UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K

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

 For the fiscal year ended December 31, 2024
 or

 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)

 Registrant's telephone number, including area code: ( 702) 910-3950
 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 $11.50
 PIIIW
 The Nasdaq Stock Market LLC

 Securities registered pursuant to Section 12(g) of the Act: None
 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
 Yes o No x
 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
 Yes o No x
 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 o

 Accelerated filer o

 Non-accelerated filer x

 Smaller reporting company x

 Emerging growth company o

 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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. o
 If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o
 Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). o
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
 The aggregate market value of the registrant's voting and non-voting stock held by non-affiliates on June 28, 2024 (the last business day of the registrant's most recently completed second fiscal quarter) based on the closing price on that date as reported by the Nasdaq Stock Market was approximately $ 39.1 million.
 As of March 13, 2025, the registrant had 163,159,548 shares of Class A common stock, par value $0.0001, and 195,956,984 shares of Class V common stock, par value $0.0001, outstanding.
 DOCUMENTS INCORPORATED BY REFERENCE
 Portions of the registrant's definitive proxy statement for its 2025 annual meeting of stockholders to be filed with the Securities and Exchange Commission (the "SEC") within 120 days after December 31, 2024 are incorporated by reference into Part III of this Annual Report on Form 10-K.

 Page

 Cautionary Statement Regarding Forward-Looking Statements

 Summary Risk Factors

 Item 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 1C.

 Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 Item 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 [Reserved]

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item 8.

 Financial Statements and Supplementary Data

 Item 9.

 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item 14.

 Principal Accountant Fees and Services

 Item 15.

 Exhibit and Financial Statement Schedules

 Item 16.

 Form 10-K Summary

 SIGNATURES

 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
 This Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "Form 10-K") 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-K, 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 anticipated cash runway and our ability to raise additional capital to fund our existing operations and continue as a going concern, future results of anticipated products and prospects, our intention to implement the reverse stock split of our Class A common stock and our ability to regain 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-K 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-K 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 those described under the sections in this Form 10-K in Part I, Item 1A. " Risk Factors " and Part II, Item 7. " Management's Discussion and Analysis of Financial Condition and Results of Operations " and elsewhere in this Form 10-K.
 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-K and the documents that we reference in this Form 10-K 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. "Foresight" refers to the Company prior to the closing of the Business Combinations (defined below), and "P3 LLC" refers to the surviving entity of the P3 Merger (defined below), which was renamed P3 Health Group, LLC.
 P3 Health Partners Inc. | 2024 Form 10-K | 1

 SUMMARY RISK FACTORS
 Our business is subject to numerous risks and uncertainties, including those described in Part I, Item 1A. " Risk Factors " in this Form 10-K. You should carefully consider these risks and uncertainties when investing in our common stock. The principal risks and uncertainties affecting our business include 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.
 • 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.
 P3 Health Partners Inc. | 2024 Form 10-K | 2

 • 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 investor confidence in our company and, as a result, the value of our Class A common stock and your investment.
 • Other risks and uncertainties described in this Form 10-K, including those under Part I, Item 1A. " Risk Factors."
 P3 Health Partners Inc. | 2024 Form 10-K | 3

 Item 1. Business.
 Background
 We were incorporated in Delaware as Foresight Acquisition Corp. ("Foresight") on August 20, 2020. On December 3, 2021 (the "Closing Date"), we completed the Business Combinations (defined and discussed more fully below) with P3 Health Group Holdings, LLC, a Delaware limited liability company ("P3 Health Group Holdings") and we changed our name to P3 Health Partners Inc. Following the Business Combinations, we are organized in an "Up-C" structure, in which P3 Health Partners Inc. is the sole manager of P3 Health Group, LLC and directly owns approximately 45% of P3 Health Group, LLC as of December 31, 2024. Substantially all of the Company's assets are held and operations are conducted by P3 LLC and its subsidiaries, and the Company's only assets are equity interests in P3 LLC.
 Business Combinations
 The Business Combinations were effected pursuant to (1) an agreement and plan of merger, dated as of May 25, 2021 (as amended, the "Merger Agreement"), by and among Foresight, P3 Health Group Holdings and Merger Sub, and (2) the transaction and combination agreement, dated as of May 25, 2021 (as amended, the "Transaction and Combination Agreement"), by and among Foresight, the Merger Corps, the Blockers, and the Blocker sellers (each term as defined in the Transaction and Combination Agreement), pursuant to which, among other things, P3 Health Group Holdings merged with and into Merger Sub (the "P3 Merger"), with Merger Sub as the surviving company, which was renamed P3 LLC, and the Merger Corps merged with and into the Blockers, with the Blockers as the surviving entities and wholly owned subsidiaries of Foresight (collectively, the "Business Combinations").
 Overview
 P3 is a patient-centered and physician-led population health management company. We strive to offer superior care to those patients that we serve. Founded and led by physicians, P3 is a team of doctors, clinicians and healthcare professionals with a shared passion for delivering value-based care ("VBC"). We believe our leadership team's more than 20 years of experience in VBC and population health management, combined with our strong payor relationships, large community-based physician networks and custom technology platform uniquely position us to empower physicians, align incentives for healthcare providers and payors and improve the clinical outcomes for the communities we serve.
 As fellow healthcare professionals, we understand the challenges physicians face when providing VBC. We have leveraged that expertise to build our "P3 Care Model." The key attributes that differentiate P3 include: 1) patient centricity, 2) physician leadership, and 3) our delegated/integrated care model. Tactically, we typically leverage the community's existing healthcare infrastructure to build a strong network of local physicians. We primarily contract with local physicians to enter the P3 network using an affiliate model, rather than building and staffing our own clinics or acquiring individual practices. By doing so, we preserve the existing patient-physician relationship, allow physicians to maintain their independence and have a built-in patient panel on Day 1. We then align physician incentives and provide our team tools and technology to support our physician partners in a VBC system and care for the patients we have the honor and privilege to serve together. We augment these affiliate partnerships with employed Primary Care Physicians ("PCPs"), P3 operated clinics, and wellness centers. Furthermore, we offer a broad delegated care model in which we take on the responsibility to reshape the local healthcare market to provide high quality care for patients throughout the care continuum.
 We operate in the $1,029.8 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. 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 fee-for-service ("FFS"), which is also referred to as "traditional Medicare."
 In MA, the Centers for Medicare & Medicaid Services ("CMS") pays health plans a monthly sum per member to manage all health expenses of a participating member. Our platform focuses on Medicare Advantage and manages the needs of our members through subscription-like per-member-per-month ("PMPM") arrangements with health plans or payors. From there, the economics of our care model are further impacted by our ability to drive total cost of care savings and bend the cost curve. Our model allows us to "do well" while also "doing good." We contract with health plans to
 P3 Health Partners Inc. | 2024 Form 10-K | 4

 provide capitated care services with respect to certain of their MA members. Our contracts with four health plans to provide capitated care services for their members collectively accounted for approximately 59% and 60% of our capitated revenue for the years ended December 31, 2024 and 2023, respectively.
 The U.S. healthcare system is ripe for change and disruption, and we believe that the P3 Care Model is distinctly situated to address several pain points, including:
 • Unsustainable and rising healthcare costs. The United States spent $4.9 trillion, representing 17.6% of GDP, on healthcare in 2023. National health expenditures are projected to grow 5.6% per year from 2023 to 2032, according to CMS. While representing only 17% of the United States population, the 65 and older age group accounted for 21% of all healthcare spending in 2023, with an average spend of approximately $14,570 per person. This segment is growing faster than the rest of the population and is projected to reach 22% of the United States population by 2050. Healthcare expenditures are particularly concentrated in this age group in large part due to the high rate of chronic conditions. Rising healthcare costs disproportionately impact low- and middle-income seniors, who often embrace MA plans. This is our area of focus given we believe we can have the greatest clinical and financial impact on this population. Improved care management of seniors is critical to reducing the rapid growth in U.S. healthcare spending.
 • Inadequate access to primary care and PCP shortages. The current FFS reimbursement model leads to relatively lower pay for PCPs as well as fewer quality touchpoints with patients. We believe that factors like these directly contribute to fewer physicians considering entering, or staying in, the field of primary care.
 • Sub-optimal quality of care and sub-optimal clinical outcomes. The FFS model unintentionally incentivizes the volume of patients and services performed rather than the quality of services and care—resulting in a deprioritization of preventative services and overall health of the patient.
 • PCP burnout and dissatisfaction. The traditional FFS model values quantity over quality, which has been shown to lead to physician burnout and jeopardizes the long-term sustainability of the independent primary care business model. According to a 2024 Physicians Foundation report, six in 10 physicians show signs of burnout, compared to four in 10 in 2018. In addition, as average reimbursement rates decline in an FFS model, physicians would need to continually increase the number of patients seen to sustain their practice.
 • Difficulty in maintaining PCP independence. Small physician practices deliver the majority of care in the U.S.—with 51.8% of physicians working in practices with 10 or fewer physicians, per a 2023 American Medical Association report. That report also found that 46.7% of PCPs worked in a practice that was wholly owned by physicians (e.g., private practice) representing a continued decline since 2020 (49.1%), the first year in which the share of physicians in private practice became a minority. In our experience, physicians who have chosen to work at smaller practices throughout their careers tend to do so because they value their independence. Given the increasingly significant financial and administrative burdens, these physicians are generally unable to maintain independence while effectively transitioning to a VBC model. We believe that allowing them to maintain their independence increases their engagement with population health management practices, which is key to transforming the healthcare system.
 • Limited collaboration between PCPs and payors. Over the years, we have seen that payors recognize the importance of PCPs in directing and managing total cost of care. Payors have attempted to increase their proximity to primary care physicians through acquisitions and investments in care delivery services and technologies. However, a payor's ability to impact physician workflows continues to be structurally limited by the multi-payor nature of most physician practices. This makes it challenging for any single payor to achieve the level of integration we believe is needed to improve clinical engagement and effectively manage healthcare costs. We believe this creates significant opportunity for a platform to partner directly and create alignment between payors and physicians.
 We aim to overcome these hurdles with a differentiated model that we believe is an attractive option for patients, physicians and payors. P3 honors the existing social and moral contract between patients and their PCPs, partnering with local physicians using an affiliate model. We risk-stratify our patients to help our physician partners prioritize care for those who need it the most. We also provide care teams to serve as an extension of the physician's practice. These teams provide wraparound services to our patients and collaborate with the patients' caregivers to ensure patients have the tools to successfully navigate their healthcare journey across the care continuum. We have made significant investments in
 P3 Health Partners Inc. | 2024 Form 10-K | 5

