P3 Health Partners Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Unregistered Sales of Equity Securities, Financial Statements and Exhibits
$PIII
Medical/Nursing Services
Health Care
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 29, 2025
(Exact name of registrant as specified in its charter)
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(702 ) 910-3950
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Not Applicable
(Former name or former address, if changed since last report)
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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Item 1.01 Entry into a Material Definitive Agreement.
On May 29, 2025 (the “Effective Date”), P3 Health Group, LLC (“P3 LLC”), a subsidiary of P3 Health Partners Inc. (the “Company”), entered into a financing transaction with VBC Growth SPV 5, LLC (“VBC 5”), consisting of an unsecured promissory note (the “Promissory Note”) and warrants (the “Warrants”) to purchase shares of Class A Common Stock, par value $0.0001 per share, of the Company (the “Common Stock”). VBC 5 is a Delaware limited liability company managed by Chicago Pacific Founders GP III, L.P. (“CPF GP III”), an affiliate of the principal stockholder of the Company. The entry into the Promissory Note and the issuance of the Warrants was approved by a committee of independent, disinterested directors of the Company.
VBC 5 Promissory Note
The Promissory Note was issued by P3 LLC to VBC 5 on May 29, 2025, and provides for funding of up to $70.0 million (the “Promissory Note”), available for draw by P3 LLC in tranches, as follows: (i) a first tranche of $15.0 million available to P3 LLC upon the Effective Date, (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 VBC5 in one or more draws no later than December 31, 2025. The maturity date of the Promissory Note is August 13, 2028. Interest is payable at 19.5% per annum on a quarterly cycle (in arrears) beginning June 30, 2025. P3 LLC may elect to pay interest 11.5% in kind and 8.0% in cash, but if the terms of the Subordination Agreement (as defined below) do not permit P3 LLC to pay interest in cash, interest will be paid entirely in-kind. The Promissory Note may be prepaid, at the Company’s 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 $1.5 million. The Promissory Note provides for mandatory prepayments with the proceeds of certain asset sales, and VBC 5 has the right to demand payment in full upon (i) certain “Changes of Control” and (ii) certain “Qualified Financings” (each as defined in the Promissory Note).
The 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 Promissory Note, or if a mandatory prepayment event occurs.
Pursuant to the Promissory Note, P3 LLC will pay VBC 5 on the Effective Date an up-front fee of 1.5% of the maximum draw amount. In addition, P3 LLC will pay VBC 5 a back-end fee at the time the loans issued under the Promissory Note are repaid as follows: (i) if repaid prior to June 30, 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 July 1, 2025 through September 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 October 1, 2025 through December 31, 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 after December 31, 2025 or later, 9.0% of the aggregate principal amount of the loans advanced to P3 LLC on or prior to such date.
P3 LLC intends to use the proceeds of the Promissory Note to fund the Company’s ongoing working capital requirements.
Warrants
In connection with the Promissory Note, on May 29, 2025, P3 LLC, the Company and VBC 5 entered into a Warrant Agreement (the “Warrant Agreement”). Pursuant to the Warrant Agreement, P3 LLC issued Warrants to VBC 4 to purchase 1,430,281 shares of Class A Common Stock, par value $0.0001 per share (“Class A Common Stock”) at an exercise price of $7.39 per share. Each Warrant will be exercisable only following any required Company stockholder approval of the issuance of the shares of Class A Common Stock underlying the Warrants pursuant to the Nasdaq Listing Rules (as described below). The number of shares of Class A Common Stock for which the Warrant is exercisable and the exercise price may be adjusted upon any event involving subdivisions, certain Fundamental Transactions (as defined in the Warrant Agreement), combinations, distributions, recapitalizations and like transactions. Pursuant to the Warrant Agreement, the Warrants and the right to purchase shares of Class A Common Stock upon the exercise of the Warrants will terminate on May 29, 2032.
Under the Warrant Agreement, shares of Class A Common Stock may not be issued pursuant to the Warrant and the Warrant is not exercisable for shares of Class A Common Stock unless and until the Company has obtained any required stockholder approval pursuant to the Nasdaq Listing Rules. The Company has agreed to use its reasonable best efforts to obtain such stockholder approval at its next annual meeting of stockholders. If the Company does not obtain such
stockholder approval, the Company has agreed to call up to three special meetings of Company stockholders every six months thereafter to seek such stockholder approval.
VBC 5 Subordination Agreement
In connection with the transactions described above, P3 LLC entered into a subordination agreement, dated as of May 29, 2025 (the “VBC 5 Subordination Agreement”), with CRG Servicing LLC, as administrative agent under P3 LLC’s existing term loan facility (the “Term Loan Facility”) and VBC 5. Pursuant to the VBC 5 Subordination Agreement, VBC 5 agreed to subordinate its right of payment under the Promissory Note to the right of payment and security interests of the lenders under the Term Loan Facility. The terms of the VBC 5 Subordination Agreement will effectively require P3 LLC to pay all interest under the Promissory Note in-kind.
Amendment to Term Loan Agreement
In connection with the transactions described above, on May 29, 2025, P3 LLC entered into the Ninth Amendment (the “Ninth Amendment”) to that certain Term Loan Agreement, dated as of November 19, 2020, by and among P3 LLC, as borrower, the subsidiary guarantors party thereto, the lenders from time to time party thereto and CRG Servicing LLC, as administrative agent and collateral agent. The Ninth Amendment permits the issuance of the Promissory Note and the entry into the VBC 5 Subordination Agreement.
The foregoing descriptions of the Promissory Note, the Warrant Agreement, the Subordination Agreement and the Ninth Amendment do not purport to be complete and each is qualified in its entirety by the terms of the Promissory Note, the Warrant Agreement, the Subordination Agreement and the Ninth Amendment, respectively, copies of which are filed herewith as Exhibit 10.1, 10.2, 10.3 and 10.4, respectively, and are incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure included in Item 1.01 above is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure included in Item 1.01 above relating to the Warrant Agreement and the Warrants is incorporated herein by reference. The Warrants were, and the shares underlying the Warrants will be, issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Regulation D promulgated thereunder, as no general solicitation was used in the offer and sale of such securities.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Description | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| P3 Health Partners Inc. | |||||||||||
| Date: | June 3, 2025 | By: | /s/ Leif Pedersen | ||||||||
| Leif Pedersen | |||||||||||
| Chief Financial Officer | |||||||||||