developed software.

Amortization expense is associated with definite lived intangible assets, including trademarks and tradenames, customer contracts, provider network agreements, and payor contracts.

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federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income or loss generated by P3 LLC.

Non-controlling Interest

We consolidate the financial results of P3 LLC and report a non-controlling interest on our consolidated statements of operations, representing the portion of net income or loss attributable to the non-controlling interest.

Non-controlling Interests

We consolidate the financial results of P3 LLC and report non-controlling interest on our consolidated statements of operations, representing the portion of net income or loss attributable to the non-controlling interests.

The weighted average ownership percentages during the period are used to calculate the net income or loss attributable to P3 Health Partners Inc.

and the non-controlling interest.

and the non-controlling interests.

P3 Health Partners Inc.

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Capitated revenue $ 1,428,979 98 % $ 1,483,602 99 %

Other patient service revenue 16,853 1 14,066 1

Other revenue 30,101 2 16,853 1

Total operating revenue 1,459,080 100 1,500,455 100

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Mark-to-market of stock warrants 7,850 1 22,114 1

Gain on asset sale, net 13,269 1 — —

Gain (loss) on asset sale, net (162) — 13,269 1

Other (3,414) (0) 1,457 0

Total other income (expense) 14,667 1 (15,801) (1)

Total other (provision) benefit (50,760) (3) 14,667 1

Loss before income taxes (321,061) (22) (305,991) (20)

Income tax provision (4,387) (0) (2,695) (0)

Income tax provision (benefit) (2,025) (0) (4,387) (0)

Net loss (323,086) (22) (310,378) (21)

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Capitated revenue $ 1,428,979 $ 1,483,602 $ (54,623) (4) %

Other patient service revenue 16,853 14,066 2,787 20 %

Other revenue 30,101 16,853 13,248 79 %

Total operating revenue $ 1,459,080 $ 1,500,455 $ (41,375) (3) %

Capitated revenue was $1.5 billion for the year ended December 31, 2024, an increase of $231.3 million, or 18%, compared to $1.3 billion for the year ended December 31, 2023.

This increase was primarily driven by a 14% increase in the total number of at-risk members from 108,900 at December 31, 2023 to 123,800 at December 31, 2024, which was primarily due to an increase by nine counties under contract with our health plans, effective January 1, 2024.

Capitated revenue was approximately 99% of total operating revenue for each of the years ended December 31, 2024 and 2023.

The decrease in capitated revenue was primarily driven by a (7)% decrease in the total average number of at-risk members from 126,000 at December 31, 2024 to 116,100 at December 31, 2025, which was primarily driven by the strategic termination of underperforming payor contracts and affiliate providers in the current year.

Capitated revenue was approximately 98% and 99% of total operating revenue for the years ended December 31, 2025 and 2024, respectively.

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| 2025 Form 10-K | 65

Other patient service revenue was $16.9 million for the year ended December 31, 2024, an increase of $2.8 million, or 20%, compared to $14.1 million for the year ended December 31, 2023.

Other patient service revenue was approximately 1% of total operating revenue for each of the years ended December 31, 2024 and 2023.

Other revenue was approximately 2% and 1% of total operating revenue for the years ended December 31, 2025 and 2024, respectively.

The increase in other revenue was primarily driven by an increase in revenue from incentive-sharing arrangements related to Part D program incentive initiatives.

Medical Expense

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Medical expense $ 1,519,240 $ 1,559,372 $ (40,132) (3) %

Medical expense was $1.6 billion for the year ended December 31, 2024, an increase of $324.6 million, or 26%, compared to $1.2 billion for the year ended December 31, 2023.

The increase was driven by an increase in the total number of at-risk members year-over-year, as described above, resulting from the addition of nine counties under contract with our health plans, effective January 1, 2024, and elevated costs from increased demand for medical care in the current period.

The decrease in medical expense was driven by a decrease in the total number of at-risk members year-over-year, as described above, driven by the strategic termination of underperforming payor contracts and affiliate providers in the current year.

Premium Deficiency Reserve

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Premium deficiency reserve $ 18,749 $ 53,698 $ (34,949) (65) %

Premium deficiency reserve was an expense of $53.7 million for the year ended December 31, 2024 compared to a benefit of $12.7 million for the year ended December 31, 2023.