 technology to customize patient care management plans. Taken as a whole, our P3 Care Model is designed to help facilitate enhanced clinical outcomes for our key stakeholders, resulting in a 95% physician retention rate from 2018 through December 31, 2024.
 We are led by one of the most experienced management teams in population health. Our executive team has a track record of more than 20 years in the healthcare industry. These years of experience have fostered strong relationships in the managed care, physician and payor segments. This is paired with a deep understanding of physicians, patients, technology, payments and branding. Lastly, the core of our care model is based on their collective years of experience in medical cost management. We believe these critical facets position our team to successfully navigate and enable the shift to patient-centric, physician-led, VBC.
 We Deliver VBC to the Fastest Growing Market in Healthcare
 A need for a new payment structure and an aging U.S. population
 Historically, healthcare in the U.S. has been focused on reacting to acute events, which resulted in the development of the FFS payment model. The FFS model unintentionally incentivizes the volume of patients and services performed rather than the quality of services and care—resulting in a deprioritization of preventative services and overall health of the patient. Beyond sub-optimal clinical outcomes, FFS results in significant healthcare spend. As 10,000 seniors age into Medicare each day and prevalence of chronic conditions increases, the need for lower healthcare spend leads the push towards VBC and additional offerings such as MA.
 VBC and MA
 MA serves as an alternative to traditional Medicare. MA is an integrated plan that includes both Part A and Part B coverage. Most MA plans also offer Part D, vision, hearing, dental and other benefits. Typically, the out-of-pocket costs are lower for MA plans than traditional Medicare, but patients are limited to seeing physicians within the plan's network and some coverage of certain specialty services may require PCPs' referrals and plan authorizations.
 MA has been well received since it was introduced, with penetration among Medicare beneficiaries increasing from 19% in 2007 to 54% in 2024 and is projected to increase to 64% by 2034. This trend reflects the understanding that MA plans are financially and clinically valuable to Medicare eligible patients.
 Our Market Opportunity
 We believe there is significant white space opportunity. As of December 31, 2024, we have contracted with 3,100 primary care physicians. This represents less than 1% of the total number of PCPs in the U.S. of approximately 535,000. We believe the industry is primed for a platform like ours, which allows physicians to remain independent while accessing financial resources and infrastructure to support a VBC model.
 We believe our total addressable market is represented by the approximately 68 million Americans (approximately 17% of the total population) who were enrolled in either traditional Medicare or MA nationally in 2024, which represented $1,030 billion of annual spend. Within this, we believe our core addressable market to be the Medicare Advantage market, specifically within moderate-to-highly populated MA eligible dense counties, which we define as having greater than 10,000 Medicare eligible lives. By multiplying these approximately 33 million Medicare Advantage members by an average $1,000 per member per month spend, we estimate this represents a core addressable market size of over $300 billion.
 The P3 Care Model
 Patient-Centric
 Patient wellness, not sickness. The VBC model rewards superior clinical outcomes and value delivered to the patient. With this in mind, we built our model to consider the whole patient rather than individual illnesses as they arise. We work with our physician partners to develop a holistic view of a patient's health over time to understand the most effective methods to empower their patients to actively participate in and better manage their health (e.g., medication adherence, complete understanding of potential impediments to receiving care).
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 Robust care teams. We staff dedicated care managers and care navigators to help ensure end-to-end patient care across the full continuum. Care navigators are responsible for day-to-day patient care (e.g., scheduling appointments, assisting with check-ins, etc.). Care managers, on the other hand, tend to have more medical responsibilities (e.g., reviewing patient charts, coordinating care with PCPs, ensuring appropriate documentation, etc.) and serve as a communication point across care teams. Together, they complement our network of physicians and enable the highest quality of care for our patients—ensuring they are being seen at the right time by the appropriate physician and all corresponding documentation and communication has been streamlined.
 Personalized care. Using our proprietary technology platform for integrated data reporting, physicians can stratify their patient panels based on risk. Identifying patients who are high risk (or rising risk) helps prioritize those patients who may need to be seen more often or require additional resources to improve their health. Additionally, our tailored tech suite provides our physician partners with detailed insights to understand what is driving individual patient clinical outcomes and medical costs. Leveraging this data, we then collaborate with physicians to build individualized, longitudinal care plans, catered to the needs of individual patients.
 Physician-Led
 Collaborative and supportive partnerships. As members of our team are former physicians, we have a deep understanding of the way in which physicians are trained. In our experience, most physicians not only understand the value of a VBC model, but also want to provide their patients with the highest quality care. However, the way in which most physicians today were trained caters to an FFS model. To support the VBC model, we provide training to physicians on best clinical practices based on nationally recognized care guidelines. As a result, we have seen physicians deliver cost saving, quality healthcare. Unlike some of our peers, we typically enter markets with our affiliate physician model and contract directly with physician groups or independent physicians to enter the P3 network rather than primarily building and staffing our own clinics or acquiring physician practices. By doing so, we preserve the existing patient-physician relationship and create a built-in patient panel on Day 1. Affiliate physicians retain their independence, while gaining access to P3's teams, tools and technologies that are key to success in a VBC model. P3's care teams become an extension of each physician's office and support our collective patients to navigate the health care system, collaborate with caregivers, and enable a successful health care journey. All P3 affiliated physicians must pass an annual credentialing process and maintain compliance with all regulatory standards.
 Aligned incentives. Our model properly aligns physicians' incentives with clinical outcomes, designed so that patients receive the optimal care they deserve. To do this, we offer several types of incentive-based payments to our affiliated physicians. First, as physicians join our network, we continue to pay them on an FFS basis per visit, or structure a contract to offer a monthly, fixed, capitated payment for each patient paneled to their practice. Additionally, we provide quality incentive payments to our physician partners as they close quality gaps in care, enable patient access and improve documentation. Finally, as improved clinical outcomes result in reduced medical costs, we share the savings between P3 and our physician partners. These contracts were built with the physician in mind, which is reflected in our results—a 95% physician retention rate from 2018 through December 31, 2024. Aligning physician incentives with performance on growth, quality, patient disease documentation, and medical expense creates better economics within their practices.
 Broad Delegated Care Model
 Reshaping local healthcare. Our more than 20 years of experience in the population health management space has allowed us to build the capabilities to better control and manage the delivery of services across the full care continuum. Our team has the ability to take on additional services from our payor partners, including networking, credentialing, utilization management and claims processing. In order to take on these functions, our teams must pass regular delegation audits by CMS as well as our payor partners. By assuming responsibility for the patient's entire care experience, we can tailor care provision and coordination to their individual needs. We take on this added burden, as it allows us to reshape the local healthcare market and accelerate the shift from a FFS model to a VBC model.
 Delegated services. Through delegation, we can build local networks of physicians and specialists to meet the needs of our patients. By creating a captive network, we ensure that our network of physicians and specialists are properly educated on best clinical practices based on national recognized care guidelines. Furthermore, delegation allows us to align incentives across the full continuum, not just the PCP office. With additional tools like utilization management, we ensure that quality care is delivered in the appropriate care setting. To help with care delivery effectiveness, we perform concurrent reviews to manage acute and post-acute hospitals for length of stay and appropriateness. Finally, by taking on
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 responsibility for processing and paying claims, we are able to ensure the appropriate payment for the appropriate care. Ownership over claims creates value and helps to accelerate the reduction of unnecessary medical costs.
 P3 Technology/Health Hub
 The backbone of our P3 Care Model is our proprietary technology platform—P3 Technology/Health Hub—which enables physicians, care teams, patients and their family members to engage in the care journey. Our platform was purposefully built as a data and technology-enabled care ecosystem that drives preventive rather than reactive care.
 P3 Technology/Health Hub integrates clinical and claims data from disparate data points each month from payors, outpatient and inpatient facilities and other ancillary care settings. By using P3 Technology/Health Hub at the time of patient onboarding, we are able to assign patient risk levels using our proprietary risk stratification tool that leverages multiple parameters to prioritize patients who require additional resources. We continually collect data on patients from multiple sources so our care teams can proactively and dynamically deliver individualized care based on changes to a patient's health profile. For example, within approximately 12 hours of a hospitalization—even out of state—our physician partners are notified and alerted to the patient's clinical status. Our care managers also monitor patient care and provide physicians with actionable insights to enable additional care across settings and locations. These factors create a positive feedback loop, whereby our technology accelerates clinical outcomes, improving strong performance, and further growing our business.
 The P3 Technology/Health Hub is built on multiple products, including:
 Provider Portal. This physician-facing product enables our physician partners to understand, care for and monitor their patients. Physicians can access a risk stratified patient list based on historical diagnoses, suspect diagnoses, ER visits, chronic comorbidities and socio-economic factors, among others. By using this, P3 is able to present physicians with care opportunities, Healthcare Effectiveness Data and Information Set ("HEDIS ") gaps in care and drug substitution opportunities, which directly translate into stronger cost management. Analyzing the risk-stratified patient-level data helps physicians and office staff strategize patient scheduling to optimize their resources and work hours to meet the healthcare needs of the patients that need the most care. Provider Portal also generates additional possible conditions that the physicians can screen for during patient visits. This exercise gives physicians a longitudinal view of patients' health and any potential undiagnosed medical conditions they may have developed since their last annual wellness visit. This represents an important opportunity for physicians to address the conditions which otherwise may have been missed during initial health reviews of the patient.
 Provider Portal is also used by our internal certified coders to review and reconcile claims data with electronic medical record and charts data. This provides P3 an opportunity to capture dropped or missed codes documented in the patient's medical record that were not properly converted during the initial submission of claims by our physician partner offices. This practice also ensures that the diagnosis data that is submitted to health plans is validated with appropriate supporting documentation for seamless acceptance by CMS for year-over-year risk calculation for our patients.
 P3 Care Connect. P3 Care Connect is a comprehensive management tool used by P3 care management, utilization management and concurrent review teams. P3 Care Connect enables P3 care managers to provide concierge and individualized care for specific, high-risk and special needs populations. This capability allows our platform and its constituents to deliver highly impactful clinical programs aimed to reduce cost and improve clinical outcomes while optimizing efficiency. Care orchestration through a combination of program management, cohort building, care plan and assessment builders help our care managers build more intelligent care plans. P3 Care Connect allows our care and medical management teams to process prior authorizations, track P3 patient referrals within our network throughout the care continuum and manage a concurrent review for inpatient services through an automated platform that improves efficiency and auditability of existing business workflows. This tool also enables a streamlined communication between P3 and primary care physicians, specialists and other ancillary care physicians who are involved in the care of our patients.
 Analytic Management Tools. Analytic Management Tools is a business intelligence platform that converts data into visualizations and real-time metrics to empower decision making at every level across the organization. This platform provides comprehensive physician profiles, cost analysis, and quality metrics, allowing management to identify trends, uncover improvement opportunities, and optimize resource utilization. Additionally, its embedded Risk Adjustment engine helps quantify burden of illness, offering clinical risk stratification data that supports targeted care coordination for high-risk patient populations. It helps our administrative teams deliver a data driven approach for a better, more engaged physician experience and act as a support system to their practices.
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 This tool combines data management with data analysis to evaluate and transform complex data sets into meaningful, actionable information used to support effective strategic, tactical and operational insights. It also provides comprehensive information that drives performance to improve clinical outcomes and quality of care and creates physician profiles and cost analysis to improve healthcare management. With an embedded Risk Adjustment engine, it allows the organization to determine the burden of illness for our patients while providing stratification clinical data to physicians.
 Our Disciplined Growth Strategy
 We intend to utilize our competitive strengths to increase our footprint within our current markets and across new states and counties to ultimately increase the number of physicians and patients we serve while at the same time managing the growth of the business in a disciplined, cost-efficient manner. As we grow our network, we conduct periodic strategic reviews of our provider and payor contracts, as a result of which we may elect to periodically exit underperforming provider and payor contracts in an effort to rationalize our network costs.
 Additional membership through current relationships. Recent data suggests that the number of Medicare-eligible patients and MA penetration rates will continue to increase in the upcoming years. We believe that this trend will translate into increased coverage by our current payor partners in our existing markets. As these new patients enroll in MA through our payors, they become attributed to our platform with little incremental cost to us.
 Furthermore, we believe our physician partners will also increase their patient coverage as the number of available MA lives increases. We expect to be favorably positioned to benefit from this source of growth, bolstered by the sticky physician-patient relationship and our platform's ability to assist our physician partners in more effectively managing healthcare quality, patient experience and cost.
 Expansion in current markets. Based on our ability to provide a compelling value proposition for physicians looking to shift to value-based care while remaining independent, we believe there is significant opportunity to grow lives in our current markets in Arizona, California, Nevada, and Oregon. Additionally, we have the opportunity to expand our existing membership base through our payor partners' presence in our current markets.
 Expansion into adjacent markets. Once we establish a presence in a geography, we are then able to leverage our regional infrastructure and our relationships with payors as we expand into adjacent geographies. We are more easily able to deploy this 'land and expand' strategy once we have established the P3 brand in a particular market.
 Expansion into new markets. We are constantly evaluating our pipeline of opportunities to continue growing our membership. Based on our analysis and experience to date, we have identified a list of target markets that we believe are ideal candidates for the P3 Care Model, whether across physicians or payors. We can facilitate this growth through new payor contracts, new network partnerships via joint ventures or expanding into a new market as part of an existing payor contract.
 Execute on accretive acquisitions. While our growth to date has been organic, we believe there are additional robust opportunities to acquire additional lives across both physicians and payors.
 Competition
 The healthcare industry is highly competitive and fragmented. Our primary competition remains the status quo, FFS environment that much of the healthcare system operates in today. We currently face competition in every aspect of our business, including in offering a favorable reimbursement structure for existing physician partners and attracting payors and physician partners who are not contracted with us, from a range of large- and medium-sized local and national companies that provide care under a variety of models that could attract patients, providers and payors. Our primary competitors in the population health management space include Oak Street Health, Astrana Health and agilon health, in addition to numerous local provider networks, hospitals and health systems. Moreover, large, well-financed payors have in some cases developed their own managed care services tools and may provide these services to their physicians and patients at discounted prices or may seek to expand their relationships with additional competing physicians or physician networks. Other organizations may also seek to apply specialized services or programs, including providing data analytics or disease-based programs, designed to enable physicians or payors to operate successfully under VBC arrangements. Our competitors typically vary by geography, and we may also encounter competition in the future from other new entrants. Our growth strategy and our business could be adversely affected if we are not able to continue to access existing geographies, successfully expand into new geographies or maintain or establish new relationships with payors and physician partners.
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 See the section titled "Risk Factors—Risks Related to Our Business and Industry—We operate in a competitive industry, and if we are not able to compete effectively, our business, financial condition and results of operations will be harmed."
 The principal competitive factors in our business include the nature and caliber of relationships with physicians; patient healthcare quality, outcomes and cost; the strength of relationships with payors; the quality of the physician experience; local geography leadership position; and the strength of the underlying economic model. We believe our platform, partnership and network model enables us to compete favorably.
 Intellectual Property
 We rely on a combination of trademark laws in the U.S. as well as confidentiality procedures and contractual provisions to protect our trade secrets, including proprietary technology, databases and our brand.
 We have a federal trademark registration application for "P3 Health Partners" in the U.S. We also have filed other applications to protect names and marks that are meaningful to our business in the U.S. across various states and local jurisdictions, including for the use of the local brand created within each of our geographies, and will pursue additional trademark registrations to the extent we believe it would be beneficial and cost-effective.
 We are the controller of a variety of registered domain names that include "p3hp" and similar variations.
 We have developed proprietary technology and processes that support our operational programs and clinical insights, including our P3 Technology/Health Hub, which is a proprietary system that aids in the aggregation and analysis of third-party data we collect. Our internally developed technology is continuously refined to support the needs of our platform and partners. Although we do not currently hold a patent for P3 Technology/Health Hub, we have filed provisional patent applications relating to the P3 Technology/Health Hub, and we continue to regularly assess the most appropriate methods of protecting our intellectual property and may decide to pursue available protections in the future.
 We maintain our intellectual property and confidential business information in a number of ways. For instance, we have a policy of requiring all employees and consultants to execute confidentiality agreements upon the commencement of an employment or consulting relationship with us. Our employee agreements also require relevant employees to assign to us all rights to any inventions made or conceived during their employment with us in accordance with applicable law. In addition, we have a policy of requiring individuals and entities with which we discuss potential business relationships to sign non-disclosure agreements. Lastly, our contracts with physicians include confidentiality and non-disclosure provisions.
 We may be unable to obtain, maintain and enforce our intellectual property rights, and assertions by third parties that we violate their intellectual property rights could have a material adverse effect on our business, financial condition and results of operations.
 Human Capital
 As of December 31, 2024, we had approximately 360 full-time employees. We consider our relationship with our employees to be good. None of our employees are currently represented by a labor union or party to a collective bargaining agreement.
 Our human capital resources objectives include sourcing, recruiting, developing, retaining, rewarding, recognizing and integrating our existing and prospective employees. We recognize that attracting, motivating and retaining skilled and purpose-driven talent from all backgrounds at all levels is vital to continuing our success. By improving employee retention and engagement, we also improve our ability to protect the long-term interests of our stakeholders and stockholders. We invest in our employees through what we consider to be high-quality benefits, various health and wellness initiatives, and social events that bring our employees together to support the communities in which we live and work. We believe we offer competitive compensation packages and work to ensure fairness in internal compensation practices.
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 People join P3 because of our mission: to ensure providers and their patients get the healthcare they deserve. Together with our employees and physician partners, we have defined our core values as:
 • People: Our attitude is respecting and valuing everyone. Our community is strong and safe. We are "family" and we take care of each other with the same intensity as we take care of our patients.
 • Passion: Our heart is our patients. Our soul is our clinicians. Our strength is our people and culture.
 • Purpose: Our core is fixing health care. Our mindset is disciplined purposeful growth.
 Our human capital efforts are supported by our dedicated human resources team. This team supports the business in identifying and recruiting top talent, supporting the onboarding of new hires through an employee orientation program, providing a structured approach to performance management that allows leaders and employees to collaborate to set organizational goals, chart plans, and assign performance targets such that it becomes a systematic process to achieving goals and objectives and having productive conversations about performance outcomes and career development. Our talent management framework is designed to help us meet the human capital and business needs within the organization. From identification of critical roles to succession planning and retention management practices, the team provides resources and tools, and leads the processes and experiences to help us successfully execute on our talent management strategy.
 Our efforts to promote a positive employee experience and foster an inclusive culture are further supported and enhanced by local and national in-person and virtual events, including town halls, in-office celebrations and employee activity committees.
 Government Regulation
 Regulatory Licensing and Certification
 Many states require regulatory approval, including licensure and certification, before establishing certain types of clinics offering certain professional and ancillary services, including the services P3 offers. The operations of the P3 owned and managed clinics are subject to extensive federal, state and local regulation relating to, among other things, the adequacy of medical care, equipment, personnel, operating policies and procedures, and proof of financial ability to operate. Our ability to operate profitably will depend in part on the ability of P3 owned and managed clinics and its providers to obtain and maintain all necessary licenses and other approvals, and maintain updates to their enrollment in the Medicare and Medicaid programs, including the addition of new clinic locations, providers and other enrollment information. In addition, certain ancillary services such as the provision of diagnostic laboratory testing require additional state and federal licensure and regulatory oversight, including oversight by CMS, under Clinical Laboratory Improvement Amendments of 1988 ("CLIA") which requires all clinical laboratories to meet certain quality assurance, quality control and personnel standards, and comparable state laboratory licensing authorities. Standards for testing under CLIA are based on the complexity of the tests performed by the laboratory, with tests classified as "high complexity," "moderate complexity," or "waived." P3 owned and managed clinics hold CLIA Certificates of Waiver and perform certain CLIA-waived tests, which subjects such clinics to certain CLIA requirements. Sanctions for failure to comply with applicable state and federal licensing, certification and other regulatory requirements include suspension, revocation or limitation of the applicable authorization, significant fines and penalties and/or an inability to receive reimbursement from government healthcare programs and other third-party payors.
 With respect to P3's providers participating in its network, P3 providers must meet minimum requirements to apply for participation or continued participation with P3 through a credentialing process, including, without limitation, having a valid, current medical license and Drug Enforcement Administration registration, if required for the provider's scope of practice, the absence of any debarment, suspension, exclusion or other restriction from receiving payments from any government or other third-party payor program, and clearing National Practitioner Data Bank of any reports and/or disciplinary actions. P3's credentialing program is designed to meet CMS and the National Committee for Quality Assurance ("NCQA") credentialing requirements as well as applicable federal and state laws. P3's credentialing committee is comprised of a group of multispecialty providers with responsibilities for thoroughly reviewing each P3 provider's qualifications and credentials. Providers are generally recredentialed every three years or more often if necessary, which is consistent with industry guidelines. In addition, network providers are required under their participating provider agreements with P3 to have established an ongoing quality assurance program. Moreover, P3's contracts may allow P3 to withhold compensation from time to time based upon the providers meeting certain quality metrics, including HEDIS quality measures and care coordination metrics.
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 State Corporate Practice of Medicine and Fee-Splitting Laws
 Our arrangements with our affiliated professional entities and other physician partners are subject to various state laws, commonly referred to as corporate practice of medicine and fee-splitting laws, which are intended to prevent unlicensed persons from interfering with or influencing the physician's professional judgment, and prohibiting the sharing of professional service fees with non-professional or business interests. These laws vary from state to state, including those where the Company does business, and are subject to broad interpretation and enforcement by state regulators. For example, the corporate practice of medicine prohibition in Nevada has only been established through attorney general opinions and there is no statutory or regulatory fee-splitting prohibition in the state. Arizona's corporate practice of medicine was established under older case law, and more recent legislation suggests that the prohibition may not be strictly enforced in the state. Oregon prohibits the corporate practice of medicine but has an exception for professional corporations with majority physician ownership where a non-licensed person or entity may hold minority ownership interest in such professional corporation. Florida does not prohibit the corporate practice of medicine but has professional fee-splitting laws, which prohibit the sharing of professional fees based on referrals for professional services.
 California's corporate practice of medicine doctrine has been developed through statutes, case law and state attorney general opinions. The general prohibition on the corporate practice of medicine arises out of the California Business and Professions Code, which has been enforced through case law and attorney general opinions. In California, physicians and certain licensed professionals cannot be employed by non-professional corporations, except under limited exceptions which do not apply to the Company. Additionally, all clinical decisions and certain business or management decisions that result in control over a physician's practice of medicine or a licensed professional's clinical decisions must be made by a physician or licensed professional and not by an unlicensed person or entity. California also prohibits professional fee splitting arrangements, but management fees based on a percentage of gross revenue or similar arrangement that is commensurate with fair market value of services provided by the management company are generally permissible.
 We believe we have structured our management services agreements with the our affiliated professional entities to comply with the corporate practice of medicine and fee-splitting laws of Nevada, and we expect to enter into similar agreements with affiliated professional entities in California and other states where we may operate in the future, where all clinical decisions and other business and management decisions that result in control over a physician's practice of medicine or a licensed professional's clinical decisions remain exclusively with the affiliated professional entities, their physician shareholders and the physicians and licensed professionals employed and contracted by such entities.
 A determination of non-compliance against us and/or our affiliated professional entities or other physician partners based on the reinterpretation of existing laws or adoption of new laws could lead to adverse judicial or administrative action, civil or criminal penalties, receipt of cease-and-desist orders from state regulators, loss of provider licenses, and/or restructuring of these arrangements.
 Healthcare Fraud and Abuse Laws
 We are subject to a number of federal and state healthcare regulatory laws that restrict certain business practices in the healthcare industry. These laws include, but are not limited to, federal and state anti-kickback, false claims, self-referral and other healthcare fraud and abuse laws.
 The federal Anti-Kickback Statute ("AKS") prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration, directly or indirectly, in cash or kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
 Several courts have interpreted the AKS's intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the AKS has been violated.
 The AKS includes statutory exceptions and regulatory safe harbors that protect certain arrangements. By way of example, the AKS safe harbor for value-based arrangements and the safe harbor for arrangements between managed care organizations and downstream contractors both require, among other things, that the arrangement does not induce a person or entity to reduce or limit medically necessary items or services furnished to any patient. Failure to meet the requirements of an applicable AKS safe harbor, however, does not render an arrangement illegal. Rather, the government may evaluate
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 such arrangements on a case-by-case basis, taking into account all facts and circumstances, including the parties' intent and the arrangement's potential for abuse, and may be subject to greater scrutiny by enforcement agencies.
 The Stark Law prohibits a physician who has a financial relationship, or who has an immediate family member who has a financial relationship, with entities providing designated health services ("DHS") from referring Medicare and Medicaid patients to such entities for the furnishing of DHS, unless an exception applies. The Stark Law also prohibits the entity from billing for any such prohibited referral. Unlike the AKS, the Stark Law is violated if the financial arrangement does not meet an applicable exception, regardless of any intent by the parties to induce or reward referrals or the reasons for the financial relationship and the referral.
 The federal False Claims Act ("FCA") prohibits a person from knowingly presenting, or caused to be presented, a false or fraudulent request for payment from the federal government, or from making a false statement or using a false record to have a claim approved. A claim includes "any request or demand" for money or property presented to the United States government. Moreover, the government may assert that a claim including items and services resulting from a violation of the AKS or the Stark Law constitutes a false or fraudulent claim for purposes of the civil FCA. Penalties for a violation of the FCA include fines for each false claim, plus up to three times the amount of damages caused by each false claim. Private individuals also have the ability to bring actions under these false claims laws in the name of the government alleging false and fraudulent claims presented to or paid by the government (or other violations of the statutes) and to share in any amounts paid by the entity to the government in fines or settlement. Such suits, known as qui tam actions, are pervasive in the healthcare industry.
 Further, the Civil Monetary Penalties Statute authorizes the imposition of civil monetary penalties, assessments and exclusion against an individual or entity based on a variety of prohibited conduct, including, but not limited to offering remuneration to a federal health care program beneficiary that the individual or entity knows or should know is likely to influence the beneficiary to order or receive health care items or services from a particular provider. Moreover, in certain cases, providers who routinely waive copayments and deductibles for Medicare and Medicaid beneficiaries can also be held liable under the AKS and civil FCA. One of the statutory exceptions to the prohibition is non-routine, unadvertised waivers of copayments or deductible amounts based on individualized determinations of financial need or exhaustion of reasonable collection efforts. The U.S. Department of Health and Human Services ("HHS") Office of Inspector General emphasizes, however, that this exception should only be used occasionally to address special financial needs of a particular patient. Although this prohibition applies only to federal healthcare program beneficiaries, the routine waivers of copayments and deductibles offered to patients covered by commercial payors may implicate applicable state laws related to, among other things, unlawful schemes to defraud, excessive fees for services, tortious interference with patient contracts and statutory or common law fraud.
 The Health Insurance Portability and Accountability Act, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (collectively, "HIPAA"), also established federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the AKS, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
 Several states in which we operate have also adopted similar fraud and abuse laws as described above. The scope of these laws and the interpretations of them vary from state to state and are enforced by state courts and regulatory authorities, each with broad discretion. Some state fraud and abuse laws apply to items or services reimbursed by any payor, including patients and commercial insurers, not just those reimbursed by a federally funded healthcare program.
 Violation of any of these laws or any other governmental regulations that apply may result in significant penalties, including, without limitation, administrative civil and criminal penalties, damages, disgorgement, fines, additional reporting requirements and compliance oversight obligations, in the event that a corporate integrity agreement or other agreement is required to resolve allegations of noncompliance with these laws, the curtailment or restructuring of operations, exclusion from participation in governmental healthcare programs and/or individual imprisonment.
 Healthcare Reform
 In the United States, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system, many of which are intended to contain or reduce healthcare costs. By way of
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 example, in the United States, the Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the "ACA"), substantially changed the way healthcare is financed by both governmental and private insurers. The ACA required, among other things, CMS to establish a Medicare shared savings program that promotes accountability and coordination of care through the creation of Accountable Care Organizations ("ACOs"). The Medicare shared savings program allows for providers, physicians and other designated health care professionals and suppliers to form ACOs and voluntarily work together to invest in infrastructure and redesign delivery processes to give coordinated high quality care to their Medicare patients, avoid unnecessary duplication of services and prevent medical errors. ACOs that achieve quality performance standards established by CMS are eligible to share in a portion of the Medicare program's cost savings. ACO program methodologies and participation requirements are updated by CMS for each performance year and participants are expected to comply with such program requirements and required to report on performance after the close of the year. ACOs that fail to comply with such program requirements can face penalties or even termination of their participation in the Medicare shared savings program.
 Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA without specifically ruling on the constitutionality of the ACA. Prior to the Supreme Court's decision, President Biden issued an executive order initiating a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace. The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare.
 In addition, other legislative changes have been proposed and adopted since the ACA was enacted. These changes included aggregate reductions to Medicare payments to providers, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through the first six months of fiscal year 2032, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022, unless additional Congressional action is taken. In addition, on January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
 Additionally, the Center for Medicare and Medicaid Innovation continues to test an array of value-based alternative payment models, including the Global and Professional Direct Contracting Model to allow Direct Contracting Entities to negotiate directly with the government to manage traditional Medicare beneficiaries and share in the savings and risks generated from managing such beneficiaries. Although we currently do not participate in these pilot payment models, we may choose to do so in the future. Additional changes that may affect our business include the expansion of new programs such as Medicare payment for performance initiatives for physicians under the Medicare Access and CHIP Reauthorization Act of 2015, which first affected physician payment in 2019. At this time, it is unclear how the introduction of the Medicare quality payment program will impact overall physician reimbursement. In addition, there likely will continue to be regulatory proposals directed at containing or lowering the cost of healthcare, as government healthcare programs and other third-party payors transition from FFS to value-based reimbursement models, which can include risk-sharing, bundled payment and other innovative approaches. It is possible that the federal or state governments will implement additional reductions, increases, or changes in reimbursement in the future under government programs that may adversely affect us or increase the cost of providing our services. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue or attain growth, any of which could have a material impact on our business.
 Further, healthcare providers and industry participants are also subject to a growing number of requirements intended to promote the interoperability and exchange of patient health information. For example, on April 5, 2021, healthcare providers and certain other entities became subject to information blocking restrictions pursuant to the Cures Act that prohibit practices that are likely to interfere with the access, exchange or use of electronic health information, except as required by law or specified by the HHS as a reasonable and necessary activity. Violations may result in penalties or other disincentives. It is unclear at this time what the costs of compliance with the new rules will be and what additional risks there may be to our business.
 Data Privacy and Security Laws
 We are subject to a number of federal and state laws and regulations that govern the collection, use, disclosure, and protection of health-related and other personal information, including health information privacy and security laws, data breach notification laws, and consumer protection laws and regulations.
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 Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation. Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.
 Federal and State Insurance and Managed Care Laws
 Regulation of downstream risk-sharing arrangements, including, but not limited to, at-risk and other value-based arrangements, varies significantly from state to state. Some states require downstream entities and risk-bearing entities to obtain an insurance license, a certificate of authority, or an equivalent authorization, in order to participate in downstream risk-sharing arrangements with payors. In some states, statutes, regulations and/or formal guidance explicitly address whether and in what manner the state regulates the transfer of risk by a payor to a downstream entity. However, the majority of states do not explicitly address the issue, and in such states, regulators may nonetheless interpret statutes and regulations to regulate such activity. If downstream risk-sharing arrangements are not regulated directly in a particular state, the state regulatory agency may nonetheless require oversight by the licensed payor as the party to such a downstream risk-sharing arrangement. Such oversight is accomplished via contract and may include the imposition of reserve requirements, as well as reporting obligations. Further, state regulatory stances regarding downstream risk-sharing arrangements can change rapidly and codified provisions may not keep pace with evolving risk-sharing mechanisms and other new value-based reimbursement models. Certain of the states where we currently operate or may choose to operate in the future regulate the operations and financial condition of risk bearing organizations like us and our affiliated providers. By way of example, P3 recently acquired Medcore HP, a licensed health plan under the Knox Keene Act, which subjects the entity to certain capital requirements, licensing or certification, governance controls, utilization review, grievance procedures, and reporting requirements among others. While these regulations have not had a material impact on our business to date, as we continue to expand, for example, through acquisitions or otherwise, these rules may require additional resources and capitalization and add complexity to our business.
 Seasonality
 Our business experiences some variability depending upon the time of the year. While new patients are attributed to our platform throughout the year, we experience the largest portion of our at-risk membership growth during the first quarter. Operations in our new markets generally begin on January 1, at which time our payor partners attribute patients to our physician partners as our agreements with those payors in those geographies become effective. This coincides with the beginning of the Medicare program year, when plan enrollment selections made during the prior Annual Enrollment Period, which runs each year from October 15 to December 7, take effect.
 In addition, in January of each year, CMS revises the risk adjustment factor for each patient based upon health conditions documented in the prior year, leading to an overall increase in per-member revenue. As the year progresses, our per-member revenue declines as new members join us typically with less complete or accurate documentation (and therefore lower risk-adjustment scores) and patient morbidity disproportionately impacts our higher-risk (and therefore greater revenue) members.
 Medical costs will vary seasonally depending on a number of factors, including the weather and the number of calendar working days in a given period. Certain illnesses, such as the influenza virus, are far more prevalent during colder months of the year, which will result in an increase in medical expenses during these time periods. We therefore expect to see higher levels of per member medical costs in the first and fourth quarters.
 See Part II, Item 7. " Management's Discussion and Analysis of Results of Operations —Key Factors Affecting our Performance—Impact of Seasonality."
 Available Information
 We were incorporated under the laws of the State of Delaware on August 20, 2020 under the name Foresight Acquisition Corp. Upon the closing of the Business Combinations, we changed our name to P3 Health Partners Inc. Our principal executive offices are located at 2370 Corporate Circle, Suite 300, Henderson, NV 89074 and our telephone number is (702) 910-3950. Our website is www.p3hp.org. Under the investor relations page of the Company's website, ir.p3hp.org, we make available free of charge a variety of information for investors, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, Proxy Statements on Schedule 14A and any amendments to those materials filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as
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 reasonably practicable after we electronically file that material with or furnish it to the Securities and Exchange Commission ("SEC"). The information found on our website is not part of this or any other report we file with, or furnish to, the SEC.
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 Item 1A. Risk Factors.
 Our business involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Form 10-K. The occurrence of any of the events described below could harm our business, operating results, financial condition, liquidity, or prospects. In any such event, the market price of our Class A common stock could decline, and you may lose all or part of your investment. This Form 10-K also contains forward-looking statements that involve risks and uncertainties. See " Cautionary Statement Regarding Forward-Looking Statements." Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain important factors, including those set forth below.
 Risks Related to Our Business and Financial Results
 Our management has performed an analysis of our ability to continue as a going concern and has identified substantial doubt about our ability to continue as a going concern.
 As of December 31, 2024, we had $38.8 million of unrestricted cash and cash equivalents available to fund future operations, $154.8 million of outstanding indebtedness, of which $65.0 million is classified as current on our balance sheet, $31.5 million of paid in-kind interest, and $255.1 million of unpaid claims. 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 the aggregate proceeds of $30.0 million we received from a related party financing transaction in February and March 2025, and assuming no other financing transactions, we believe we will require additional funding in 2025. As a result of these factors, management has concluded that there is substantial doubt about our ability to continue as a going concern within one year after the date the consolidated financial statements included elsewhere in this Form 10-K are issued. In evaluating our ability to continue as a going concern and meet our obligations, management considered our current projections of future cash flows, current financial condition, sources of liquidity, and debt obligations for at least one year from the date of issuance of this Form 10-K.
 We continue to explore raising additional capital through a combination of debt financing and equity issuances and sales of assets. As substantial doubt about our ability to continue as a going concern exists, our ability to finance our operations through the sale and issuance of debt or equity securities or through bank or other financing could be impaired and there is no assurance that sources of financing will be available on a timely basis, or on satisfactory terms, or at all. If we are unable to raise additional capital or generate cash flows necessary to fund our operations or refinance our indebtedness, we will need to curtail planned activities, discontinue certain operations, or sell certain assets, which could materially and adversely affect our business, financial condition, results of operations, and prospects.
 Risks Related to Our Operating History
 We have a history of net losses. We expect to continue to incur losses for the foreseeable future and we may never achieve or maintain profitability.
 We have experienced losses since our inception. For the year ended December 31, 2024, we incurred net losses of $310.4 million. As of December 31, 2024, we had an accumulated deficit of $503.2 million. We expect to continue to incur net losses, comprehensive losses, and negative cash flows from operating activities in accordance with our operating plan. We expect that our operating expenses will continue to increase as we grow our business, build relationships with physician partners and payors, develop new services and comply with the requirements associated with being a public company. Since our inception, we have financed our operations primarily through cash we obtained as a result of the Business Combinations, private placements of equity securities, issuances of promissory notes, payments received from various payors, borrowings under the Term Loan Facility (as defined herein) and the disposition of certain of our Florida assets. We may not succeed in sufficiently increasing our revenue to offset these expenses. Consequently, we may not be able to achieve and maintain profitability for the current or any future fiscal year. We may never be able to generate sufficient revenue to achieve or sustain profitability and our recent and historical growth should not be considered indicative of our future performance.
 We may need to raise additional capital to fund our existing operations or develop and commercialize new services or expand our operations.
 We may need to spend significant amounts to fund our existing operations, including expansion into new geographies, to improve our platform and to develop new services. Based upon management's assessment of the
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 Company's ability to continue as a going concern as described above in the risk factor entitled "Our management has performed an analysis of our ability to continue as a going concern and has identified substantial doubt about our ability to continue as a going concern," absent additional funding, we believe that our existing cash, cash equivalents and restricted cash are not sufficient to fund our operating and capital needs for at least the next 12 months. We maintain the majority of our cash, cash equivalents and restricted cash in accounts with major U.S. financial institutions, and our deposits at these institutions, at times, may exceed insured limits. Market conditions can impact the viability of these institutions. In the event of failure of any of the financial institutions where we maintain our cash, cash equivalents and restricted cash, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all. Any inability to access or delay in accessing these funds could adversely affect our business and financial position.
 Our expectation regarding the sufficiency of funds is based on assumptions that may change as a result of many factors currently unknown to us. Until such time, if ever, as we can generate sufficient revenue, we may finance our cash needs through a combination of equity offerings and debt financings or other sources. In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans.
 Our present and future funding requirements will depend on many factors, including:
 • our ability to achieve revenue growth;
 • our ability to effectively manage medical expense amounts;
 • the cost of expanding our operations, including our geographic scope, and our offerings, including our marketing efforts;
 • our rate of progress in launching, commercializing and establishing adoption of our services; and
 • the effect of competing technological and market developments.
 To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a securityholder. In addition, debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends and these forms of financing may have rights, preferences, and privileges senior to those of holders of our common stock and may involve restrictive covenants which could place significant restrictions on our operations. For example, since December 2022, in various private placement transactions and in connection with the issuance of unsecured promissory notes (see Note 10 "Debt" to the consolidated financial statements included elsewhere in this Form 10-K), we have issued an aggregate of 110.8 million shares of Class A common stock and warrants and pre-funded warrants to purchase an aggregate of 307.1 million shares of Class A common stock. See Part II, Item 7A. " Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources." If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, intellectual property, or future revenue streams or grant licenses on terms that may not be favorable to us. Furthermore, any capital raising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to advance development activities. If we are unable to raise additional funds when needed to fund our operations, we will need to curtail planned activities, discontinue certain operations, or sell certain assets, which could materially and adversely affect our business, financial condition, results of operations, and prospects.
 Our business and the markets in which we operate are rapidly evolving, which makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.
 Our business and the markets in which we operate are rapidly evolving which make it difficult to evaluate and assess the success of our business to date, our future prospects and the risks and challenges that we may encounter. These risks and challenges include our ability to:
 • attract new members and partner physicians to our platform and position our platform as a convenient and accepted way to access and deliver healthcare;
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 • retain our current members, affiliated professional entities and other physician partners and encourage them to continue to utilize our platform and services;
 • gain market acceptance of our services and products with members and physicians and maintain and expand such relationships;
 • comply with existing and new laws and regulations applicable to our business and in our industry;
 • anticipate and respond to changes in Medicare reimbursement rates and the markets in which we operate;
 • react to challenges from existing and new competitors;
 • maintain and enhance our reputation and brand;
 • effectively manage our growth and business operations, including new geographies;
 • forecast our revenue, which includes reimbursements, and budget for, and manage, our expenses, including our medical expense amounts, and capital expenditures;
 • hire and retain talented individuals at all levels of our organization;
 • maintain and improve the infrastructure underlying our platform, including our data protection, intellectual property and cybersecurity; and
 • successfully update our platform and services, including expanding our services into different healthcare products and services, develop and update our software, offerings and services to benefit our members.
 If we fail to understand fully or adequately address the challenges that we are currently encountering or that we may encounter in the future, including those challenges described here and elsewhere in this "Risk Factors" section, our business, financial condition and results of operations could be adversely affected. If the risks and uncertainties that we plan for when operating our business are incorrect or change, or if we fail to manage these risks successfully, our results of operations could differ materially from our expectations and our business, financial condition and results of operations could be adversely affected.
 Our relatively limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.
 We were established in 2017 and we are continuing to grow our marketing and management capabilities. Consequently, predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history. Our relatively limited operating history, evolving business and rapid growth make it difficult to evaluate our future prospects and the risks and challenges we may encounter, and we may not continue to grow at or near historical rates. If our growth strategy is not successful, we may not be able to continue to grow our revenue or operations.
 In addition, as a business with a limited operating history, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown challenges. We are transitioning to a company capable of supporting commercialization, sales and marketing. We may not be successful in such a transition and, as a result, our business may be adversely affected.
 We may not be able to maintain compliance with our debt covenants in the future which could result in an event of default.
 Our Term Loan Facility (as defined herein) with CRG Partners (the "Lender"), the VGS Promissory Note, the VGS 2 Promissory Note and the VGS 3 Promissory Note (each as defined herein) contain affirmative and negative covenants which, among other things, require us to maintain minimum liquidity and annual minimum revenue levels that increase over time and restrict P3 LLC's ability and the ability of its subsidiaries from, among other things, incurring certain indebtedness and liens, and making certain restricted payments. If we breach these or other financial covenants and fail to secure a waiver or forbearance from the lenders, such breach or failure could result in an event of default and accelerate the repayment of the outstanding or the exercise of other rights or remedies that our lenders may have under
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 applicable law. As of December 31, 2024, we were not in compliance with its Term Loan Facility, VGS Promissory Note, VGS 2 Promissory Note and VGS 3 Promissory Note covenants related to issuance of the 2024 financial statements with an audit opinion free of a "going concern" explanatory paragraph. 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 and VGS 3 Promissory Note or the lenders of any future indebtedness we may incur will grant any such waiver or forbearance in the future.
 We may not recognize the anticipated benefits of recent and future acquisitions or dispositions and any such transactions could disrupt our operations and have a material adverse effect on our business, financial condition and results of operations.
 The anticipated benefits of any future acquisitions or dispositions may not be realized fully, or at all, and may take longer to realize than expected. Anticipated benefits of any acquisition may be affected by, among other things, competition and our ability to grow and manage growth profitably. Further, we may not be able to continue the operational success or successfully finance or integrate any businesses that we acquire. The integration of any acquisition may divert management's time and resources from our core business and disrupt our operations or may result in conflicts with our business. Any acquisition may not be successful, may reduce our cash reserves, may negatively affect our earnings and financial performance and, to the extent financed with the proceeds of debt, may increase our indebtedness. We cannot ensure that any acquisition we make will not have a material adverse effect on our business, financial condition and results of operations.
 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.
 As of December 31, 2024, the net carrying value of other intangible assets represented $574.4 million, or 73% of our total assets. Indefinite-lived intangible assets are evaluated for impairment annually, or more frequently if circumstances indicate impairment may have occurred. Definite-lived intangible assets totaling $573.7 million are amortized over 10 years. If our operating performance falls below our then current projections or if there are material changes to management's assumptions, we have in the past and could in the future be required to recognize additional non-cash charges to operating earnings for other intangible asset impairment, which could be significant. For example, due to the decrease in the share price over the second and fourth quarters of 2022, the Company recorded a significant goodwill impairment charge of $1,315.0 million during the year ended December 31, 2022. Goodwill or intangible asset impairments have had, and any future impairments may have, a material adverse effect on our results of operations.
 Risks Related to Our Business and Industry
 Pandemics or epidemics have impacted, and may in the future impact, our operations and may materially and adversely affect our business and financial results.
 The extent to which any pandemic, epidemic, or outbreak of an infectious disease may directly or indirectly impact our operations and results of operations will depend on multiple factors, including, but not limited to the ultimate geographic spread of the disease, the duration and scope of the outbreak, the emergence of variants, the availability and efficacy of vaccines, and government, social, business and other actions that are taken in response to the pandemic or outbreak. We may be unable to properly anticipate or prepare for these events and, as a result, our business may be materially adversely impacted.
 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 success depends largely upon the continued services of key members of senior management and other key employees. Most key employees are at-will employees and therefore they may terminate employment with us at any time with no advance notice. We also rely on our leadership team in the areas of managed care, operations and general and administrative functions. From time to time, there may be changes in our management team resulting from the hiring or departure of executives, which could disrupt our business. The replacement of one or more of our executive officers or
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 other key employees would likely involve significant time and costs and may significantly delay or prevent the achievement of our business objectives. Our business would also be adversely affected if we fail to adequately plan for succession of our leadership or if we fail to effectively recruit, integrate, retain and develop key talent and/or align our talent with our business needs, in light of the current rapidly changing environment.
 Competition for qualified personnel in our industry is intense due to the limited number of individuals who possess the required skills and experience. In particular, we face substantial competition for physicians and other healthcare providers. As a result, as we continue to grow and enter new geographies, it may be difficult for us to hire additional qualified personnel with the necessary skills. We continued to experience labor shortages in 2024. A number of factors have and may in the future adversely affect the labor force available to us or increase labor costs, including high employment levels, federal unemployment subsidies, increased wages offered by other employers, and other government regulations. In addition, we have experienced high employee turnover and expect to continue to experience high employee turnover in the future. New hires require significant training and, in most cases, take significant time before such personnel achieve full productivity. New employees may not become as productive as we expect, and we may be unable to hire or retain sufficient numbers of qualified individuals. If our retention efforts are not successful or our employee turnover rate increases in the future, we may not be able to effectively pursue our business plan which could harm our business, financial condition, cash flows and results of operations.
 Finally, as job candidates often consider the value of the stock options or other equity instruments they are to receive in connection with their employment, the volatility in the price of our stock may adversely affect our ability to attract or retain highly skilled personnel. Further, the requirement to expense stock options and other equity instruments may discourage us from granting the size or type of stock option or equity awards that job candidates require to join our company. Failure to attract new personnel or failure to retain and motivate our current personnel could have a material adverse effect on our business, financial condition and results of operations.
 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 a material adverse effect on our business, financial condition, cash flows and results of operations.
 Our business depends on our ability to identify and develop successful geographies and relationships with physician partners and payors, and to successfully execute upon our growth initiatives to increase the profitability of our physician partners. In order to pursue our strategy successfully, we must effectively implement our platform, partnership and network model, including identifying suitable candidates and successfully building relationships with and managing integration of new physician partners and payors. We contract with a limited number of affiliated professional entities and other physician partners and rely on such physicians within each geography. In addition, certain of our providers are permitted to provide services on other platforms. Our growth initiatives in our existing geographies depend, in part, on our physician partners' ability to increase their capacity to service Medicare patients, and to effectively meet increased patient demand. Our affiliated professional entities and other physician partners may encounter difficulties in recruiting additional primary care physicians to their practices due to many factors, including significant competition in their geographies. Accordingly, the loss or dissatisfaction of any physician partners, our inability to recruit and integrate physician partners into our model, or the failure of our affiliated professional entities or other physician partners to recruit additional primary care physicians or manage and scale capacity to timely meet patient demand, could substantially harm our brand and reputation, impact our competitiveness, inhibit widespread adoption of our platform, partnership and network model and impair our ability to attract new physician partners and maintain existing physician partnerships, both in new geographies and in geographies in which we currently operate, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.
 Further, our growth strategy depends, in part, on securing and integrating new high-caliber physician partners and expanding into new geographies in which we have little or no operating experience. Integration and other risks can be more pronounced for larger and more complicated relationships or relationships outside of our core business space, or if multiple relationships are pursued simultaneously. Additionally, new geographies may be characterized by stakeholder preferences for, and experience with, rates of MA enrollment, MA reimbursement rates, payor concentration and rates of unnecessary variability in and utilization of medical care that differ from those in the geographies where our existing operations are located. Likewise, new geographies into which we seek to expand may have laws and regulations that differ from those applicable to our current operations. We may be unfamiliar with the regulatory requirements in each geography that we enter, and we may be forced to incur significant expenditures to ensure compliance with requirements to which we are subject. If we are unable or unwilling to incur such costs, our growth in new geographies may be less successful than in our current geographies.
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 Further, our growth to date has increased the significant demands on our management, operational and financial systems, infrastructure and human and capital resources. We must continue to improve our existing systems for operational and financial management, including our reporting systems, procedures and controls. These improvements have and could require significant capital expenditures and place increasing demands on our management. We may not be successful in managing or expanding our operations or in maintaining adequate financial and operating systems and controls. If we do not successfully manage these processes, our business, financial condition, cash flows and results of operations could be harmed.
 If growth in the number of patients and physician partners on our platform decreases, or the number of services that we are able to provide to physician partners and members decreases, due to legal, regulatory, economic or business developments, our business, financial condition and results of operations will be harmed.
 Substantially all of our total revenue relates to federal government healthcare programs. The policies and decisions made by the federal government regarding these programs have a substantial impact on the size of our membership base, the reimbursement rates among members, and our network of providers and therefore, our results of operation. Additionally, our future results of operations depend, in part, on our ability to expand our services and offerings, including broadening our continuum of care.
 There are sometimes wide variations in the established per member reimbursement rates as a result of, among other things, members' risk status, acuity levels and age, plan benefit design and geography. As the composition of our membership base changes, due to programmatic, competitive, regulatory, benefit design, economic or other changes, there is a corresponding change to our premium revenue, costs and margins, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.
 Additional factors that could affect our ability to sell products and services include, but are not limited to:
 • price, performance and functionality of our solution;
 • availability, price, performance and functionality of competing solutions;
 • our ability to develop and sell complementary services;
 • stability, performance and security of our hosting infrastructure and hosting services; and
 • changes in healthcare laws, regulations or trends.
 Any of these consequences could lower retention rate and have a material adverse effect on our business, financial condition and results of operations.
 If the estimates and assumptions we use to project the size, revenue or medical expense amounts of our target geographies are inaccurate or the cost of providing services exceeds the amounts received by us, our future growth prospects may be impacted, and we may generate losses or fail to attain financial performance targets.
 We often do not have access to reliable historical data regarding the size, revenue or medical expense levels of our target geographies or potential physician partners. As a result, our market opportunity estimates and financial forecasts developed as we enter into a new geography, are subject to significant uncertainty, and are based on assumptions and estimates that may not prove to be accurate. The estimates and forecasts in this Form 10-K and our other public disclosures relating to the size and expected growth of the market for our services and the estimates of our market opportunity may prove to be inaccurate.
 Principal assumptions relating to our market opportunity include estimates of the total number and average length of relationships between MA patients and their physicians, historical MA patient growth rates, amount of revenue and medical expenses associated with MA members expected to be attributed to our affiliated professional entities and other physician partners and historical experience that such physician partners have with a similar platform. Our market opportunity is based on the assumption that our platform, partnership and network model will be more attractive to potential physician partners than competing options. However, potential physician partners may elect to pursue a different strategic option.
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 Changes in our anticipated ratio of medical expense to revenue can significantly impact our financial results. Accordingly, the failure to adequately predict and control medical costs and expenses could have a material adverse effect on our business, results of operations, financial condition and cash flows. Additionally, the medical expenses of patients may be outside of our affiliated providers' control in the event that patients take certain actions that increase such expenses, such as unnecessary hospital visits. Numerous factors impact our ability to accurately estimate and control our medical expenses, many of which are not within our control. Factors that may cause medical expenses to exceed estimates include:
 • the health status of our members;
 • higher levels of hospitalization among our members;
 • higher than expected utilization of new or existing healthcare services or technologies;
 • an increase in the cost of healthcare services and supplies, whether as a result of inflation or otherwise;
 • changes to mandated benefits or other changes in healthcare laws, regulations and practices;
 • increased costs attributable to specialist physicians, hospitals and ancillary providers;
 • changes in the demographics of our members and medical trends;
 • contractual or claims disputes with providers, hospitals or other service providers within and outside a health plan's network;
 • the occurrence of catastrophes, major epidemics or pandemics, or acts of terrorism; and
 • the reduction of health plan premiums.
 Additionally, fluctuations in the magnitude of the hospital and physician network, including the discontinuation of a hospital or specialty or ancillary physician's participation in our payors' provider network, could adversely impact our business, financial condition, cash flows, and results of operations. If we underestimate or do not correctly predict the cost of the care our affiliated providers furnish to patients, we might be underpaid for the care that must be provided to patients, which could have a negative impact on our results of operations and financial condition.
 We primarily depend on reimbursement by third-party payors, as well as payments by individuals, which could lead to delays, uncertainties and disagreements regarding the timing and process of reimbursement, including any changes or reductions in Medicare reimbursement rates or rules.
 The reimbursement process is complex and can involve lengthy delays. Although we recognize revenue when we provide services to patients, we have experienced and may from time to time experience delays in receiving the associated capitation payments or, for patients on fee-for-service arrangements, the reimbursement for the service provided. In addition, third-party payors may disallow, in whole or in part, requests for reimbursement based on determinations that the patient is not eligible for coverage, certain amounts are not reimbursable under plan coverage, were for services provided that were not medically necessary, or additional supporting documentation is necessary. Third-party payors are also increasingly focused on controlling healthcare costs, and such efforts, including any revisions to reimbursement policies, may further reduce, complicate or delay our reimbursement claims. Further, the Medicare program and its reimbursement rates and rules, upon which many third-party payors base their reimbursement rate, are subject to frequent change. Each year, CMS issues a final rule to establish the MA benchmark payment rates for the following calendar year. Any reduction to MA reimbursement levels may have a material adverse effect on our business, results of operations, financial condition and cash flows. Additionally, any delay or default by the government in making Medicare reimbursement payments could materially and adversely affect our business, financial condition and results of operations.
 Retroactive adjustments may change amounts realized from third-party payors. As described below, we are subject to audits by such payors, including governmental audits of our Medicare claims, and may be required to repay these payors if a finding is made that we were incorrectly reimbursed. Delays, uncertainties and disagreements regarding the reimbursement process may adversely affect accounts receivable, increase the overall costs of collection and cause us to incur additional borrowing and other costs related to resolving disagreements or uncertainties. For example, in July 2021, a discrepancy was identified in the service agreement with one of our health plans in the way the revenue of Medicare Part C
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 and Medicare Part D was being calculated compared to the definitions of "revenue" under the service agreement. This discrepancy resulted in a contract dispute and a renegotiation of the service agreement. In January 2023, the renegotiation was settled and we reflected the known settlement of $5.0 million within health plan settlements payable on our consolidated balance sheet as of December 31, 2022. The remaining settlement balance of $3.0 million is recorded within health plan settlements payable on our consolidated balance sheet as of December 31, 2024.
 In addition, certain of our patients are covered under health plans that require the patient to cover a portion of their own healthcare expenses through the payment of copayments or deductibles. We may not be able to collect the full amounts due with respect to these payments that are the patient's financial responsibility, or in those instances where physicians provide services to uninsured individuals. To the extent permitted by law, amounts not covered by third-party payors are the obligations of individual patients for which we may not receive whole or partial payment. Any increase in cost shifting from third-party payors to individual patients, including as a result of high deductible plans for patients, increases our collection costs and reduces overall collections, which we may not be able to offset with sufficient revenue.
 In response to the COVID-19 pandemic, the CMS, the federal agency responsible for administering the Medicare program, made several changes in the manner in which Medicare pays for telehealth visits, many of which relax previous requirements, including site requirements for both the providers and patients, telehealth modality requirements and others. State law applicable to telehealth, particularly licensure requirements, was also relaxed in many jurisdictions as a result of the COVID-19 pandemic. It is unclear which, if any, of these changes will remain in place permanently and which will be rolled-back. If regulations change to restrict our ability to or prohibit us from delivering care through telehealth modalities, our financial condition and results of operations may be adversely affected.
 The termination or non-renewal of the Medicare Advantage contracts held by the health plans with which we contract, or the termination or nonrenewal of our contracts with those plans, could have a material adverse effect on our revenue and operations.
 We contract with health plans to provide capitated care services with respect to certain of their MA members. Our operations are dependent on a concentrated number of payors with whom we contract to provide services to members. Our contracts with four health plans to provide capitated care services for their members collectively accounted for approximately 59% and 60% of our capitated revenue for the years ended December 31, 2024 and 2023, respectively. If a plan with which we contract for these services loses its MA contracts with CMS, receives reduced or insufficient government reimbursement under the MA program, decides to discontinue its MA and/or commercial plans, decides to contract with another company to provide capitated care services to its members, or decides to directly provide care, our contract with that plan could be at risk and we could lose revenue. In addition, certain of our contracts with health plans are terminable without cause. If any of these contracts were terminated, certain patients covered by such plans may choose to shift to another PCP within their health plan's network. Moreover, our inability to maintain our agreements with health plans, in particular with key payors such as Centene Corporation, Atrio Health Plans, United Healthcare and Aetna, with respect to their MA members or to negotiate favorable terms for those agreements in the future, could result in the loss of patients and could have a material adverse effect on our profitability and business.
 The healthcare industry has also experienced and continues to experience a trend of consolidation, resulting in fewer but larger payors that have significant bargaining power, given their market share. Payments from payors are the result of negotiated rates. These rates may decline based on renegotiations and larger payors having significant bargaining power to negotiate higher discounted fee arrangements with healthcare providers. As a result, payors increasingly are demanding discounted fee structures or the assumption by healthcare providers of all or a portion of the financial risk related to paying for care provided through capitation agreements.
 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.
 Our success depends upon our continued ability to collaborate with and expand a network of high-caliber affiliated professional entities and other physician partners who can provide high quality of care, improve clinical outcomes and effectively manage healthcare costs, which are key drivers of our results of operations. Our physician partners could demand an increased payment arrangement or take other actions, or fail to take actions, that could result in higher medical costs, lower quality of care for our members, harm to our reputation or create difficulty meeting regulatory or other requirements. Likewise, our physician partners could take actions contrary to our instructions, requests, policies or objectives or applicable law, or could have economic or business interests or goals that are or become inconsistent with our own. Further, our physician partners may not engage with our platform to assist in improving overall quality of care and
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 management of healthcare costs, which could produce results that are inconsistent with our estimates and financial models and negatively impact our growth.
 In addition to receiving care from our affiliated professional entities and other physician partners, our members also receive care from an array of hospitals, specialists and ancillary providers who typically contract directly with our payors. We cannot guarantee the quality and efficiency of services from such providers, over which we have no control. Members who receive sub-optimal healthcare from such providers may be dissatisfied with our physician partners, which would have a negative impact on member satisfaction and retention. Any of these consequences could adversely impact our business, financial condition and results of operations.
 We could also experience significant losses if the expenses incurred to deliver healthcare services to our attributed members exceed revenue we receive from payors in respect of our attributed members. Under a capitation contract, a payor typically prospectively pays periodic capitation payments representing a prospective budget from which its physician partnerships manage healthcare expenses on behalf of the population enrolled with that physician partnership. To manage total medical services expense, we rely on our affiliated professional entities' and other physician partners' ability to improve clinical outcomes, implement clinical initiatives to provide a better healthcare experience for our members and accurately and sufficiently document the risk profile of our members. While our contracts vary, generally, if the cost of medical care provided exceeds the corresponding capitated revenue we receive, we may realize operating deficits, which are typically not capped, and could lead to substantial losses.
 Reductions in the quality ratings of the health plans we serve could have a material adverse effect on our business, results of operations, financial condition and cash flows.
 As a result of the Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (the "ACA"), the level of reimbursement each health plan receives from CMS is dependent, in part, upon the quality rating of the MA plan. Such ratings impact the percentage of any cost savings rebate and any bonuses earned by such health plan. Since a significant portion of our revenue is expected to be calculated as a percentage of CMS reimbursement received by these health plans with respect to our patients, reductions in the quality ratings of a health plan that we serve could have a material adverse effect on our business, results of operations, financial condition and cash flows.
 Given each health plan's control of its plans and the many other providers that serve such plans, we believe that we will have limited ability to influence the overall quality rating of any such plan. The Bipartisan Budget Act, passed in February 2018, implemented certain changes to prevent artificial inflation of star ratings for MA plans offered by the same organization. In addition, CMS has terminated plans that have had a rating of less than three stars for three consecutive years, whereas MA plans with five stars are permitted to conduct enrollment throughout almost the entire year. Because low quality ratings can potentially lead to the termination of a plan that we serve, we may not be able to prevent the potential termination of a contracting plan or a shift of patients to other plans based upon quality issues which could, in turn, have a material adverse effect on our business, results of operations, financial condition and cash flows.
 We operate in a competitive industry, and if we are not able to compete effectively, our business, financial condition and results of operations will be harmed.
 Our industry is competitive and we expect it to continue to attract increased competition, which could make it difficult for us to succeed. We currently face competition in various aspects of our business, including in offering a favorable reimbursement structure for physician partners and potential physician partners and attracting payors and physician partners who are not contracted with us, from a range of companies that provide similar services under different care models that could attract patients, providers and payors, including hospitals, managed service organizations and provider networks and data analysis consultants. Further, individual physicians who are contracted within our network may affiliate with our competitors. Competition from hospitals, managed service organizations and provider networks and data analysis consultants, payors and other parties could result in payors changing the benefit structure that is offered to our members, which could negatively impact our profitability and market share.
 Our primary competitors include Oak Street Health, Inc., Astrana Health, Inc. and agilon health, inc., in addition to numerous local provider networks, hospitals and health systems. Moreover, large, well-financed payors have in some cases developed their own managed services tools and may provide these services to their physicians and patients at discounted prices, or may seek to expand their relationships with additional competing physicians or physician networks, including in geographic areas we serve. This may result in a more competitive environment and increased challenges to
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 grow at the rates we have projected. We expect that competition will continue to increase as a result of consolidation in the healthcare industry and increased demand for its services.
 Some of our competitors may have greater name recognition, particularly in local geographies, longer operating histories, superior products or services and significantly greater resources than we do. Further, our current or potential competitors may be acquired by or partner with third parties with greater resources than we have. As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements and may have the ability to initiate or withstand substantial benefits structure and premium competition. In addition, current and potential competitors have established, and may in the future establish, cooperative relationships with providers of complementary services, technologies or services to increase the attractiveness of their services.
 Accordingly, new competitors or alliances may emerge that have greater market share, a larger customer base, better data aggregation systems, greater marketing expertise, greater financial resources and larger marketing teams than we have, which could put us at a competitive disadvantage. Our competitors could also be better positioned to serve certain segments of the healthcare delivery industry, which could create additional pressure on the premiums that our payors are able to charge. If we are unable to successfully compete, our business, financial condition, cash flows and results of operations could be materially adversely affected.
 Our future growth and the success of our business will depend in large part upon the effectiveness and efficiency of our marketing efforts, and our ability to develop brand awareness cost-effectively.
 Our business success depends on our ability to attract and retain members, which significantly depends on our marketing practices. Our future growth and ability to achieve profitability will depend in large part upon the effectiveness and efficiency of our marketing efforts, including our ability to:
 • create greater awareness of our brand;
 • identify the most effective and efficient levels of spending in each market, media and specific media vehicle;
 • determine the appropriate creative messages and media mix for advertising, marketing and promotional expenditures;
 • effectively manage marketing costs (including creative and media) to maintain acceptable consumer acquisition costs;
 • select the most effective markets, media and specific media vehicles in which to advertise; and
 • convert consumer inquiries into clients and members.
 We believe that developing and maintaining widespread awareness of our brand in a cost-effective manner is critical to achieving widespread adoption of our services and attracting new clients and members. Our brand promotion activities may not generate consumer awareness or increase revenue, and even if they do, any increase in revenue may not offset the expenses we incur in building our brand. If we fail to successfully promote and maintain our brand, or incur substantial expenses in doing so, we may fail to attract or retain members necessary to realize a sufficient return on our brand-building efforts or to achieve the widespread brand awareness that is critical for broad adoption of our brands.
 Developments affecting spending by the healthcare industry could adversely affect our business.
 The U.S. healthcare industry has changed significantly in recent years, and we expect that significant changes will continue to occur, including as a result the recent change in U.S. Presidential administration. General reductions in expenditures by healthcare industry participants could result from, among other things:
 • government regulations or private initiatives that affect the manner in which healthcare providers interact with patients, payors or other healthcare industry participants, including changes in pricing or means of delivery of healthcare products and services;
 • consolidation of healthcare industry participants;
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 • reductions in government funding for healthcare; and
 • adverse changes in business or economic conditions affecting healthcare payors or providers or other healthcare industry participants.
 Any of these changes in healthcare spending could adversely affect our revenue. Even if general expenditures by industry participants remain the same or increase, developments in the healthcare industry may result in reduced spending in some or all of the specific markets that we serve now or in the future. The timing and impact of developments in the healthcare industry are difficult to predict. We cannot assure you that the demand for our solutions and services will continue to exist at current levels or that we will have adequate technical, financial, and marketing resources to react to changes in the healthcare industry.
 We and our affiliated professional entities and other physician partners may become subject to medical liability claims, which could cause us to incur significant expenses and may require us to pay significant damages if the claims are not covered by insurance.
 Our overall business entails the risk of medical liability claims. Successful medical liability claims could result in substantial damage awards that exceed the limits of our and those affiliated professionals' insurance coverage. We carry or will carry professional liability insurance for the Company and each of our healthcare professionals. Additionally, all of the network providers that contract or will contract with us separately carry or will carry professional liability insurance for themselves and their healthcare professionals. Professional liability insurance is expensive and insurance premiums may increase significantly in the future, particularly as we expand our services. As a result, adequate professional liability insurance may not be available to us and our affiliated professionals in the future at acceptable costs or at all, which may negatively impact our and our affiliated professionals' ability to provide services to members, and thereby adversely affect our overall business and operations.
 Any claims made against us or our affiliated professionals that are not fully covered by insurance could be costly to defend against, result in substantial damage awards, and divert the attention of our management and our affiliated professional entities from our operations, which could have a material adverse effect on our business, financial condition and results of operations. In addition, any claims may adversely affect our business or reputation.
 If we or our affiliated professional entities or other physician partners fail to comply with applicable data interoperability and information blocking rules, our consolidated results of operations could be adversely affected.
 The 21st Century Cures Act (the "Cures Act"), which was passed and signed into law in December 2016, includes provisions related to data interoperability, information blocking and patient access. In March 2020, the HHS, Office of the National Coordinator for Health Information Technology, which is now known as the Office of the Assistant Secretary for Technology Policy and Office of the National Coordinator for Health Information Technology ("ASTP/ONC"), and CMS finalized and issued complementary rules that are intended to clarify provisions of the Cures Act regarding interoperability and information blocking, and include, among other things, requirements surrounding information blocking, changes to ASTP/ONC's health IT certification program and requirements that CMS regulated payors make relevant claims/care data and provider directory information available through standardized patient access and provider directory application programming interfaces that connect to provider electronic health record systems. The companion rules will transform the way in which healthcare providers, health IT developers, health information exchanges/health information networks ("HIEs/HINs"), and health plans share patient information, and create significant new requirements for healthcare industry participants. For example, the ASTP/ONC rule, which went into effect on April 5, 2021, prohibits healthcare providers, health IT developers of certified health IT, and HIEs/HINs from engaging in practices that are likely to interfere with, prevent, materially discourage, or otherwise inhibit the access, exchange or use of electronic health information ("EHI"), also known as "information blocking." To further support access and exchange of EHI, the ASTP/ONC rule identifies eight "reasonable and necessary activities" as exceptions to information blocking activities, as long as specific conditions are met. In June 2023, the HHS Office of Inspector General ("OIG") published its final rule implementing the statutory penalties for information blocking, which are up to $1 million per violation. Enforcement of information blocking penalties began on September 1, 2023. Further, in December 2023, ASTP/ONC finalized its rule titled Health Data, Technology, and Interoperability: Certification Program Updates, Algorithm Transparency, and Information Sharing ("HTI-1 Final Rule"). Among other things, the HTI-1 Final Rule narrows the scope of entities that qualify as certified health IT developers, makes updates to its Health IT Certification Program requirements, a voluntary program for certifying health IT, and modifies the information blocking exceptions. In addition, in December 2024, ASTP/ONC issued the HTI-2 Final Rule, which among other things, finalizes certain Trusted Exchange Framework and Common Agreement ("TEFCA")-related
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 proposals, and amends the information blocking regulations by including definitions related to the TEFCA Manner Exception. In December 2024, ASTP/ONC also released the final HTI-3 Final Rule, which among other things, finalizes the addition of a definition of "reproductive health care," creates a new Protecting Care Access Exception and finalizes revisions to the Privacy and Infeasibility Exceptions. Any failure to comply with these rules could have a material adverse effect on our business, results of operations and financial condition.
 Our business and operations would suffer in the event of information technology system failures, security breaches, cyberattacks or other deficiencies in cybersecurity.
