piii-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40033

P3 Health Partners Inc.

(Exact name of registrant as specified in its charter)


Delaware			85-2992794
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
2370 Corporate Circle Suite 300 Henderson, Nevada			89074
(Address of principal executive offices)			(Zip Code)

(702) 910-3950

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange

on which registered

Class A common stock, par value $0.0001 per share

PIII

The Nasdaq Stock Market LLC

Warrants, each whole warrant exercisable for one

share of Class A common stock at an exercise price

of $575.00

PIIIW

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of May 1, 2025, the registrant had 3,268,093 shares of Class A common stock, par value $0.0001 and 3,919,924 shares of Class V common stock, par value $0.0001 outstanding.

TABLE OF CONTENTS


		Page
	Cautionary Statement Regarding Forward-Looking Statements	1


PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements	4
	Condensed Consolidated Balance Sheets (Unaudited)	5
	Condensed Consolidated Statements of Operations (Unaudited)	6
	Condensed Consolidated Statements of Stockholders’ Equity and Mezzanine Equity (Unaudited)	7
	Condensed Consolidated Statements of Cash Flows (Unaudited)	8
	Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38























SIGNATURES

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

In addition to historical information, this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025 (the “Form 10-Q”) contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Form 10-Q, including statements regarding our future results of operations and financial position, business and growth strategy, prospective products, research and development costs, future revenue, market opportunity, timing and likelihood of success, plans and objectives of management for future operations, our ability to raise additional capital and continue as a going concern, the anticipated closing of the asset sale discussed herein, future results of anticipated products and prospects, and our ability to maintain compliance with the Nasdaq listing rules, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” “would” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words.

The forward-looking statements in this Form 10-Q are only predictions and are based largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Form 10-Q and are subject to a number of known and unknown risks, uncertainties and assumptions, and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, without limitation, the following:

•Our ability to continue as a going concern.

•Our need to raise additional capital to fund our existing operations or develop and commercialize new services or expand our operations.

•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.

•We may not be able to maintain compliance with our debt covenants in the future, which could result in an event of default.

•Our relatively limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.

•A significant portion of our assets consists of other intangible assets, the value of which may be reduced if we determine that those assets are impaired.

•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.

•Our growth depends in part on our ability to identify and develop successful new geographies, physician partners, payors and patients. If we are not able to successfully execute upon our growth strategies, there may be material adverse effect on our business, financial condition, cash flows and results of operations.

•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.

•We primarily depend on capitation payments from third-party payors, as well as payments by individuals, which could lead to delays, uncertainties and disagreements regarding the timing and process of payments, including any changes or reductions in Medicare reimbursement rates or rules.

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•The termination or non-renewal of the Medicare Advantage (“MA”) 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 our operations.

•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.

•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.

•Developments affecting spending by the healthcare industry could adversely affect our business.

•Our business and operations would suffer in the event of information technology system failures, security breaches, cyberattacks or other deficiencies in cybersecurity.

•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.

•We conduct business in a heavily regulated industry and if we fail to adhere to all of the complex government laws and regulations that apply to our business, we could incur fines or penalties or be required to make changes to our operations or experience adverse publicity, any or all of which could have a material adverse effect on our business, results of operations, financial condition, cash flows, and reputation.

•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.

•We face inspections, reviews, audits and investigations under federal and state government programs and contracts. These audits could have adverse findings that may negatively affect our business, including our results of operations, liquidity, financial condition and reputation.

•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.

•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, par value $0.0001 per share (the “Class A common stock”).

•We will be required to make payments under the Tax Receivable Agreement, dated as of December 3, 2021, by and among P3 LLC and the members of P3 LLC from time to time party thereto (the “Tax Receivable Agreement”) for certain tax benefits we may claim, and the amounts of such payments could be significant.

•Foresight Sponsor Group, LLC (the “Sponsor”) and its 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.

•Our failure to meet the continued listing requirements of The Nasdaq Capital Market could result in a delisting of our securities.

•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

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investor confidence in our company and, as a result, the value of our Class A common stock and your investment.

•The factors described under Part I, Item 1A. “Risk Factors” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the “SEC”) on March 28, 2025 (the “2024 Form 10-K”), in Part II, Item 1A. “Risk Factors” and Part I, Item 2. “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in this Form 10-Q and in our subsequent filings with the SEC.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

You should read this Form 10-Q and the documents that we reference in this Form 10-Q and have filed as exhibits hereto completely and with the understanding that our actual future results, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

Unless the context otherwise requires, “we,” “us,” “our,” “P3” and the “Company” refer to P3 Health Partners Inc. and its subsidiaries. “P3 LLC” refers to the surviving entity after the consummation of a series of business combinations in December 2021 with Foresight Acquisition Corp. (the “Business Combinations”), which was renamed P3 Health Group, LLC.