Premium deficiency reserve was an expense of $18.7 million for the year ended December 31, 2025, compared to $53.7 million for the year ended December 31, 2024.

The change was due to management’s assessment of the profitability of contracts, wherein increased medical expense is expected to increase our future losses.

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Corporate, general and administrative expense $ 106,311 $ 112,596 $ (6,285) (6) %

Corporate, general and administrative expense was $112.6 million for the year ended December 31, 2024, a decrease of $9.8 million, or 8%, compared to $122.4 million for the year ended December 31, 2023.

The decrease was primarily driven by a decrease of $8.6 million in salary and related expense resulting primarily from a reduction in head count of 10%, a $6.2 million gain recognized upon the settlement and write-off of contingent consideration related to an acquisition completed in a prior year, partially offset by an increase of $1.9 million in non-income based taxes.

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| 2024 Form 10-K | 64

The decrease in corporate, general and administrative expense was primarily driven by a decrease of $10.6 million in salary and related expense resulting primarily from a reduction in headcount of 11% and a decrease of $1.4 million in non-income based taxes.

The decrease was partially offset by a $6.2 million gain recognized in the year ended December 31, 2024 upon the settlement and write-off of contingent consideration related to an acquisition completed in a prior year.

Professional expenses increased by $2.5 million, primarily driven by higher consulting expenses during a transition period involving overlapping third-party support, partially offset by lower accounting and legal expenses.

Other Income (Expense)

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Mark-to-market of stock warrants 7,850 22,114 (14,264) (65) %

Gain on asset sale, net 13,269 — 13,269 NM

Gain (loss) on asset sale, net (162) 13,269 (13,431) (101) %

Other (3,414) 1,457 (4,871) (334) %

Total other income (expense) $ (50,760) $ 14,667 $ (65,427) (446) %

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NM — not meaningful

Interest expense, net was $22.2 million for the year ended December 31, 2024, compared to $16.0 million for the year ended December 31, 2023.

This increase was primarily due to interest associated with the Company’s unsecured promissory notes issued in December 2022 and March 2024.

Mark-to-market of stock warrants was a gain of $22.1 million for the year ended December 31, 2024, compared to a gain of $0.4 million for the year ended December 31, 2023.

This increase was primarily due to the issuance of common warrants in our May 2024 private placement offering.

The gain on asset sale, net, of $13.3 million for the year ended December 31, 2024 reflects the sale of the Florida Assets (defined below).

Other income was $1.5 million for the year ended December 31, 2024, which consisted primarily of interest income on our notes receivable of $1.7 million.

The increase from other expense of $0.2 million for the year ended December 31, 2023, consisted primarily of $1.0 million cybersecurity loss, increase of $0.3 million interest income and $0.4 million of other income.

The increase in interest expense, net was primarily due to the increase in principal amounts outstanding for the Company’s unsecured promissory notes.

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The Company recorded a gain of $7.9 million related to its liability-classified stock warrants during the year ended December 31, 2025, compared to a gain of $22.1 million for the year ended December 31, 2024.

The gain on asset sale, net reflects the sale of the Florida Assets (defined below).

Other income (expense) for the year ended December 31, 2025 consisted primarily of losses on the disposal of assets of $3.4 million.

Other income for the year ended December 31, 2024 consisted primarily of interest income on our notes receivable of $1.7 million.

Liquidity and Capital Resources

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We have experienced losses since our inception and net losses of $323.1 million and $310.4 million for the years ended December 31, 2025 and 2024, respectively.

We expect to continue to incur operating losses and generate negative cash flows from operations for the foreseeable future due to the strong growth we have experienced over the last seven years and the investments we are making in expanding our business, which require up-front expenses.

Our future capital requirements will depend on many factors, including the pace of our growth, ability to manage medical costs, the maturity of our members, our ability to complete the sale of our remaining Florida operations, and our ability to raise capital and refinance our indebtedness as it matures.

We may need to raise additional capital through a combination of debt and/or

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equity financing and to the extent we are unsuccessful at doing so, we may 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.