 Our information technology systems facilitate our ability to conduct our business. While we have disaster recovery systems and business continuity plans in place, any disruptions in our disaster recovery systems or the failure of these systems to operate as expected could, depending on the magnitude of the problem, materially adversely affect our operating results by limiting our capacity to effectively monitor and control our operations. Despite our implementation of a variety of security measures, our information technology systems could be subject to physical or electronic break-ins, and similar disruptions from unauthorized tampering or any weather-related disruptions where our headquarters is located. In addition, in the event that a significant number of our management personnel were unavailable in the event of a disaster, our ability to effectively conduct business could be adversely affected.
 In the ordinary course of our business, we, our affiliated professional entities or other physician partners collect and store sensitive data, including personal information, protected health information ("PHI"), intellectual property and proprietary business information owned or controlled by us or our employees, members and other parties (collectively, "Confidential Information"). We manage and maintain our applications and data utilizing a combination of on-site systems and cloud-based data centers. We utilize external security and infrastructure vendors to provide and manage parts of our information technology systems, including our data centers. These applications and data encompass a wide variety of business-critical information, including research and development information, customer information, commercial information and business and financial information. We face a number of risks with respect to the protection of this Confidential Information, including loss of access, inappropriate use or disclosure, unauthorized access, inappropriate modification and the risk of being unable to adequately monitor and audit and modify our controls over our Confidential Information. This risk extends to the third-party vendors and subcontractors we use to manage this sensitive data or otherwise process it on our behalf. A breach or failure of our or our third-party vendors' or subcontractors' network, hosted service providers or vendor systems could result from a variety of circumstances and events, including third-party action, employee negligence or error, malfeasance, malware (e.g., ransomware), misconfigurations, "bugs" or other vulnerabilities, computer viruses, cyberattacks by computer hackers such as denial-of-service and phishing attacks, failures during the process of upgrading or replacing software and databases, power outages, hardware failures, telecommunication failures, user errors, or catastrophic events. If these third-party vendors or subcontractors fail to protect their information technology systems and our Confidential Information, we may be vulnerable to disruptions in service and unauthorized access to our Confidential Information and we could incur liability and reputational damage.
 The secure processing, storage, maintenance and transmission of information are vital to our operations and business strategy, and we devote significant resources to protecting such Confidential Information. Although we take reasonable measures to protect sensitive data from unauthorized access, use or disclosure, our information technology and infrastructure may still be vulnerable. We have in the past experienced low-threat attacks by hackers or breaches due to employee error, malfeasance or other malicious or inadvertent disruptions. For example, in April 2023 we were the target of a type of wire transfer fraud known as business email compromise ("BEC") scam. BEC scams involve using social engineering to cause employees to wire funds to the perpetrators in the mistaken belief that the requests were made by a company executive or established vendor. While this fraud did not cause material losses to us, it reflects that we are continually susceptible to the risk of being targeted for a cyberattack.
 Attacks upon information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise. Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures against hacking, phishing, spoofing, BEC, employee error or manipulation, or other similar adverse events. We may also experience security breaches that may remain undetected for an extended period. Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
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 Any such breach or interruption could compromise our networks and the Confidential Information stored there could be accessed by unauthorized parties, publicly disclosed, lost or stolen. Our information systems must also be continually updated, patched and upgraded to protect against known vulnerabilities. The volume of new vulnerabilities has increased markedly, as has the criticality of patches and other remedial measures. In addition to remediating newly identified vulnerabilities, previously identified vulnerabilities must also be continuously addressed. Accordingly, we are at risk that cyberattackers exploit these known vulnerabilities before they have been addressed.
 If a cyberattack or security incident were to occur and cause interruptions in our operations, it could result in legal claims or proceedings, and liability under federal or state laws that protect the privacy of personal information, and corresponding regulatory penalties. In addition, we could face criminal liability, damages for contract breach and incur significant costs for remedial measures to prevent future occurrences and mitigate past violations. Notice of breaches may be required to be made to affected individuals or other state or federal regulators, and for extensive breaches, notice may need to be made to the media or State Attorneys General. Such a notice could harm our reputation and our ability to compete. Although we maintain insurance covering certain security and privacy damages and claim expenses, we may not carry insurance or maintain coverage sufficient to compensate for all liability and in any event, insurance coverage would not address the reputational damage that could result from a security incident. Despite our implementation of security measures to prevent unauthorized access, our data is currently accessible through multiple channels, and there is no guarantee we can protect our data from breach. Unauthorized access, loss or dissemination could also disrupt our operations and damage our reputation, any of which could adversely affect our business.
 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.
 Numerous state and federal laws, regulations, standards and other legal obligations, including consumer protection laws and regulations, which govern the collection, dissemination, use, access to, confidentiality, security and processing of personal information, including health-related information, could apply to our operations or the operations of our partners. For example, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and regulations implemented thereunder (collectively, "HIPAA"), imposes privacy, security and breach notification obligations on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their business associates that perform certain services that involve creating, receiving, maintaining or transmitting individually identifiable health information for or on behalf of such covered entities, and their covered subcontractors. HIPAA requires covered entities, such as the affiliated professional entities or other physician partners, and business associates, such as us, to develop and maintain policies with respect to the protection of, use and disclosure of PHI, including the adoption of administrative, physical and technical safeguards to protect such information, and certain notification requirements in the event of a breach of unsecured PHI.
 Additionally, under HIPAA, covered entities must report breaches of unsecured PHI to affected individuals without unreasonable delay, not to exceed 60 days following discovery of the breach by a covered entity or its agents. Notification also must be made to the HHS Office for Civil Rights and, in certain circumstances involving large breaches, to the media. Business associates must report breaches of unsecured PHI to covered entities within 60 days of discovery of the breach by the business associate or its agents. A non-permitted use or disclosure of PHI is presumed to be a breach under HIPAA unless the covered entity or business associate establishes that there is a low probability the information has been compromised consistent with requirements enumerated in HIPAA.
 Entities that are found to be in violation of HIPAA as the result of a breach of unsecured PHI, a complaint about privacy practices or an audit by HHS may be subject to significant civil, criminal and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance. HIPAA also authorizes state Attorneys General to file suit on behalf of their residents. Courts may award damages, costs and attorneys' fees related to violations of HIPAA in such cases. While HIPAA does not create a private right of action allowing individuals to sue us in civil court for violations of HIPAA, its standards have been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.
 The Federal Trade Commission (the "FTC") also has authority to initiate enforcement actions against entities that mislead customers about HIPAA compliance, make deceptive statements about privacy and data sharing in privacy policies, fail to limit third-party use of personal health information, fail to implement policies to protect personal health information or engage in other unfair practices that harm customers or that may violate Section 5(a) of the FTC Act. Even when HIPAA does not apply, according to the FTC, violating consumers' privacy rights or failing to take appropriate steps
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 to keep consumers' personal information secure may constitute unfair and/or deceptive acts or practices in violation of Section 5(a) of the Federal Trade Commission Act. The FTC expects a company's data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. We expect even greater scrutiny by federal and state regulators, partners, and consumers of our collection, use and disclosure of health information. Additionally, federal and state consumer protection laws are increasingly being applied by FTC and states' attorneys general to regulate the collection, use, storage, and disclosure of personal information, through websites or otherwise, and to regulate the presentation of website content.
 Further, certain states have also adopted comparable privacy and security laws and regulations which govern the privacy, processing and protection of health-related and other personal information. Such laws and regulations will be subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our future customers and strategic partners. For example, the state of Nevada enacted a law that went into force on October 1, 2019 and requires companies to honor consumers' requests to no longer sell their data. Further, the California Consumer Privacy Act, as amended by the California Privacy Rights Act (collectively, the "CCPA") requires covered businesses that process the personal information of California residents to, among other things: provide certain disclosures to California residents regarding the business's collection, use, and disclosure of their personal information; receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information, and enter into specific contractual provisions with service providers that process California resident personal information on the business's behalf. California's Confidentiality of Medical Information Act (the "CMIA") places restrictions on the use and disclosure of health information, including PHI, and other personal information, and can impose a significant compliance obligation. Violations of the CMIA can result in criminal, civil and administrative sanctions, and the CMIA also provides individuals a private right of action with respect to disclosures of their health information that violate CMIA. In the event that we are subject to or affected by HIPAA, the CCPA, or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
 Washington State also enacted a broadly applicable law to protect the privacy of personal health information known as the "My Health My Data Act," which generally requires affirmative consent for the collection, use, or sharing of any "consumer health data." Consumer health data is defined to include personal information that is linked or reasonably linkable to a consumer and that identifies a consumer's past, present, or future physical or mental health status; consumer health data also includes information that is derived or extrapolated from non-health information, such as algorithms and machine learning. Nevada has also passed a similar consumer health data law, and given the increased focus on the use of health data by entities that are not subject to HIPAA, additional states are expected to pass consumer health privacy laws.
 In addition, we use artificial intelligence ("AI"), machine learning, and automated decision-making technologies (collectively, "AI Technologies") in our business. The regulatory framework for AI Technologies is rapidly evolving as many federal, state, and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations. Additionally, existing laws and regulations may be interpreted in ways that would affect the operation of AI Technologies. As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or market perception of their requirements may have on our business and may not always be able to anticipate how to respond to these laws or regulations.
 It is possible that new laws and regulations will be adopted in the United States, or that existing laws and regulations, including competition and antitrust laws, may be interpreted in ways that would limit our ability to use AI Technologies for our business, or require us to change the way we use AI Technologies in a manner that negatively affects the performance of our products, services, and business and the way in which we use AI Technologies. We may need to expend resources to adjust our products or services in certain jurisdictions if the laws, regulations, or decisions are not consistent across jurisdictions. Further, the cost to comply with such laws, regulations, or decisions and/or guidance interpreting existing laws, could be significant and would increase our operating expenses (such as by imposing additional reporting obligations regarding our use of AI Technologies).
 Although we work to comply with applicable laws, regulations and standards, our contractual obligations and other legal obligations, these requirements are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another or other legal obligations with which we must comply. Any failure or perceived failure by us or our employees, representatives, contractors, consultants, collaborators, or other third parties to comply with such requirements or adequately address privacy and security concerns, even if
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 unfounded, could result in additional cost and liability to us, damage our reputation, and adversely affect our business and results of operations.
 Any future litigation against us could be costly and time-consuming to defend.
 We may become subject, from time to time, to legal proceedings, federal and state audits, government investigations, and payor audits, investigations, civil investigative demands, overpayments, and claims that arise in the ordinary course of business such as claims brought by our clients in connection with commercial disputes or employment claims made by our current or former associates. Litigation and audits may result in substantial costs and may divert management's attention and resources, which may substantially harm our business, financial condition and results of operations. Insurance may not cover such claims, may not provide sufficient payments to cover all of the costs to resolve one or more such claims and may not continue to be available on terms acceptable to us. A claim brought against us that is uninsured or underinsured could result in unanticipated costs, thereby reducing our earnings and leading analysts or potential investors to reduce their expectations of our performance, which could reduce the market price of our Class A common stock or publicly traded warrants.
 Changes in U.S. tax laws, and the adoption of tax reform policies or changes in tax legislation or policies in jurisdictions outside of the United States, could adversely affect our operating results and financial condition.
 We are subject to federal and state income and non-income taxes in the United States. Tax laws, regulations, and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political, and other conditions, and significant judgment is required in evaluating and estimating these taxes. In particular, changes in presidential, congressional, state and local administrations in the United States could result in significant changes in, and uncertainty with respect to, tax legislation, regulation and government policy directly affecting our business or indirectly affecting us because of impacts on our members, providers and vendors.
 Our effective tax rates could be affected by numerous factors, such as entry into new businesses and geographies, changes to our existing business and operations, acquisitions and investments and how they are financed, changes in our stock price, changes in our deferred tax assets and liabilities and their valuation, and changes in the relevant tax, accounting, and other laws, regulations, administrative practices, principles and interpretations. We are required to take positions regarding the interpretation of complex statutory and regulatory tax rules and on valuation matters that are subject to uncertainty, and tax authorities may challenge the positions that we take.
 Our quarterly results may fluctuate significantly, which could adversely impact the value of our Class A common stock and publicly traded warrants.
 Our quarterly results of operations, including our revenue, net loss and cash flows, have varied and may vary significantly in the future, and period-to-period comparisons of our results of operations may not be meaningful. Accordingly, our quarterly results should not be relied upon as an indication of future performance. Our quarterly financial results may fluctuate as a result of a variety of factors, many of which are outside of our control, including, without limitation, the following:
 • our ability to maintain and grow the number of members on our platform;
 • the demand for and types of services that are offered on our platform by providers;
 • the timing of recognition of revenue, including possible delays in the recognition of revenue due to sometimes unpredictable implementation timelines;
 • the timing of cash sweeps for prior rendered services;
 • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure;
 • our ability to effectively manage the size and composition of our network of healthcare providers relative to the level of demand for services from our members and our clients' members and patients;
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 • our ability to respond to competitive developments, including pricing changes and the introduction of new products and services by our competitors;
 • client and member renewal rates and the timing and terms of client and member renewals;
 • changes to our pricing model;
 • our ability to introduce new features and services and enhance our existing platform and our ability to generate significant revenue from new features and services;
 • the impact of outages of our platform and associated reputational harm;
 • security or data privacy breaches and associated remediation costs;
 • impairment charges;
 • the timing of expenses related to the development or acquisition of technologies or businesses; and
 • pandemic or epidemics.
 Any fluctuation in our quarterly results may not accurately reflect the underlying performance of our business and could cause a decline in the trading price of our Class A common stock and publicly traded warrants.
 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.
 We have no direct operations and no significant assets other than the ownership of a minority of the economic interests in P3 LLC. As of December 31, 2024, we owned approximately 45.4% of the economic interests in P3 LLC. We depend on P3 LLC and its subsidiaries for distributions, loans and other payments to generate the funds necessary to meet our financial obligations, including to satisfy our obligations under the Tax Receivable Agreement, or to pay any dividends with respect to our Class A Common Stock. Legal and contractual restrictions in agreements governing the indebtedness of P3 LLC and its subsidiaries limit our ability to obtain cash from P3 LLC. The earnings from, or other available assets of, P3 LLC and its subsidiaries may not be sufficient to enable us to satisfy our financial obligations, including our obligations under the Tax Receivable Agreement, or pay any dividends on our Class A common stock should we decide to do so. P3 LLC is classified as a partnership for U.S. federal income tax purposes and, as such, is generally not be subject to entity level U.S. federal income tax. Instead, taxable income is allocated to holders of P3 LLC units, including us. As a result, we generally will incur taxes on our allocable share of any net taxable income generated by P3 LLC. Under the terms of the P3 LLC Amended and Restated Limited Liability Agreement (the "P3 LLC A&R LLC Agreement"), and the Tax Receivable Agreement, P3 LLC is obligated to make tax distributions or payments to holders of its P3 LLC units, including us, except to the extent such distributions or payments would render P3 LLC insolvent or are otherwise prohibited by law or the terms of any credit facility. In addition to our tax payment obligations, we also incur expenses related to our operations and our interests in P3 LLC, including costs and expenses of being a publicly traded company, all of which could be significant. To the extent that we require funds and P3 LLC or its subsidiaries are restricted from making distributions under applicable law or regulation or under the terms of their financing arrangements, or are otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition, including our ability to pay our income taxes when due.
 Our business could be adversely impacted by climate change, extreme weather conditions and natural disasters.
 The intensifying effects of climate change present physical, liability, and transition risks with both macro and micro implications for companies and financial markets. There is increasing concern that a gradual increase in global average temperatures due to increased concentration of carbon dioxide and other greenhouse gases in the atmosphere are causing significant changes in weather patterns around the globe and an increase in the frequency and severity of natural disasters. Changes in weather patterns and an increased frequency, intensity and duration of extreme weather events (such as floods, droughts, hurricanes, wildfires and severe storms), whether as a result of climate change or otherwise, could, among other things, disrupt our operations or damage or destroy our headquarters or owned or managed clinics, which may cause us to suffer losses and additional costs to maintain or resume operations, which could have an adverse impact on our business and results of operations. Public health crises arising from such extreme weather events and natural disasters or
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 effects of climate change could also impact our business operations and result in increased medical care costs. For example, natural disasters, such as a major hurricane affecting Florida or wildfire affecting California, could have significant impacts on the health of a large number of our members. In addition, implementing changes to mitigate risks associated with such events may result in substantial short- and long-term additional operational expenses, which could have a material adverse effect on our business, results of operations or financial condition.
 Risks Related to Our Legal and Regulatory Environment
 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.
 The U.S. healthcare industry is heavily regulated and closely scrutinized by federal, state and local governments. Comprehensive statutes and regulations govern the manner in which we provide and bill for services and collect reimbursement from governmental programs and private payors, our contractual relationships and arrangements with healthcare providers and vendors, our marketing activities and other aspects of our operations. Of particular importance are:
 • the federal Anti-Kickback Statute (the "AKS"), which prohibits the knowing and willful offer, payment, solicitation or receipt of any bribe, kickback, rebate or other remuneration for referring an individual, in return for ordering, leasing, purchasing or recommending or arranging for or to induce the referral of an individual or the ordering, purchasing or leasing of items or services covered, in whole or in part, by any federal healthcare program, such as Medicare and Medicaid. Although there are several statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution, the exceptions and safe harbors are drawn narrowly. By way of example, the AKS safe harbor for value-based arrangements requires, among other things, that the arrangement does not induce a person or entity to reduce or limit medically necessary items or services furnished to any patient. Failure to meet the requirements of a safe harbor, however, does not render an arrangement illegal, although such arrangements may be subject to greater scrutiny by government authorities. Further, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;
 • the federal physician self-referral law (the "Stark Law"), which, subject to limited exceptions, prohibits physicians from referring Medicare or Medicaid patients to an entity for the provision of certain designated health services ("DHS"), if the physician or a member of such physician's immediate family has a direct or indirect financial relationship (including an ownership interest or a compensation arrangement) with the entity, and prohibits the entity from billing Medicare or Medicaid for such DHS. Unlike the AKS, the Stark Law is violated if the financial arrangement does not meet an applicable exception, regardless of any intent by the parties to induce or reward referrals or the reasons for the financial relationship and the referral;
 • the federal False Claims Act (the "FCA"), which imposes civil and criminal liability on individuals or entities that knowingly submit false or fraudulent claims for payment to the government or knowingly make, or cause to be made, a false statement in order to have a false claim paid, including qui tam or whistleblower suits. There are many potential bases for liability under the FCA. The government has used the FCA to prosecute Medicare and other government healthcare program fraud; including alleged upcoding or improper coding of diagnosis codes under the risk-adjustment methodology, billing for services not provided, and providing care that is not medically necessary or that is substandard in quality. In addition, we could be held liable under the FCA if we are deemed to "cause" the submission of false or fraudulent claims by, for example, providing inaccurate billing, coding or risk adjustment information to our affiliated professional entities and other physician partners through Provider Portal and Analytic Management Tools, respectively. The government may also assert that a claim including items or services resulting from a violation of the AKS or Stark Law constitutes a false or fraudulent claim for purposes of the FCA;
 • the Civil Monetary Penalties Statute, which prohibits, among other things, an individual or entity from offering remuneration to a federal healthcare program beneficiary that the individual or entity knows or should know is likely to influence the beneficiary to order or receive healthcare items or services from a particular provider;
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 • the criminal healthcare fraud provisions of HIPAA and related rules that prohibit knowingly and willfully executing a scheme or artifice to defraud any healthcare benefit program or falsifying, concealing or covering up a material fact or making any material false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the AKS, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;
 • reassignment of payment rules that prohibit certain types of billing and collection practices in connection with claims payable by the Medicare or Medicaid programs;
 • similar state law provisions pertaining to anti-kickback, self-referral and false claims issues, some of which may apply to items or services reimbursed by any payor, including patients and commercial insurers;
 • laws that regulate debt collection practices;
 • a provision of the Social Security Act that imposes criminal penalties on healthcare providers who fail to disclose, or refund known overpayments;
 • federal and state laws that prohibit providers from billing and receiving payment from Medicare and Medicaid for services unless the services are medically necessary, adequately and accurately documented, and billed using codes that accurately reflect the type and level of services rendered; and
 • federal and state laws pertaining to the provision of services by nurse practitioners and physician assistants in certain settings, physician supervision of those services, and reimbursement requirements that depend on the types of services provided and documented and relationships between physician supervisors and nurse practitioners and physician assistants.
 The laws and regulations in these areas are complex, changing and often subject to varying interpretations. As a result, there is no guarantee that a government authority will find that we or our affiliated professional entities or other physician partners are in compliance with all such laws and regulations that apply to our business. Further, because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of the business activities undertaken by us or our affiliated professional entities or other physician partners could be subject to challenge under one or more of these laws, including, without limitation, our patient assistance programs that waive or reduce the patient's obligation to pay copayments, coinsurance or deductible amounts owed for the services we provide to them if they meet certain financial need criteria.
 After recent settlements by the U.S. Department of Justice ("DOJ"), in December 2024, the OIG issued a special fraud alert concerning certain marketing arrangements between healthcare professionals ("HCPs") and MA brokers and agents, as well as MA organizations. The OIG stated that certain payments from MA organizations to HCPs or their staff relating to MA plan marketing and enrollment, as well as payments from HCPs to agents, brokers and others in exchange for referring Medicare enrollees to a particular HCP, can result in abusive arrangements that could lead to improper steering, anticompetitive conduct and other harms to enrollees and to the Medicare program. In June 2024, we received a civil investigative demand ("CID") from the DOJ pursuant to the False Claims Act in the course of the government's investigation concerning our arrangements with insurance agents and brokers. The CID requests documentation and information relating to the marketing of our broker programs and our arrangements with, and remuneration paid to, MA brokers, agents and agencies, as well as our arrangements with third parties relating to these programs. We are cooperating with the investigation and providing the requested information. No assurance can be given as to the timing or outcome of the government's investigation.
 If our operations are found to be in violation of any of such laws or any other governmental regulations that apply, we may be subject to significant penalties, including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, the curtailment or restructuring of operations, integrity oversight and reporting obligations, exclusion from participation in federal and state healthcare programs and imprisonment. In addition, any action against us or our affiliated professional entities or other physician partners for violation of these laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses, divert our management's attention from the operation of our business and result in adverse publicity, or otherwise experience a material adverse impact on our business, results of operations, financial condition, cash flows, reputation as a result.
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 If any of our affiliated professional entities, other physician partners or owned or managed clinics lose their regulatory licenses, permits, accreditations and/or registrations, as applicable, or become ineligible to receive reimbursement under Medicare, Medicaid or other third-party payors, there may be a material adverse effect on our business, financial condition, cash flows, or results of operations.
 The operations of our owned and managed clinics through our affiliated professional entities and other physician partners are subject to extensive federal, state and local regulation relating to, among other things, the adequacy of medical care, equipment, personnel, operating policies and procedures, fire prevention, rate-setting, compliance with building codes and environmental protection and proof of financial ability to operate. Our owned and managed clinics and affiliated professional entities and other physician partners are also subject to extensive laws and regulation relating to facility and professional licensure, conduct of operations, including financial relationships among healthcare providers, Medicare, Medicaid and state fraud and abuse and physician self-referrals, and maintaining updates to our affiliated professional entities' and other physician partners' enrollment in the Medicare and Medicaid programs, including the addition of new clinic locations, providers and other enrollment information. Our owned and managed clinics and affiliates professional entities are subject to periodic inspection by licensing authorities and accreditation organizations to assure their continued compliance with these various standards. There can be no assurance that these regulatory authorities will determine that all applicable requirements are fully met at any given time. Should any of our owned or managed clinics or affiliated professional entities be found to be noncompliant with these requirements, we could be assessed fines and penalties, could be required to refund reimbursement amounts or could lose our licensure or Medicare and/or Medicaid certification so that we or our affiliated professional entities and other physician partners are unable to receive reimbursement from such programs and possibly from other third-party payors, any of which could materially adversely affect our business, financial condition, cash flows or results of operations. See "—The evolving regulation of value-based reimbursement models and regulation, licensure and oversight by state regulatory authorities as a risk-bearing entity may have a material adverse effect on our operations."
 If our arrangements with our affiliated professional entities and other physician partners are found to constitute the improper rendering of medical services or fee splitting under applicable state laws, our business, financial condition and our ability to operate in those states could be adversely impacted.
 Our contractual relationships with our affiliated professional entities and other physician partners may implicate certain state laws that generally prohibit non-professional entities from providing licensed medical services or exercising control over licensed physicians or other healthcare professionals (such activities generally referred to as the "corporate practice of medicine") or engaging in certain practices such as fee-splitting with such licensed professionals. The interpretation and enforcement of these laws vary significantly from state to state. There can be no assurance that these laws will be interpreted in a manner consistent with our practices or that other laws or regulations will not be enacted in the future that could have a material and adverse effect on our business, financial condition and results of operations. Regulatory authorities, state boards of medicine, state attorneys general and other parties may assert that, despite the agreements through which we operate, we are engaged in the provision of medical services and/or that our arrangements with our affiliated professional entities and other physician partners constitute unlawful fee-splitting. If a jurisdiction's prohibition on the corporate practice of medicine or fee-splitting is interpreted in a manner that is inconsistent with our practices, we would be required to restructure or terminate our arrangements with our affiliated professional entities and other physician partners to bring our activities into compliance with such laws. A determination of non-compliance, or the termination of or failure to successfully restructure these relationships could result in disciplinary action, penalties, damages, fines, and/or a loss of revenue, any of which could have a material and adverse effect on our business, financial condition and results of operations. State corporate practice and fee-splitting prohibitions also often impose penalties on healthcare professionals for aiding in the improper rendering of professional services, which could discourage physicians and other healthcare professionals from providing clinical services to members of the health plans with whom we contract.
 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.
 As a result of our participation in the Medicare and Medicaid programs, we are subject to various governmental inspections, reviews, audits and investigations to verify our compliance with these programs and applicable laws and regulations. Other third-party payors may also reserve the right to conduct audits. We also periodically conduct internal audits and reviews of our regulatory compliance. An adverse inspection, review, audit or investigation could result in:
 • refunding amounts we have been paid pursuant to the Medicare or Medicaid programs or from payors;
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 • state or federal agencies imposing fines, penalties and other sanctions on us;
 • temporary suspension of payment for new patients to the facility or agency;
 • decertification or exclusion from participation in the Medicare or Medicaid programs or one or more payor networks;
 • self-disclosure of violations to applicable regulatory authorities;
 • damage to our reputation;
 • the revocation of a facility's or agency's license;
 • criminal penalties;
 • a corporate integrity agreement with HHS's Office of Inspector General; and
 • loss of certain rights under, or termination of, our contracts with payors.
 We have in the past and will likely in the future be required to refund amounts we have been paid and/or pay fines and penalties as a result of these inspections, reviews, audits and investigations. If adverse inspections, reviews, audits or investigations occur and any of the results noted above occur, it could have a material adverse effect on our business and operating results. Furthermore, the legal, document production and other costs associated with complying with these inspections, reviews, audits or investigations could be significant.
 Our records and submissions to a health plan may contain inaccurate or unsupportable information regarding risk adjustment scores of members, which could cause us to overstate or understate our revenue and subject us to various penalties.
 The claims and encounter records that we submit to health plans may impact data that support the Medicare Risk Adjustment Factor ("RAF") scores attributable to members. These RAF scores determine, in part, the revenue to which the health plans and, in turn, we or our affiliated professional entities or other physician partners are entitled for the provision of medical care to such members. The data submitted to CMS by each health plan is based, in part, on medical charts and diagnosis codes that we prepare and submit to the health plans. Each health plan generally relies on us and our affiliated professional entities or other physician partners to appropriately document and support such RAF data in our medical records. Each health plan also relies on us and our affiliated professional entities or other physician partners to appropriately code claims for medical services provided to members. Erroneous claims and erroneous encounter records and submissions could result in inaccurate revenue and risk adjustment payments, which may be subject to correction or retroactive adjustment in later periods. This corrected or adjusted information may be reflected in financial statements for periods subsequent to the period in which the revenue was recorded. We might also need to refund a portion of the revenue that we received, which refund, depending on its magnitude, could damage our relationship with the applicable health plan and could have an adverse effect on our business, results of operations, financial condition and cash flows.
 Additionally, CMS audits MA plans for documentation to support RAF-related payments for members chosen at random. The MA plans ask providers to submit the underlying documentation for members that they serve. It is possible that claims associated with members with higher RAF scores could be subject to more scrutiny in a CMS or plan audit. There is a possibility that an MA plan may seek repayment from us should CMS make any payment adjustments to the MA plan as a result of its audits. The plans also may hold us liable for any penalties owed to CMS for inaccurate or unsupportable RAF scores provided by us or our affiliated professional entities or other physician partners. In addition, we could be liable for penalties to the government under the federal FCA, that include a monetary penalty adjusted for inflation on an annual basis for each false claim, plus up to three times the amount of damages caused by each false claim, which can be as much as the amounts received directly or indirectly from the government for each such false claim.
 CMS has indicated that payment adjustments will not be limited to RAF scores for the specific MA enrollees for which errors are found but may also be extrapolated to the entire MA plan subject to a particular CMS contract. Based on a final rule issued by CMS in January 2023, overpayments to MA plans that are identified as a result of a Risk Adjustment Data Validation ("RADV") audit will be subject to extrapolation for plan year 2018 and any subsequent plan year. On November 14, 2024, CMS initiated the payment year 2018 MA RADV audits and expects to begin issuing payment year
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 2018 audit findings in mid-calendar year 2026. In addition, CMS will not apply an adjustment factor, known as an FFS Adjuster, in RADV audits to account for potential differences in diagnostic coding between the MA program and Medicare FFS program. We are continuing to assess the potential impact this final rule may have on our business and operations.
 On March 31, 2023, CMS issued its final 2024 Medicare Advantage Rate Announcement, which implements a three-year phase-in of certain changes to the methodology CMS will use to perform risk adjustment for plan years 2024 through 2026. Under the new risk adjustment model that was implemented in 2024, CMS has changed the manner by which over 2,000 diagnosis codes, across a range of disease and condition categories, are considered for purposes of patient risk scoring, with certain of these codes no longer impacting risk scoring. On April 1, 2024, CMS released the 2025 Medicare Advantage Rate Announcement, which continues the three-year phase in by blending 67% of the risk score calculated using the updated 2024 MA risk adjustment model with 33% of the risk score calculated using the 2020 MA risk adjustment model. While the codes subject to changes represent only a fraction of the total number of conditions considered for purposes of risk adjustment, this change and any future changes to CMS's risk adjustment methodology could impact the revenue we record from Medicare Advantage plans.
 There can be no assurance that a health plan will not be randomly selected or targeted for review by CMS or that the outcome of such a review will not result in a material adjustment in our revenue and profitability, even if the information we submitted to the plan is accurate and supportable.
 The impact of recent healthcare legislation and other changes in the healthcare industry and in healthcare spending is currently unknown, but may adversely affect our business, financial condition and results of operations.
 The impact of healthcare reform legislation and other changes in the healthcare industry and in healthcare spending is currently unknown, but may adversely affect our business, financial condition and results of operations. Our revenue is dependent on the healthcare industry and could be affected by changes in healthcare spending, reimbursement and policy. The healthcare industry is subject to changing political, regulatory and other influences. By way of example, the ACA, which was enacted in 2010, made major changes in how healthcare is delivered and reimbursed, and it increased access to health insurance benefits to the uninsured and underinsured populations of the United States.
 Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.
 Other legislative changes have been proposed and adopted since the ACA was enacted. These changes include aggregate reductions to Medicare payments to providers, which began in 2013 and will remain in effect through the first six months of fiscal year 2032, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022, unless additional Congressional action is taken. In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. New laws may result in additional reductions in Medicare and other healthcare funding, which may materially adversely affect consumer demand and affordability for our products and services and, accordingly, the results of our financial operations. Additional changes that may affect our business include the expansion of new programs such as Medicare payment for performance initiatives for physicians under the Medicare Access and CHIP Reauthorization Act of 2015 ("MACRA"), which first affected physician payment in 2019. At this time, it is unclear how the introduction of the Medicare quality payment program will impact overall physician reimbursement.
 Such changes in the regulatory environment may also result in changes to our payer mix that may affect our operations and revenue. In addition, certain provisions of the ACA authorize voluntary demonstration projects, which include the development of bundling payments for acute, inpatient hospital services, physician services and post-acute services for episodes of hospital care. Further, the ACA may adversely affect payors by increasing medical costs generally, which could have an effect on the industry and potentially impact our business and revenue as payors seek to offset these increases by reducing costs in other areas.
 In addition, new legislative proposals to reform healthcare and government insurance programs, along with the trend toward managed healthcare in the United States, could result in reduced demand and prices for our services. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments and other third-party payers will pay for healthcare products and services, which could adversely affect our business, financial condition and results of operations.
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 The evolving regulation of value-based reimbursement models and regulation, licensure and oversight by state regulatory authorities as a risk-bearing entity may have a material adverse effect on our operations.
 Regulation of downstream risk-sharing arrangements, including, but not limited to, global risk and other value-based arrangements, varies significantly from state to state. Some states require downstream entities and risk-bearing entities to obtain an insurance license, a certificate of authority, or an equivalent authorization, in order to participate in downstream risk-sharing arrangements with payors. In some states, statutes, regulations and/or formal guidance explicitly address whether and in what manner the state regulates the transfer of risk by a payor to a downstream entity. However, the majority of states do not explicitly address the issue, and in such states, regulators may nonetheless interpret statutes and regulations to regulate such activity. If downstream risk-sharing arrangements are not regulated directly in a particular state, the state regulatory agency may nonetheless require oversight by the licensed payor as the party to such a downstream risk-sharing arrangement. Such oversight is accomplished via contract and may include the imposition of reserve requirements, as well as reporting obligations. Further, state regulatory stances regarding downstream risk-sharing arrangements can change rapidly and codified provisions may not keep pace with evolving risk-sharing mechanisms and other new value-based reimbursement models. Certain of the states where we currently operate or may choose to operate in the future regulate the operations and financial condition of risk bearing organizations like us and our affiliated providers. These regulations can include capital requirements, licensing or certification, governance controls and other similar matters. As a result, new and existing laws, regulations or guidance could have a material adverse effect on our operations and could subject us to the risk of restructuring or terminating our arrangements with our affiliated professional entities or other physician partners, as well as the risk of regulatory enforcement, penalties and sanctions, if state and federal enforcement agencies disagree with our interpretation of these laws. In addition, Medcore HP, which we acquired in 2021, is a licensed health plan under California's Knox Keene Act, which subjects the entity to certain capital requirements, licensing or certification, governance controls, utilization review and grievance procedures, among others. Non-compliance with the Knox-Keene Act may result in an enforcement action, fines and penalties, and, in egregious cases, limitations on or revocation of the Knox-Keene license. In August 2024, the Office of Enforcement for the California Department of Managed Health Care conducted an investigation of Medcore HP and imposed an administrative penalty of $150,000 and a corrective action plan based on Medcore HP's failure to meet minimum levels of tangible net equity and for untimely filing of certain annual reports and monthly financial statements. Although these penalties have not had a material impact on our business to date, as we continue to expand, these rules may require additional resources and capitalization and add complexity to our business.
 Regulatory proposals directed at containing or lowering the cost of healthcare, including the Direct Contracting Model, and our participation, voluntary or otherwise, in such proposed models, could impact our business, financial condition, cash flows and operations.
 The ACA also required CMS to establish a Medicare shared savings program that promotes accountability and coordination of care through the creation of ACOs. The Medicare shared savings program allows for providers, physicians and other designated healthcare professionals and suppliers to form ACOs and voluntarily work together to invest in infrastructure and redesign delivery processes to give coordinated high quality care to their Medicare patients, avoid unnecessary duplication of services and prevent medical errors. ACOs that achieve quality performance standards established by CMS are eligible to share in a portion of the Medicare program's cost savings. We have an ACO in Arizona participating in the Medicare Shared Savings Plan ("MSSP"), and is subject to ACO program methodologies and participation requirements that are updated by CMS for each performance year. We and our affiliated providers as ACO participants are expected to comply with such program requirements and are required to report to CMS on performance after the close of the year. Failure to comply with such program requirements could subject us and our affiliated providers to significant penalties and, in some cases, termination from participating in MSSP.
 Additionally, the CMS Innovation Center continues to test an array of value-based alternative payment models, including the Accountable Care Organization Realizing Equity, Access, and Community Health ("ACO REACH") Model (formerly known as the Global and Professional Direct Contracting Model) to allow REACH ACOs to negotiate directly with the government to manage traditional Medicare beneficiaries and share in the savings and risks generated from managing such beneficiaries. Additional changes that may affect our business include the expansion of new programs such as Medicare payment for performance initiatives for physicians under the MACRA, which first affected physician payment in 2019. At this time, it is unclear how the introduction of the Medicare quality payment program will impact overall physician reimbursement. In addition, there likely will continue to be regulatory proposals directed at containing or lowering the cost of healthcare, as government healthcare programs and other third-party payors transition from FFS to value-based reimbursement models, which can include risk-sharing, bundled payment and other innovative approaches. It is possible that the federal or state governments will implement additional reductions, increases, or changes in
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 reimbursement in the future under government programs that may adversely affect us or increase the cost of providing our services. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue or attain growth, any of which could have a material impact on our business.
 Risks Related to Ownership of Our Common Stock
 Failure to maintain effective internal control over financial reporting could have a material adverse effect on our business, financial condition, results of operations, and stock price and may adversely affect investor confidence in our company and, as a result, the value of our Class A common stock and your investment.
 Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") requires us to evaluate the effectiveness of our internal controls over financial reporting as of the end of each fiscal year, including a management report assessing the effectiveness of our internal controls over financial reporting. For as long as we are a "non-accelerated filer," our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404. An independent assessment of the effectiveness of our internal controls could detect problems that our management's assessment might not. Our ability to comply with the annual internal control reporting requirements will depend on the effectiveness of our financial reporting and data systems and controls across our company. We expect these systems and controls to require additional investment as we become increasingly more complex and our business grows. To effectively manage this complexity, we will need to continue to maintain and revise our operational, financial and management controls, and our reporting systems and procedures. Certain weaknesses or deficiencies or failures to implement required new or improved controls, or difficulties encountered in the implementation or operation of these controls, could harm our operating results and cause us to fail to meet our financial reporting obligations, or result in material misstatements in our financial statements, which could adversely affect our business and reduce our stock price.
 In connection with the audits of our consolidated financial statements for the years ended December 31, 2018, 2019, 2020 and 2021, and, as previously reported, the restatement of our consolidated financial statements for the years ended December 31, 2020 and 2019, we previously identified material weaknesses in our internal control over financial reporting. In response to these material weaknesses, we implemented a comprehensive remediation plan as discussed under the heading "Remediation Activities" in Part II, Item 9A, " Controls and Procedures." Based on these remediation efforts, our management has concluded the material weaknesses have been remediated as of December 31, 2024. However, we cannot assure you that there will not be material weaknesses in our internal control over financial reporting in the future and that the measures we have taken to date, and actions we may take in the future, will be sufficient to prevent or avoid potential future material weaknesses. A material weakness in our internal control over financial reporting could result in an increased probability of fraud, financial statement restatements, the potential loss of customers, litigation from our stockholders, reduction in our ability to obtain financing, and require additional expenditures to remediate. Our failure to implement and maintain effective internal control over financial reporting could result in errors in our financial statements that could result in loss of investor confidence in the accuracy and completeness of our financial reports and a decline in our stock price, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities.
 We cannot predict the impact our dual-class structure may have on the stock price of our Class A common stock.
 We cannot predict whether our dual-class structure will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences. Certain investors, including large institutional investors, may prefer companies that do not have multiple share classes or may have investment guidelines that preclude them from investing in companies that have multiple share classes. In addition, certain index providers have previously implemented, and may in the future determine to implement, restrictions on including companies with multiple share classes in certain of their indices. For example, from July 2017 to April 2023, S&P Dow Jones excluded companies with multiple share classes from the S&P Composite 1500 (composed of the S&P 500, S&P MidCap 400 and S&P SmallCap 600). Indices have discretion to reassess and implement such policies with respect to multi-class differing voting right structures. Under any such policies, our dual-class capital structure would make us ineligible for inclusion in any of these indices. As a result, the market price of our Class A common stock could be materially adversely affected.
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 Delaware law and our certificate of incorporation and bylaws contain certain provisions, including anti-takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.
 Our certificate of incorporation and bylaws, and the General Corporation Law of the State of Delaware ("DGCL"), contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of Class A common stock, and therefore depress the trading price of Class A common stock. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of our board of directors or taking other corporate actions, including effecting changes in our management. Among other things, the certificate of incorporation and the bylaws include provisions:
 • providing for a classified board of directors with staggered, three-year terms;
 • regarding the ability of the board of directors to issue shares of preferred stock, including "blank check" preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
 • prohibiting cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
 • regarding the limitation of the liability of, and the indemnification of, directors and officers;
 • providing that certain transactions are not "corporate opportunities" and that, subject to certain exceptions, Foresight Sponsor Group, LLC, (the "Sponsor") or its affiliates and any of their respective principals, members, directors, partners, stockholders, officers, employees or other representatives, or any director or stockholder who is not employed by us or our subsidiaries, are not subject to the doctrine of corporate opportunity and such persons do not have any fiduciary duty to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us or any of our subsidiaries;
 • regarding the ability of the board of directors to amend the bylaws, which may allow the board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquiror to amend the bylaws to facilitate an unsolicited takeover attempt; and
 • regarding advance notice procedures with which stockholders must comply to nominate candidates to the board of directors or to propose matters to be acted upon at a stockholders' meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the board of directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of our company.
 These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our board of directors or management.
 The Sponsor, its affiliates and representatives, non-employee directors and other non-employee stockholders of the Company are not limited in their ability to compete with us, and the corporate opportunity provisions in our certificate of incorporation could enable such persons to benefit from corporate opportunities that might otherwise be available to us, which presents potential conflicts of interest.
 Our certificate of incorporation provides that subject to certain exceptions, the Sponsor and its affiliates and any of their respective principals, members, directors, partners, stockholders, officers, employees or other representatives, or any director or stockholder of the Company who is not employed by us or our subsidiaries, would not be restricted from
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 owning assets or engaging in businesses that compete directly or indirectly with us or any of our subsidiaries. In particular, subject to the limitations of applicable law and the certificate of incorporation, these persons may among other things:
 • engage in a corporate opportunity in the same or similar business activities or lines of business in which we or our affiliates have a reasonable expectancy interest or property right;
 • purchase, sell or otherwise engage in transactions involving securities or indebtedness of us or our affiliates, provided that such transactions do not violate our insider trading policies; and
 • otherwise compete with us.
 One or more of these persons may become aware, from time to time, of certain business opportunities (such as acquisition opportunities) and may direct such opportunities to other businesses in which they have invested, in which case we may not become aware of or otherwise have the ability to pursue such opportunities. Further, such businesses may choose to compete with us for these opportunities, possibly causing these opportunities to not be available to us or causing them to be more expensive for us to pursue. As a result, our renunciation of our interest and expectancy in any business opportunity that may be from time to time be presented to such persons, could adversely impact our business or prospects if attractive business opportunities are procured by such parties for their own benefit rather than for ours.
 The provision of our certificate of incorporation requiring exclusive forum in certain courts in the State of Delaware or the federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.
 Our certificate of incorporation requires, to the fullest extent permitted by law, that (i) any derivative action or proceeding brought on our company's behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or stockholders to our company or our stockholders, (iii) any action asserting a claim against our company arising pursuant to any provision of the DGCL or the certificate of incorporation or our bylaws or (iv) any action asserting a claim against our company governed by the internal affairs doctrine will have to be brought in a state court located within the State of Delaware (or if no state court of the State of Delaware has jurisdiction, the federal district court for the District of Delaware), in all cases subject to the courts having personal jurisdiction over the indispensable parties named as defendants. The foregoing provision will not apply to claims seeking to enforce any liability or duty created by the Exchange Act.
 Additionally, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
 Although we believe these exclusive forum provisions benefit our company by providing increased consistency in the application of Delaware law and federal securities laws in the types of lawsuits to which each applies, the exclusive forum provisions may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers or stockholders, which may discourage lawsuits with respect to such claims. Further, in the event a court finds either exclusive forum provision contained in our certificate of incorporation to be unenforceable or inapplicable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.
 An active, liquid trading market for our Class A common stock may not be sustained.
 There can be no assurance that we will be able to maintain an active trading market for our Class A common stock on Nasdaq or any other exchange in the future. If an active market for our Class A common stock is not maintained, or if we fail to satisfy the continued listing standards of Nasdaq for any reason and our Class A common stock is delisted, it may be difficult for our stockholders to sell their Class A common stock without depressing the market price for our Class A common stock, or at all. See "Our failure to meet the continued listing requirements of The Nasdaq Capital Market could result in a delisting of our securities," below. An inactive trading market may also impair our ability to both raise capital by selling shares of capital stock, attract and motivate employees through equity incentive awards and acquire other companies, products, or technologies by using shares of capital stock as consideration.
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 There may be sales of a substantial amount of our Class A common stock in future by our stockholders, and these sales could cause the price of our Class A common stock to fall.
 As of December 31, 2024, there were approximately 162.9 million shares of Class A common stock outstanding and an additional approximately 196.0 million shares of Class V common stock, which are exchangeable, together with P3 LLC units, for an equivalent number of shares of Class A common stock. Our issued and outstanding shares of Class A common stock are freely transferable, except for any shares held by our "affiliates," as that term is defined in Rule 144 under the Securities Act. As of December 31, 2024, approximately 58.7% of the outstanding shares of Class A common stock (on an as-converted and as-exchanged basis) were held by entities affiliated with us and our executive officers and directors.
 In addition, pursuant to certain registration rights agreements that we have entered into with certain of our stockholders, we are obligated to register the resale of shares of Class A common stock held by such stockholders and issuable upon the exercise or exchange of securities held by such stockholders. In addition, certain of these stockholders are entitled to demand the registration of such shares of Class A common stock subject to certain minimum requirements and also have certain "piggyback" registration rights with respect to registration statements we file.
 Upon effectiveness of any registration statement we file for the resale of shares held by such stockholders, and upon the expiration of any applicable lock-up periods applicable to such stockholders, these stockholders may sell large amounts of our Class A common stock in the open market or in privately negotiated transactions, which could have the effect of increasing the volatility in the share price of our Class A common stock or putting significant downward pressure on the price of our Class A common stock.
 Sales of substantial amounts of our Class A common stock in the public market, or the perception that such sales will occur, could adversely affect the market price of our Class A common stock and make it difficult for us to raise funds through securities offerings in the future.
 Our failure to meet the continued listing requirements of The Nasdaq Capital Market could result in a delisting of our securities.
 We are required to meet the continued listing requirements of the Nasdaq Capital Market and if we fail to satisfy such continued listing requirements, Nasdaq may take steps to delist our securities. For example, on May 15, 2024, we received a deficiency letter (the "Deficiency Letter") from the listing qualifications department of Nasdaq indicating that, for the prior thirty-one consecutive business days, the bid price for our Class A common stock had closed below the minimum $1.00 per share requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Rule"). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were granted an initial period of 180 calendar days, or until November 11, 2024, to regain compliance with the Bid Price Rule. We did not regain compliance with the Bid Price Rule prior to this time.
 On November 12, 2024, Nasdaq granted us an additional 180 calendar day period to regain compliance with the Bid Price Rule. On March 3, 2025, we filed a definitive proxy statement with the SEC to seek stockholder approval to amend our certificate of incorporation to effect a reverse stock split at a special meeting of stockholders to be held on March 31, 2025. However, there can be no assurance that any such reverse stock split will be approved by the stockholders and implemented, and, even if implemented, would increase the market price of our Class A common stock in proportion to the reverse split ratio or result in a sustained increase in the market price of our Class A common stock. In addition, it is possible that the reduced number of issued shares of Class A common stock resulting from such a reverse stock split could adversely affect the liquidity of our Class A common stock. There can also be no assurance that any actions that we take will be successful in restoring our compliance with the Bid Price Rule or will prevent future non-compliance therewith. There is also no assurance that we will maintain compliance with the other listing requirements of The Nasdaq Capital Market or that we will be successful in appealing any delisting determination.
 Delisting from the Nasdaq Capital Market would cause us to pursue eligibility for trading of our securities on other markets or exchanges, or on the "pink sheets." In such case, our stockholders' ability to trade, or obtain quotations of the market value of our Class A common stock would be severely limited because of lower trading volumes and transaction delays. These factors could contribute to lower prices and larger spreads in the bid and ask prices of our Class A common stock. There can be no assurance that our securities, if delisted from the Nasdaq Capital Market in the future, would be listed on a national securities exchange, a national quotation service, the over-the-counter markets or the pink sheets. Delisting from the Nasdaq Capital Market, or even the issuance of a notice of potential delisting, would also result in
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 negative publicity, make it more difficult for us to raise additional capital, adversely affect the market liquidity of our securities, decrease securities analysts' coverage of us or diminish investor confidence. Moreover, there is no assurance that any actions that we take will be successful in restoring our compliance with the Bid Price Rule or will prevent future non-compliance therewith. There is also no assurance that we will maintain compliance with the other listing requirements of The Nasdaq Capital Market.
 Risks Related to Our Warrants
 Our warrants may have an adverse effect on the market price of our Class A common stock.
 Foresight issued 10.8 million warrants to purchase shares of our Class A common stock (the "Public Warrants") as part of the units offered in its initial public offering and, simultaneously with the closing of its initial public offering, Foresight issued in a private placement an aggregate of 0.8 million units, including (i) an aggregate of 0.3 million private placement warrants, each exercisable to purchase one share of Class A common stock at $11.50 per share, subject to adjustment (the "Private Placement Warrants"), and (ii) an aggregate of 0.8 million shares of Class A common stock.
 Since December 2022, in various private placement transactions and in connection with our issuance of our outstanding promissory notes (see Note 10 "Debt" to the consolidated financial statements included elsewhere in this Form 10-K), we have issued warrants and pre-funded warrants to purchase an aggregate of 307.1 million shares of Class A common stock.
 To the extent such warrants are exercised, additional shares of our Class A common stock will be issued, which will result in dilution to our stockholders and increase the number of shares of Class A common stock eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of our Class A common stock.
 We may redeem unexpired Public Warrants prior to their exercise at a time that is disadvantageous to our stockholders, thereby making the Public Warrants worthless to our stockholders.
 We have the ability to redeem outstanding Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per Public Warrant if, among other things, the last reported sales price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of such redemption to the Public Warrant holders. If and when the Public Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding Public Warrants could force our stockholders (i) to exercise their Public Warrants and pay the exercise price therefor at a time when it may be disadvantageous for them to do so, (ii) to sell their Public Warrants at the then-current market price when you might otherwise wish to hold your Public Warrants or (iii) to accept the nominal redemption price which, at the time the outstanding Public Warrants are called for redemption, is likely to be substantially less than the market value of your Public Warrants.
 In addition, we may redeem the Public Warrants commencing 90 days after they become exercisable and prior to their expiration, at a price of $0.10 per Public Warrant if, among other things, the last reported sale price of our Class A common stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which we send the notice of redemption to the Public Warrant holders. In such a case, the holders will be able to exercise their Public Warrants for cash or on a cashless basis prior to redemption and receive that number of shares of Class A common stock determined based on the redemption date and the fair market value of our Class A common stock. The value received upon exercise of the Public Warrants (1) may be less than the value the holders would have received if they had exercised their Public Warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the Public Warrants, including because the number of shares of Class A common stock received in connection with such an exercise is capped at 0.361 shares of Class A common stock per whole Public Warrant (subject to adjustment) irrespective of the remaining life of the Public Warrants.
 None of the Private Placement Warrants will be redeemable by us so long as they are held by the Sponsor or its permitted transferees.
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 Certain of our warrants are accounted for as liabilities and the changes in value of these warrants could have a material effect on our financial results.
 On April 12, 2021, the Acting Chief Accountant and Acting Director of the Division of Corporation Finance of the SEC published a statement on the SEC's website indicating that the terms of the public and private warrants issued by many special purpose acquisition companies may need to be accounted for as liabilities, rather than as equity (the "SEC Warrant Accounting Statement"). As a result of the SEC Warrant Accounting Statement, Foresight, along with many other current and former special purpose acquisition companies, concluded that certain warrants should be presented as liabilities with subsequent fair value remeasurement and engaged a valuation firm to determine the fair market value of its warrants. Accordingly, Foresight reevaluated the accounting treatment of the Public Warrants to purchase 10.8 million shares of Class A common stock and Private Placement Warrants to purchase 0.3 million shares of Class A common stock, and determined to classify all of the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings.
 As a result, included on our consolidated balance sheet as of December 31, 2024 contained elsewhere in this Form 10-K are derivative liabilities related to embedded features contained within the warrants. Accounting Standards Codification 815, Derivatives and Hedging, provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statements of operations. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly, based on factors, which are outside of its control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material.
 Risks Related to the Tax Receivable Agreement
 Our sole material asset is our interest in P3 LLC, and, accordingly, we depend on distributions from P3 LLC to pay our taxes and expenses, including payments under the Tax Receivable Agreement. P3 LLC's ability to make such distributions may be subject to various limitations and restrictions.
 We are a holding company and have no material assets other than our ownership in P3 LLC. As such, we have no independent means of generating revenue or cash flow, and our ability to pay taxes and operating expenses or declare and pay dividends in the future, if any, will be dependent upon the financial results and cash flows of P3 LLC and its subsidiaries, and distributions we receive from P3 LLC. There can be no assurance that P3 LLC and its subsidiaries will generate sufficient cash flow to distribute funds to us, or that applicable state law and contractual restrictions, including negative covenants in any debt agreements of P3 LLC or its subsidiaries, will permit such distributions. The credit agreement governing P3 LLC's credit facilities restrict its ability to make distributions to the Company, and future debt instruments or other agreements may restrict the ability of P3 LLC to make distributions to the Company or of P3 LLC's subsidiaries to make distributions to P3 LLC.
 P3 LLC is treated as a partnership for U.S. federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax. Instead, taxable income will be allocated to holders of P3 LLC Units, including us. Accordingly, we will incur income taxes on our allocable share of any net taxable income of P3 LLC. Under the terms of the P3 LLC A&R LLC Agreement, P3 LLC will be obligated, subject to various limitations and restrictions, including with respect to any debt agreements, to make tax distributions to holders of P3 LLC Units, including us. In addition to tax expenses, we will also incur expenses related to our operations, including payments under the Tax Receivable Agreement, which could be substantial. We intend, as its sole manager, to cause P3 LLC to make cash distributions to the owners of P3 LLC Units in an amount sufficient to (i) fund all of such owners' tax obligations in respect of taxable income allocated to such owners and (ii) cover our operating expenses, including payments under the Tax Receivable Agreement. However, P3 LLC's ability to make such distributions may be subject to various limitations and restrictions, such as restrictions on distributions under contracts or agreements to which P3 LLC is then a party, including debt agreements, or any applicable law, or that would have the effect of rendering P3 LLC insolvent. If P3 LLC does not have sufficient funds to pay tax or other liabilities or to fund its operations, it may have to borrow funds, which could materially adversely affect its liquidity and financial condition and subject it to various restrictions imposed by any such lenders. To the extent that we are unable to make timely payments under the Tax Receivable Agreement for any reason, the unpaid amounts will be deferred and will accrue interest until paid. Our failure to make any payment required under the Tax Receivable Agreement (including any accrued and unpaid interest) within 90 calendar days of the date on which the payment is required to be made will constitute a material breach of a material obligation under the Tax Receivable Agreement, which will terminate the Tax Receivable Agreement and accelerate future payments thereunder, unless the applicable payment is not made because (i)
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 P3 LLC is prohibited from making such payment under the terms of the Tax Receivable Agreement or the terms governing certain of its indebtedness or (ii) P3 LLC does not have, and despite using commercially reasonable efforts cannot obtain, sufficient funds to make such payment. In addition, if P3 LLC does not have sufficient funds to make distributions, its ability to declare and pay cash dividends will also be restricted or impaired.
 Under the P3 LLC A&R LLC Agreement, P3 LLC will, from time to time, make distributions in cash to its equityholders (including us) pro rata, in amounts at least sufficient to cover the taxes on their allocable share of taxable income of P3 LLC. As a result of (i) potential differences in the amount of net taxable income allocable to us and to P3 LLC's other equityholders, (ii) the lower tax rates currently applicable to corporations as opposed to individuals, and (iii) the favorable tax benefits that we anticipate from any purchase of P3 Existing Units in connection with the Business Combinations and future redemptions or exchanges by the P3 Equityholders of P3 LLC Units for Class A common stock or cash pursuant to the P3 LLC A&R LLC Agreement, tax distributions payable to us may be in amounts that exceed our actual tax liabilities with respect to the relevant taxable year, including our obligations under the Tax Receivable Agreement. Our board of directors will determine the appropriate uses for any excess cash so accumulated, which may include, among other uses, the payment of other expenses or dividends on our stock, although we will have no obligation to distribute such cash (or other available cash) to our stockholders. Except as otherwise determined by us as the sole manager of P3 LLC, no adjustments to the exchange ratio for P3 LLC Units and corresponding shares of our Class A common stock will be made as a result of any cash distribution by us or any retention of cash by us. To the extent we do not distribute such excess cash as dividends on our Class A common stock, we may take other actions with respect to such excess cash, for example, holding such excess cash or lending it (or a portion thereof) to P3 LLC, which may result in shares of our Class A common stock increasing in value relative to the value of P3 LLC Units. The holders of P3 LLC Units may benefit from any value attributable to such cash balances if they acquire shares of our Class A common stock in exchange for their P3 LLC Units, notwithstanding that such holders may previously have participated as holders of P3 LLC Units in distributions by P3 LLC that resulted in such excess cash balances.
 We will be required to make payments under the Tax Receivable Agreement for certain tax benefits we may claim, and the amounts of such payments could be significant.
 We are party to the Tax Receivable Agreement with certain of the P3 Equityholders and P3 LLC. The Tax Receivable Agreement generally provides for the payment by us to the P3 Equityholders of 85% of the income tax benefits, if any, that we actually realize (or are deemed to realize in certain circumstances) in periods after the closing as a result of: (i) increases in our proportionate share of the tax basis of P3 LLC's assets resulting from Business Combinations, future redemptions or exchanges by the P3 Equityholders of P3 LLC Units for our Class A common stock or cash and certain distributions (or deemed distributions) by P3 LLC; and (ii) certain other tax benefits resulting from payments we make under the Tax Receivable Agreement. We will retain the benefit of the remaining 15% of these cash savings. The amount of the cash payments that we may be required to make under the Tax Receivable Agreement could be significant and is dependent upon significant future events and assumptions, including the timing of the exchanges of P3 LLC units, the price of our Class A common stock at the time of each exchange, the extent to which such exchanges are taxable transactions and the amount of the exchanging P3 Equityholder's tax basis in its P3 LLC units at the time of the relevant exchange. The amount of such cash payments is also based on assumptions as to the amount and timing of taxable income we generate in the future, the U.S. federal income tax rate then applicable and the portion of our payments under the Tax Receivable Agreement that constitute interest or give rise to depreciable or amortizable tax basis. Moreover, payments under the Tax Receivable Agreement will be based on the tax reporting positions that we determine, which tax reporting positions are subject to challenge by taxing authorities. We will be dependent on distributions from P3 LLC to make payments under the Tax Receivable Agreement, and we cannot guarantee that such distributions will be made in sufficient amounts or at the times needed to enable us to make our required payments under the Tax Receivable Agreement, or at all. Any payments made by us to the P3 Equityholders under the Tax Receivable Agreement will generally reduce the amount of overall cash flow that might have otherwise been available to us. The payments under the Tax Receivable Agreement are also not conditioned upon the P3 Equityholders maintaining a continued ownership interest in P3 LLC or us.
 In certain cases, payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the Tax Receivable Agreement.
 The Tax Receivable Agreement provides that if we breach any of our material obligations under the Tax Receivable Agreement, if we undergo a change of control or if, at any time, we elect an early termination of the Tax Receivable Agreement, then the Tax Receivable Agreement will terminate and our obligations, or our successor's obligations, to make payments under the Tax Receivable Agreement would accelerate and become immediately due and payable. The amount due and payable in those circumstances is determined based on certain assumptions, including an
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 assumption that we would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the Tax Receivable Agreement. We may need to incur debt to finance payments under the Tax Receivable Agreement to the extent our cash resources are insufficient to meet our obligations under the Tax Receivable Agreement as a result of timing discrepancies or otherwise.
 As a result of the foregoing, (i) we could be required to make cash payments to the P3 Equityholders that are greater than the specified percentage of the actual benefits we ultimately realize in respect of the tax benefits that are subject to the Tax Receivable Agreement, and (ii) we would be required to make a cash payment equal to the present value of the anticipated future tax benefits that are the subject of the Tax Receivable Agreement, which payment may be made significantly in advance of the actual realization, if any, of such future tax benefits. In these situations, our obligations under the Tax Receivable Agreement could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combination, or other changes of control due to the additional transaction costs a potential acquirer may attribute to satisfying such obligations. There can be no assurance that we will be able to finance our obligations under the Tax Receivable Agreement.
 We will not be reimbursed for any payments made to P3 Equityholders under the Tax Receivable Agreement in the event that any tax benefits are disallowed.
 We will not be reimbursed for any cash payments previously made to the P3 Equityholders pursuant to the Tax Receivable Agreement if any tax benefits initially claimed by us are subsequently challenged by a taxing authority and are ultimately disallowed. Instead, any excess cash payments made by us to a P3 Equityholder will be netted against any future cash payments that we might otherwise be required to make under the terms of the Tax Receivable Agreement. However, a challenge to any tax benefits initially claimed by us may not arise for a number of years following the initial time of such payment or, even if challenged early, such excess cash payment may be greater than the amount of future cash payments that we might otherwise be required to make under the terms of the Tax Receivable Agreement and, as a result, there might not be future cash payments from which to net against. The applicable U.S. federal income tax rules are complex and factual in nature, and there can be no assurance that the Internal Revenue Service or a court will agree with our tax reporting positions. As a result, it is possible that we could make cash payments under the Tax Receivable Agreement that are substantially greater than our actual cash tax savings.
 Certain of the P3 Equityholders may receive payments under the Tax Receivable Agreement, and their interests may conflict with yours.
 The P3 Equityholders may receive payments from us under the Tax Receivable Agreement upon any redemption or exchange of their P3 LLC units, including the issuance of shares of our Class A common stock upon any such redemption or exchange. As a result, the interests of the P3 Equityholders may conflict with the interests of holders of our Class A common stock. For example, the P3 Equityholders may have different tax positions from us which could influence their decisions regarding whether and when to dispose of assets, whether and when to incur new or refinance existing indebtedness, especially in light of the existence of the Tax Receivable Agreement, and whether and when we should terminate the Tax Receivable Agreement and accelerate our obligations thereunder. In addition, the structuring of future transactions may take into consideration tax or other considerations of P3 Equityholders even in situations where no similar considerations are relevant to us.
 General Risk Factors
 We may be subject to securities litigation, which is expensive and could divert management attention.
 The market price of our securities has experienced and may experience volatility and, in the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert management's attention from other business concerns, which could seriously harm our business.
 Because we have no current plans to pay cash dividends on our Class A common stock for the foreseeable future, you may not receive any return on investment unless you sell your Class A common stock for a price greater than that which you paid for it.
 We may retain future earnings, if any, for future operations, expansion and debt repayment and have no current plans to pay any cash dividends for the foreseeable future. Any decision to declare and pay dividends will be made at the
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 discretion of our board of directors and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that our board of directors may deem relevant. In addition, our ability to declare dividends may be limited by restrictive covenants contained in any existing or future indebtedness. As a result, you may not receive any return on an investment in our Class A common stock unless you sell your Class A common stock for a price greater than that which you paid for it.
 The market price and trading volume of our Class A common stock and Public Warrants may be volatile and could decline significantly.
 The trading price of our securities may fluctuate substantially and may be lower than the price at which you purchase such securities. There can be no assurance that the market price of Class A common stock and Public Warrants will not fluctuate widely or decline significantly in the future in response to a number of factors, including those described in this "Risk Factors" section, many of which are beyond our control and may not be related to our operating performance, and which may limit or prevent investors from readily selling their Class A common stock or Public Warrants and may otherwise negatively affect the liquidity of the Class A common stock or Public Warrants. These fluctuations could cause you to lose all or part of your investment.
 Factors affecting the trading price of our securities may include:
 • actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;
 • the public's reaction to our press releases, other public announcements and filings with the SEC;
 • changes in the market's expectations about our operating results;
 • success of competitors;
 • our operating results failing to meet the expectation of securities analysts or investors in a particular period;
 • changes in financial estimates and recommendations by securities analysts concerning us or the health population management industry in general;
 • short sales of our stock or trading phenomena such as "short squeezes;"
 • operating and stock price performance of other companies that investors deem comparable to us;
 • our ability to market new and enhanced products on a timely basis;
 • changes in laws and regulations affecting our business;
 • our ability to meet compliance requirements;
 • commencement of, or involvement in, litigation involving us;
 • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;
 • the volume of shares of our Class A common stock available for public sale;
 • any major change in our board of directors or management;
 • sales of substantial amounts of Class A common stock by our directors, executive officers or significant stockholders or the perception that such sales have or could occur; and
 • general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations, public health crises, and acts of war or terrorism.
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 A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to us could depress our stock price regardless of our business, prospects, financial condition or results of operations. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.
 If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the price and trading volume of our securities could decline.
 The trading market for our securities depends in part on the research and reports that securities or industry analysts publish about us or our business. We do not control these analysts, and the analysts who publish information about us may have relatively little experience with us or our industry, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates. If few or no securities or industry analysts cover us, the trading price for our securities would be negatively impacted. If one or more of the analysts who covers us downgrades our securities, publishes incorrect or unfavorable research about us, ceases coverage of us, or fails to publish reports on us regularly, demand for and visibility of our securities could decrease, which could cause the price or trading volumes of our securities to decline.
 We will continue to incur significantly increased costs and devote substantial management time as a result of operating as a public company.
 As a public company, we incur significant legal, accounting and other expenses. We are subject to the reporting requirements of the Exchange Act and are required to comply with the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules and regulations of the SEC and Nasdaq, including the establishment and maintenance of effective disclosure and financial controls, corporate governance requirements and required filings of annual, quarterly and current reports with respect to our business and results of operations. New or changing laws, regulations and standards are subject to varying interpretations, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. As a result, our efforts to comply with evolving laws, regulations and standards of a U.S. public company are likely to continue to result in increased general and administrative expenses. In addition, we expect that our management and other personnel will need to continue to divert attention from operational and other business matters to devote substantial time to these public company requirements. In particular, we have incurred and expect to continue to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act. We have hired additional legal and accounting personnel and may in future need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge and may need to establish an internal audit function.
 Being a public company has also made it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. This could also make it more difficult for us to attract and retain qualified people to serve on our board of directors, board committees or as executive officers.
 Our results of operations and financial condition are subject to management's accounting judgments and estimates, as well as changes in accounting policies.
 The preparation of our financial statements requires us to make estimates and assumptions affecting the reported amounts of our assets, liabilities, revenues and expenses. If these estimates or assumptions are incorrect, it could have a material adverse effect on our results of operations or financial condition. Generally accepted accounting principles in the U.S. are subject to interpretation by the Financial Accounting Standards Board, the American Institute of Certified Public Accountants, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results, and could affect the reporting of transactions completed before the announcement of a change.
 Scrutiny of, and evolving expectations regarding, sustainability and environmental, social, and governance ("ESG") matters could increase our costs, harm our reputation and adversely impact our financial results.
 We, as with other companies, are facing scrutiny related to our sustainability and ESG practices and disclosures from certain investors, capital providers, shareholder advocacy groups, other market participants, government entities,
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 customers, and other stakeholder groups. For example, certain institutional and individual investors have requested various ESG-related information and disclosures as they increasingly incorporate ESG criteria in making investment and voting decisions. With this focus, public reporting regarding sustainability and ESG practices is becoming broadly expected and standardized, which could lead to scrutiny of our ESG practices or lack thereof. While there are some other governments and actors taking different approaches, such scrutiny may result in increased costs, increased risk of litigation or reputational damage relating to our ESG practices or performance, changes in demands for certain products, enhanced compliance or disclosure obligations, or other adverse impacts on our business, financial condition or results of operations.
 While we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others), such initiatives may be costly and may not have the desired effect. For example, expectations around companies' management of ESG matters continue to evolve rapidly, in many instances due to factors that are out of our control. In addition, we may commit to certain initiatives or goals, and we may not ultimately be able to achieve such commitments or goals due to cost, technological constraints, or other factors that are within or outside of our control. Moreover, actions or statements that we may take based on expectations, assumptions, or third-party information that we currently believe to be reasonable may subsequently be determined to be erroneous or be subject to misinterpretation. Even if this is not the case, our current actions may subsequently be determined to be insufficient by various stakeholders. If our ESG practices and reporting do not meet investor, consumer, employee, regulator, or other stakeholder expectations, which continue to evolve, our brand, reputation and customer retention may be negatively impacted, and we may be subject to investor or regulator engagement regarding such matters. Certain market participants, including major institutional investors, use third-party benchmarks, ratings or scores to measure our ESG practices in making investment and voting decisions. Unfavorable ratings or scores of us or our industry may lead to negative investor sentiment, the exclusion of our stock into ESG-oriented investment funds, and the diversion of investment to other companies or industries, which could have a negative impact on our stock price and our access to and cost of capital. As ESG best practices, reporting standards and disclosure requirements continue to develop, we may incur increasing costs related to ESG monitoring and reporting. In addition, we operate in various jurisdictions where new ESG and sustainability-related rules and regulations have been adopted and may continue to be introduced. For example, we may be subject to the requirements of the State of California's Climate Corporate Data Accountability Act and Climate Related Financial Risk Act, if they survive their current federal court challenge as well as the SEC's climate disclosure proposal, if it is enforced by the Trump Administration and survives its current federal court challenge. Operating in more than one jurisdiction is likely to make our compliance with ESG and sustainability-related rules more complex and expensive, and potentially expose us to greater levels of legal risks associated with our compliance. We are currently assessing the potential impacts of such adopted or proposed rules and regulations, as well as other sustainability and climate-related disclosure obligations and evolving legal and regulatory requirements, to which we may be subject. Our failure to comply with any applicable rules or regulations could lead to penalties and adversely impact our reputation, customer attraction and retention, access to capital and employee retention. Such ESG matters may also impact our suppliers and customers, which may augment or cause additional impacts on our business, financial condition or results of operations.