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PART I—FINANCIAL INFORMATION.

Item 1. Financial Statements.

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P3 HEALTH PARTNERS INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

(unaudited)



	March 31, 2025		December 31, 2024
ASSETS
CURRENT ASSETS:
Cash	$	40,082	$	38,816
Restricted cash	1,211		5,286
Health plan receivable, net of allowance for credit losses of $150	129,350		121,266
Clinic fees, insurance and other receivable	5,409		3,947
Prepaid expenses and other current assets	14,980		14,422
Assets held for sale	403		403
TOTAL CURRENT ASSETS	191,435		184,140

Property and equipment, net	5,308		5,734
Intangible assets, net	553,889		574,350
Other long-term assets	33,238		19,196

TOTAL ASSETS (1)	$	783,870	$	783,420
LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	11,503	$	8,442
Accrued expenses and other current liabilities	27,971		29,416
Accrued payroll	3,216		2,722
Health plan settlements payable	56,715		55,565
Claims payable	268,664		255,089
Premium deficiency reserve	60,406		67,368
Accrued interest	12,410		12,460
Current portion of long-term debt	65,000		65,000
Short-term debt	796		—
Liabilities held for sale	353		353
TOTAL CURRENT LIABILITIES	507,034		496,415

Operating lease liability	10,981		11,339
Warrant liabilities	6,990		10,312

Long-term debt, net	106,121		89,824
Other Long-Term Liabilities	31,665		26,001

TOTAL LIABILITIES (1)	662,791		633,891
COMMITMENTS AND CONTINGENCIES
MEZZANINE EQUITY:
Redeemable non-controlling interest	57,829		73,593
STOCKHOLDERS’ EQUITY:
Class A common stock, $0.0001 par value; 800,000 shares authorized; 3,263 and 3,257 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively	—		—
Class V common stock, $0.0001 par value; 205,000 shares authorized; 3,919 shares issued and outstanding as of March 31, 2025 and December 31, 2024	—		—
Additional paid in capital	586,923		579,129
Accumulated deficit	(523,673)		(503,193)
TOTAL STOCKHOLDERS’ EQUITY	63,250		75,936
TOTAL LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ EQUITY	$	783,870	$	783,420

(1)The Company’s condensed consolidated balance sheets include the assets and liabilities of its consolidated variable interest entities (“VIEs”). As discussed in Note 13 “Variable Interest Entities,” P3 LLC is itself a VIE. P3 LLC represents substantially all the assets and liabilities of the Company. As a result, the language and amounts below refer only to VIEs held at the P3 LLC level. The condensed consolidated balance sheets include total assets that can be used only to settle obligations of P3 LLC’s consolidated VIEs totaling $10.7 million and $9.3 million as of March 31, 2025 and December 31, 2024, respectively, and total liabilities of P3 LLC’s consolidated VIEs for which creditors do not have recourse to the general credit of the Company totaled $15.6 million and $14.9 million as of March 31, 2025 and December 31, 2024, respectively. These VIE assets and liabilities do not include $41.1 million and $40.3 million of net amounts due to affiliates as of March 31, 2025 and December 31, 2024, respectively, as these are eliminated in consolidation and not presented within the condensed consolidated balance sheets.

All periods presented have been retroactively adjusted to reflect the 1-for-50 reverse stock split effected on April 11, 2025. See Note 3 “Significant Accounting Policies” for further information.

See accompanying notes to condensed consolidated financial statements.