O n November 30, 2024, we and certain of our subsidiaries (the “Sellers”) entered into an asset purchase agreement with certain entities affiliated with an entity in which Chicago Pacific Founders (“CPF”), our principal stockholder, has an ownership interest (the “Buyers”), which was amended on December 30, 2024, effective as of December 5, 2024 (as amended, the “Florida Asset Purchase Agreement”).

Our future capital requirements will depend on many factors, including the pace of our growth, ability to manage medical costs, the maturity of our members, and our ability to raise capital and refinance our indebtedness as it matures.

We may need to raise additional capital through a combination of debt and/or equity financing and to the extent we are unsuccessful at doing so, we may 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.

On November 30, 2024, we and certain of our subsidiaries (the “Sellers”) entered into an asset purchase agreement with certain entities affiliated with an entity in which Chicago Pacific Founders (“CPF”), our principal stockholder, has an ownership interest (the “Buyers”), which was amended on December 30, 2024, effective as of December 5, 2024 (as amended, the “Florida Asset Purchase Agreement”).

Pursuant to the Florida Asset Purchase Agreement, the Sellers sold to the Buyers all of the assets, clinical and non-clinical, exclusively or primarily used by our MA-related business operated out of Eagle Park, Florida (the “Florida Assets”) on a cash-free, debt-free basis for a purchase price of approximately $15.0 million less a $0.3 million working capital adjustment, subject to further adjustment, and an adjustment for certain payment obligations totaling $0.2 million.

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We recognized a $13.3 million net gain on asset sale on the consolidated statement of operations for the year ended December 31, 2024.

On May 1, 2025, our subsidiary, P3 Health Partners-Florida, LLC (“P3 Florida”), entered into an asset purchase agreement with Invictus Equity Group, LLC (“Invictus”) for the purchase of the remaining assets previously held for sale.

Pursuant to the asset purchase agreement, P3 Florida sold to Invictus the assets, clinical and non-clinical, exclusively or primarily used by our MA-related businesses operated out of Apollo Beach and Clearwater, Florida, for a purchase price of approximately $0.1 million.

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May 2024 Private Placement

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As of December 31, 2025, we have sold approximately 540 shares of our Class A common stock under the Sales Agreement for net proceeds of approximately $33,000.

March 2023 Private Placement

On April 6, 2023, pursuant to a securities purchase agreement, dated March 30, 2023, with the purchasers named therein, which included certain affiliated entities of CPF and our Chief Medical Officer and member of our board of directors, we issued 79.9 million units at a price of approximately $1.12 per unit for institutional investors, and a purchase price of approximately $1.19 per unit for employees and consultants.

Each unit consisted of one share of Class A common stock and 0.75 of a warrant to purchase one share of Class A common stock at an exercise price of $1.13.

Certain institutional investors elected to receive pre-funded warrants to purchase Class A common stock in lieu of a portion of their Class A common stock.

In total, we sold (i) an aggregate of 69.2 million shares of our Class A common stock, (ii) warrants to purchase an aggregate of 59.9 million shares of Class A common stock, and (iii) pre-funded warrants to purchase an aggregate of 10.8 million shares of Class A common stock for aggregate proceeds of approximately $86.6 million, net of offering costs of approximately $2.9 million (collectively, the “March 2023 Private Placement”).

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Letter Agreement with CPF

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(“CPF GP I”), Chicago Pacific Founders GP III, L.P., (“CPF GP III”) (on behalf of the funds of which CPF GP I is the general partner, certain funds of which CPF GP III is the general partner) and/or certain of their affiliated entities and funds (collectively, the “CPF Parties”).

Pursuant to the CPF Letter Agreement, (i) for as long as the CPF Parties own 40% of the Company’s outstanding Common Stock, CPF will be entitled to designate one additional independent member of the Company’s board of directors, who must be independent and satisfy all applicable requirements regarding service as a director of the Company under applicable law and SEC and stock exchange rules, (ii) for as long as the CPF Parties own 40% of the Company’s outstanding Common Stock, CPF will be entitled to certain information rights and protective provisions, and (iii) subject to the terms of the CPF Letter Agreement, the CPF Parties agreed to a standstill restriction from the date of the closing of the March 2023 Private Placement to June 30, 2024 that limits the ownership of the CPF Parties to 49.99% of the Company’s Common Stock and Class V Common Stock.