 Item 1B. Unresolved Staff Comments.
 None.

 Item 1C. Cybersecurity.
 Cybersecurity Risk Management and Strategy
 We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information.
 We design and assess our program based on the HITRUST Common Security Framework. This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the HITRUST Common Security Framework as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
 Our cybersecurity risk management program is integrated into our overall risk management program, and shares common methodologies, reporting channels and governance processes that apply across the risk management program to other legal, compliance, strategic, operational, and financial risk areas.
 Key elements of our cybersecurity risk management program include but are not limited to:
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 • risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information;
 • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents;
 • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes;
 • cybersecurity awareness training of our employees, including incident response personnel, and senior management;
 • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and
 • a third-party risk management process for key service providers based on our assessment of their criticality to our operations and respective risk profile.
 We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition. We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. See the section titled "Risk Factors—Risks Related to Our Business and Industry—Our business and operations would suffer in the event of information technology system failures, security breaches, cyberattacks or other deficiencies in cybersecurity."
 Cybersecurity Governance
 Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the "Committee") oversight of cybersecurity risks, including oversight of management's implementation of our cybersecurity risk management program.
 The Committee receives periodic reports from management on our cybersecurity risks. In addition, management updates the Committee, where it deems appropriate, regarding cybersecurity incidents it considers to be significant or potentially significant.
 The Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from management on our cyber risk management program. Board members receive presentations on cybersecurity topics from our Senior Vice President of Technology and Director of Information Systems Security or other internal security staff or external experts as part of the Board's continuing education on topics that impact public companies.
 Our management team, including our Senior Vice President of Technology, Director of Information Systems Security, and Director of Information Systems Governance Risk and Compliance, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our management team's experience spans all aspects of information technology including cybersecurity, IT operations (infrastructure engineering and architecture design), and IT governance audit compliance across industries such as energy, healthcare, pharmaceuticals, and finance. Our Senior Vice President of Technology's experience includes over 30 years in technology leadership and management, with 25 years within the healthcare sector, specializing in cybersecurity programs, and establishing technology compliance programs with industry standards such as Sarbanes-Oxley, HIPAA, HITRUST, and NIST. Our Director of Information Systems Security's experience includes over 20 years in IT, with 12 years within the healthcare sector, managing risk assessments and leading security programs using the HITRUST framework to ensure compliance with HIPAA, NIST, ISO 27001, and GDPR. Our Director of Information Systems Governance Risk and Compliance's experiences includes over 25 years in IT audit and security governance, establishing and leading IT GRC programs, directing IT security initiatives, and maintaining relevant certifications including CDPSE, CRISC, and CISA.
 Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security
 P3 Health Partners Inc. | 2024 Form 10-K | 50

 personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our IT environment.

 Item 2. Properties.
 As of December 31, 2024, our principal executive office is located in Henderson, NV, where we occupy facilities totaling approximately 35,000 square feet, primarily under a lease that expires in July 2030. We use this facility principally for corporate activities. We also lease offices in Tucson, AZ; Las Vegas, NV; Salem, OR; Stockton, CA; and the St. Petersburg/Tampa areas, FL. We believe that our facilities are adequate to meet our needs for the immediate future, and that, should it be needed, suitable additional space will be available to accommodate any such expansion of our operations.