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P3 HEALTH PARTNERS INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)


	Three Months Ended March 31,
	2025		2024
OPERATING REVENUE:
Capitated revenue	$	369,517	$	384,134
Other patient service revenue	3,708		4,354
TOTAL OPERATING REVENUE	373,225		388,488
OPERATING EXPENSE:
Medical expense	372,043		382,057
Premium deficiency reserve	(6,962)		1,000
Corporate, general and administrative expense	24,999		27,401
Sales and marketing expense	181		322
Depreciation and amortization	21,052		21,539

TOTAL OPERATING EXPENSE	411,313		432,319
OPERATING LOSS	(38,088)		(43,831)
OTHER INCOME (EXPENSE):
Interest expense, net	(8,725)		(4,256)
Mark-to-market of stock warrants	3,322		216

Other	318		337
TOTAL OTHER INCOME (EXPENSE)	(5,085)		(3,703)
LOSS BEFORE INCOME TAXES	(43,173)		(47,534)
INCOME TAX PROVISION (EXPENSE)	(1,073)		(2,072)
NET LOSS	(44,246)		(49,606)
LESS: NET LOSS ATTRIBUTABLE TO REDEEMABLE NON-CONTROLLING INTEREST	(23,766)		(30,906)
NET LOSS ATTRIBUTABLE TO CONTROLLING INTEREST	$	(20,480)	$	(18,700)

NET LOSS PER SHARE (Note 9):
Basic	$	(6.28)	$	(7.86)
Diluted	$	(6.28)	$	(7.86)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Note 9):
Basic	3,260		2,378
Diluted	3,260		2,378

See accompanying notes to condensed consolidated financial statements.

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P3 HEALTH PARTNERS INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND MEZZANINE EQUITY

(in thousands)

(unaudited)


	Redeemable Non-controlling Interest		Class A Common Stock			Class V Common Stock			Additional Paid in Capital		Accumulated Deficit		Total Stockholders’ Equity
			Shares	Amount		Shares	Amount
STOCKHOLDERS’ EQUITY, December 31, 2023	$	291,532	2,331	$	—	3,932	$	—	$	509,474	$	(367,344)	$	142,130

Exchanges of redeemable non-controlling interest for Class A common stock	—		2	—		(2)	—		—		—		—

Issuance of Class A common stock upon settlement of restricted stock units, net of shares withheld for tax	—		55	—		—	—		(73)		—		(73)


Equity-based compensation	—		—	—		—	—		1,449		—		1,449

Fair value adjustment to redeemable non-controlling interest	(20,579)		—	—		—	—		20,579		—		20,579
Remeasurement adjustment to redeemable non-controlling interest resulting from ownership changes	(1,211)		—	—		—	—		1,211		—		1,211

Net loss	(30,906)		—	—		—	—		—		(18,700)		(18,700)
STOCKHOLDERS’ EQUITY, March 31, 2024	$	238,836	2,388	$	—	3,930	$	—	$	532,640	$	(386,044)	$	146,596


	Redeemable Non-controlling Interest		Class A Common Stock			Class V Common Stock			Additional Paid in Capital		Accumulated Deficit		Total Stockholders’ Equity
			Shares	Amount		Shares	Amount
STOCKHOLDERS’ EQUITY, December 31, 2024	$	73,593	3,257	$	—	3,919	$	—	$	579,129	$	(503,193)	$	75,936

Issuance of Class A common stock upon settlement of restricted stock units, net of shares withheld for tax	—		6	—		—	—		—		—		—


Equity-based compensation	—		—	—		—	—		1,808		—		1,808

Remeasurement adjustment to redeemable non-controlling interest from material ownership changes	8,002		—	—		—	—		(8,002)		—		(8,002)

Class A common stock warrants issued	—		—	—		—	—		13,988		—		13,988
Net loss	(23,766)		—	—		—	—		—		(20,480)		(20,480)
STOCKHOLDERS’ EQUITY, March 31, 2025	$	57,829	3,263	$	—	3,919	$	—	$	586,923	$	(523,673)	$	63,250

See accompanying notes to condensed consolidated financial statements.

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P3 HEALTH PARTNERS INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Three Months Ended March 31,
	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(44,246)	$	(49,606)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	21,052		21,539
Equity-based compensation	1,808		1,449
Amortization of original issue discount and debt issuance costs	331		(140)





Mark-to-market adjustment of stock warrants	(3,322)		(216)
Premium deficiency reserve	(6,962)		1,000
Changes in operating assets and liabilities:
Health plan receivable	(8,084)		(25,198)
Clinic fees, insurance, and other receivable	(1,462)		2,892
Prepaid expenses and other current assets	(558)		(3,296)
Other long-term assets	(14,345)		(17)
Accounts payable, accrued expenses, and other current liabilities	1,593		(5,553)
Accrued payroll	494		1,542
Health plan settlements payable	1,150		(12,944)
Claims payable	13,575		44,168
Accrued interest	5,614		4,387

Operating lease liability	(104)		(37)
Net cash used in operating activities	(33,466)

SEC Form 10-Q filed by P3 Health Partners Inc.