In connection with the May 2024 Private Placement, we entered into an amended and restated CPF Letter Agreement pursuant to which the CPF Parties agreed to extend the ownership restriction standstill to July 31, 2025.

On December 12, 2024, in connection with the issuance of warrants to VGS 3 (defined below), we entered into a second amended and restated CPF Letter Agreement pursuant to which the CPF Parties agreed to further extend the ownership restriction standstill to January 1, 2026.

On December 12, 2024, in connection with the issuance of warrants to VGS 3 (defined below), we entered into a second amended and restated CPF Letter Agreement pursuant to which the CPF Parties extended the ownership restriction standstill to January 1, 2026.

As of the date of this Form 10-K, CPF has not exercised its right to designate an additional independent director under the terms of the CPF Letter Agreement.

In November 2020, we entered into a Term Loan and Security Agreement with CRG Servicing, LLC (as amended, the “Term Loan Agreement”) providing for funding of up to $100.0 million (the “Term Loan Facility”).

The Term Loan Facility’s maturity date is December 31, 2025.

The Term Loan Facility’s initial maturity date was September 30, 2025.

As of December 31, 2025, we had $82.9 million of borrowings outstanding under the Term Loan Facility, and remaining availability under the Term Loan Facility ended upon termination of the commitment period on February 28, 2022.

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In March 2021, we elected to pay interest at 8.0% with the remaining interest at 4.0% being added to principal as paid in-kind (“PIK”) for a period of three years (or 12 payments).

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We are required to remain in compliance with financial covenants such as minimum liquidity of $5.0 million and annual minimum revenue levels.

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On an annual basis, we must post a minimum amount of annual revenue equal to $585.0 million in 2024 and $650.0 million in 2025.

The maturity date may be accelerated as a remedy under the certain default provisions in the Term Loan Agreement, or in the event a mandatory prepayment event occurs.

The maturity date may be accelerated as a remedy under certain default provisions in the Term Loan Agreement, or in the event a mandatory prepayment event occurs.

In connection with the issuance of the VGS Promissory Note (defined below) and entry into the 2022 Subordination Agreement (defined below), on December 13, 2022, we entered into an amendment to the Term Loan Agreement to permit the issuance of the VGS Promissory Note and the entry into the 2022 Subordination Agreement.

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In connection with the issuance of the VGS 3 Promissory Note (defined below) and entry into the VGS 3 Subordination Agreement (defined below), on December 12, 2024, we entered into the Sixth Amendment to the Term Loan Agreement to permit the issuance of the VGS 3 Promissory Note and the entry into the VGS 3 Subordination Agreement.

In connection with the issuance of the VGS 4 Promissory Note (defined below) and entry into the VGS 4 Subordination Agreement (defined below), on February 13, 2025, we entered into the Seventh Amendment to the Term Loan Agreement to permit the issuance of the VGS 4 Promissory Note and the entry into the VGS 4 Subordination Agreement.

On May 2, 2025, we entered into the Eighth Amendment to the Term Loan Agreement (the “Eighth Amendment”), by and among P3 LLC, as borrower, the subsidiary guarantors party thereto, the lenders from time to time party thereto and CRG, as administrative agent and collateral agent.

The Eighth Amendment amended the Term Loan Agreement to permit the issuance of a surety bond in connection with the Company’s participation in the Accountable Care Organization – Realizing Equity, Access, and Community Health (“ACO REACH”) program and added P3 Health Partners REACH ACO LLC as a subsidiary guarantor.

The Eighth Amendment did not modify the principal amount outstanding, maturity date, interest rate, or payment terms under the Term Loan Agreement.

In connection with the VGS 5 transactions described below, on May 29, 2025, we entered into the Ninth Amendment to the Term Loan Agreement (the “Ninth Amendment”), by and among P3 LLC, as borrower, the subsidiary guarantors party thereto, the lenders from time to time party thereto and CRG, as administrative agent and collateral agent.

The Ninth Amendment permits the issuance of the VGS 5 Promissory Note and the entry into the VGS 5 Subordination Agreement.

On August 27, 2025, we entered into the Tenth Amendment to the Term Loan Agreement (the “Tenth Amendment”), by and among P3 LLC, as borrower, the subsidiary guarantors party thereto, the lenders from time to time party thereto and CRG, as administrative agent and collateral agent.