 Item 3. Legal Proceedings.
 The Company is a party to various claims, legal and regulatory proceedings, lawsuits and administrative actions arising in the ordinary course of business. The Company carries general and professional liability insurance coverage to mitigate the Company's risk of potential loss in such cases. An accrual is established when a specific contingency is probable and estimable. The Company also faces contingencies that are reasonably possible to occur that cannot currently be estimated. The Company believes that disposition of these matters will not have a material adverse effect on the Company's consolidated financial position, net loss or cash flows. It is the Company's policy to expense costs associated with loss contingencies, including any related legal fees, as they are incurred.
 Hudson Class D Dispute
 On June 11, 2021, Hudson Vegas Investment SPV, LLC ("Hudson"), a holder of P3's Class D Units, filed an action in the Delaware Court of Chancery captioned Hudson Vegas Investments SPV, LLC v. Chicago Pacific Founders Fund, L.P., et al., C.A. No. 2021-0518-JTL (the "Hudson Action"), in which it challenged the Business Combinations. Specifically, Hudson purported to assert claims against P3, certain managers that were on the P3 Board of Managers, certain of its officers, and Chicago Pacific Founders Fund, L.P. for breach of P3's then-existing LLC agreement (the "LLC Agreement") (against P3 and Chicago Pacific Founders Fund, L.P.), breach of fiduciary duty (against certain of P3's officers) and breach of contract claims related to the then-existing LLC Agreement (against the P3 Board of Managers) in connection with the process leading up to, and approval of, the Business Combinations. In the Hudson Action, Hudson sought to enjoin the consummation of the Business Combinations and seeks a declaration that the Business Combinations violate its rights under the P3 then-existing LLC Agreement, a declaration that certain managers on the P3 Board of Managers and certain of P3's officers breached their fiduciary duties, and money damages including attorneys' fees.
 On June 13, 2021, P3 filed an action in the Delaware Court of Chancery captioned P3 Health Group Holdings, L.L.C. v. Hudson Vegas Investment SPV, LLC, C.A. No. 2021-0519-JTL (the "P3 Action"). In the P3 Action, P3 sought: (i) a declaration that the Business Combinations do not violate Section 3.10 of P3's Existing LLC Agreement; and (ii) reformation of a provision of P3's Existing LLC Agreement. The P3 Action was consolidated with the Hudson Action. The combined cases are captioned In re P3 Health Group Holdings, L.L.C, C.A. No. 2021-0518-JTL (the "Action").
 On August 22, 2024, the parties to the Action executed a Confidential Settlement and Mutual Release Agreement, pursuant to which the parties to the Action agreed to jointly file a Stipulation of Dismissal with Prejudice relating to the Action. On October 9, 2024, the Action was dismissed with prejudice.
 Civil Investigative Demand
 In June 2024, we received a civil investigative demand ("CID") from the DOJ pursuant to the False Claims Act in the course of the government's investigation concerning our arrangements with insurance agents and brokers. The CID requests documentation and information relating to the marketing of our broker programs and our arrangements with, and remuneration paid to, MA brokers, agents and agencies, as well as our arrangements with third parties relating to these programs. We are cooperating with the investigation and providing the requested information. No assurance can be given as to the timing or outcome of the government's investigation. See "— 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."
 P3 Health Partners Inc. | 2024 Form 10-K | 51

 Item 4. Mine Safety Disclosures.
 Not applicable.
 P3 Health Partners Inc. | 2024 Form 10-K | 52

 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
 Market Information
 Our Class A common stock and warrants trade on the Nasdaq Capital Market under the symbols "PIII" and "PIIIW," respectively. There is no trading market for shares of our Class V common stock.
 Holders of our Common Stock
 As of March 13, 2025, there were 27 holders of record of our Class A common stock and 36 holders of Class V common stock. The actual number of holders of our Class A common stock is greater than the number of record holders and includes holders whose Class A common stock are held in street name by brokers and other nominees.
 Dividend Policy
 We have never declared or paid any cash dividends on our capital stock. We currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business and do not anticipate declaring or paying any dividends in the foreseeable future. Any future determination related to our dividend policy will be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements, business prospects and other factors the board of directors deems relevant, and subject to the restrictions contained in any financing instruments. The terms of our existing Term Loan Facility (as defined below) preclude us from paying cash dividends without consent. Our ability to declare dividends may also be limited by restrictive covenants pursuant to any other future debt or equity financing agreements.
 Stock Performance Graph
 The following graph and related information provide a comparison of the cumulative total return for our Class A common stock, the S&P 500 Index and the S&P 500 Healthcare Index between April 6, 2021 (the date our common stock commenced trading on Nasdaq) through December 31, 2024. All values assume an initial investment of $100 and reinvestment of any dividends. The comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our Class A common stock.

 The performance graph above and related information shall not be deemed to be "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act, and shall not be incorporated by reference into any registration statement or other document filed by us with the SEC, whether made before or after the date of this Form 10-K, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference to such filing.
 P3 Health Partners Inc. | 2024 Form 10-K | 53

 Recent Sales of Unregistered Securities
 There were no unregistered sales of our equity securities during the fiscal year ended December 31, 2024, that were not otherwise disclosed in a Current Report on Form 8-K.
 Purchases of Equity Securities by the Issuer and Affiliated Purchaser
 None.

 Item 6. [Reserved]
 P3 Health Partners Inc. | 2024 Form 10-K | 54

 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
 The following discussion and analysis is intended to provide the reader with an understanding of our business, including an overview of our results of operations and liquidity and should be read in conjunction with the consolidated financial statements and related notes to the consolidated financial statements included elsewhere in this Form 10-K. This discussion contains forward-looking statements and involves numerous risks and uncertainties. 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. Our historical results are not necessarily indicative of the results that may be expected for any periods in the future.

 Overview
 P3 is a patient-centered and physician-led population health management company. We strive to offer superior care to all those in need. We believe that the misaligned incentives in the FFS healthcare payment model and the fragmentation between physicians and care teams has led to sub-optimal clinical outcomes, limited access, high spending and unnecessary variability in the quality of care. 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: 1) patient-focused model, 2) physician-led model, and 3) our broad delegated model. Our model operates by entering into arrangements with payors providing for monthly payments to manage the total healthcare needs of members attributed to our primary care physicians. In tandem, we enter into arrangements directly with existing physician groups or independent physicians in the community to join our VBC network. 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. 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").
 We predominantly enter into capitated contracts with the nation's largest health plans to provide holistic, comprehensive healthcare to MA members. Under the typical capitation arrangement, we are entitled to PMPM fees from payors to provide a defined range of healthcare services for MA health plan members attributed to our PCPs. These PMPM fees comprise our capitated revenue and are determined as a percent of the premium ("POP") payors receive from CMS for these members. Our contracted recurring revenue model offers us highly predictable revenue, and rewards us for providing high-quality care rather than driving a high volume of services. In this capitated arrangement, our goals are well-aligned with payors and patients alike—the more we improve health outcomes, the more profitable we will be over time.
 Under this capitated contract structure, we are generally responsible for all members' medical costs across the care continuum, including, but not limited to emergency room and hospital visits, post-acute care admissions, prescription drugs, specialist physician spend, and primary care spend. Keeping members healthy is our primary objective. When they need medical care, delivery of the right care in the right setting can greatly impact outcomes. When our members need care outside of our network of PCPs, we utilize a number of tools including network management, utilization management and claims processing to ensure that the appropriate quality care is provided.
 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. Our platform has enabled us to grow our revenue by an average of 74% annually from December 31, 2020 to December 31, 2024. As of December 31, 2024, our PCP network served approximately 123,800 at-risk members. We believe we have significant growth opportunities available to us across existing and new markets, with less than 1% of the 535,000 PCPs in the U.S. currently included in our physician network.
 P3 Health Partners Inc. | 2024 Form 10-K | 55

 Key Factors Affecting our Performance
 Growing Medicare Advantage Membership on Our Platform
 Membership and revenue are tied to the number of members attributed to our physician network by our payors. We believe we have multiple avenues to serve additional members, including through:
 • Growth in membership under our existing contracts and existing markets:
 Patients who are attributed to our physician network who (a) age into Medicare and elect to enroll in MA or (b) elect to convert from Medicare FFS to MA.
 • Adding new contracts (either payor contracts or physician contracts) in existing markets.
 • Adding new contracts (either payor contracts or physician contracts) in adjacent and new markets.
 Growing Existing Contract Membership
 As new patients age-in to Medicare and enroll in MA through our payors, they become attributed to our network of physicians with little incremental cost to us.
 In addition to age-ins, Medicare eligible patients can change their enrollment selections during select periods throughout the year. Our sales and marketing teams actively work with local community partners to connect with Medicare eligible patients and make them aware of their healthcare choices and the services that we offer with our VBC model, including greater access to their physicians and customized care plans catered to their needs. The ultimate effect of our marketing efforts is increased awareness of P3 and additional patients choosing us as their primary care provider. We believe that our marketing efforts also help to grow our payor partners' membership base as we grow our own patient base and help educate patients about their choices on Medicare, further aligning our model with that of healthcare payors.
 Growing Membership in Adjacent and New Markets
 Our affiliate model allows us to quickly and efficiently enter into new and adjacent markets in two ways: (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. 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. When choosing a market to enter, we make our decision on a county-by-county basis across the United States. We look at various factors including: (i) population size, (ii) payor participants and concentration, (iii) health system participants and concentration, and (iv) competitive landscape.
 When entering a new market, we supplement the existing physician network with local market leadership teams and support infrastructure to drive the improvement in medical cost and quality. When entering an adjacent market, we are able to leverage the investments we previously made to have a faster impact on our expanded footprint.
 Growing Membership in Existing Markets
 Once established in a market, we have an opportunity to efficiently expand both our provider and payor contracts. Given the benefits PCPs experience from joining our P3 Care Model, which offers providers the teams, tools and technologies to better support their patient base, we often experience growth in our affiliate network after entering a market. 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. 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.
 P3 Health Partners Inc. | 2024 Form 10-K | 56

 Additionally, by expanding the number of contracted payors, we can leverage our existing infrastructure to quickly increase our share of patients within our physician network. However, we have and intend to continue to conduct periodic strategic reviews of our provider and payor contracts, as a result of which we may elect to periodically exit underperforming provider and payor contracts from our network.
 Growing Capitated Revenue Per Member
 Medicare pays capitation using a risk adjusted model, which compensates payors based on the health status, or acuity, of each individual member. 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. 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. Through the P3 Care Model, we determine and assess the health needs of our patients and create an individualized care plan consistent with those needs. We capture and document health conditions as a part of this process. We expect that our PMPM revenue will continue to improve the longer members participate in our care model as we better understand and assess their health status (acuity) and coordinate their medical care.
 Effectively Managing Member Medical Expense
 Our medical expense is our largest expense category, representing 86% of our total operating expense for the year ended December 31, 2024. We manage our medical costs by improving our members access to healthcare. Our care model focuses on maintaining health and leveraging the primary care setting as a means of avoiding costly downstream healthcare costs, such as emergency department visits and acute hospital inpatient admissions.
 Achieving Operating Efficiencies
 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 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. While we expect our absolute investment in our enterprise resources to increase over time, we expect our investment will decrease as a percentage of revenue when we are able to leverage our infrastructure across a broader group of at-risk members. We expect our corporate, general and administrative expenses to increase in absolute dollars in the future as we continue to invest to support growth of our business, as well as due to the costs required to operate as a public company, including insurance coverage, investments in internal audit, investor relations and financial reporting functions, fees paid to the Nasdaq Stock Market, and increased legal and audit fees.
 Impact of Seasonality
 Our operational and financial results reflect some variability depending upon the time of year in which they are measured. This variability is most notable in the following areas:
 At-Risk Member Growth. While new members are attributed to our platform throughout the year, we experience the largest portion of our at-risk member growth during the first quarter. Contracts with new payors typically begin on January 1, at which time new members become attributed to our network of physicians. Additionally, new members are attributed to our network on January 1, when plan enrollment selections made during the prior Annual Enrollment Period from October 15 through December 7 of the prior year take effect.
 Revenue Per Member. Our revenue is based on percentage of premium we have negotiated with our payors as well as our ability to accurately and appropriately document the acuity of a member's health status. We experience some seasonality with respect to our per member revenue as it will generally decline over the course of the year. In January of each year, CMS revises the risk adjustment factor for each patient based upon health conditions documented in the prior year, leading to an overall increase in per-patient revenue. As the year progresses, our per-patient revenue declines as new patients join us typically with less complete or accurate documentation (and therefore lower risk-adjustment scores) and patients with more severe acuity profiles (and, therefore, higher per member revenue rates) expire.
 P3 Health Partners Inc. | 2024 Form 10-K | 57

 Medical Costs. Medical expense is driven by utilization of healthcare services by our attributed membership. Medical expense will vary seasonally depending on a number of factors, including the weather and the number of business days. Certain illnesses, such as the influenza virus, are far more prevalent during colder months of the year, which will result in an increase in medical expenses during these time periods. We would therefore expect to see higher levels of per-member medical expense in the first and fourth quarters. Business days can also create year-over-year comparability issues if one year has a different number of business days compared to another.

 Non-GAAP Financial Measures and Key Performance Metrics
 We use certain financial measures, which are not calculated in accordance with accounting principles generally accepted in the U.S. ("GAAP"), as well as key performance metrics, to supplement our consolidated financial statements. The measures set forth below should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures and key performance metrics as used by us may not be comparable to similarly titled measures used by other companies. Our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. The presentation of non-GAAP financial measures and key performance metrics provides additional information to investors regarding our results of operations that our management believes is useful for identifying trends, analyzing and benchmarking the performance of our business.
 Non-GAAP Financial Measures
 Adjusted EBITDA
 The key non-GAAP metric we utilize to measure our profitability and performance is Adjusted EBITDA. We present Adjusted EBITDA because we believe it helps investors understand underlying trends in our business and facilitates an understanding of our operating performance from period to period because it facilitates a comparison of our recurring core business operating results.
 By definition, EBITDA consists of net income (loss) before interest, income taxes, depreciation, and amortization. We define Adjusted EBITDA as EBITDA, further adjusted to exclude the effect of certain supplemental adjustments, such as mark-to-market warrant gain/loss, premium deficiency reserves, equity-based compensation expense, and certain other items that we believe are not indicative of our core operating performance. Our definition of Adjusted EBITDA may not be the same as the definitions used in any of our debt agreements.
 Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with GAAP. It is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, debt principal repayments, and other expenses defined above, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity.
 Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA on a supplemental basis. You should review the reconciliation of net loss to Adjusted EBITDA set forth below and not rely on any single financial measure to evaluate our business.
 P3 Health Partners Inc. | 2024 Form 10-K | 58

 The following table sets forth a reconciliation of our net loss, the most directly comparable GAAP metric, to Adjusted EBITDA loss:

 2024
 2023

 $
 (310,378)
 $
 (186,426)

 22,173
 15,985

 86,058
 86,675

 Income tax provision
 4,387
 2,695

 Mark-to-market of stock warrants
 (22,114)
 (433)

 (12,705)

 Equity-based compensation
 5,752
 5,979

 Other(1)

 (6,775)
 2,656

 Transaction and other related costs(2)

 —

 Adjusted EBITDA loss
 $
 (167,199)
 $
 (85,504)

 (1)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
 Medical margin is a non-GAAP financial metric. We present medical margin because we believe it helps investors understand underlying trends in our business and facilitates an understanding of our operating performance from period to period by facilitating a comparison of our recurring core business operating results.
 Medical margin represents the amount earned from capitated revenue after medical claims expenses are deducted. Medical claims expenses represent costs incurred for medical services provided to our members. As our platform grows and matures over time, we expect medical margin to increase in absolute dollars; however, medical margin PMPM may vary as the percentage of new members brought onto our platform fluctuates. New membership added to the platform is typically dilutive to medical margin PMPM.
 Medical margin should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using medical margin on a supplemental basis. You should review the reconciliation of gross profit to medical margin set forth below and not rely on any single financial measure to evaluate our business.
 The following table presents our medical margin:

 2024
 2023

 $
 $

 Less: medical claims expense
 (1,398,143)
 (1,117,258)

 Medical margin
 $
 85,459
 $
 135,051

 P3 Health Partners Inc. | 2024 Form 10-K | 59

 The following table sets forth a reconciliation of our gross profit, the most directly comparable GAAP metric, to medical margin:

 2024
 2023

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

 (16,853)
 (14,066)

 Other medical expense
 161,229
 117,482

 Medical margin
 $
 85,459
 $
 135,051

 Key Performance Metrics
 We monitor the following operating metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions.
 Gross Profit
 Gross profit represents the amount earned from total operating revenue less the sum of: (i) medical claims expenses and (ii) other medical expenses including physician compensation expense related to surplus sharing and bonuses and other direct medical expenses incurred to improve care for our members. We believe this metric provides insight into the economics of the P3 Care Model, as it includes all medical claims expense associated with our members' care as well as partner compensation and additional medical costs we incur as part of our aligned partnership model. 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):

 2024
 2023

 Total operating revenue
 $
 $

 Less: medical claims expense
 (1,398,143)
 (1,117,258)

 Less: other medical expense
 (161,229)
 (117,482)

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

 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.
 Affiliate Primary Care Physicians
 Affiliate primary care physicians represent the approximate number of primary care physicians included in our affiliate network, with whom members may be attributed under our capitation arrangements, as of the end of the reporting period. We had 3,100 and 2,750 primary care physicians as of December 31, 2024 and 2023, respectively.
 Platform Support Costs
 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.
 P3 Health Partners Inc. | 2024 Form 10-K | 60

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

 2024
 2023

 Platform support costs
 $
 92,202
 $
 96,937

 % of total operating revenue
 6.1
 %
 7.7
 %

 Key Components of Results of Operations
 Revenue
 Capitated revenue. We contract with health plans using an at-risk model. Under the at-risk model, we are responsible for the cost of all covered health care services provided to members assigned by the health plans to the Company in exchange for a fixed payment, which generally is a POP based on health plans' premiums received from CMS. 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. Medicare pays capitation using a "risk adjustment model," which compensates providers based on the health status (acuity) of each individual patient. MA plans with higher acuity patients receive higher premiums. Conversely, MA 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 (using a Risk Adjustment Factor, "RAF"), our PMPM payments change commensurately with how our contracted Medicare Advantage plans' premiums change with CMS.
 The transaction price for these contracts is variable as it primarily includes PMPM fees, which can fluctuate throughout the course of the year based on the acuity of each individual enrollee. 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 a PMPM transaction price to transfer the service for a distinct increment of the series and is recognized net of projected acuity adjustments and performance incentives or penalties. We recognize revenue in the month in which attributed 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.
 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. 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.
 Operating Expense
 Medical expense. Medical expenses primarily include costs of all covered services provided to members by non-P3 employed providers. This also includes an estimate of the cost of services that have been incurred, but not yet reported ("IBNR"). IBNR is recorded as claims payable on the accompanying consolidated balance sheets. Estimates for incurred claims are based on historical enrollment and cost trends while also taking into consideration operational changes. Future and actual results typically differ from estimates. Differences could result from an overall change in medical expenses per member, changes in member mix or simply due to the addition of new members. IBNR estimates are made on an accrual basis and adjusted in future periods as required. 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
 P3 Health Partners Inc. | 2024 Form 10-K | 61

 premiums and stop-loss insurance recoveries on those contracts. PDR represents the advance recognition of a probable future loss in the current period's financial statements.
 Corporate, general and administrative expense. Corporate, general and administrative expenses include employee-related expenses, including salaries and related costs and equity-based compensation for our executive, technology infrastructure, operations, clinical and quality support, finance, legal, and human resources departments. In addition, general and administrative expenses include all corporate technology and occupancy costs.
 Sales and marketing expense. Sales and marketing expenses consist of costs related to patient and provider marketing and community outreach. These expenses capture all costs for both our local and enterprise sales and marketing efforts.
 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. Amortization expense is associated with definite lived intangible assets, including trademarks and tradenames, customer contracts, provider network agreements, and payor contracts.
 Other Income (Expense)
 Interest expense, net. Interest expense primarily consists of interest on our Term Loan Facility (as defined below) and unsecured promissory notes and amortization of debt issuance costs and original issue discount.
 Mark-to-market of stock warrants. Mark-to-market of stock warrants consists of the change in the fair value on the revaluation of warrant liabilities associated with our public and private placement Class A common stock warrants.
 Other. Other consists of gains and losses resulting from other transactions.
 Income Taxes
 P3 LLC is treated as a partnership for U.S. federal and most applicable state and local income tax jurisdictions. As a partnership, P3 LLC is generally not subject to taxes, other than entity level state income taxes, such as the Oregon corporate activity tax, a quasi-gross receipts tax that is levied on our Oregon sourced revenue. Any taxable income or loss generated by P3 LLC is passed through to and included within the taxable income or loss of its members, including us, on a pro rata basis. We are subject to U.S. 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. 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.
 P3 Health Partners Inc. | 2024 Form 10-K | 62

 Results of Operations
 The following tables set forth our consolidated statements of operations data for the periods indicated. Amounts may not sum due to rounding.

 % of Revenue
December 31, 2023
 % of Revenue

 Operating revenue:

 $
 %
 $
 %

 16,853
 14,066

 Total operating revenue

 Operating expense:

 Medical expense
 1,559,372
 1,234,740

 (12,705)
 (1)

 Corporate, general and administrative expense
 112,596
 122,362

 Sales and marketing expense
 1,331
 3,233

 86,058
 86,675

 Impairment of assets held for sale
 8,058
 —
 —

 Total operating expense
 1,821,113
 1,434,305

 Operating loss
 (320,658)
 (21)
 (167,930)
 (13)

 Other (expense) income:

 (22,173)
 (1)
 (15,985)
 (1)

 Mark-to-market of stock warrants
 22,114

 Gain on asset sale, net
 13,269
 —
 —

 Other
 1,457
 (249)
 (0)

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

 Loss before income taxes
 (305,991)
 (20)
 (183,731)
 (15)

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

 (310,378)
 (21)
 (186,426)
 (15)

 Net loss attributable to redeemable non-controlling interest
 (174,529)
 (12)
 (128,653)
 (10)

 Net loss attributable to controlling interest
 $
 (135,849)
 (9)
 %
 $
 (57,773)
 (5)
 %

 Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023
 Revenue

 2024
 2023
 %

 $
 $
 $
 231,293
 %

 16,853
 14,066
 2,787
 %

 Total operating revenue
 $
 $
 $
 234,080
 %

 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.
 P3 Health Partners Inc. | 2024 Form 10-K | 63

 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.
 Medical Expense

 2024
 2023
 %

 Medical expense
 $
 1,559,372
 $
 1,234,740
 $
 324,632
 %

 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.
 Premium Deficiency Reserve

 2024
 2023
 %

 $
 $
 (12,705)
 $
 66,403
 (523)
 %

 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. The change was due to management's assessment of the profitability of contracts, wherein increased medical expense is expected to increase our future losses.
 Corporate, General and Administrative Expense

 2024
 2023
 %

 Corporate, general and administrative expense
 $
 112,596
 $
 122,362
 $
 (9,766)
 (8)
 %

 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.
 P3 Health Partners Inc. | 2024 Form 10-K | 64

 Other Income (Expense)

 2024
 2023
 %

 Other (expense) income:

 $
 (22,173)
 $
 (15,985)
 $
 (6,188)
 %

 Mark-to-market of stock warrants
 22,114
 21,681
 5,007
 %

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

 Other
 1,457
 (249)
 1,706
 (685)
 %

 Total other income (expense)
 $
 14,667
 $
 (15,801)
 $
 30,468
 (193)
 %

 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.

 Liquidity and Capital Resources
 P3 Health Partners Inc. is a holding company and has no material assets other than its ownership of equity interests in P3 LLC. As such, we have no independent means of generating revenue or cash flow, and our ability to pay taxes, make payments under the Tax Receivable Agreement ("TRA"), and to pay dividends will depend on the financial results and cash flows of P3 LLC and the distributions received from P3 LLC. Deterioration in the financial condition, earnings or cash flow of P3 LLC for any reason could limit or impair P3 LLC's ability to pay such distributions. Additionally, to the extent that we need funds and P3 LLC is restricted from making such distributions under applicable law or regulation or under the terms of any financing arrangements, or P3 LLC is otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition. It is anticipated that the distributions we will receive from P3 LLC may, in certain periods, exceed the actual tax liabilities and obligations to make payments under the TRA.
 Cash Sources
 To date, we have financed our operations principally through the cash we obtained as a result of the Business Combinations, private placements of our equity securities, payments from our payors, issuances of promissory notes, borrowings under the Term Loan Facility, and the sale of the Florida Assets (defined below). We generate cash from our operations, generally from our contracts with payors. As of December 31, 2024, we had $38.8 million of unrestricted cash and cash equivalents available to fund future operations.
 We have experienced losses since our inception and net losses of $310.4 million and $186.4 million for the years ended December 31, 2024 and 2023, 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
 P3 Health Partners Inc. | 2024 Form 10-K | 65

 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.
 Asset Sale
 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. The asset sale closed on November 30, 2024 simultaneously with the execution of the Florida Asset Purchase Agreement. We recognized a $13.3 million net gain on asset sale on the consolidated statement of operations for the year ended December 31, 2024.
 May 2024 Private Placement
 On May 24, 2024, pursuant to a securities purchase agreement, dated May 22, 2024, with the purchasers named therein, which included certain affiliated entities of CPF and institutional investors, we issued approximately 67.4 million units at a price of approximately $0.6270 per unit. Each unit consisted of one share of Class A common stock and a warrant to purchase one share of Class A common stock at an exercise price of $0.5020. 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 41.6 million shares of Class A common stock, (ii) common warrants to purchase an aggregate of 67.4 million shares of Class A common stock, and (iii) pre-funded warrants to purchase an aggregate of 25.8 million shares of Class A common stock for aggregate proceeds of $39.8 million, net of $2.4 million in offering costs (collectively, the "May 2024 Private Placement"). See Note 14 "Capitalization" to our consolidated financial statements included elsewhere in this Form 10-K for additional information about the May 2024 Private Placement.
 Shelf Registration
 On November 9, 2023, we filed a shelf Registration Statement on Form S-3 with a capacity of $250 million (the "Shelf Registration"), which was declared effective by the SEC on November 20, 2023, and entered into an Open Market Sales Agreement ("Sales Agreement") pursuant to which we may issue and sell, from time to time, through the sales agent, shares of our Class A common stock with an aggregate value of up to $75 million. The sales agent will make commercially reasonable efforts, following our instructions, to sell shares over time, adhering to specified limits. Sales will be conducted through at-the-market offerings as defined by Rule 415(a)(4) under the Securities Act. The aggregate value of shares of Class A common stock that may be offered, issued, and sold under the Sales Agreement is included in the aggregate value of securities that may be offered, issued, and sold by us under the Shelf Registration. Upon termination of the Sales Agreement, any unused portion will be available for sale in other offerings pursuant to the Shelf Registration. As of December 31, 2024, we have sold approximately 27,000 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").
 P3 Health Partners Inc. | 2024 Form 10-K | 66

 Letter Agreement with CPF
 On April 6, 2023, in connection with entry into the Purchase Agreement for the March 2023 Private Placement, we entered into a letter agreement (as amended from time to time, the "CPF Letter Agreement") with Chicago Pacific Founders GP, L.P. ("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. 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.
 Term Loan
 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. As of December 31, 2024, we had $65.0 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. Interest is payable at 12.0% per annum on a quarterly cycle (in arrears), which began on March 31, 2021. 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).
 We are required to remain in compliance with financial covenants such as minimum liquidity of $5.0 million and annual minimum revenue levels. In addition, the Term Loan Agreement restricts our ability and the ability of our subsidiaries to, among other things, incur indebtedness and liens. 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.
 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.
 In connection with the issuance of the VGS 2 Promissory Note (defined below) and entry into the 2024 Subordination Agreement (defined below), on March 22, 2024, we entered into the Fourth Amendment to the Term Loan Agreement to permit the issuance of the VGS 2 Promissory Note and the entry into the 2024 Subordination Agreement.
 In connection with the sale of the Florida Assets, on November 30, 2024, we entered into the Fifth Amendment to the Term Loan Agreement, which permits the sale of the Florida Assets (the "Permitted Florida Disposition"), provided that the mandatory prepayment covenant did not apply to the proceeds of the Permitted Florida Disposition, and removed the ability to elect to pay a portion of the interest in-kind.
 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
 P3 Health Partners Inc. | 2024 Form 10-K | 67

 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
 On December 13, 2022, we entered into a financing transaction with VBC Growth SPV LLC ("VGS") which included the issuance of an unsecured promissory note (the "VGS Promissory Note") to VGS and the entry into a warrant agreement and the 2022 Subordination Agreement (defined below). The VGS Promissory Note provided for funding of up to $40.0 million. We paid VGS an up-front fee of 1.5%. Interest was payable at 14.0% per annum on a quarterly cycle (in arrears) beginning March 31, 2023. We had the option to pay interest of 6.0% in kind and 8.0% in cash, subject to certain limitations. The VGS Promissory Note had a maturity date of May 19, 2026.
 On December 12, 2024, we entered into a promissory note (the "VGS 1 2024 Loan") with VGS providing for funding of up to approximately $38.1 million, the proceeds from which were used to repay in full all principal, interest and other amounts owing under the VGS Promissory Note. In connection with the replacement of the VGS Promissory Note with the VGS 1 2024 Loan, VGS waived the 9.0% back-end facility fee that otherwise would have been payable under the VGS Promissory Note. The VGS 1 2024 Loan has a maturity date of June 30, 2028 and an interest rate that is lower than the VGS Promissory Note by 50 basis points, among other things. The VGS 1 2024 Loan did not include the issuance of warrants. 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; provided that prepayments must be in increments of at least 5% of the total loan amount. The VGS 1 2024 Loan provides for mandatory prepayments with the proceeds of certain asset sales, and the Lender 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 1 2024 Loan).
 The VGS 1 2024 Loan 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 connection with the issuance of the VGS 1 2024 Loan, we also entered into a subordination agreement, dated as of December 12, 2024 (the "VGS 1 2024 Subordination Agreement") with VGS which subordinates VGS's right of payment under the VGS 1 2024 Loan to the right of payment and security interests of the lenders under the Term Loan Facility. Under the terms of the VGS 1 2024 Subordination Agreement, we are effectively required to pay all interest under the VGS 1 2024 Loan in-kind.
 VGS 2 Promissory Note
 On March 22, 2024, we entered into a financing transaction with VBC Growth SPV 2, LLC ("VGS 2"), consisting of the issuance by P3 LLC of an unsecured promissory note (the "VGS 2 Promissory Note") to VGS 2. The VGS 2 Promissory Note provided for funding of up to $25.0 million. The VGS 2 Promissory Note matures on September 30, 2027. As of December 31, 2024, we had $25.4 million of borrowings outstanding under the VGS 2 Promissory Note, $0.4 million of which consists of an up-front fee of 1.5% of the aggregate principal amount of the loan paid to VGS 2 in-kind. Interest is payable at 17.5% per annum on a quarterly cycle (in arrears) beginning June 30, 2024. We may elect to pay either (1) 8.0% cash interest and 9.5% PIK interest, or (2) 17.5% PIK interest, provided that payment of cash interest will be permitted only to the extent permitted by the Term Loan Agreement and the 2024 Subordination Agreement, and if not so permitted, such interest shall accrue as PIK interest.
 The VGS 2 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; provided that prepayments must be in increments of at least $1.25 million. The VGS 2 Promissory Note provides for mandatory prepayments with the proceeds of certain asset sales, and VGS 2 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 2 Promissory Note).
 The VGS 2 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 the certain default provisions in the agreement, or in the event a mandatory prepayment event occurs.
 P3 Health Partners Inc. | 2024 Form 10-K | 68

 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 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.
 In addition, we will pay VGS 2 a back-end fee at the time the VGS 2 Promissory Note is redeemed as follows: (i) if paid after June 30, 2024 and on or before September 30, 2024, 4.5%; (ii) if paid after September 30, 2024 and on or before December 31, 2024, 6.75% and (iii) if paid after December 31, 2024, 9.0%.
 In connection with the sale of the Florida Assets, on November 30, 2024, we entered into a first amendment to the VGS Promissory Note and VGS 2 Promissory Note to permit the Permitted Florida Disposition and provide that the Company was not obligated to use the proceeds of the Permitted Florida Disposition to prepay the loans under the VGS Promissory Note and the VGS 2 Promissory Note.
 VGS 3 Promissory Note
 On December 12, 2024, we entered into a financing transaction with VBC Growth SPV 3 LLC ("VGS 3"), consisting of the issuance by P3 LLC of an unsecured promissory note (the "VGS 3 Promissory Note") to VGS 3 and the entry into a warrant agreement and the VGS 3 Subordination Agreement (defined below). The VGS 3 Promissory Note provided for funding of up to $25.0 million. The VGS 3 Promissory Note matures on June 30, 2028. As of December 31, 2024, we had $25.4 million of borrowing outstanding under the VGS 3 Promissory Note, $0.4 million of which consists of an up-front fee of 1.5% of the aggregate principal amount of the loan paid to VGS 3 in-kind. Interest is payable at 19.5% per annum on a quarterly cycle (in arrears) beginning March 31, 2025. We may elect to pay either (1) 8.0% cash interest and 11.5% PIK interest, or (2) 19.5% PIK interest, provided that payment of cash interest will be permitted only to the extent permitted by the Term Loan Agreement and the VGS 3 Subordination Agreement, and if not so permitted, such interest shall accrue as PIK interest.
 The VGS 3 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; provided that prepayments must be in increments of at least $1.25 million. The VGS 3 Promissory Note provides for mandatory prepayments with the proceeds of certain asset sales, and VGS 3 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 3 Promissory Note).
 The VGS 3 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 the certain default provisions in the agreement, or in the event a mandatory prepayment event occurs.
 In connection with the issuance of the VGS 3 Promissory Note, we also entered into a subordination agreement, dated as of December 12, 2024 (the "VGS 3 Subordination Agreement") with VGS 3 which subordinates VGS 3's right of payment under the VGS 3 Promissory Note to the right of payment and security interests of the lenders under the Term Loan Facility. Under the terms of the VGS 3 Subordination Agreement, we will be required to pay all interest under the VGS 3 Promissory Note in-kind.
 In addition, we will pay VGS 3 a back-end fee at the time the VGS 3 Promissory Note is redeemed as follows: (i) if paid after January 31, 2025 and on or before April 30, 2025, 4.5%; (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
 P3 Health Partners Inc. | 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
 On February 13, 2025, we entered into a financing transaction with VBC Growth SPV 4 LLC ("VGS 4"), consisting of the issuance by P3 LLC of an unsecured promissory note (the "VGS 4 Promissory Note") to VGS 4 and the entry into a warrant agreement and the VGS 4 Subordination Agreement (defined below). The VGS 4 Promissory Note provides for funding of up to $30.0 million, available for us to draw in (i) a first tranche of $15.0 million, which was drawn on February 18, 2025, and (ii) a second tranche of up to $15.0 million which was drawn on March 14, 2025. In addition, we paid VGS 4 an up-front fee of 1.5% of $30.0 million, the maximum draw amount, in-kind. The VGS 4 Promissory Note matures on August 13, 2028. 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.
 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; provided that prepayments must be in increments of at least $1.5 million. 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 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.
 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.
 Repurchase Promissory Note
 In June 2019, we issued a share repurchase promissory note to a former equity investor for $15.0 million, which was subsequently amended in November 2020 (as amended, the "Repurchase Promissory Note"). The Repurchase Promissory Note automatically matures and is due and payable on the earlier of June 30, 2026, a change in control transaction, or an underwritten primary public offering, each as defined in the agreement. The Repurchase Promissory Note accrues PIK interest of 11.0% per year. The principal balance, accrued interest, and an exit fee of $0.6 million are due at maturity.
 Cash Uses
 Our primary uses of cash include payments for medical expenses, administrative expenses, cost associated with our care model, and debt service. Final reconciliation and receipts of amounts due from payors are typically settled in arrears.
 Pursuant to our election under Section 754 of the Internal Revenue Code (the "Code"), we expect to obtain an increase in our share of the tax basis in the net assets of P3 LLC when its units are redeemed or exchanged. We intend to treat any redemptions and exchanges of P3 LLC units as direct purchases of the units for U.S. federal income tax purposes.
 P3 Health Partners Inc. | 2024 Form 10-K | 70

 These increases in tax basis may reduce the amounts that we would otherwise pay in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent the tax basis is allocated to those capital assets.
 In connection with the Business Combinations, we entered into a TRA that provides for the payment by us of 85% of the amount of any tax benefits that we actually realize, or in some cases are deemed to realize, as a result of (i) increases in our share of the tax basis in the net assets of P3 LLC resulting from any redemptions or exchanges of P3 LLC, (ii) tax basis increases attributable to payments made under the TRA, and (iii) deductions attributable to imputed interest pursuant to the TRA (the "TRA Payments"). We expect to benefit from the remaining 15% of any tax benefits that we may actually realize.
 The estimation of a liability under the TRA is, by its nature, imprecise and subject to significant assumptions regarding a number of factors, including (but not limited to) the amount and timing of taxable income generated by the Company each year as well as the tax rate then applicable. The TRA liability is estimated to be $11.5 million as of December 31, 2024. Due to the Company's history of losses, the Company has not recorded tax benefits associated with the increase in tax basis as a result of the Business Combinations. As a result, the Company determined that payments to TRA holders are not probable and no TRA liability has been recorded as of December 31, 2024.
 As non-controlling interest holders exercise their right to exchange their units in P3 LLC, a TRA liability may be recorded based on 85% of the estimated future tax benefits that the Company may realize as a result of increases in the tax basis of P3 LLC. 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.
 The following table summarizes current and long-term material cash requirements as of December 31, 2024:

 Material Cash Requirements

 Total
 Less than
1 year
 1-3
years
 3-5
years
 More than
5 years

 Unpaid claims(1)

 $
 255,089
 $
 255,089
 $
 —
 $
 —
 $
 —

 Long-term debt, principal(2)

 168,807
 40,375
 63,432
 —

 Long-term debt, interest(3)

 84,870
 19,518
 56,773
 8,579
 —

 Operating lease liabilities(4)

 19,612
 3,996
 6,862
 5,961
 2,793

 Total
 $
 528,378
 $
 343,603
 $
 104,010
 $
 77,972
 $
 2,793

 (1)Represents unpaid claims due to third parties for health care services provided to members, including estimates for incurred but not reported claims. Estimates for incurred claims are based on historical enrollment and cost trends while also taking into consideration operational changes. Future and actual results typically differ from estimates. Differences could result from an overall change in medical expense per members, changes in member mix or simply due to addition of new members.
 (2)Represents principal payments only. We will pay interest on outstanding indebtedness based on the rates and terms summarized in Note 10 "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.
 (4)Represents minimum operating lease payments, excluding potential lease renewals. See Note 13 "Commitments and Contingencies" in our consolidated financial statements.
 Liquidity and Going Concern
 As discussed above, we have experienced losses since our inception, and as of December 31, 2024, we had an accumulated deficit of $503.2 million. For the year ended December 31, 2024, we incurred net losses of $310.4 million and used $110.1 million of cash for operating activities. As of December 31, 2024, we had $38.8 million of unrestricted cash and cash equivalents, $154.8 million of outstanding indebtedness, of which $65.0 million is classified as current on our balance sheet, and $255.1 million of unpaid claims. 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. This belief is based on assumptions that may change as a result of many factors currently unknown to us.
 P3 Health Partners Inc. | 2024 Form 10-K | 71

 We continue to explore raising additional capital through a combination of debt financing and equity issuances and sales of assets. If we raise funds by issuing debt securities or preferred stock, or by incurring loans, these forms of financing would have rights, preferences, and privileges senior to those of holders of our common stock and may involve restrictive covenants which could place significant restrictions on our operations. If we raise capital through the issuance of additional equity, such sales and issuance would dilute the ownership interests of the existing holders of our Class A common stock. There is no assurance that sources of financing will be available on a timely basis, or on satisfactory terms, or at all. If we are unable to raise additional capital or generate cash flows necessary to fund our operations or refinance our indebtedness, we will need to curtail planned activities, discontinue certain operations, or sell certain assets, which could materially and adversely affect our business, financial condition, results of operations, and prospects.
 As a result of these factors, we have concluded that there is substantial doubt about our ability to continue as a going concern within one year after the date the consolidated financial statements included elsewhere in this Form 10-K are issued. In evaluating our ability to continue as a going concern and meet our obligations, we considered our current projections of future cash flows, current financial condition, sources of liquidity, and debt obligations for at least one year from the date of issuance of this Form 10-K. This evaluation of our cash resources available over the next year from the date of issuance of the consolidated financial statements included elsewhere in this Form 10-K does not take into consideration the potential mitigating effect of our ongoing efforts to raise capital. Future capital raising events cannot be considered probable, as these events depends on factors outside of our control.
 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.
 Our independent registered public accounting firm, in its report on the Company's consolidated financial statements for the year ended December 31, 2024, 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. 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, 2024.
 Cash Flows
 The following table summarizes our cash flows:

 2024
 2023

 Net cash used in operating activities
 $
 (110,128)
 $
 (76,028)

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

 Net cash provided by financing activities
 98,771
 100,332

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

 Operating Activities
 Net cash used in operating activities was $110.1 million for the year ended December 31, 2024, compared to net cash used in operating activities of $76.0 million for the year ended December 31, 2023. 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.
 P3 Health Partners Inc. | 2024 Form 10-K | 72

 Investing Activities
 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 $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. 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. Actual results could differ from those estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected. 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.
 Medical Expense and Claims Payable
 The cost of healthcare services is recognized in the period services are provided. Medical expense includes costs of all covered services provided to members assigned by the health plans under P3's at-risk model. Medical expense includes the cost for third-party healthcare service providers, the cost for overseeing the quality of care and programs, and from time to time, remediation of certain claims that might result from periodic reviews conducted by various regulatory agencies. This also includes an estimate of the cost of services that have been incurred, but not yet reported ("IBNR").
 We estimate our IBNR by applying standard actuarial methodologies, which utilize historical data, including the period between the date services are rendered and the date claims received (and paid), denied claims activity, expected medical cost inflation, seasonality patterns, and changes in membership mix. Such estimates are subject to impact from changes in both the regulatory and economic environments. Our claims payable represents management's best estimate of
 P3 Health Partners Inc. | 2024 Form 10-K | 73

 its liability for unpaid medical costs. We have included incurred but not reported claims of $255.1 million and $178.0 million on our consolidated balance sheets as of December 31, 2024 and 2023, respectively.
 Our consolidated financial statements could be materially impacted if actual claims expense is different from our estimates. If our liability for incurred and not reported claims at December 31, 2024 were to differ by plus or minus 5%, the impact on medical claims expense would be approximately $12.8 million.
 Premium Deficiency Reserves
 A PDR is recorded when there is a probable future loss on unearned capitated premiums after estimated expected claim costs and claim adjustment expenses. Losses under prepaid health care services contracts shall be recognized when it is probable that expected future health care costs and maintenance costs under a group of existing contracts will exceed anticipated future premiums and stop-loss insurance recoveries on those contracts. To determine the need to recognize a loss, contracts shall be grouped in a manner consistent with the provider's method of establishing premium rates, for example, by community rating practices, geographical area, or statutory requirements, to determine whether a loss has been incurred. In our at-risk arrangements, the more we improve health outcomes and lower the overall cost of care, the more profitable we will be over time.
 We assess the profitability of our at-risk arrangements to identify contracts where current operating results or forecasts indicate probable future losses. Management estimates the Company's PDR by utilizing estimates of membership growth rates, changes in membership mix, estimated PMPM payments under contracts, historical claims data, seasonality patterns, our ability to lower the overall cost of care and incremental medical costs, such as those related to COVID-19 admissions. Such estimates are subject to impact from changes in both the regulatory and economic environments. The Company's PDR represents management's best estimate of its probable future losses. We have included premium deficiency reserve liabilities of $67.4 million and $13.7 million on our accompanying consolidated balance sheets as of December 31, 2024 and 2023, respectively.
 Recent Accounting Pronouncements
 See Note 4 "Recent Accounting Pronouncements" to our consolidated financial statements included elsewhere in this Form 10-K for a description of recent accounting standards issued and the anticipated effects on our consolidated financial statements.

 Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
 Not required for Smaller Reporting Companies.
 P3 Health Partners Inc. | 2024 Form 10-K | 74

 Item 8. Financial Statements and Supplementary Data.

 Report of Independent Registered Public Accounting Firm (BDO USA, P.C.; Las Vegas, Nevada; PCAOB ID# 243)

 Consolidated Balance Sheets

 Consolidated Statements of Operations

 Consolidated Statements of Stockholders' Equity and Mezzanine Equity

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 P3 Health Partners Inc. | 2024 Form 10-K | 75

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 Shareholders and Board of Directors
 P3 Health Partners Inc.
 Henderson, Nevada

 Opinion on the Consolidated Financial Statements

 We have audited the accompanying consolidated balance sheets of P3 Health Partners Inc. (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, stockholders' equity and mezzanine equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

 Going Concern Uncertainty

 The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations and has working capital deficiencies that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 Basis for Opinion

 These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

 Critical Audit Matters

 The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

 Estimate of the Premium Deficiency Reserve Liabilities

 As described in Note 3 to the consolidated financial statements, the Company's consolidated premium deficiency reserve liabilities ("PDR") balance was approximately $67.4 million on December 31, 2024. PDR is established when it is probable that expected future health care costs and maintenance costs under a group of contracts will exceed future premium and stop-loss insurance recoveries on those contracts. The Company assesses if a PDR is needed through review of current results and forecasts. For purposes of determining premium deficiency losses, contracts are grouped consistent
 P3 Health Partners Inc. | 2024 Form 10-K | 76

 with the Company's method of acquiring, servicing, and measuring the profitability of such contracts based on the expected medical loss ratio ("MLR").

 We identified the estimate of PDR as a critical audit matter. The principal consideration for this determination was the significant judgment used in developing certain assumptions in the expected MLR. Auditing these elements involved subjective auditor judgment due to the nature and extent of audit effort required to address these matters, including the extent of specialized skills or knowledge needed.

 The primary procedures we performed to address this critical audit matter included:
 • Assessing the reasonableness of certain assumptions used in the expected MLR by comparing them to historical performance of the Company and its peers to determine if contradictory evidence existed.
 • Utilizing personnel with specialized knowledge and skills in actuarial methods to assess the reasonableness of the healthcare claims trend assumption in the expected MLR.

 Valuation of Incurred but Not Reported Claims

 As described in Notes 3 and 8 to the consolidated financial statements, the Company's claims payable balance was approximately $255.1 million on December 31, 2024. The Company's claims payables primarily consist of the Company's estimate for claims that have been incurred but have either not yet been received, processed, or paid and as such, not reported ("IBNR"). Management develops its IBNR liability estimate using standard actuarial methodologies, which utilize historical data, including the period between the date services are rendered and the date claims are received and paid (the completion factor), per member per month healthcare cost trends, denied claims activity, expected medical cost inflation, seasonality patterns, changes in membership mix, and a provision for adverse deviation ("PAD").

 We identified the valuation of IBNR liability as a critical audit matter. The principal considerations for this determination were the significant judgments involved in: (i) evaluating the actuarial methodologies used, (ii) estimating the completion factors and per member per month cost based on historical payment patterns and consideration of health care cost trend factors, and (iii) determining the appropriate level of PAD. Auditing these elements involved subjective auditor judgments due to the nature and extent of audit effort required to address these matters, including the extent of specialized skills or knowledge needed.

 The primary procedures we performed to address this critical audit matter included:
 • Testing the completeness and accuracy of the underlying reports used in estimating: (i) the completion factors by agreeing to underlying claims data and repricing certain claims, and (ii) the per member per month cost by agreeing to underlying claims data and confirming member information with health plans.
 • Utilizing personnel with specialized knowledge and skills in actuarial methods to assist in: (i) evaluating the appropriateness and consistency of the actuarial methodologies used, (ii) evaluating the reasonableness of the completion factors, per member per month healthcare cost trends factors, and the PAD used by the Company's management and its actuarial specialist by comparing our independently determined IBNR estimate to management's recorded IBNR liability, and (iii) evaluating the reasonableness of management's prior period estimates using subsequent claims development.

 Determination of the Premium Risk Adjustment Revenue

 As described in Note 3 to the consolidated financial statements, the Company's consolidated capitated revenue included approximately $33.5 million of estimated premium risk adjustment revenue during the year ended December 31, 2024. Medicare pays capitation using a "risk adjustment model," which compensates providers based on the health status (acuity) of each individual patient, also known as the hierarchal condition categories ("HCC"). 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 (using a Risk Adjustment Factor or "RAF").

 We identified the determination of Medicare Advantage premium risk adjustment revenue as a critical audit matter. The principal considerations for this determination were the significant complexities involved in determining the HCC and the corresponding RAF. Auditing these elements involved especially challenging and complex calculations due to the nature and extent of audit effort required to address these matters, including the extent of specialized skills or knowledge needed.

 The primary procedures we performed to address this critical audit matter included:
 • Assessing the accuracy of the underlying data used in the determination of the HCC by vouching a selection of encounter data to underlying support.
 P3 Health Partners Inc. | 2024 Form 10-K | 77

 • Utilizing personnel with specialized knowledge and skills in actuarial methods to assist in determining the HCC and the corresponding risk adjustment revenue.

 /s/ BDO USA, P.C.
 We have served as the Company's auditor since 2021.
 Las Vegas, Nevada
 P3 Health Partners Inc. | 2024 Form 10-K | 78

 CONSOLIDATED BALANCE SHEETS
 (in thousands, except per share amounts)

 2024
 2023

 ASSETS

 CURRENT ASSETS:

 Cash
 $
 38,816
 $
 36,320

 Restricted cash
 5,286
 4,614

 Health plan receivable, net of allowance for credit losses of $ 150

 121,266
 118,497

 Clinic fees, insurance and other receivable
 3,947
 2,973

 Prepaid expenses and other current assets
 14,422
 3,613

 Assets held for sale
 —

 TOTAL CURRENT ASSETS
 184,140
 166,017

 5,734
 8,686

 Intangible assets, net
 574,350
 666,733

 19,196
 19,531

 TOTAL ASSETS (1)

 $
 783,420
 $
 860,967

 LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS' EQUITY

 CURRENT LIABILITIES:

 Accounts payable
 $
 8,442
 $
 8,663

 Accrued expenses and other current liabilities
 29,416
 36,884

 Accrued payroll
 2,722
 3,506

 Health plan settlements payable
 55,565
 34,992

 Claims payable
 255,089
 178,009

 67,368
 13,670

 Accrued interest
 12,460
 23,648

 Current portion of long-term debt
 —

 Liabilities held for sale
 —

 TOTAL CURRENT LIABILITIES
 496,415
 299,372

 Operating lease liability
 11,339
 13,622

 Warrant liabilities
 10,312
 1,085

 Contingent consideration
 —
 4,907

 Long-term debt, net
 89,824
 108,319

 Other Long-Term Liabilities
 26,001
 —

 TOTAL LIABILITIES (1)

 633,891
 427,305

 COMMITMENTS AND CONTINGENCIES (Note 13)

 MEZZANINE EQUITY:

 Redeemable non-controlling interest
 73,593
 291,532

 STOCKHOLDERS' EQUITY:

 Class A common stock, $ 0.0001 par value; 800,000 shares authorized; 162,870 and 116,588 shares issued and outstanding as of December 31, 2024 and 2023, respectively

 Class V common stock, $ 0.0001 par value; 205,000 shares authorized; 195,957 and 196,569 shares issued and outstanding as of December 31, 2024 and 2023, respectively

 Additional paid in capital
 579,093
 509,442

 Accumulated deficit
 ( 503,193)
 ( 367,344)

 TOTAL STOCKHOLDERS' EQUITY
 75,936
 142,130

 TOTAL LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS' EQUITY
 $
 783,420
 $
 860,967

 (1) The Company's consolidated balance sheets include the assets and liabilities of its consolidated variable interest entities ("VIEs"). As discussed in Note 20 "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 consolidated balance sheets include total assets that can be used only to settle obligations of P3 LLC's consolidated VIEs totaling $ 9.3 million and $ 8.6 million as of December 31, 2024 and 2023, 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 $ 14.9 million and $ 13.6 million as of December 31, 2024 and 2023, respectively. These VIE assets and liabilities do not include $ 40.3 million and $ 44.2 million of net amounts due to affiliates as of December 31, 2024 and 2023, respectively, as these are eliminated in consolidation and not presented within the consolidated balance sheets.
 See accompanying notes to consolidated financial statements.
 P3 Health Partners Inc. | 2024 Form 10-K | 79

 CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except per share amounts)

 2024
 2023

 OPERATING REVENUE:

 $
 $

 16,853
 14,066

 TOTAL OPERATING REVENUE

 OPERATING EXPENSE:

 Medical expense
 1,559,372
 1,234,740

 ( 12,705)

 Corporate, general and administrative expense
 112,596
 122,362

 Sales and marketing expense
 1,331
 3,233

 86,058
 86,675

 Impairment of assets held for sale
 8,058
 —

 TOTAL OPERATING EXPENSE
 1,821,113
 1,434,305

 OPERATING LOSS
 ( 320,658)
 ( 167,930)

 OTHER INCOME (EXPENSE):

 ( 22,173)
 ( 15,985)

 Mark-to-market of stock warrants
 22,114

 Gain on asset sale, net
 13,269
 —

 Other
 1,457
 ( 249)

 TOTAL OTHER INCOME (EXPENSE)
 14,667
 ( 15,801)

 LOSS BEFORE INCOME TAXES
 ( 305,991)
 ( 183,731)

 INCOME TAX PROVISION
 ( 4,387)
 ( 2,695)

 NET LOSS
 ( 310,378)
 ( 186,426)

 LESS: NET LOSS ATTRIBUTABLE TO REDEEMABLE NON-CONTROLLING INTEREST
 ( 174,529)
 ( 128,653)

 NET LOSS ATTRIBUTABLE TO CONTROLLING INTEREST
 $
 $

 NET LOSS PER SHARE (Note 16):

 Basic
 $
 ( 0.94)
 $
 ( 0.61)

 Diluted
 $
 ( 1.08)
 $
 ( 0.63)

 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Note 16):

 Basic
 145,175
 94,889

 Diluted
 146,998
 294,590

 See accompanying notes to consolidated financial statements.
 P3 Health Partners Inc. | 2024 Form 10-K | 80

 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND MEZZANINE EQUITY

 Redeemable
Non-controlling
Interest
 Class A Common Stock
 Class V Common Stock
 Additional Paid in Capital
 Accumulated
Deficit
 Total Stockholders'
Equity

 Shares
 Shares

 STOCKHOLDERS' EQUITY, December 31, 2022
 $
 516,805
 41,579
 $
 201,592
 $
 $
 315,375
 $
 ( 309,545)
 $
 5,854

 Cumulative adjustment due to adoption of new credit loss standard
 ( 124)
 —
 —
 —
 —
 —
 ( 26)
 ( 26)

 Exchanges of redeemable non-controlling interest for Class A common stock
 —
 5,371
 ( 5,371)
 ( 1)
 —
 —
 —

 Vesting of Class V common stock awards
 —
 —
 —
 ( 1)
 —
 —

 Issuance of Class A common stock upon settlement of restricted stock units, net of shares withheld for tax
 —
 —
 —
 —
 ( 16)
 —
 ( 16)

 Issuance of restricted stock awards
 —
 —
 —
 —
 —
 —
 —

 At-the-market sales, net of offering costs
 —
 —
 —
 —
 —

 Equity-based compensation
 —
 —
 —
 —
 5,194
 —
 5,194

 Restricted stock unit awards issued in satisfaction of executive transaction bonuses
 —
 —
 —
 —
 —
 5,000
 —
 5,000

 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
 ( 117,860)
 —
 —
 —
 —
 117,860
 —
 117,860

 Private placement, net of offering costs
 —
 69,157
 —
 —
 86,576
 —
 86,583

 ( 128,653)
 —
 —
 —
 —
 —

 STOCKHOLDERS' EQUITY, December 31, 2023
 291,532
 116,588
 196,569
 509,442
 ( 367,344)
 142,130

 Exchanges of redeemable non-controlling interest for Class A common stock
 —
 —
 ( 612)
 —
 —
 —
 —

 Issuance of Class A common stock upon settlement of restricted stock units, net of shares withheld for tax
 —
 4,066
 —
 —
 —
 ( 103)
 —
 ( 103)

 Equity-based compensation
 —
 —
 —
 —
 —
 5,752
 —
 5,752

 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
 ( 22,831)
 —
 —
 —
 —
 22,831
 —
 22,831

 Private placement, net of offering costs
 —
 41,604
 —
 —
 8,465
 —
 8,469

 Class A common stock warrants issued
 —
 —
 —
 —
 —
 12,127
 —
 12,127

 ( 174,529)
 —
 —
 —
 —
 —

 STOCKHOLDERS' EQUITY, December 31, 2024
 $
 73,593
 162,870
 $
 195,957
 $
 $
 579,093
 $
 ( 503,193)
 $
 75,936

 See accompanying notes to consolidated financial statements.
 P3 Health Partners Inc. | 2024 Form 10-K | 81

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 2024
 2023

 CASH FLOWS FROM OPERATING ACTIVITIES:

 $
 ( 310,378)
 $
 ( 186,426)

 Adjustments to reconcile net loss to net cash used in operating activities:

 86,058
 86,675

 Equity-based compensation
 5,752
 5,979

 Amortization of original issue discount and debt issuance costs

 Accretion of contingent consideration
 —

 Gain on write off of contingent consideration
 ( 4,907)
 —

 Gain on asset sale
 ( 13,269)
 —

 Deferred income taxes
 ( 1,090)
 —

 Impairment of assets held for sale
 8,058
 —

 Mark-to-market adjustment of stock warrants
 ( 22,114)
 ( 433)

 ( 12,705)

 Changes in operating assets and liabilities:

 Health plan receivable
 ( 2,769)
 ( 46,555)

 Clinic fees, insurance, and other receivable
 ( 990)
 4,560

 Prepaid expenses and other current assets
 ( 10,834)
 ( 1,243)

 ( 43)
 ( 58)

 Accounts payable, accrued expenses, and other current liabilities
 ( 8,101)
 15,988

 Accrued payroll
 ( 784)

 Health plan settlements payable
 20,573
 21,384

 Claims payable
 77,080
 26,802

 Accrued interest
 7,895
 9,587

 Other long-term liabilities
 5,897
 —

 Operating lease liability
 ( 450)

 Net cash used in operating activities
 ( 110,128)
 ( 76,028)

 CASH FLOWS FROM INVESTING ACTIVITIES:

 Purchases of property and equipment
 —
 ( 1,827)

 Proceeds from asset sale
 14,525
 —

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

 CASH FLOWS FROM FINANCING ACTIVITIES:

 Proceeds from long-term debt, net of original issue discount
 88,057
 14,101

 Payment of debt issuance costs
 ( 103)
 ( 173)

 Proceeds from liability-classified warrants and private placement offering, net of offering costs paid
 40,496
 86,595

 Proceeds from at-the-market sales, net of offering costs paid
 —

 Deferred offering costs paid
 ( 507)
 ( 175)

 Payment of tax withholdings upon settlement of restricted stock unit awards
 ( 103)
 ( 16)

 Repayment of short-term and long-term debt
 ( 30,973)
 —

 Proceeds from short-term debt
 1,871
 —

 Net cash provided by financing activities
 98,771
 100,332

 Net change in cash and restricted cash
 3,168
 22,477

 Cash and restricted cash, beginning of year
 40,934
 18,457

 Cash and restricted cash, end of year
 $
 44,102
 $
 40,934

 P3 Health Partners Inc. | 2024 Form 10-K | 82

 CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

 2024
 2023

 Supplemental disclosures of cash flow information:

 Cash paid for interest
 $
 14,191
 $
 5,813

 Cash paid for income taxes
 $
 5,477
 $

 Supplemental disclosures of non-cash investing and financing information:

 Operating lease liabilities arising from obtaining new right-of-use assets
 $
 $
 7,222

 Operating lease liabilities and right-of-use assets reduced due to lease modification or termination
 $
 ( 92)
 $
 —

 Increase in accrued expenses related to debt issuance costs and original issue discount
 $
 $

 Increase in accounts payable related to private placement offering costs
 $
 $

 Increase in accounts payable related to at-the-market offering costs
 $
 —
 $

 Increase in accrued expenses related to at-the-market offering costs
 $
 —
 $

 Increase in other receivable related to at-the-market sales proceeds
 $
 —
 $

 Restricted stock unit awards issued in satisfaction of executive transaction bonuses
 $
 —
 $
 5,000

 Remeasurement adjustment to redeemable noncontrolling interest resulting from ownership changes
 $
 ( 22,831)
 $
 ( 117,860)

 Fair value adjustment to redeemable noncontrolling interest
 $
 ( 20,579)
 $
 20,579

 Warrants issued in connection with new debt
 $
 12,127
 $
 —

 Reconciliation of cash and restricted cash:

 Cash
 $
 38,816
 $
 36,320

 Restricted cash
 5,286
 4,614

 Total cash and restricted cash
 $
 44,102
 $
 40,934

 See accompanying notes to consolidated financial statements.

 P3 Health Partners Inc. | 2024 Form 10-K | 83

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 Note 1: Organization

 Note 2: Going Concern and Liquidity

 Note 3: Significant Accounting Policies

 Note 4: Recent Accounting Pronouncements

 Note 5: Fair Value Measurements and Hierarchy

 Note 6: Property and Equipment

 Note 7: Intangible Assets

 Note 8: Claims Payable

 Note 9: Retirement Plan

 Note 10: Debt

 Note 11: Income Taxes

 Note 12: Warrants

 Note 13: Commitments and Contingencies

 Note 14: Capitalization

 Note 15: Equity-Based Compensation

 Note 16: Net Loss per Share

 Note 17: Redeemable Non-controlling Interest

 Note 18: Segment Reporting

 Note 19: Related Parties

 Note 20: Variable Interest Entities

 Note 21: Subsequent Events

 P3 Health Partners Inc. | 2024 Form 10-K | 84

 Note 1: Organization
 P3 Health Partners Inc. ("P3") is a patient-centered and physician-led population health management company and, for accounting purposes, the successor to P3 Health Group Holdings, LLC and its subsidiaries (collectively, "P3 LLC," and together with P3, the "Company") after the consummation of a series of business combinations in December 2021 with Foresight Acquisition Corp. (the "Business Combinations"). As the sole manager of P3 LLC, P3 operates and controls all of the business and affairs of P3 LLC and P3's only assets are equity interests in P3 LLC.
 P3 LLC was founded on April 12, 2017 and began commercial operations on April 20, 2017 to provide population health management services on an at-risk basis to insurance plans offering medical coverage to Medicare beneficiaries under Medicare Advantage programs. Medicare Advantage ("MA") programs are insurance products created solely for Medicare beneficiaries. Insurance plans contract directly with the Centers for Medicare and Medicaid Services ("CMS") to offer Medicare beneficiaries benefits that replace traditional Medicare fee-for-service ("FFS") coverage.
 The Company's contracts with health plans are based on an at-risk shared savings model. Under this model, the Company is financially responsible for the cost of all contractually-covered services provided to members assigned to the Company by health plans in exchange for a fixed monthly "capitation" payment, which is generally a percentage of the payment health plans receive from CMS. Under this arrangement, Medicare beneficiaries generally receive all their healthcare coverage through the Company's network of employed and affiliated physicians and specialists.
 The services provided to health plans' members vary by contract. These may include utilization management, care management, disease education, and maintenance of a quality improvement and quality management program for members assigned to the Company. The Company is also responsible for the credentialing of its providers, processing and payment of claims, and the establishment of a provider network for certain health plans.
 In addition to the Company's contracts with health plans, the Company provides primary healthcare services through its employed physician clinic locations. These primary care clinics are reimbursed for services provided under FFS contracts with various payers and through capitated – per member, per month ("PMPM") arrangements.

 Note 2: Going Concern and Liquidity
 The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has experienced losses since its inception and had net losses of $ 310.4 million and $ 186.4 million for the years ended December 31, 2024 and 2023, respectively. Such losses were primarily the result of costs incurred in adding new members and adverse claims experience, partly driven by general market conditions for MA plans. The Company anticipates operating losses and negative cash flows to continue for the foreseeable future as it continues to grow membership.
 As of December 31, 2024 and 2023, the Company had $ 38.8 million and $ 36.3 million, respectively, in unrestricted cash and cash equivalents available to fund future operations. The Company has a working capital deficit of $ 312.3 million as of December 31, 2024. The Company's capital requirements will depend on many factors, including the pace of the Company's growth, ability to manage medical costs, the maturity of its members, its ability to complete the sale of its remaining Florida operations, and its ability to raise capital. The Company continues to explore raising additional capital through a combination of debt financing and equity issuances and sales of assets. When the Company pursues additional debt and/or equity financing, there can be no assurance that such financing will be available on terms commercially acceptable to the Company or at all. If the Company is unable to raise additional capital or generate cash flows necessary to fund its operations or refinance its indebtedness, it will need to curtail planned activities, discontinue certain operations, or sell certain assets, which could materially and adversely affect its business, financial condition, results of operations, and prospects. As a result of these matters, substantial doubt exists about the Company's ability to continue as a going concern within one year after the date the financial statements are issued. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.
 P3 Health Partners Inc. | 2024 Form 10-K | 85

 Note 3: Significant Accounting Policies
 Basis of Presentation and Principles of Consolidation
 The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and include the accounts of the Company. All intercompany transactions and balances have been eliminated.
 The Company periodically evaluates entities for consolidation either through ownership of a majority voting interest, or through means other than voting interest, in accordance with the Variable Interest Entity ("VIE") accounting model. This evaluation includes a qualitative review of the design of the entity, its organizational structure, including decision making ability and financial agreements, as well as a quantitative review. The Company consolidates a VIE when it has a variable interest that provides it with a controlling financial interest in the VIE, referred to as the primary beneficiary of the VIE.
 As the sole managing member of P3 LLC, P3 has the right to direct the most significant activities of P3 LLC and the obligation to absorb losses and receive benefits. The rights of the non-managing members of P3 LLC are limited and protective in nature and do not give substantive participation rights over the sole managing member. Accordingly, P3 identifies itself as the primary beneficiary of P3 LLC and began consolidating P3 LLC as of December 3, 2021, the closing date of the Business Combinations (the "Closing Date"), resulting in a non-controlling interest related to the common units of P3 LLC ("Common Units") held by members other than P3. Additionally, as more fully described in Note 20 "Variable Interest Entities," P3 LLC is the primary beneficiary of the following physician practices (collectively, the "Network VIEs"):
 • Kahan, Wakefield, Abdou, PLLC
 • Bacchus, Wakefield, Kahan, PC
 • P3 Health Partners Professional Services, P.C.
 • P3 Medical Group, P.C.
 • P3 Health Partners California, P.C. (f/k/a Omni IPA Medical Group, Inc.)
 Comprehensive Loss
 Comprehensive loss includes net loss to common stockholders as well as other changes in equity that result from transactions and economic events other than those with stockholders. There was no difference between comprehensive loss and net loss to common stockholders for the periods presented.
 Use of Estimates
 The preparation of these consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that could affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to allowance for credit losses, revenue recognition, the liability for unpaid claims, equity-based compensation, premium deficiency reserves ("PDR"), fair value and impairment recognition of long-lived assets (including intangibles), fair value of liability classified instruments, and judgments related to deferred income taxes. The Company bases its estimates on the best information available at the time, its experiences, and various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates.
 Commitments and Contingencies
 An accrual is established for commitments and contingencies when management, after considering the facts and circumstances of each matter as then known to management, has determined a specific contingency is probable and estimable. The Company also faces contingencies that are reasonably possible to occur that cannot currently be estimated. When only a range of amounts is reasonably estimable and no amount within the range is more likely than another, the low end of the range is recorded. The Company expenses costs associated with loss contingencies, including any related legal fees, as they are incurred. Due to the inherent uncertainties surrounding gain contingencies, the Company does not recognize potential gains until realized.
 P3 Health Partners Inc. | 2024 Form 10-K | 86

 Net Loss per Share
 Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of warrants, stock options, restricted stock units, restricted stock awards, and Common Units convertible into shares of Class A common stock during the period by applying the treasury stock method or if-converted method, as applicable.
 Cash and Restricted Cash
 Cash includes all cash and liquid investments with an initial maturity of three months or less. Cash deposits held in accounts at each financial institution are insured up to $250,000 by the Federal Deposit Insurance Corporation ("FDIC"). The Company maintains its cash in bank deposit accounts that, at times, may exceed FDIC insured limits. Management does not expect any losses to occur on such accounts.
 As of December 31, 2024 and 2023, the Company had cash of $ 38.8 million and $ 36.3 million, respectively, deposited at banking institutions which are subject to the FDIC insured limit.
 Restricted cash is held for a specific purpose (such as payment of healthcare claims) and is thus not available to the Company for immediate or general business use. As of December 31, 2024 and 2023, the Company had restricted cash of $ 5.3 million and $ 4.6 million, respectively.
 Revenue Recognition
 The Company categorizes revenue based on various factors, such as the nature of contracts, as follows:

 Revenue Type
 Year Ended December 31, 2024
 % of Total
 Year Ended December 31, 2023
 % of Total

 $
 98.9
 %
 $
 98.9
 %

 Other patient service revenue:

 Clinical fees & insurance revenue
 5,934
 0.4
 5,192
 0.3

 Care coordination / management fees
 10,563
 0.7
 8,301
 0.7

 Incentive fees
 0.0
 0.1

 Total other patient service revenue
 16,853
 1.1
 14,066
 1.1

 Total revenue
 $
 100.0
 %
 $
 100.0
 %

 During the years ended December 31, 2024 and 2023, four and four health plan customers each accounted for 10% or more of total revenue and collectively comprised 59 % and 60 % of the Company's total revenue, respectively.
 Capitated Revenue
 The Company contracts with health plans using an at-risk model. Under the at-risk model, the Company is responsible for the cost of all covered services provided to members assigned by the health plans to the Company in exchange for a fixed premium payment, which generally is a percentage of the health plans' premiums ("POP") paid by CMS. Through this capitation arrangement, the Company stands ready to provide assigned Medicare Advantage beneficiaries all their medical care via the Company's directly employed and affiliated physician/provider network. Since the Company controls and provides medical care to its assigned members, the Company acts as a principal in these capitation arrangements. As of December 31, 2024 and 2023, the Company had at-risk contracts in effect with 23 health plans across five states.
 The capitated revenue the Company receives is determined via a competitive bidding process with CMS and is based on the costs of care in local markets and the average utilization of services by patients enrolled. Medicare pays capitation using a "risk adjustment model," which compensates providers based on the health status (acuity) of each individual patient, also known as hierarchal condition categories ("HCC"). Medicare Advantage plans with higher acuity
 P3 Health Partners Inc. | 2024 Form 10-K | 87

 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 (using a Risk Adjustment Factor or "RAF"). The Company generally estimates transaction prices using the most likely methodology. Amounts are only included in the transaction price to the extent any significant uncertainty of reversal on cumulative revenue will not occur and is resolved. 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 a 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. The Company recognizes 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. Premium risk adjustments recorded in 2024 and 2023, which increased capitation revenue, were $33.5 million and $27.7 million, respectively. As the period between the time of service and time of payment is typically one year or less, the Company elected the practical expedient not to adjust for the effects of a significant financing component.
 The Company's contracts with health plans may include core functions and services for managing assigned patients' medical care, the combination of which is offered as a single solution. Capitation contracts have a single performance obligation that is a stand ready obligation to perform healthcare services to the population of enrolled members and constitutes a series for the provision of managed healthcare services for the term of the contract, which is deemed to be one month since the mix of patients-customers can change month over month. The Company does not offer nor price each individual function as a standalone service to health plans.
 Monthly, each plan is contractually obligated to reserve for payment of medical claims equal to a defined POP attributable to members assigned to the Company. In turn, the Company administers medical claims for contractually covered services for assigned health plan members from that health plan's reserve. On a quarterly or monthly basis, health plans conduct a settlement of the reserve to determine any surplus or deficit amount. The reconciliation and distribution of the reserve occur within 120 days following the end of each quarter. An annual settlement reconciliation and distribution occur within the period specified by the individual health plan's contract (which can be up to 21 months following each year-end).
 Revenue recognized from the balance of deferred revenue as of December 31, 2023 was $ 12.7 million during the year ended December 31, 2024.
 Three health plan customers accounted for 10% or more of total health plan receivable each as of December 31, 2024 and 2023.
 As of December 31, 2024 and 2023, Management has deemed the Company's settlement receivables to be fully collectible from those health plans where the Company is not delegated for claims processing. Accordingly, a constraint on the variable consideration associated with settlement receivables was not recorded.
 Other Patient Service Revenue – Clinical Fees and Insurance Revenue
 Clinical fees and insurance revenue relates to net patient fees received from various payors and direct patients under contracts in which the Company's sole performance obligation is to provide healthcare services through the operation of medical clinics. The Company recognizes clinic fees and insurance revenue in the period in which services are provided. Under FFS payment arrangements, revenue is recognized on the date of service using a portfolio approach. The Company's performance obligations are typically satisfied in the same day services are provided. All the Company's contracts with its customers under these arrangements include a single performance obligation.
 The Company's contractual relationships with patients, in most cases, also involve third-party payors (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through state-sponsored health insurance exchanges). Transaction prices for services provided are dependent upon specific rules in place with third party payors–specifically, Medicare/Medicaid and pre-negotiated rates with managed care health plans and commercial insurance companies. Contractual arrangements with third parties typically include payments at amounts which are less than standard charges. These charges generally have predetermined rates for diagnostic service codes or discounted FFS rates. The Company perpetually reviews its contractual estimation processes to consider and incorporate updates to
 P3 Health Partners Inc. | 2024 Form 10-K | 88

 laws, regulations, and frequent changes in the managed care system. Contractual terms are negotiated and updated accordingly upon renewal.
 Clinical fees and insurance revenue is based upon the estimated amounts the Company expects to receive from patients and third-party payors. Estimates of explicit price concessions under managed care and commercial insurance plans are tied to payment terms specified in related contractual agreements. Retroactively calculated explicit price concessions tied to reimbursement agreements with third-party payers are recognized on an estimated basis in the period related services are rendered and adjusted in future periods as final payments are received. Revenue related to uninsured patients, uninsured co-payments, and deductibles (for patients with healthcare coverage) may also be discounted. The Company records implicit price concessions (based on historical collection experience) related to uninsured accounts to recognize self-pay revenue at their most likely amounts to be collected.
 The Company deems FFS revenue to be variable consideration and its estimates of associated transaction prices will not result in a significant revenue reversal in the future.
 The Company has elected the practical expedient not to adjust the transaction price for any financing components as those were deemed to be insignificant and to expense all incremental customer contract acquisition costs as incurred as such costs are not material and would be amortized over a period less than one year.
 Health Plan Receivables/Payables
 Receivables or payables primarily consist of amounts the Company expects to receive or pay under at-risk capitation contracts with various health plans. These contracts involve a payment model where contracted health plans receive a fixed capitation amount per patient, per service year, regardless of service usage, from CMS. Whereas a portion of the payment is then allocated to the Company if capitation payments surpass the health plan's incurred medical expenses. A receivable is recorded for contracts in a surplus, while payable is recognized for contracts in a deficit position. Final amounts due to/from health plans are based upon settlement reports from the health plans, which outline covered lives, capitation rates, and medical costs. As such, these amounts are updated as the company receives revised information from the health plans. Receivables are recorded at the anticipated collection amount as reported by the health plans. The total health plan receivable for December 31, 2024 and 2023 respectively are $ 121.3 million and $ 118.5 million. The total health plan playable for December 31, 2024 and 2023 respectively are $ 55.6 million and $ 35.0 million.
 Other Patient Service Revenue – Care Coordination Fees and Management Fees
 The Company's delegated health plans may also pay a Care Coordination Fee ("CCF") or management fee to the Company. CCFs and management fees are intended to fund the costs of delegated services provided to certain health plans. CCFs are specifically identified and separated in each monthly capitation payment the Company receives from these parties. None of the Company's other health plans bifurcate CCFs nor are any of them contractually required to do so. Based on similarities of the terms of the care coordination and administrative services, the Company uses a portfolio approach to record revenue from CCFs and management fees.
 Patient Fees Receivable
 Substantially all client fees and insurance receivables are due under FFS contracts with third party payors, such as commercial insurance companies, government-sponsored healthcare programs, or directly from patients. The Company has agreements with third-party payors that provide for payments at amounts different from the established rates. Payment arrangements include prospectively determined rates per discharge, reimbursed costs, discounted charges, and per diem payments. Patient fees receivable, where a third-party payor is responsible for the amount due, are recorded at the invoiced amount, net of any expected contractual adjustments and implicit price concessions, and do not bear interest. Contractual adjustments arising under reimbursement arrangements with third-party payors are accrued on an estimated basis in the period the related services are rendered and are adjusted in future periods as final settlements are determined. The Company continuously monitors activities from payors (including patients) and records an implicit price concession as a reduction of revenue based on specific contracts and actual historical collection patterns to reflect the estimated amounts the Company expects to collect. Patient fees receivable of $ 2.8 million and $ 0.7 million are included in clinic fees, insurance and other receivable in the Company's consolidated balance sheets as of December 31, 2024 and 2023, respectively, and are recorded net of contractual allowances.
 P3 Health Partners Inc. | 2024 Form 10-K | 89

 Property and Equipment
 Property and equipment is carried at acquisition cost, net of accumulated depreciation. Costs for repairs and maintenance of property and equipment, after such property and equipment has been placed in service, are expensed as incurred. Costs and related accumulated depreciation are eliminated when property and equipment is sold or otherwise disposed. Sales and disposals may result in asset-specific gains or losses. Any such gains or losses are included as a component of operations. The Company records depreciation using the straight-line method over the estimated useful lives of the respective assets. The following table summarizes the estimated useful lives of the Company's property and equipment:

 Classification
 Depreciation Cycle

 Leasehold improvements (cycle: lease term)
 1 to 10 years

 Furniture and fixtures
 2 to 7 years

 Vehicles
 5 years

 Computer equipment
 3 years

 Medical equipment
 7 years

 Software
 3 years

 The Company capitalizes certain costs incurred in connection with developing its own proprietary technology to serve core functions of its business operations such as revenue and medical cost analysis, care management and various facets that promote impactful utilization. As of December 31, 2024 and 2023, the Company has capitalized $ 0.3 million and $ 3.9 million, respectively, to property and equipment for these software costs (specifically to work in progress). In 2024, $ 3.5 million of capitalized costs were placed into service. No capitalized costs were placed into service in 2023. All costs associated with internally developed technology following deployment, or that otherwise do not meet capitalization criteria, are expensed as incurred.
 Assets Held for Sale
 The Company classifies assets and related liabilities as held for sale when: (i) management has committed to a plan to sell the net assets, (ii) the net assets are available for immediate sale, (iii) there is an active program to locate a buyer, (iv) the sale and transfer of the net assets is probable within one year, (v) the net assets are being actively marketed for sale at price that is reasonable in relation to its current fair value, and (vi) it is unlikely that significant changes will be made to the plan to sell the net assets. Assets and liabilities held for sale are presented separately on our consolidated balance sheets at the lower of cost or fair value, less costs to sell. Depreciation and amortization expense for long-lived assets are not recorded while these assets are classified as held for sale. For each period that assets are classified as being held for sale, they are tested for recoverability.
 Fair Value Measurements
 The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels (see Note 5 "Fair Value Measurements and Hierarchy" for further discussion):
 Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
 Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
 Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.
 P3 Health Partners Inc. | 2024 Form 10-K | 90

 Impairment of Long-Lived Assets
 The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate their carrying amounts may not be recoverable. Recoverability of an asset or asset group is measured by comparing its carrying amount to the future undiscounted net cash flows the asset or asset group is expected to generate. If such assets are considered impaired (e.g., future undiscounted cash flows are less than net book value), an impairment charge is recognized, measured by the difference between the carrying value and the estimated fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
 Intangible Assets
 Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives. In determining the estimated useful lives of definite-lived intangibles, the Company considers the nature, competitive position, life cycle position and historical and expected future operating cash flows of each acquired asset, as well as its commitment to support these assets through continued investment and legal infringement protection.
 The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Determining whether an impairment loss occurred requires comparing the carrying amount to the sum of undiscounted cash flows expected to be generated by the asset. Such events and circumstances include the occurrence of an adverse change in the market involving the business employing the assets or a situation in which it is more likely than not that the Company will dispose of such assets. If the comparison indicates that there is impairment, the impairment loss to be recognized as a non-cash charge to earnings is measured by the amount by which the carrying amount of the asset exceeds its fair value and the impaired asset is written down to its fair value or, if fair value is not readily determinable, to an estimated fair value based on discounted expected future cash flows.
 Leases
 The Company determines whether a contract is or contains a lease at the inception of the contract. For leases with terms greater than 12 months, the Company records the related operating or finance right-of-use asset and lease liability at the present value of lease payments over the lease term. The Company is generally not able to readily determine the implicit rate in the lease and therefore uses the determined incremental borrowing rate at lease commencement to compute the present value of lease payments. The incremental borrowing rate represents an estimate of the market interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. Renewal options are not included in the measurement of the right-of-use assets and lease liabilities unless the Company is reasonably certain to exercise the optional renewal periods. Some leases also include early termination options, which can be exercised under specific conditions. Additionally, certain leases contain incentives, such as construction allowances from landlords, which reduce the right-of-use asset related to the lease.
 Certain of the Company's leases contain rent escalations over the lease term. The Company recognizes expense for operating leases on a straight-line basis over the lease term. The Company's lease agreements contain variable payments for common area maintenance and utilities. The Company has elected the practical expedient to combine lease and non-lease components for all asset categories; therefore, the lease payments used to measure the lease liability for these leases include fixed minimum rentals along with fixed non-lease component charges. Variable lease payments are excluded from the measurement of right-of-use assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. The Company does not have significant residual value guarantees or restrictive covenants in its lease portfolio.
 Equity-Based Compensation
 Equity-based compensation cost is measured at the grant date for all equity-based awards based on the fair value of the awards. For equity awards that vest subject to the satisfaction of service-based conditions, compensation cost is recognized on a straight-line basis over the requisite service period, which varies by award. For equity awards that vest subject to the satisfaction of performance-based conditions, the Company evaluates the probability of achieving each performance-based condition at each reporting date and recognizes compensation cost when it is deemed probable that the performance-based condition will be met on an accelerated basis over the requisite service period, which varies by award. Equity-based compensation is recorded within corporate, general and administrative expense in the accompanying consolidated statements of operations. The Company accounts for forfeitures as they occur.
 P3 Health Partners Inc. | 2024 Form 10-K | 91

 The Company uses the Black-Scholes option-pricing model to determine the fair value of the Company's stock option awards. The risk-free interest rate estimate was based on constant maturity, which is the theoretical value of a U.S. Treasury that is based on recent values of auctioned U.S. Treasuries with remaining terms similar to the expected term of the stock option awards. The expected dividend yield was based on the Company's expectation of not paying dividends in the foreseeable future. The expected term was calculated using the "simplified" method; whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the stock option due to P3's lack of sufficient historical data. The expected volatility was estimated using an average of the historical volatilities of a peer group comprised of publicly traded companies in the same industry. The Company assesses the impact of material nonpublic information on its share price or expected volatility, as applicable, at the time of grant.
 The Company's restricted stock and restricted stock unit awards are measured based on the fair market value of the underlying shares of Class A common stock on the date of grant.
 Warrant Liability
 The Company has public and private placement warrants of Class A common stock classified as liabilities as well as warrants of Class A common stock issued to a lender classified as equity. The Company classifies as equity any equity-linked contracts that (1) require physical settlement or net-share settlement or (2) give the Company a choice of net-cash settlement or settlement in the Company's own shares (physical settlement or net-share settlement). Warrants classified as equity are initially measured at fair value. Subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity.
 The Company classifies as assets or liabilities any equity-linked contracts that (1) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside the Company's control) or (2) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). For equity-linked contracts that are classified as liabilities, the Company records the fair value of the equity-linked contracts at each balance sheet date and records the change in the statements of operations as a gain (loss) from change in fair value of warrant liability. The Company's public warrant liability is valued using observable market prices for those public warrants. The Company's private placement warrants are valued using a binomial lattice pricing model when the warrants are subject to the make-whole table, or otherwise are valued using a Black-Scholes pricing model. The Company's warrants issued to a capital provider are valued using a Black-Scholes-Merton pricing model based on observable market prices for public shares and warrants. The assumptions used in preparing these models include estimates such as volatility, contractual terms, discount rates, dividend yield, expiration dates and risk-free rates.
 The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms. The assessment considers whether the warrants are freestanding financial instruments, meet the definition of a liability, and whether the warrants meet all of the requirements for equity classification, including whether the warrants are indexed to the Company's own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
 Premium Deficiency Reserve
 PDR liabilities are established when it is probable that expected future health care costs and maintenance costs under a group of existing contracts will exceed anticipated future premiums and stop-loss insurance recoveries on those contracts. The Company assesses if a PDR liability is needed through review of current results and forecasts. For purposes of determining premium deficiency losses, contracts are grouped consistent with our method of acquiring, servicing, and measuring the profitability of such contracts based on the expected medical loss ratio. The Company grouped its Medicare Advantage health plan contracts together as a single group as it operates in one line of business. The Company further concluded that the costs to administer these contracts are based on centralized and shared service functions. As of December 31, 2024 and 2023, the PDR liability was $ 67.4 million and $ 13.7 million, respectively, which represented an estimate of probable contract losses expected to be generated by the Company's health plans.
 Medical Expense and Claims Payable
 The cost of healthcare services is recognized in the period services are provided. This also includes an estimate of the cost of services that have been incurred, but not yet reported ("IBNR"). Medical expense also includes costs for overseeing the quality of care and programs, which focus on patient wellness. Additionally, medical expense can include,
 P3 Health Partners Inc. | 2024 Form 10-K | 92

 from time to time, remediation of certain claims that might result from periodic reviews conducted by various regulatory agencies.
 Management estimates the Company's IBNR by applying standard actuarial methodologies, which utilize historical data, including the period between the date services are rendered and the date claims are received and paid, the completion factor, per member per month healthcare trends, denied claims activity, expected medical cost inflation, seasonality patterns, changes in membership mix, and a provision for adverse deviation. IBNR estimates are subject to the impact from changes in both the regulatory and economic environments. Such estimates are made on an accrual basis and adjusted in future periods as required. Future and actual results typically differ from estimates. Differences could result from an overall change in medical expenses per member, changes in member mix or simply due to the addition of new members. Any adjustments to prior period estimates are included in the current period.
 The Company's claims payable represents management's best estimate of its liability for unpaid medical costs as of December 31, 2024 and 2023.
 Income Taxes
 The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
 Deferred tax assets are evaluated for future realization and reduced by a valuation allowance to the extent the Company believes it is more likely than not that they will not be realized. The Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under tax law, and results of recent operations.
 The Company records uncertain tax positions on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company considers many factors when evaluating its uncertain tax positions during the course of the year through a review of policies and procedures, reviews of customary and regular tax filings, and discussions with third party experts. This review can involve significant judgment and may require periodic adjustments. The resolution of these uncertain tax positions in a manner inconsistent with management's expectations could have a material impact on the Company's consolidated financial statements. The Company recognizes interest and penalties related to uncertain tax positions as a component of its provision for income taxes. Accrued interest and penalties are included with the related tax liability.
 See Note 11 "Income Taxes" for further information.
 Advertising Expense
 The Company uses advertising primarily to promote the health plans with which it conducts business as well as its physician clinics throughout the geographic areas it serves. Advertising costs are charged directly to operations as incurred. Advertising expense totaled $ 1.3 million and $ 3.2 million for the years ended December 31, 2024 and 2023, respectively.

 Note 4: Recent Accounting Pronouncements
 Recently Adopted Accounting Pronouncements
 ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07")
 Accounting Standards Update ("ASU") 2023-07 improves the disclosures about a public entity's reportable segments and addresses requests from investors for additional, more detailed information about a reportable segment's expenses. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The amendments require retrospective application to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed
 P3 Health Partners Inc. | 2024 Form 10-K | 93

 in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. In the fourth quarter of 2024, the Company adopted ASU 2023-07 effective January 1, 2024 on a retrospective basis, which did not impact the Company's financial condition and results of operations, but did result in expanded reportable segment disclosures. See Note 18 "Segment Reporting" for further information.
 ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements ("ASU 2024-02")
 ASU 2024-02 removes references to various Financial Accounting Standards Board ("FASB") Concepts Statements from the FASB accounting standards codification (the "Codification") to simplify and clarify the accounting guidance. The ASU aims to distinguish between authoritative and nonauthoritative literature and to address unintended applications of guidance. The Company adopted ASU 2024-02 effective January 1, 2024. The guidance will be applied prospectively to all new transactions recognized on or after January 1, 2024.
 ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity's Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06")
 ASU 2020-06 eliminates two of the three models in ASC 470-20 that require issuers to separately account for embedded conversion features and eliminates some of the requirements for equity classification in ASC 815-40-25 for contracts in an entity's own equity. The guidance also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and generally requires them to include the effect of potential share settlement for instruments that may be settled in cash or shares. The Company adopted ASU 2020-06 effective January 1, 2024 using the modified retrospective method. The Company's liability-classified stock warrants remained classified as liabilities under the amended guidance. The adoption of this standard did not have a material impact on the Company's consolidated financial statements and related disclosures.
 Recent Accounting Pronouncements Not Yet Adopted
 ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03")

 ASU 2024-03 enhances transparency and decision-usefulness of expense disclosures in response to investors' requests for more detailed, disaggregated expense information, enabling a clearer understanding of a public business entity's performance and cost structure. The amendments improve disclosure requirements in financial statement notes for specific expense categories, including inventory purchases, employee compensation, depreciation, amortization, and depletion, as well as qualitative descriptions of other expenses. The amendments are effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted and can be applied prospectively or retrospectively at the option of the Company. The Company is evaluating the effect ASU 2024-03 will have on its consolidated financial statements and related disclosures.
 ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09")
 ASU 2023-09 enhances the transparency and decision usefulness of income tax disclosures, in response to investors' feedback, indicating the need for improved information to assess an entity's operations, tax risks, and planning opportunities, particularly in understanding exposure to jurisdictional tax changes and their impact on cash flows. The amendments address these concerns by improving income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. The amendments in this update are effective for annual periods beginning after December 15, 2024 and should be applied prospectively. Retrospective application is permitted. The Company is evaluating the effect ASU 2023-09 will have on its consolidated financial statements and related disclosures.
 ASU 2023-06, Disclosure Improvements: Codification Amendments In Response to the SEC's Disclosure Update and Simplification Initiative ("ASU 2023-06")
 ASU 2023-06 clarifies or improves disclosure and presentation requirements on a variety of topics and aligns the requirements in the Codification with the SEC's regulations. The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The amendments in this update should be applied prospectively. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment
 P3 Health Partners Inc. | 2024 Form 10-K | 94

 will be removed from the Codification and will not become effective for any entity. The Company is evaluating the effect ASU 2023-06 will have on its consolidated financial statements and related disclosures.

 Note 5: Fair Value Measurements and Hierarchy
 Information about the Company's financial liabilities measured at fair value on a recurring basis is presented below:

 Level 1
 Level 2
 Level 3
 Total

 Warrant liability as of December 31, 2024
 $
 $
 —
 $
 10,185
 $
 10,312

 Warrant liability as of December 31, 2023
 $
 1,056
 $
 —
 $
 $
 1,085

 The key Level 3 weighted average inputs into the option pricing model related to the private placement warrants to purchase Class A common stock were as follows:

 2024
 2023

 Volatility
 91.7
 %
 75.0
 %

 4.4
 %
 4.0
 %

 Exercise price
 $
 0.50
 $
 11.50

 6.2 years
 2.9 years

 Generally, an increase in the market price of the Company's shares of common stock, an increase in the volatility of the Company's shares of common stock, and an increase in the remaining term of the warrants would each result in a directionally similar change in the estimated fair value of the Company's warrant liabilities. Such changes would increase the associated liability while decreases in these assumptions would decrease the associated liability. An increase in the risk-free interest rate would result in a decrease in the estimated fair value measurement and thus a decrease in the associated liability. The Company has not, and does not plan to, declare dividends on its common stock and, as such, there is no change in the estimated fair value of the warrant liabilities due to the dividend assumption.
 The following table sets forth a summary of changes in the fair value of the Company's private placement warrants to purchase Class A common stock, which are considered to be Level 3 fair value measurements:

 2024
 2023

 Beginning balance
 $
 $

 Issuance of May 2024 Common Warrants (see Note 12)

 31,341
 —

 Mark-to-market adjustment of stock warrants
 ( 21,185)
 ( 11)

 Ending balance
 $
 10,185
 $

 The Company recorded gains of $ 22.1 million and $ 0.4 million from changes in the fair value of stock warrants for the years ended December 31, 2024 and 2023, respectively.
 The book value of cash; clinic fees, insurance receivables, and other receivables; accounts payable; and accrued expenses and other current liabilities approximate fair value because of the short maturity and high liquidity of these instruments.
 During the year ended December 31, 2024, the Company recorded a gain of $ 6.2 million reflecting the write-off and settlement of contingent consideration related to the Company's 2021 acquisition of Medcore HP, a Level 3 fair value measurement, upon resolution with the sellers of the assumed claims payable and risk adjustment factor. The gain is included in corporate, general, and administrative expense in the consolidated statement of operations.
 P3 Health Partners Inc. | 2024 Form 10-K | 95

 Note 6: Property and Equipment
 The Company's property and equipment balances consisted of the following as of:

 2024
 2023

 Leasehold improvements
 $
 2,332
 $
 2,933

 Furniture & fixtures
 1,106
 1,165

 Computer equipment & software
 7,060
 3,699

 Medical equipment
 1,082
 1,106

 Software (development in process)
 3,877

 Vehicles

 Other
 —

 12,582
 13,467

 Less: accumulated depreciation
 ( 6,848)
 ( 4,781)

 $
 5,734
 $
 8,686

 Total depreciation of property and equipment recognized on the consolidated statements of operations was $ 2.4 million and $ 2.3 million for the years ended December 31, 2024 and 2023, respectively.
 Asset Sale
 On November 30, 2024, the Company and certain of its subsidiaries (the "Sellers") entered into an asset purchase agreement with certain entities affiliated with an entity in which CPF, the Company's 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 the Company's 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. The asset sale closed on November 30, 2024 simultaneously with the execution of the asset purchase agreement. The Company recognized a $ 13.3 million net gain on asset sale on the consolidated statement of operations for the year ended December 31, 2024.
 The major classes of assets and liabilities disposed of as part of the Florida Assets sale are summarized as follows (in thousands):

 Assets:

 Prepaid expenses and other current assets
 $

 Intangible assets, net

 1,202

 Total assets disposed
 $
 1,500

 Liabilities:

 Operating lease liability
 $

 Total liabilities disposed
 $

 Net assets disposed

 $
 1,257

 The Company expects to close on the sale of the remaining Florida assets during the first half of fiscal year 2025. As of December 31, 2024, the Company determined that the carrying value of the assets was less than the fair value and a loss on impairment of assets held for sale was recognized on the consolidated statement of operations for the year ended December 31, 2024. The fair value was determined based on a quoted market price less costs to sell. Net assets classified as
 P3 Health Partners Inc. | 2024 Form 10-K | 96

 held for sale for the Company's remaining Florida operations are summarized as follows as of December 31, 2024 (in thousands):

 Assets:

 $

 Intangible assets, net
 7,576

 Impairment
 ( 8,058)

 Total assets
 $

 Liabilities:

 Accrued expenses and other current liabilities
 $

 Operating lease liability

 Total liabilities
 $

 Net assets
 $

 Note 7: Intangible Assets
 Intangible assets, net consisted of the following as of:

 2024
 2023

 Gross Carrying
 Accumulated
Amortization
 Net Carrying
 Gross Carrying
 Accumulated
Amortization
 Net Carrying

 Indefinite lived intangible assets:

 Medical licenses
 $
 $
 —
 $
 $
 $
 —
 $

 Definite lived intangible assets:

 Customer relationships
 671,819
 ( 206,951)
 464,868
 684,000
 ( 142,500)
 541,500

 Trademarks
 148,635
 ( 46,427)
 102,208
 148,635
 ( 31,671)
 116,964

 Payor contracts
 4,700
 ( 1,410)
 3,290
 4,700
 ( 940)
 3,760

 Provider network
 4,734
 ( 1,450)
 3,284
 4,800
 ( 991)
 3,809

 Total
 $
 830,588
 $
 ( 256,238)
 $
 574,350
 $
 842,835
 $
 ( 176,102)
 $
 666,733

 Amortization of intangible assets was $ 83.7 million and $ 84.3 million during the years ended December 31, 2024 and 2023, respectively. Estimated future amortization of intangible assets is $ 82.0 million for each of the years 2025 through 2029.
 P3 Health Partners Inc. | 2024 Form 10-K | 97

 Note 8: Claims Payable
 Activity in the liability for claims payable was as follows:

 2024
 2023

 Claims unpaid, beginning of period
 $
 178,009
 $
 151,207

 Incurred, related to:

 Current period
 1,341,031
 1,064,341

 Prior period(s)
 ( 1,588)
 ( 2,617)

 Total incurred
 1,339,443
 1,061,724

 Paid, related to:

 Current period
 1,093,866
 893,092

 Prior period(s)
 168,497
 141,830

 Total paid
 1,262,363
 1,034,922

 Claims unpaid, end of period
 $
 255,089
 $
 178,009

 Note 9: Retirement Plan
 The Company maintains a retirement savings 401(k) Plan (the "401(k) Plan") for full-time employees. Participants may elect to contribute to the 401(k) Plan, through payroll deductions, subject to Internal Revenue Service limitations. At its discretion, the Company can make a matching contribution to the 401(k) Plan. The Company recognized expense related to its contributions to the 401(k) Plan of $ 1.1 million and $ 1.2 million during the years ended December 31, 2024 and 2023, respectively.

 Note 10: Debt
 Long-term Debt
 Long-term debt consisted of the following:

 2024
 2023

 Repurchase Promissory Note
 $
 15,000
 $
 15,000

 Term Loan Facility

 VGS 1 2024 Loan (2024) / VGS Promissory Note (2023)
 38,057
 29,102

 VGS 2 Promissory Note
 25,375
 —

 VGS 3 Promissory Note
 25,375
 —

 Long-term debt, gross
 168,807
 109,102

 Less: unamortized debt issuance costs and original issue discount
 ( 13,983)
 ( 783)

 154,824
 108,319

 Less: current portion of long-term debt
 ( 65,000)
 —

 Long-term debt, net
 $
 89,824
 $
 108,319

 Repurchase Promissory Note
 In June 2019, the Company issued a share repurchase promissory note to a former equity investor for $ 15.0 million, which was subsequently amended in November 2020 (as amended, the "Repurchase Promissory Note"). The Repurchase Promissory Note automatically matures and is due and payable on the earlier of June 30, 2026, a change in control transaction, or an underwritten primary public offering, each as defined in the agreement. The Repurchase
 P3 Health Partners Inc. | 2024 Form 10-K | 98

 Promissory Note accrues paid-in-kind ("PIK") interest of 11.0 % per year. The principal balance, accrued interest, and an exit fee of $ 0.6 million are due at maturity. Accrued interest was $ 15.1 million and $ 11.7 million as of December 31, 2024 and 2023, respectively.
 Term Loan Facility
 In November 2020, the Company entered into a Term Loan Agreement and Security Agreement with a commercial lender (as amended, the "Term Loan Agreement"), which provided funding up to $ 100.0 million (the "Term Loan Facility"), of which $ 65.0 million was drawn as of December 31, 2024 and 2023. The Company's access to additional borrowings under the Term Loan Facility ended upon termination of the commitment period on February 28, 2022. The Term Loan Agreement was amended on November 16, 2021 to provide for certain modifications and to obtain consent from the lenders to consummate the Business Combinations. The Term Loan Agreement was amended on December 21, 2021 to provide for certain modifications and to permit the consummation of an acquisition in a prior year and related transactions. The Term Loan Agreement was amended on December 13, 2022 to provide for certain modifications and to permit the issuance of the VGS Promissory Note (defined below) and related transactions. The Term Loan Agreement was amended on March 22, 2024 to provide for certain modifications and to permit the issuance of the VGS 2 Promissory Note (defined below) and related transactions. The Term Loan Agreement was amended on November 30, 2024 to permit the Company's sale of the Florida Assets (the "Permitted Florida Disposition"), provide that the mandatory prepayment covenant does not apply to the proceeds of the Permitted Florida Disposition, and remove the ability to elect to pay a portion of the interest in-kind. The Term Loan Agreement was amended on December 12, 2024 to provide for certain modifications and to permit the issuance of the VGS 3 Promissory Note (defined below) and related transactions. The Security Agreement provides the lenders collateral in 100 % of the Company's pledged stock, its subsidiaries (including tangible and intangible personal property), and bank accounts.
 The principal balance is due in full on the maturity date, which is December 31, 2025. This maturity date may be accelerated as a remedy under certain default provisions in the agreement or in the event a mandatory prepayment trigger occurs. Effective November 30, 2024, interest is payable at 12.0 % per annum on a quarterly cycle (in arrears). PIK interest is subject to acceleration in the event certain occurrences in the Term Loan Facility's agreement are triggered. Accrued interest was $ 12.5 million and $ 7.9 million as of December 31, 2024 and 2023, respectively.
 The Term Loan Facility includes certain restrictive covenants, including restrictions on the payment of cash dividends. The Company must remain in compliance with financial covenants such as minimum liquidity of $ 5.0 million and annual minimum revenue levels. On an annual basis, the Company must post a minimum amount of annual revenue equal to or greater than $ 585.0 million in 2024 and $ 650.0 million in 2025. The Company is also subject to certain restrictions that include indebtedness and liens.
 As of December 31, 2024, the Company was not in compliance with its Term Loan Facility covenants related to issuance of the 2024 financial statements with an audit opinion free of a "going concern" explanatory paragraph. The Term Loan Facility lenders granted 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 the Company's audited financial statements for the fiscal year ended December 31, 2024. The Company was in material compliance with all other covenants under the Term Loan Facility as of December 31, 2024; however, there can be no assurance that the Company will be able to maintain compliance with these covenants in the future or that the lenders under the Term Loan Facility or the lenders of any future indebtedness the Company may incur will grant any such waiver or forbearance in the future.
 VGS 1 2024 Loan (2024) and VGS Promissory Note (2023)
 In December 2022, P3 LLC entered into a related party financing transaction (see Note 19 "Related Parties") with VBC Growth SPV LLC ("VGS") which included the issuance of an unsecured promissory note (the "VGS Promissory Note") to VGS; warrant agreement, pursuant to which the Company issued warrants to purchase 0.4 million shares of Class A common stock at an exercise price of $ 4.26 per share to VGS (see Note 12 "Warrants"); and a subordination agreement, pursuant to which VGS agreed to subordinate its right of payment under the VGS Promissory Note to the right of payment and security interests of the lenders under the Term Loan Facility. The VGS Promissory Note provided for funding of up to $ 40.0 million. The Company paid VGS an up-front fee of 1.5 %. Interest was payable at 14.0 % per annum on a quarterly cycle (in arrears) beginning March 31, 2023. The Company had the option to pay interest of 6.0 % in-kind and 8.0 % in cash, subject to certain limitations. The VGS Promissory Note had a maturity date of May 19, 2026. As of December 31,
 P3 Health Partners Inc. | 2024 Form 10-K | 99

 2023, $ 29.1 million had been drawn on the VGS Promissory Note and the Company had recorded debt issuance costs and original issue discount of $ 0.8 million. Accrued interest was $ 4.0 million as of December 31, 2023.
 On December 12, 2024, the Company entered into an unsecured promissory note (the "VGS 1 2024 Loan") with VGS providing for funding of up to approximately $ 38.1 million, the proceeds from which were used to repay in full all principal, interest, and other amounts owing under the VGS Promissory Note. In connection with the replacement of the VGS Promissory Note with the VGS 1 2024 Loan, VGS waived the 9.0 % back-end facility fee that otherwise would have been payable under the VGS Promissory Note. The VGS 1 2024 Loan has a maturity date of June 30, 2028 and an interest rate that is lower than the VGS Promissory Note by 50 basis points, among other things. The VGS 1 2024 Loan did not include the issuance of warrants. All other terms of the VGS 1 2024 Loan are the same as the terms of the VGS Promissory Note. The Company accounted for this transaction as a troubled debt restructuring as the Company was experiencing financial difficulty, and the amended terms resulted in a concession to the Company. As the future undiscounted cash flows under the modified terms exceeded the carrying amount on the date of modification, the modification was accounted for prospectively. As of December 31, 2024, the Company had $ 38.1 million of borrowings outstanding under the VGS 1 2024 Loan and recorded debt issuance costs and original issuance discount of $ 0.7 million. Accrued interest was $ 0.3 million as of December 31, 2024.
 The Company will pay VGS a back-end fee of 9.0 % at the time the VGS 1 2024 Loan is redeemed. The VGS 1 2024 Loan 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; provided that prepayments must be in increments of at least 5% of the total loan amount. The VGS 1 2024 Loan provides for mandatory prepayments with the proceeds of certain asset sales, and the lender 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 1 2024 Loan).
 The VGS 1 2024 Loan restricts the Company's 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 connection with the issuance of the VGS 1 2024 Loan, the Company also entered into a subordination agreement, dated as of December 12, 2024 (the "VGS 1 2024 Subordination Agreement") with VGS which subordinates VGS's right of payment under the VGS 1 2024 Loan to the right of payment and security interests of the lenders under the Term Loan Facility. Under the terms of the VGS 1 2024 Subordination Agreement, the Company is effectively required to pay all interest under the VGS 1 2024 Loan in-kind.
 VGS 2 Promissory Note
 On March 22, 2024, P3 LLC entered into a related party financing transaction (see Note 19 "Related Parties") with VBC Growth SPV 2, LLC ("VGS 2"), consisting of the issuance of an unsecured promissory note (the "VGS 2 Promissory Note") to VGS 2 and a subordination agreement ("VGS 2 Subordination Agreement"), pursuant to which VGS 2 agreed to subordinate its right of payment under the VGS 2 Promissory Note to the right of payment and security interests of the lenders under the Term Loan Facility. The VGS 2 Promissory Note provided for funding of up to $ 25.0 million. The Company paid VGS 2 an up-front fee of 1.5 % of the aggregate principal amount of the loan in-kind. As of December 31, 2024, $ 25.4 million had been drawn on the VGS 2 Promissory Note and the Company had recorded debt issuance costs and original issue discount of $ 0.5 million.
 The VGS 2 Promissory Note matures on September 30, 2027. Interest is payable at 17.5 % per annum on a quarterly cycle (in arrears) beginning June 30, 2024. The Company may elect to pay interest 8.0 % in cash and 9.5 % in-kind, but if the terms of the VGS 2 Subordination Agreement do not permit the Company to pay interest in cash, interest will be paid entirely in-kind. Accrued interest was $ 3.6 million as of December 31, 2024.
 The Company will pay VGS 2 a back-end fee of 9.0 % at the time the VGS 2 Promissory Note is redeemed. The VGS 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; provided that prepayments must be in increments of at least $ 1.25 million.
 The VGS 2 Promissory Note restricts the Company'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 the certain default provisions in the agreement, or in the event a mandatory prepayment event occurs.
 P3 Health Partners Inc. | 2024 Form 10-K | 100

 The VGS 2 Promissory Note provides for mandatory prepayments with the proceeds of certain asset sales, and VGS 2 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 2 Promissory Note).
 In connection with the sale of the Florida Assets, on November 30, 2024, the VGS Promissory Note and VGS 2 Promissory Note were amended to permit the Permitted Florida Disposition and provide that the Company was not obligated to use the proceeds of the Permitted Florida Disposition to prepay the loans under the VGS Promissory Note and the VGS 2 Promissory Note.
 VGS 3 Promissory Note
 On December 12, 2024, P3 LLC entered into a related party financing transaction (see Note 19 "Related Parties") with VBC Growth SPV 3, LLC ("VGS 3"), consisting of the issuance of an unsecured promissory note (the "VGS 3 Promissory Note") to VGS 3; warrant agreement, pursuant to which the Company issued warrants to purchase 71.4 million shares of Class A common stock at an exercise price of $ 0.21 per share to VGS 3 (see Note 12 "Warrants"); and a subordination agreement (the "VGS 3 Subordination Agreement"), pursuant to which VGS 3 agreed to subordinate its right of payment under the VGS 3 Promissory Note to the right of payment and security interests of the lenders under the Term Loan Facility. The VGS 3 Promissory Note provides for funding of up to $ 25.0 million. The Company paid VGS 3 an up-front fee of 1.5 % of the aggregate principal amount of the loan in-kind. As of December 31, 2024, $ 25.4 million had been drawn on the VGS 3 Promissory Note and the Company had recorded debt issuance costs, comprising the fair value of the warrants issued to VGS 3 and other costs incurred related to this financing, and original issue discount of $ 12.8 million.
 The VGS 3 Promissory Note matures on June 30, 2028. Interest is payable at 19.5 % per annum on a quarterly cycle (in arrears) beginning June 30, 2025. The Company may elect to pay either interest 8.0 % in cash or 11.5 % in-kind, but if the terms of the VGS 3 Subordination Agreement do not permit the Company to pay interest in cash, interest will be paid entirely in-kind. Accrued interest was $ 0.1 million as of December 31, 2024.
 The Company will pay VGS 3 a back-end fee at the time the VGS 3 Promissory Note is redeemed as follows: (i) if paid after January 31, 2025 and on or before April 30, 2025, 4.5 %; (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 %. The VGS 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; provided that prepayments must be in increments of at least $ 1.25 million.
 The VGS 3 Promissory Note restricts the Company'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 the certain default provisions in the agreement, or in the event a mandatory prepayment event occurs.
 The VGS 3 Promissory Note provides for mandatory prepayments with the proceeds of certain asset sales, and VGS 3 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 3 Promissory Note).
 As of December 31, 2024, long-term debt maturities are as follows (in thousands):

 2025
 $

 2026
 15,000

 2027
 25,375

 2028
 63,432

 168,807

 Less: unamortized debt issuance costs and original issue discount
 ( 13,983)

 $
 154,824

 Note 11: Income Taxes
 As a result of the Business Combinations, substantially all the Company's assets and operations are held and conducted by P3 LLC and its subsidiaries, and the Company's only assets are equity interests in P3 LLC. P3 LLC is treated as a partnership for U.S. federal and most applicable state and local income tax jurisdictions. As a partnership, P3 LLC is generally not subject to taxes, other than entity level state income taxes. Any taxable income or loss generated by P3 LLC
 P3 Health Partners Inc. | 2024 Form 10-K | 101

 is passed through to and included within the taxable income or loss of its members in accordance with the terms of the P3 LLC Amended & Restated Limited Liability Agreement dated as of the Closing Date ("P3 LLC A&R LLC Agreement"). Prior to the Business Combinations, the income and losses of P3 LLC were passed through to its members and nontaxable to P3 LLC.
 The Company is taxed as a corporation and pays corporate federal, state, and local taxes on income allocated to it from P3 LLC based on the Company's economic interest held in P3 LLC. While the Company consolidates P3 LLC for financial purposes as a VIE, the Company will not be taxed on the earnings attributed to the non-controlling interests. As a result, the income tax burden on the earnings taxed on the non-controlling interests is not reported by the Company in its consolidated financial statements.
 The components of loss before income taxes were as follows:

 2024
 2023

 Domestic
 $
 ( 305,991)
 $
 ( 183,731)

 Foreign
 —
 —

 Total
 $
 ( 305,991)
 $
 ( 183,731)

 The components of income tax expense were as follows:

 2024
 2023

 Current income taxes:

 Federal
 $
 1,217
 $

 State
 4,260
 2,525

 Total current income taxes
 5,477
 2,695

 Deferred income taxes:

 Federal
 ( 835)
 —

 State
 ( 255)
 —

 Total deferred income taxes
 ( 1,090)
 —

 Total income tax expense
 $
 4,387
 $
 2,695

 A reconciliation of the statutory federal income tax to the Company's provision for income taxes is as follows:

 2024
 2023

 Tax at federal statutory rate
 $
 ( 64,258)
 $
 ( 38,584)

 Non-controlling interest and nontaxable income
 36,984
 24,486

 Change in valuation allowance
 29,929
 29,781

 Investment in P3 LLC
 ( 796)
 ( 20,420)

 Return to provision
 2,006
 4,134

 Deferred tax adjustments
 ( 21)
 1,754

 Other reconciling items
 1,544

 Total
 $
 4,387
 $
 2,695

 Effective tax rate
 ( 1.4)
 %
 ( 1.5)
 %

 P3 Health Partners Inc. | 2024 Form 10-K | 102

 The Company's tax rate is affected primarily by the recognition of a valuation allowance and the portion of income and expense allocated to the non-controlling interest.
 Deferred Income Taxes
 Deferred income taxes result from differences in the recognition of amounts for tax and financial reporting purposes, as well as operating loss and tax credit carryforwards. Significant components of the Company's deferred income tax assets and liabilities are as follows:

 2024
 2023

 Deferred tax assets:

 Investment in P3 LLC
 $
 32,438
 $
 19,709

 Net operating loss carryforwards
 33,087
 21,525

 Accrued liabilities

 Goodwill and identifiable intangible assets
 1,712
 1,923

 Section 163j interest limitation
 5,104
 3,031

 Other deferred tax assets

 Total deferred tax assets
 72,981
 47,041

 Less: valuation allowance
 ( 71,457)
 ( 46,370)

 Net deferred tax assets
 1,524

 Deferred tax liabilities:

 Operating lease, right-of-use assets
 ( 410)
 ( 338)

 Other deferred tax liabilities
 ( 24)
 ( 333)

 Total deferred tax liabilities
 ( 434)
 ( 671)

 Net deferred tax asset
 $
 1,090
 $
 —

 The Company recognizes deferred tax assets to the extent it believes that these assets are more likely than not to be realized. The realization of tax benefits of net deferred tax assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable. Based on the available evidence as of December 31, 2024, the Company believes that it is more likely than not that the tax benefits of the U.S. losses incurred will not be realized. Accordingly, the Company has recorded a valuation allowance against the tax benefits of the U.S. losses incurred. The Company intends to maintain the valuation allowance on the U.S. net deferred tax assets until sufficient positive evidence exists to support a reversal of, or decrease in, the valuation allowance.
 As of December 31, 2024, the Company has recognized a net deferred tax liability of $ 1.1 million in connection with its subsidiary, Medcore HP ("MHP"). Because MHP does not file a consolidated corporate income tax return with the Company, the deferred tax assets of MHP are separately assessed for realizability. Based on the weight of all available evidence as of December 31, 2024, the Company believes that it is more likely than not that the tax benefits of the deferred tax assets of MHP will be realized.
 As of December 31, 2024, the Company has recognized a net deferred tax asset of $ 2.0 million in connection with certain of the Network VIEs. Because the Network VIEs do not file a consolidated corporate income tax return with the Company, the deferred tax assets are separately assessed for realizability. Based on the weight of all available evidence as of December 31, 2024, including cumulative losses in recent years, the Company believes that it is more likely than not that the tax benefits of the deferred tax assets of certain of the Network VIEs will not be realized. Accordingly, the Company has recorded a valuation allowance against the tax benefits of the related deferred tax assets.
 As of December 31, 2024, the Company has U.S. federal income tax net operating loss carryforwards of $ 88.4 million available to offset future taxable income, all of which will be carried forward indefinitely, but utilization is limited to 80% of taxable income in any given year. The Company also has state net operating loss carryforwards of $ 36.1 million, of which $ 1.5 million will expire in 2033, $ 4.5 million will expire in 2034, $ 7.6 million will expire in 2035, $ 5.5 million will expire in 2039, $ 4.5 million will expire in 2043, and $ 12.5 million will be carried forward indefinitely.
 P3 Health Partners Inc. | 2024 Form 10-K | 103

 The federal and state net operating loss carryforwards may be subject to limitations under Section 382 and Section 383 of the Internal Revenue Code of 1986 (the "Code") and similar provisions under state law. The Tax Reform Act of 1986 contains provisions that limit the federal net operating loss carryforwards that may be used in any given year in the event of special occurrences, including significant ownership changes. The Company has completed a Section 382 analysis covering the period January 1, 2018 through September 30, 2023. The Section 382 analysis tested the Company's stock for each occurrence of stock issuance during the covered period. Through the analysis period, ownership changes were identified resulting in annual limitations to tax attributes; however, due to the indefinite carryforward of U.S. federal income tax net operating losses, no such carryforwards have been derecognized.
 Uncertain Tax Positions
 The Company is subject to examination for tax years beginning with the year ended December 31, 2020. The Company is not currently under any U.S. federal or state income tax audits for any tax year.
 A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

 2024
 2023

 Balance at January 1
 $
 —
 $
 —

 Additions based on tax positions related to the current year
 4,285
 —

 Balance at December 31
 $
 4,285
 $
 —

 As of December 31, 2024, there are $ 4.3 million unrecognized tax benefits related to state tax filing positions that if recognized would affect the annual effective tax rate. Events that could impact the liability include expiration of the statute of limitations or settlement with the state tax authority. Over the next 12 months, the Company does not expect a significant increase or decrease in the unrecognized tax benefits recorded at December 31, 2024.
 The Company recorded interest and penalties of $ 1.6 million related to uncertain tax positions within the income tax provision on the consolidated statement of comprehensive loss during the year ended December 31, 2024. As of December 31, 2024, accrued interest and penalties related to uncertain tax positions of $ 1.6 million were recorded within other long-term liabilities on the consolidated balance sheet. No such amounts were recorded during the year ended or as of December 31, 2023.
 Tax Receivable Agreement
 In connection with the Business Combinations, the Company entered into a TRA that provides for the payment by the Company of 85 % of the amount of any tax benefits that are realized, or in some cases are deemed to realize, as a result of (i) increases in the Company's share of the tax basis in the net assets of P3 LLC resulting from any redemptions or exchanges of P3 LLC, (ii) tax basis increases attributable to payments made under the TRA, and (iii) deductions attributable to imputed interest pursuant to the TRA. The Company expects to benefit from the remaining 15 % of any tax benefits that are realized.
 Pursuant to the Company's election under Section 754 of the Code, the Company expects to obtain an increase in its share of the tax basis in the net assets of P3 LLC when Common Units are redeemed or exchanged. The Company intends to treat any redemptions and exchanges of Common Units as direct purchases of the units for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that the Company would otherwise pay in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent the tax basis is allocated to those capital assets.
 The estimation of liability under the TRA is, by its nature, imprecise and subject to significant assumptions regarding a number of factors, including the timing and amount of taxable income generated by the Company each year, as well as the tax rate then applicable, among other factors. Actual tax benefits realized by the Company may differ from tax benefits calculated under the TRA as a result of the use of certain assumptions in the TRA, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits.
 The payment obligation under the TRA is an obligation of the Company and not of P3 LLC. The payments that the Company will be required to make will generally reduce the amount of the overall cash flow that might have otherwise
 P3 Health Partners Inc. | 2024 Form 10-K | 104

 been available, but the Company expects the cash tax savings realized from the utilization of the related tax benefits will exceed the amount of any required payments.
 As of December 31, 2024 and 2023, the TRA liability is estimated to be $ 11.5 million and $ 11.0 million, respectively; however, due to the full valuation allowance recorded by the Company, which results in no tax benefits that are to be realized related to the amortization of the step-up, the Company determined that payments to TRA holders are not probable and no TRA liability has been recorded as of December 31, 2024 and 2023. As non-controlling interest holders exercise their right to exchange their Common Units, a TRA liability may be recorded based on 85 % of the estimated future tax benefits that the Company may realize as a result of increases in its tax basis of P3 LLC. 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 a share of the Company's Class A common stock at the time of the relevant redemption or exchange.