The Tenth Amendment

• amends the payment structure of the Term Loan Agreement by extending the interest-only period to June 30, 2026, extending the final maturity date to September 30, 2027, and changing the principal payments to a fixed $5,000,000 per payment date;

• changes the interest rate from 12% to 12% through September 30, 2025 and 15% thereafter;

• includes two separate PIK periods, replacing the previous single PIK period:

the first PIK Period measures from closing of the Term Loan Agreement through September 30, 2024 and includes the option to pay 8% cash plus 4% PIK (added to the principal);

and the second PIK Period measures from September 30, 2025 through September 30, 2027 and includes the option to pay 12% cash plus 3% PIK;

• updates board observation rights for lender representatives.

P3 Health Partners Inc.

| 2025 Form 10-K | 69

Loan Agreement to permit the issuance of the VGS 4 Promissory Note and the entry into the VGS 4 Subordination Agreement.

VGS Promissory Note and VGS 1 2024 Loan

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All other terms of the VGS 1 2024 Loan are the same as the terms of the VGS Promissory Note.

As of December 31, 2024, we had $38.1 million of borrowings outstanding under the VGS 1 2024 Loan.

The VGS 1 2024 Loan may be prepaid, at our option, either in whole or in part, without penalty or premium, at any time and from time to time, subject to the payment of the back-end fee;

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The maturity date may be accelerated as a remedy under the certain default provisions in the agreement, or in the event a mandatory prepayment event occurs.

In connection with the issuance of the VGS 2 Promissory Note, we also entered into a subordination agreement, dated as of March 22, 2024 (the “2024 Subordination Agreement”) with VGS 2 which subordinates VGS 2’s right of payment under the VGS 2 Promissory Note to the right of payment and security interests of the lenders under the Term

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Loan Facility.

Under the terms of the 2024 Subordination Agreement, we will be required to pay all interest under the VGS 2 Promissory Note in-kind.

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(ii) if paid after April 30, 2025 and on or before July 31, 2025, 6.75% and (iii) if paid after July 31, 2025, 9.0%.

As of December 31, 2024, we were not in compliance with the Term Loan Facility and 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.

Each of 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.

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;

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, VGS 3

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| 2024 Form 10-K | 69

Promissory Note or the lenders of any future indebtedness we may incur will grant any such waiver or forbearance in the future.

VGS 4 Promissory Note

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The VGS 4 Promissory Note matures on August 13, 2028.

As of December 31, 2025, we had $41.1 million of borrowing outstanding under the VGS 4 Promissory Note.

Interest on the VGS 4 Promissory Note is payable at 19.5% per annum on a quarterly cycle (in arrears) beginning March 31, 2025.

We may elect to pay interest 11.5% in-kind and 8.0% in cash, but if the terms of the VGS 4 Subordination Agreement (as defined below) do not permit P3 LLC to pay interest in cash, interest will be paid entirely in-kind.

We may elect to pay interest 11.5% in-kind and 8.0% in cash, but if the terms of the VGS 4 Subordination Agreement (as defined below) do not permit us to pay interest in cash, interest will be paid entirely in-kind.

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| 2025 Form 10-K | 71

The VGS 4 Promissory Note may be prepaid, at our option, either in whole or in part, without penalty or premium, at any time and from time to time, subject to the payment of the back-end fee described below;

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The VGS 4 Promissory Note provides for mandatory prepayments with the proceeds of certain asset sales, and VGS 4 has the right to demand payment in full upon (i) a change of control of the Company and (ii) certain qualified financings (as defined in the VGS 4 Promissory Note).

The VGS 4 Promissory Note restricts P3 LLC’s ability and the ability of its subsidiaries to, among other things, incur indebtedness and liens, and make investments and restricted payments.

The VGS 4 Promissory Note restricts our ability to, among other things, incur indebtedness and liens, and make investments and restricted payments.

The maturity date may be accelerated as a remedy under the certain default provisions in the agreement, or in the event a mandatory prepayment event occurs.

In addition, we will pay VBC 4 a back-end fee at the time the loans issued under the VGS 4 Promissory Note are repaid as follows:

(i) if repaid prior to March 31, 2025, 2.25% of the aggregate principal amount of the loans advanced to P3 LLC on or prior to such date;

(ii) if repaid from April 1, 2025 through June 30, 2025, 4.5% of the aggregate principal amount of the loans advanced to P3 LLC on or prior to such date;

(iii) if repaid from July 1, 2025 through September 30, 2025, 6.75% of the aggregate principal amount of the loans advanced to P3 LLC on or prior to such date;

and (iv) if repaid on October 1, 2025 or later, 9.0% of the aggregate principal amount of the loans advanced to P3 LLC on or prior to such date.

(i) if repaid prior to March 31, 2025, 2.25% of the aggregate principal amount of the loans advanced to us on or prior to such date;

(ii) if repaid from April 1, 2025 through June 30, 2025, 4.5% of the aggregate principal amount of the loans advanced to us on or prior to such date;

(iii) if repaid from July 1, 2025 through September 30, 2025, 6.75% of the aggregate principal amount of the loans advanced to us on or prior to such date;

and (iv) if repaid on October 1, 2025 or later, 9.0% of the aggregate principal amount of the loans advanced to us on or prior to such date.

In connection with the issuance of the VGS 4 Promissory Note, we also entered into a subordination agreement, dated as of February 13, 2025 (the “VGS 4 Subordination Agreement”), with VGS 4 which subordinates VGS 4’s right of payment under the VGS 4 Promissory Note to the right of payment and security interests of the lenders under the Term Loan Facility.

Under the terms of the VGS 4 Subordination Agreement, we will be effectively required to pay all interest under the VGS 4 Promissory Note in-kind.

VGS 5 Promissory Note

On May 29, 2025, we entered into a financing transaction with VBC Growth SPV 5, LLC (“VGS 5”), consisting of the issuance by P3 LLC of an unsecured promissory note (the “VGS 5 Promissory Note”) to VGS 5 and the entry into a warrant agreement and the VGS 5 Subordination Agreement (defined below).

The VGS 5 Promissory Note provides for funding of up to $70.0 million, available for us to draw in three tranches, as follows:

(i) a first tranche of $15.0 million which was drawn on May 29, 2025, (ii) a second tranche of up to $15.0 million available at the Company’s sole option in a single draw, on or prior to June 22, 2025, and (iii) a third tranche of $40.0 million available upon mutual agreement of P3 LLC and VGS 5 in one or more draws no later than December 31, 2025.

The VGS 5 Promissory Note matures on August 13, 2028.

As of December 31, 2025, we had $55.1 million of borrowing outstanding under the VGS 5 Promissory Note.

Interest on the VGS 5 Promissory Note is payable at 19.5% per annum on a quarterly cycle (in arrears) beginning June 30, 2025.

We may elect to pay interest 11.5% in-kind and 8.0% in cash, but if the terms of the VGS 5 Subordination Agreement do not permit us to pay interest in cash, interest will be paid entirely in-kind.

On June 21, 2025, we delivered a request to VGS 5 for $15.0 million in funding related to the second tranche, and VGS 5 funded $8.5 million in July 2025 and the additional $6.5 million funded on August 12, 2025.

On October 3, 2025, we delivered a request to VGS 5 for $13.0 million in funding related to the third tranche, which was funded on October 7, 2025.

The VGS 5 Promissory Note may be prepaid, at our option, either in whole or in part, without penalty or premium, at any time and from time to time, subject to the payment of the back-end fee described below;

provided that prepayments must be in increments of at least $3.5 million.

The VGS 5 Promissory Note provides for mandatory prepayments with the proceeds of certain asset sales, and VGS 5 has the right to demand payment in full upon (i) a change of control of the Company and (ii) certain qualified financings (as defined in the VGS 5 Promissory Note).

The VGS 5 Promissory Note restricts P3 LLC’s ability and the ability of its subsidiaries to, among other things, incur indebtedness and liens, and make investments and restricted payments.

The maturity date may be accelerated as a remedy under certain default provisions in the agreement, or in the event a mandatory prepayment event occurs.

In addition, we will pay VGS 5 a back-end fee at the time the VGS 5 Promissory Note is redeemed as follows:

(i) if paid prior to June 30, 2025, 2.25%;

(ii) if repaid from July 1, 2025 through September 30, 2025, 4.50%;

(iii) if paid after October 1, 2025 through December 31, 2025, 6.75% and (iv) if paid after December 31, 2025, 9.00%.

In connection with the issuance of the VGS 5 Promissory Note, we entered into a subordination agreement, dated as of May 29, 2025 (the “VGS 5 Subordination Agreement”), with VGS 5 which subordinates VGS 5’s right of payment

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under the VGS 5 Promissory Note to the right of payment and security interests of the lenders under the Term Loan Facility.

Under the terms of the VGS 5 Subordination Agreement, we will be effectively required to pay all interest under the VGS 5 Promissory Note in-kind.

We were not in compliance with the covenants in the Term Loan Facility, VGS Promissory Note, VGS 2 Promissory Note, VGS 3 Promissory Note, VGS 4 Promissory Note, and VGS 5 Promissory Note (collectively, the “Loan Documents”) related to issuance of the 2025 financial statements with an audit opinion free of a “going concern” explanatory paragraph.

The lenders under the Loan Documents 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, 2025.

We were in material compliance with all other covenants under the Loan Documents as of December 31, 2025;

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 Loan Documents, or the lenders of any future indebtedness we may incur will grant any such waiver or forbearance in the future.

Repurchase Promissory Note

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federal income tax purposes.

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These increases in tax basis may reduce the amounts that we would otherwise pay in the future to various tax authorities.

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The amount of the increase in the tax basis, the related estimated tax benefits, and the related TRA liability to be recorded will depend on the price of the Company’s Class A common stock at the time of the relevant redemption or exchange.

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The following table summarizes current and long-term material cash requirements as of December 31, 2025:

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183,394 29,628 153,766 — —

Long-term debt, back-end/exit fees 34,467 1,500 32,967 — —

Operating lease liabilities (4)

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We will pay interest on outstanding indebtedness based on the rates and terms summarized in Note 11 “Debt” in our consolidated financial statements.

(3) Represents interest expected to be incurred on our long-term debt based on amounts outstanding as of December 31, 2024 as summarized in Note 10 “Debt” in our consolidated financial statements.

(3) Represents interest expected to be incurred on our long-term debt, inclusive of both cash and paid in-kind interest, based on amounts outstanding as of December 31, 2025 as summarized in Note 11 “Debt” in our consolidated financial statements.

(4) Represents minimum operating lease payments, excluding potential lease renewals.

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We expect to continue to incur operating losses and generate negative cash flows from operations for the foreseeable future.

Based on our currently available cash resources, including aggregate proceeds of $30 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.

Based on our currently available cash resources, including aggregate proceeds of $18 million we received from a related party financing transaction in January and February 2026, and assuming no other financing transactions, we believe we will require additional funding in 2026.

This belief is based on assumptions that may change as a result of many factors currently unknown to us.

P3 Health Partners Inc.

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We continue to explore raising additional capital through a combination of debt financing and equity issuances and sales of assets.

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The audited consolidated financial statements included elsewhere in this Form 10-K have been prepared assuming we will continue as a going concern and do not include any adjustments that might result from the outcome of these uncertainties .

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Our independent registered public accounting firm, in its report on the Company’s consolidated financial statements for the year ended December 31, 2025, has also expressed substantial doubt about our ability to continue as a going concern.

As a result, as of December 31, 2024, we were not in compliance with covenants in the Term Loan Facility and the subordinated unsecured promissory notes that required the issuance of the 2024 financial statements with an audit opinion free of a “going concern” explanatory paragraph subject to certain exceptions.

As a result, we were not in compliance with covenants in the Term Loan Facility and the subordinated unsecured promissory notes that required the issuance of the 2025 financial statements with an audit opinion free of a “going concern” explanatory paragraph subject to certain exceptions.

The lenders under the Term Loan Facility and subordinated unsecured promissory notes have granted us a waiver of the covenant 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, 2025.

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Net cash used in operating activities $ (91,238) $ (110,128)

Net cash provided by (used in) investing activities 14,525 (1,827)

Net cash provided by investing activities 129 14,525

Net cash provided by financing activities 72,814 98,771

Net change in cash $ 3,168 $ 22,477

Net change in cash and restricted cash $ (18,295) $ 3,168

Operating Activities

Net cash used in operating activities was $91.2 million for the year ended December 31, 2025, compared to net cash used in operating activities of $110.1 million for the year ended December 31, 2024.

Significant changes impacting net cash used in operating activities during the year ended December 31, 2024 as compared to the year ended December 31, 2023 were primarily due to (i) increase of claims payable and IBNR of $77.1 million, (ii) increase of $10.8 million in prepaid and other current assets due to new and additional lines of credit for contractual obligations, and (iii) changes in working capital.

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Significant changes impacting net cash used in operating activities during the year ended December 31, 2025 as compared to the year ended December 31, 2024 were primarily due to (i) increase of claims payable and IBNR of $47.0 million, (ii) decrease of $28.7 million in health plan receivables, and (iii) changes in working capital.

Investing Activities

Net cash used in investing activities was $0.1 million for the year ended December 31, 2025.

Net cash provided by investing activities was $14.5 million for the year ended December 31, 2024, consisting of proceeds from the sale of the Florida Assets.

Net cash used in investing activities was $1.8 million for the year ended December 31, 2023, consisting of purchases of property and equipment.

Financing Activities

Net cash provided by financing activities was $72.8 million for the year ended December 31, 2025, primarily consisting of proceeds from the VGS 4 Promissory Note and the VGS 5 Promissory Note.

Net cash provided by financing activities was $98.8 million for the year ended December 31, 2024, primarily consisting of proceeds from the May 2024 Private Placement, net of offering costs, and borrowings on the VGS 2 Promissory Note, VGS 3 Promissory Note, and VGS 1 2024 Loan, partially offset by the repayment of the VGS Promissory Note.

Net cash provided by financing activities was $100.3 million for the year ended December 31, 2023, primarily consisting of proceeds from the March 2023 Private Placement, net of offering costs, and borrowings on the VGS Promissory Note.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP.

The preparation of these consolidated financial statements requires management use judgment in the application of accounting policies, including making estimates and assumptions that could affect assets and liabilities, revenue and expenses and related disclosures of contingent assets and liabilities.

The preparation of these consolidated financial statements requires management to use judgment in the application of accounting policies, including making estimates and assumptions that could affect assets and liabilities, revenue and expenses and related disclosures of contingent assets and liabilities.

Management bases its estimates on the best information available at the time, its experiences and various other assumptions believed to be reasonable under the circumstances.

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Below is a discussion of the critical accounting estimates that are particularly important to the portrayal of our financial condition and results of operations and require the application of significant judgment by management.

Capitated Revenue

The transaction price for our capitated payor contracts is variable as it primarily includes PMPM fees associated with unspecified membership.

Medicare pays capitation using a “risk adjustment model,” which compensates providers based on the health status (acuity) of each individual patient.

Medicare Advantage plans with higher acuity patients receive higher premiums.

Conversely, Medicare Advantage plans with lower acuity patients receive lesser premiums.

Under the risk adjustment model, capitation is paid on an interim basis based on enrollee data submitted for the preceding year and is adjusted in subsequent periods after final data is compiled.

As premiums are adjusted via this risk adjustment model (via a RAF), our PMPM payments will change commensurately with how our contracted Medicare Advantage plans’ premiums change with CMS.

In certain contracts, PMPM fees also include adjustments for items such as performance incentives or penalties based on the achievement of certain clinical quality metrics as contracted with payors.

Capitated revenue is recognized based on an estimated PMPM transaction price to transfer the service for a distinct increment of the series (e.g., month), net of projected acuity adjustments and performance incentives or penalties as management can reasonably estimate the ultimate PMPM payment of those contracts.

We recognize revenue in the month in which eligible members are entitled to receive healthcare benefits during the contract term.

The capitation amount is subject to possible retroactive premium risk adjustments based on the member’s individual acuity.

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Medical Expense and Claims Payable

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Such estimates are subject to impact from changes in both the regulatory and economic environments.

Our claims payable represents management’s best estimate of

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its liability for unpaid medical costs.

Our claims payable represents management’s best estimate of its liability for unpaid medical costs.

We have included incurred but not reported claims of $287.8 million and $255.1 million on our consolidated balance sheets as of December 31, 2025 and 2024, respectively.

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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.

What changed 10-K

Item 7. Management’s Discussion and Analysis