 Note 12: Warrants
 As of December 31, 2024 and 2023, there were an aggregate of 246.5 million and 81.9 million warrants outstanding, respectively, which include the 2021 Public Warrants, 2021 Private Placement Warrants, VGS Warrants, VGS 3 Warrants, March 2023 Warrants, May 2024 Common Warrants, and May 2024 Pre-Funded Warrants (each as defined below). No warrants were exercised during the years ended December 31, 2024 and 2023.
 Liability-classified
 Public Offering and Private Placement
 The 2021 Public Warrants and 2021 Private Placement Warrants entitle the holders to purchase an aggregate of 10.8 million shares of Class A common stock at a price of $ 11.50 per share. The 2021 Public Warrants will expire five years after the completion of the Business Combinations. The Company has the right to redeem the 2021 Public Warrants when the price per share of Class A common stock equals or exceeds $ 18.00 for 20 days within a 30-day trading period. The 2021 Private Placement Warrants are identical to the 2021 Public Warrants, except that the 2021 Private Placement Warrants are subject to certain transfer restrictions, are not redeemable by the Company if they are held by sponsors, and are exercisable on a cashless basis.
 May 2024 Common Warrants
 In connection with the May 2024 Private Placement (see Note 14 "Capitalization"), the Company issued warrants to purchase an aggregate of 67.4 million shares of Class A common stock at a price of $ 0.5020 per share (the "May 2024 Common Warrants"). Pursuant to the warrant agreements, the May 2024 Common Warrants and the right to purchase securities upon the exercise of the May 2024 Warrants will terminate upon the earliest to occur of the following: (a) May 22, 2031; and (b) the consummation of (i) a sale, conveyance, disposal, or encumbrance of all or substantially all of the Company's property or business or the Company's merger into or consolidation with any other corporation (other than a wholly owned subsidiary corporation) or (ii) any other transaction or series of related transactions in which more than 50% of the voting power of which the Company is disposed and the proceeds thereof are paid to the then-existing stockholders of the Company. The May 2024 Common Warrants were recorded as liability-classified financial instruments for an initial amount of $ 31.3 million.
 The key Level 3 inputs into the option pricing model related to the May 2024 Warrants at inception were as follows:

 Volatility
 95.0
 %

 4.5
 %

 Exercise price
 $
 0.50

 7.0 years

 The 2021 Public Warrants, 2021 Private Placement Warrants, and May 2024 Warrants are recorded as liabilities on the consolidated balance sheets with a balance of $ 10.3 million and $ 1.1 million as of December 31, 2024 and 2023, respectively.
 P3 Health Partners Inc. | 2024 Form 10-K | 105

 Equity-classified
 VGS Warrants
 In connection with the VGS Promissory Note issued in December 2022 (see Note 10 "Debt"), the Company and VGS entered into a warrant agreement (the "VGS Warrant Agreement") pursuant to which the Company issued warrants to purchase 0.4 million shares of Class A common stock of the Company at an exercise price of $ 4.26 per share to VGS (the "VGS Warrants"). The number of shares of common stock for which the VGS Warrants is exercisable and the exercise price may be adjusted upon any event involving subdivisions, combinations, distributions, recapitalizations, and similar transactions. Pursuant to the VGS Warrant Agreement, the warrants and the right to purchase securities upon the exercise of the warrants will terminate upon the earliest to occur of the following: (a) December 13, 2027; and (b) the consummation of (i) a sale, conveyance, consolidation with any other corporation (other than a wholly owned subsidiary corporation) or (ii) any other transaction or series of related transactions in which more than 50 % of the voting power of which the Company or P3 LLC is disposed.
 VGS 3 Warrants
 In connection with the VGS 3 Promissory Note issued in December 2024 (see Note 10 "Debt"), the Company and VGS 3 entered into a warrant agreement (the "VGS 3 Warrant Agreement") pursuant to which the Company issued warrants to purchase 71.4 million shares of Class A common stock of the Company at an exercise price of $ 0.21 per share to VGS 3 (the "VGS 3 Warrants"). The number of shares of common stock for which the VGS 3 Warrants is exercisable and the exercise price may be adjusted upon any event involving subdivisions, combinations, distributions, recapitalizations, and similar transactions. Pursuant to the VGS 3 Warrant Agreement, the warrants and the right to purchase securities upon the exercise of the warrants will terminate upon the earliest to occur of the following: (a) December 12, 2031; and (b) the consummation of (i) a sale, conveyance, consolidation with any other corporation (other than a wholly owned subsidiary corporation) or (ii) any other transaction or series of related transactions in which more than 50 % of the voting power of which the Company or P3 LLC is disposed. The Company recorded the fair value of the VGS 3 Warrants of $ 12.1 million as an increase to additional paid in capital during the year ended December 31, 2024.
 The key Level 3 inputs into the option pricing model related to the VGS 3 Warrants were as follows:

 Volatility
 91.6
 %

 4.2
 %

 Exercise price
 $
 0.21

 6.8 years

 May 2024 Pre-Funded Warrants
 In connection with the May 2024 Private Placement (see Note 14 "Capitalization"), the Company issued pre-funded warrants to purchase an aggregate of 25.8 million shares of Class A common stock at a price of $ 0.0001 per share (the "May 2024 Pre-Funded Warrants"). Pursuant to the warrant agreements, the May 2024 Pre-Funded Warrants and the right to purchase securities upon the exercise of the May 2024 Pre-Funded Warrants will terminate upon the consummation of (i) a sale, conveyance, disposal, or encumbrance of all or substantially all of the Company's property or business or the Company's merger into or consolidation with any other corporation (other than a wholly owned subsidiary corporation) or (ii) any other transaction or series of related transactions in which more than 50% of the voting power of which the Company is disposed and the proceeds thereof are paid to the then-existing stockholders of the Company. The May 2024 Pre-Funded Warrants were recorded as equity-classified financial instruments totaling $ 6.6 million.
 March 2023 Warrants
 In connection with the March 2023 Private Placement (see Note 14 "Capitalization"), the Company issued warrants to purchase an aggregate of 59.9 million shares of Class A common stock at a price of $ 1.13 per share (the "March 2023 Common Warrants"), and pre-funded warrants to purchase an aggregate of 10.8 million shares of Class A common stock at a price of $ 0.0001 per share (the "March 2023 Pre-Funded Warrants" and, together with the March 2023 Common Warrants, the "March 2023 Warrants"). Pursuant to the warrant agreements, the March 2023 Warrants and the right to purchase securities upon the exercise of the March 2023 Warrants will terminate upon the earliest to occur of the following: (a) April 5, 2028, with respect to the March 2023 Common Warrants only; and (b) the consummation of (i) a
 P3 Health Partners Inc. | 2024 Form 10-K | 106

 sale, conveyance, disposal, or encumbrance of all or substantially all of the Company's property or business or the Company's merger into or consolidation with any other corporation (other than a wholly owned subsidiary corporation) or (ii) any other transaction or series of related transactions in which more than 50 % of the voting power of which the Company is disposed and the proceeds thereof are paid to the then-existing stockholders of the Company.

 Note 13: Commitments and Contingencies
 The Company is a party to various claims, legal and regulatory proceedings, lawsuits, and administrative actions arising in the ordinary course of business. The Company carries general and professional liability insurance coverage to mitigate the Company's risk of potential loss in such cases. The Company believes that disposition of these matters will not have a material adverse effect on the Company's consolidated financial position, net loss or cash flows.
 In June 2024, we received a CID from the DOJ pursuant to the False Claims Act in the course of the government's investigation concerning our arrangements with insurance agents and brokers. The CID requests documentation and information relating to the marketing of our broker programs and our arrangements with, and remuneration paid to, MA brokers, agents and agencies, as well as our arrangements with third parties relating to these programs. We are cooperating with the investigation and providing the requested information. No assurance can be given as to the timing or outcome of the government's investigation.
 Uncertainties
 The healthcare industry is subject to numerous laws and regulations of Federal, state, and local governments. These laws and regulations include, but are not limited to, matters of licensure, accreditation, government healthcare program participation requirements, reimbursement for patient services, and Medicare / Medicaid Fraud, Waste and Abuse Prevention. Recently, government activity has increased with respect to investigations and allegations concerning possible violations of Fraud, Waste and Abuse statutes and regulations by healthcare providers. Violations of these laws and regulations could result in expulsion from government healthcare programs together with imposition of significant fines and penalties as well as significant repayment for patient services billed.
 Management believes the Company is compliant with Fraud, Waste and Abuse regulations as well as other applicable government laws. While no regulatory inquiries have been made, compliance with such laws and regulations is subject to government review and interpretation, as well as other regulatory actions which might be unknown at this time.
 Healthcare reform legislation at both the Federal and state levels continues to evolve. Changes continue to impact existing and future laws and rules. Such changes may impact the manner in which the Company conducts business, restrict the Company's revenue growth in certain eligibility categories, slow down revenue growth rates for certain eligibility categories, increase certain medical, administrative and capital costs, and expose the Company to increased risk of loss or further liabilities. As a result, the Company's consolidated financial position could be impacted by such changes.
 Leases
 The Company leases real estate in the form of corporate office space and operating facilities. The Company's real estate leases have noncancelable terms expiring in 2025 to 2033, certain of which have one to two renewal options of five to 10 years.
 Operating lease right-of-use assets of $ 12.9 million and $ 15.3 million were included within other long-term assets on the Company's consolidated balance sheets as of December 31, 2024 and 2023, respectively.
 Operating lease costs are included within operating expenses on the consolidated statements of operations and were $ 4.6 million and $ 4.5 million for the years ended December 31, 2024 and 2023, respectively.
 Lease terms and discount rates consisted of the following as of:

 2024
 2023

 Weighted average remaining lease term (years)
 4.8
 5.8

 Weighted average discount rate
 12.4
 %
 11.4
 %

 P3 Health Partners Inc. | 2024 Form 10-K | 107

 Maturities of operating lease liabilities as of December 31, 2024 are as follows (in thousands):

 Year Ending December 31,

 2025
 $
 3,996

 2026
 3,565

 2027
 3,297

 2028
 3,144

 2029
 2,817

 Thereafter
 2,793

 Total undiscounted future cash flows
 19,612

 Less: interest
 ( 5,781)

 Present value of operating lease liabilities
 $
 13,831

 The current portions of operating right-of-use liabilities of $ 2.5 million and $ 2.7 million are included in accrued expenses and other current liabilities in the Company's consolidated balance sheets as of December 31, 2024 and 2023, respectively.
 Supplemental cash flows and other information related to leases are as follows:

 2024
 2023

 Operating cash flows paid for operating leases
 $
 4,551
 $
 4,204

 Note 14: Capitalization
 As of December 31, 2024, under the Company's amended and restated certificate of incorporation dated August 20, 2020, the Company is authorized to issue: (i) 800 million shares of Class A common stock with a par value of $ 0.0001 per share, (ii) 205 million shares of Class V common stock with a par value of $ 0.0001 per share, and (iii) 10 million shares of preferred stock with a par value of $ 0.0001 per share, of which no shares were issued or outstanding as of December 31, 2024 and 2023. Holders of shares of Class A common stock and Class V common stock are each entitled to one vote on all matters to be voted upon by stockholders. The declaration, amount, and payment of any future dividends on shares of Class A common stock will be at the discretion of the Company's Board of Directors and will depend upon many factors, including the Company's results of operations, financial condition, capital requirements, restrictions in its debt agreements, and other factors that the Company's Board of Directors deems relevant. Holders of shares of Class A common stock are entitled to receive such dividends declared by the Company's Board of Directors. Holders of shares of Class V common stock are not entitled to participate in any such dividends declared by the Company's Board of Directors. The Company's Board of Directors has not declared any cash dividends during the years ended December 31, 2024 or 2023.
 May 2024 Private Placement
 On May 24, 2024, pursuant to a Securities Purchase Agreement (the "May 2024 Purchase Agreement"), dated May 22, 2024 with the purchasers named therein (the "May 2024 Purchasers"), which included certain affiliated entities of Chicago Pacific Founders GP, L.P., a Delaware limited partnership ("CPF GP"), and institutional investors, the Company issued approximately 67.4 million units at a price of approximately $ 0.6270 per unit. Each unit consists of one share of Class A common stock and a warrant to purchase one share of Class A common stock at an exercise price of $ 0.5020. 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, the Company sold (i) an aggregate of 41.6 million shares of its Class A common stock, (ii) warrants to purchase an aggregate of 67.4 million shares of Class A common stock, and (iii) warrants to purchase an aggregate of 25.8 million shares of Class A common stock for aggregate proceeds of $ 39.8 million, net of $ 2.4 million in offering costs (collectively, the "May 2024 Private Placement").
 P3 Health Partners Inc. | 2024 Form 10-K | 108

 Registration Rights Agreement
 On May 24, 2024, in connection with the May 2024 Private Placement, the Company entered into a Registration Rights Agreement (the "May 2024 Registration Rights Agreement") with the May 2024 Purchasers. Pursuant to the May 2024 Registration Rights Agreement, the Company agreed to prepare and file a registration statement with the SEC for purposes of registering the resale of the shares and shares of common stock issuable upon exercise of the warrants, which was filed with the SEC on June 18, 2024 and declared effective by the SEC on June 27, 2024. The May 2024 Registration Rights Agreement also contains certain shelf takedown and piggyback rights.
 The Company has also agreed, among other things, to indemnify the May 2024 Purchasers, their officers, directors, members, employees and agents, successors and assigns under the registration statement from certain liabilities and to pay all fees and expenses incident to the Company's obligations under the May 2024 Registration Rights Agreement.
 Amended and Restated Letter Agreement with CPF
 On May 24, 2024, in connection with entry into the Purchase Agreement, the Company entered into an amended and restated letter agreement (the "Amended and Restated Letter Agreement") with CPF GP, and Chicago Pacific Founders GP III, L.P., a Delaware limited partnership ("CPF GP III," and together with CPF GP, "CPF") (on behalf of the funds of which CPF GP 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")). The Amended and Restated Letter Agreement provides that for as long as the CPF Parties own 40 % of the Company's outstanding common stock, (i) CPF will be entitled to designate one additional independent member of the Company's board of directors, and (ii) CPF will be entitled to certain information rights and protective provisions. As of the date of the issuance of these financial statements, CPF has not exercised its right to designate a director under the terms of the Amended and Restated Letter Agreement. The CPF Parties also agreed to extend a standstill restriction that limits the ownership of the CPF Parties to 49.99 % of the Company's Class A common stock and Class V common stock from the date of the closing of the May 2024 Private Placement to July 31, 2025.
 Shelf Registration
 On November 9, 2023, the Company filed a shelf Registration Statement on Form S-3 with a capacity of $ 250 million (the "Shelf Registration"), which was declared effective by the SEC on November 20, 2023, and entered into an Open Market Sales Agreement ("Sales Agreement") pursuant to which the Company may issue and sell, from time to time, through the sales agent, shares of the Company's Class A common stock, par value $ 0.0001 per share, with an aggregate value of up to $ 75 million. The sales agent will make commercially reasonable efforts, following the Company's instructions, to sell shares over time, adhering to specified limits. Sales will be conducted through at-the-market offerings as defined by Rule 415(a)(4) under the Securities Act of 1933, as amended. The aggregate value of shares of Class A common stock that may be offered, issued, and sold under the Sales Agreement is included in the aggregate value of securities that may be offered, issued, and sold by the Company under the Shelf Registration. Upon termination of the Sales Agreement, any unused portion will be available for sale in other offerings pursuant to the Shelf Registration.
 March 2023 Private Placement
 On April 6, 2023, pursuant to a Securities Purchase Agreement (the "March 2023 Purchase Agreement"), dated March 30, 2023 with the purchasers named therein (the "March 2023 Purchasers"), which included certain affiliated entities of CPF GP, and the Company's Chief Medical Officer and member of the Company's board of directors, the Company 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 consists 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, the Company sold (i) an aggregate of 69.2 million shares of its 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 $ 86.6 million, net of $ 2.9 million in offering costs (collectively, the "March 2023 Private Placement").
 P3 Health Partners Inc. | 2024 Form 10-K | 109

 Registration Rights Agreement
 On April 6, 2023, in connection with the March 2023 Purchase Agreement, the Company entered into a Registration Rights Agreement (the "April 2023 Registration Rights Agreement") with the Purchasers. Pursuant to the April 2023 Registration Rights Agreement, the Company agreed to prepare a registration statement for purposes of registering the resale of the shares and shares of common stock issuable upon exercise of the warrants, which was filed with the SEC on May 2, 2023 and declared effective by the SEC on June 14, 2023. The Registration Rights Agreement also contains certain shelf takedown and piggyback rights.
 The Company has also agreed, among other things, to indemnify the March 2023 Purchasers, their officers, directors, members, employees and agents, successors and assigns under the registration statement from certain liabilities and to pay all fees and expenses incident to the Company's obligations under the April 2023 Registration Rights Agreement.
 Letter Agreement with CPF
 On April 6, 2023, in connection with the March 2023 Purchase Agreement, the Company entered into a letter agreement (the "Letter Agreement") with the CPF Parties. The Letter Agreement provides, pursuant to certain stipulations, that CPF will be entitled to designate one additional independent member of the Company's board of directors and that CPF will be entitled to certain information rights and protective provisions. As of the date of the issuance of these consolidated financial statements, CPF has not exercised its right to designate a director under the terms of the Letter Agreement. CPF Parties also agreed to a standstill restriction from the date of the closing of the March 2023 Private Placement to June 30, 2024 that limited the ownership of the CPF Parties to 49.99 % of the Company's Class A common stock and Class V common stock.

 Note 15: Equity-Based Compensation
 Common Unit Awards
 In connection with the closing of the Business Combinations, unvested incentive unit awards granted under the then-current equity plan were converted into Common Units, which were paired with an equal number of shares of the Company's Class V common stock, and remained subject to the original vesting conditions. If a forfeiture of unvested Common Units occurred, the associated shares of Class V common stock were also forfeited.
 During the year ended December 31, 2023, there were no Common Unit awards granted and the total fair value of Common Unit awards vested was $ 0.5 million.
 As of December 31, 2023, all Common Unit awards had vested. The Common Unit awards vested ratably over a period between one month and two years, so long as the grantee stayed employed.
 2021 Incentive Award Plan
 In connection with the Business Combinations, the Company's Board of Directors adopted, and its stockholders approved, the 2021 Incentive Award Plan (the "2021 Plan"), effective on its adoption date, in order to facilitate the grant of cash and equity incentives to employees, consultants, and directors of the Company and certain affiliates. The 2021 Plan provides that the initial aggregate number of shares reserved and available for issuance is 14.6 million plus an increase each January 1, beginning on January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (i) 1 % of the aggregate number of shares of Class A common stock and Class V common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of Class A common stock as is determined by the Company's Board of Directors. Since January 1, 2022, the aggregate number of shares of Class A common stock reserved and available for issuance under the 2021 Plan has increased by a total of 8.0 million pursuant to the automatic annual increase provision under the 2021 Plan. As of December 31, 2024, the number of shares of Class A common stock reserved and available for issuance under the 2021 Plan was 7.0 million.
 The 2021 Plan allows for the grant of (i) stock options, including incentive stock options, (ii) stock appreciation rights, (iii) restricted stock awards ("RSAs"), (iv) restricted stock unit ("RSU") awards, or (v) other stock or cash based awards as may be determined by the plan's administrator from time to time. The term of each option award shall be no more than 10 years from the date of grant. The Company's policy for issuing shares upon stock option exercise is to issue new shares of Class A common stock. The P3 LLC A&R LLC Agreement states that P3 LLC will maintain at all times a
 P3 Health Partners Inc. | 2024 Form 10-K | 110

 one -to- one ratio between the number of Common Units owned by the Company and the number of outstanding shares of Class A common stock, including, but not limited to, those issued as result of stock option exercises and settlement of RSU awards granted under the 2021 Plan.
 The 2021 Plan also permits the grant of dividend equivalent units that entitle the holder to an amount based on the value of the dividends per share paid on the Company's Class A common stock, which are accumulated on RSUs during the vesting period.
 The following table summarizes time-based stock option activity under the 2021 Plan for the year ended December 31, 2024:

Stock Options
Exercise
Price
Remaining
Contractual
Life
(in years)
 Aggregate
Intrinsic
Value

 Outstanding as of December 31, 2023
 4,087
 $
 4.24
 8.77
 $

 4,686
 $
 0.53

 Cancelled
 ( 249)
 $
 3.12

 Forfeited
 ( 1,957)
 $
 1.86

 Outstanding as of December 31, 2024
 6,567
 $
 2.35
 8.57
 $
 —

 Fully vested and expected to vest as of December 31, 2024
 6,567
 $
 2.35
 8.57
 $
 —

 Exercisable as of December 31, 2024
 1,887
 $
 5.55
 7.07
 $
 —

 The following additional disclosures are provided for time-based stock options:

 2024
 2023

 $
 0.34
 $
 0.81

 The following table summarizes performance-based stock option activity under the 2021 Plan for the year ended December 31, 2024:

Stock Options
Exercise
Price
Remaining
Contractual
Life
(in years)
 Aggregate
Intrinsic
Value

 Outstanding as of December 31, 2023
 1,650
 $
 4.60
 9.00
 $

 —
 $
 —

 Forfeited
 ( 900)
 $
 4.30

 Outstanding as of December 31, 2024
 $
 4.95
 7.95
 $
 —

 Fully vested and expected to vest as of December 31, 2024
 $
 4.95
 7.95
 $
 —

 Exercisable as of December 31, 2024
 —
 $
 —
 —
 $
 —

 The following additional disclosures are provided for performance-based stock options:

 2024
 2023

 $
 —
 $
 0.77

 P3 Health Partners Inc. | 2024 Form 10-K | 111

 The vesting criteria for 0.1 million performance-based stock option awards has not yet been achieved; therefore, no expense has been recorded.
 There were no stock options exercised during the years ended December 31, 2024 and 2023.
 The weighted average assumptions used in estimating the grant date fair value of stock options are listed in the table below:

 2024
 2023

 Expected volatility
 64.7
 %
 60.2
 %

 4.2
 %
 3.8
 %

 6.2 years
 6.6 years

 Dividend rate
 0.0
 %
 0.0
 %

 Time-based stock options vest ratably over a period between two and five years, so long as the optionee continues to provide services to the Company. As of December 31, 2024, there was $ 1.9 million and $ 2.1 million of unrecognized equity-based compensation cost related to unvested time-based and performance-based stock options under the 2021 Plan, respectively, which is expected to be recognized over a weighted-average period of 2.0 years and 8.0 years, respectively.
 The following table summarizes RSU activity under the 2021 Plan for the year ended December 31, 2024:

Grant Date
Fair Value
Units

 Non-vested as of December 31, 2023
 $
 1.60
 4,835

 $
 0.59
 1,210

 Vested
 $
 1.96
 ( 1,695)

 Forfeited
 $
 1.99
 ( 663)

 Non-vested as of December 31, 2024
 $
 0.95
 3,687

 The following additional disclosures are provided for RSU awards:

 2024
 2023

 $
 0.59
 $
 1.80

 Total fair value of shares vested (in thousands)
 $
 2,680
 $
 5,826

 In August 2023, the Company granted an aggregate of 2.5 million RSUs pursuant to the 2021 Plan to the Company's then Chief Executive Officer, Dr. Abdou, and Chief Medical Officer, Dr. Bacchus (collectively, the "Executives"), in full satisfaction of the "Second Bonus" earned by each Executive during the year ended December 31, 2022 pursuant to the terms of the transaction bonus agreements, dated May 2022, entered into between each Executive and the Company and P3 Health Group Management, LLC in connection with the consummation of the Business Combinations (together, the "RSU Transaction Bonuses"). The RSUs were fully vested at the time of grant. The fair value of the RSUs granted was $ 5.6 million, $ 0.6 million of which was recorded in equity-based compensation during the year ended December 31, 2023. The RSUs were settled in Class A common stock and the Company timely paid $ 0.7 million in withholding taxes attributable to the vesting of the RSUs to the Internal Revenue Service on behalf of Dr. Abdou on January 10, 2024. Dr. Abdou repaid such sum to the Company on May 2, 2024.
 RSUs typically vest ratably over a period between two and four years, so long as the grantee continues to provide services to the Company. As of December 31, 2024, total equity-based compensation cost related to all unvested RSUs under the 2021 Plan was $ 3.5 million, which is expected to be recognized over a weighted average period of 2.1 years.
 P3 Health Partners Inc. | 2024 Form 10-K | 112

 2024 Employee Inducement Incentive Award Plan
 On May 7, 2024, the Board of Directors adopted the Company's 2024 Employment Inducement Incentive Award Plan (the "2024 Plan"), effective on its adoption date. The 2024 Plan provides for the grant of non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents and other stock or cash-based awards to prospective employees, and contains terms and conditions intended to comply with the inducement award exception under the Nasdaq Listing Rules. The Board of Directors has reserved 16.5 million shares of the Class A common stock for issuance pursuant to awards granted under the 2024 Plan. In accordance with Nasdaq Stock Market Rule 5635(c)(4), awards under the 2024 Plan may only be made to individuals not previously employed by the Company or individuals being rehired following a bona fide period of interruption of employment, as an inducement material to such individuals' entering into employment with the Company. As of December 31, 2024, there were no shares of Class A common stock reserved and available for issuance under the 2024 Plan.
 The term of each option award shall be no more than 10 years from the date of grant. The Company's policy for issuing shares upon stock option exercise is to issue new shares of Class A common stock. The P3 LLC A&R LLC Agreement states that P3 LLC will maintain at all times a one-to-one ratio between the number of Common Units owned by the Company and the number of outstanding shares of Class A common stock, including, but not limited to, those issued as result of stock option exercises and settlement of RSU awards granted under the 2024 Plan.
 The following table summarizes stock option activity under the 2024 Plan for the year ended December 31, 2024:

Stock Options
Exercise
Price
Remaining
Contractual
Life
(in years)
 Aggregate
Intrinsic
Value

 Outstanding as of December 31, 2023
 —
 $
 —
 —
 $
 —

 12,100
 $
 0.73

 Outstanding as of December 31, 2024
 12,100
 $
 0.73
 9.36
 $
 —

 Fully vested and expected to vest as of December 31, 2024
 12,100
 $
 0.73
 9.36
 $
 —

 Exercisable as of December 31, 2024
 —
 $
 —
 —
 $
 —

 The following additional disclosures are provided for stock options:

 $
 0.47

 The weighted average assumptions used in estimating the grant date fair value of stock options are listed in the table below:

 Expected volatility
 66.5
 %

 4.5
 %

 6.3 years

 Dividend rate
 0.0
 %

 As of December 31, 2024, there was $ 4.8 million of unrecognized equity-based compensation cost related to unvested stock options under the 2024 Plan, which is expected to be recognized over a weighted-average period of 3.4 years.
 P3 Health Partners Inc. | 2024 Form 10-K | 113

 The following table summarizes RSU activity under the 2024 Plan for the year ended December 31, 2024:

Grant Date
Fair Value
Units

 Non-vested as of December 31, 2023
 $
 —
 —

 $
 0.73
 4,400

 Non-vested as of December 31, 2024
 $
 0.73
 4,400

 The following additional disclosures are provided for RSU awards:

 $
 0.73

 The RSU award will be subject to both service-vesting and performance-vesting conditions, such that both conditions must be satisfied for the RSUs to vest. The applicable vesting date will be the later of the date on which the applicable "service-vesting condition" is satisfied and the date on which the "performance-vesting condition" is satisfied. The service-vesting condition will be satisfied (i) with respect to 25% of the underlying shares on the first anniversary of the effective date of employment, and (ii) as to the remaining 75% of the underlying shares, in substantially equal installments on each quarterly anniversary over the three-year period thereafter. The performance-vesting condition will be satisfied upon the closing of the first underwritten offering and sale of the Company's Class A common stock following the effective date of employment, subject to continued employment through such date. As of December 31, 2024, total equity-based compensation cost related to all unvested RSUs under the 2024 Plan was $ 2.7 million, which is expected to be recognized over a weighted average period of 3.4 years.
 Compensation Expense
 Equity-based compensation recorded within corporate, general and administrative expense on the consolidated statements of operations was $ 5.8 million and $ 6.0 million during the years ended December 31, 2024 and 2023, respectively.
 The Company did not recognize any tax benefits related to equity-based compensation for the years ended December 31, 2024 and 2023.
 P3 Health Partners Inc. | 2024 Form 10-K | 114

 Note 16: Net Loss per Share
 The following table provides the computation of basic and diluted net loss per share:

 2024
 2023

 (in thousands, except per share data)

 Numerator–basic:

 Net loss attributable to Class A common stockholders–basic
 $
 $

 Numerator–diluted:

 Net loss attributable to Class A common stockholders–basic
 $
 $

 Effective of dilutive securities:

 Shares of Class V common stock
 —
 ( 128,653)

 Liability-classified warrants
 ( 23,078)
 —

 Net loss attributable to Class A common stockholders–diluted
 $
 ( 158,927)
 $
 ( 186,426)

 Denominator–basic:

 Weighted average Class A common shares outstanding–basic
 145,175
 94,889

 Net loss per share attributable to Class A common stockholders–basic
 $
 ( 0.94)
 $
 ( 0.61)

 Denominator–diluted:

 Weighted average Class A common shares outstanding–basic
 145,175
 94,889

 Weighted average effect of dilutive securities:

 Shares of Class V common stock
 —
 199,701

 Liability-classified warrants
 1,823
 —

 Weighted average shares outstanding–diluted
 146,998
 294,590

 Net loss per share attributable to Class A common stockholders–diluted
 $
 ( 1.08)
 $
 ( 0.63)

 Shares of Class V common stock do not share in the earnings or losses of P3 and are therefore not participating securities. As such, separate presentation of basic and diluted net income per share for Class V common stock under the two-class method is not required. The following table presents potentially dilutive securities excluded from the computation of diluted net loss per share for the periods presented because their effect would have been anti-dilutive.

 2024
 2023

 Stock warrants (1)

 179,125
 81,938

 Stock options (1)

 19,517
 5,837

 Restricted stock units (1)

 8,087
 4,835

 Shares of Class V common stock (2)

 195,957
 —

 Total
 402,686
 92,610

 __________________
 (1)Represents the number of instruments outstanding at the end of the period. Application of the treasury stock method would reduce this amount if they had a dilutive effect and were included in the computation of diluted net loss per share
 (2)Shares of Class V common stock at the end of the period are considered potentially dilutive shares of Class A common stock under application of the if-converted method in 2023 and antidilutive in 2024.

 Note 17: Redeemable Non-controlling Interest
 Non-controlling interest represents the portion of P3 LLC that the Company controls and consolidates but does not own (i.e., the Common Units held directly by equity holders other than the Company).
 P3 Health Partners Inc. | 2024 Form 10-K | 115

 The ownership of the Common Units is summarized as follows:

 December 31, 2023

 Units (in thousands)
 Ownership %
 Units (in thousands)
 Ownership %

 P3 Health Partners Inc.'s ownership of Common Units

 162,870
 45.4
 %
 116,588
 37.2
 %

 Non-controlling interest holders' ownership of Common Units

 195,957
 54.6
 196,569
 62.8

 Total Common Units
 358,827
 100.0
 %
 313,157
 100.0
 %

 Common Units participate in net income or loss allocations and distributions and entitle their holder to the right, subject to the terms set forth in the limited liability company agreement, to require the Company to redeem all or a portion of the Common Units held by such participant, together with a corresponding number of shares of Class V common stock, in exchange for Class A common stock or at the Company's option, and subject to certain limitations, in cash. As the non-controlling interest holders had an approximate 55 % and 63 % voting interest in the Company through their Class V common stock as of December 31, 2024 and 2023, respectively, and appointed most of the members to the Board of Directors, the ability to elect cash settlement upon redemption is outside of the control of the Company. As a result, the Common Units held by outside shareholders have been classified as redeemable non-controlling interest and presented as temporary equity in the Company's consolidated balance sheets.
 The redeemable non-controlling interest was initially measured at its fair value on the Closing Date. Net income or loss is attributed to the redeemable non-controlling interest during each reporting period based on a daily weighted average ownership percentage. In subsequent periods, the redeemable non-controlling interest is measured at its fair value (i.e., based on the five-day volume-weighted average price of a share of Class A common stock) at the end of each reporting period, with the remeasurement amount being no less than the initial value, as adjusted for the redeemable non-controlling interest's share of net income or loss and ownership changes. The offset of any fair value adjustment is recorded to additional paid in capital, with no impact to net income or loss. As of December 31, 2024, there was a $ 20.6 million remeasurement adjustment recorded as the fair value of redeemable non-controlling interest (i.e., based on the five-day volume-weighted average price of a share of Class A common stock) was less than the carrying value. As of December 31, 2023, there was $ 20.6 million remeasurement adjustment recorded as the fair value of redeemable non-controlling interest was greater than the carrying value.
 During the years ended December 31, 2024 and 2023, there were an aggregate of 0.6 million shares and 5.4 million shares, respectively, of Class A common stock issued to P3 LLC members in connection with such members' redemptions of an equivalent number of Common Units and corresponding cancellation and retirement of an equivalent number of Class V common stock. Such retired shares of Class V common stock may not be reissued. The redemptions occurred pursuant to the terms of the P3 LLC Amended and Restated Limited Liability Agreement (the "P3 LLC A&R LLC Agreement").
 As the P3 LLC A&R LLC Agreement states that P3 LLC will maintain at all times a one -to- one ratio between the number of Common Units owned by the Company and the number of outstanding shares of Class A common stock, there were an aggregate of 41.6 million and 69.2 million Common Units issued to the Company resulting from the May 2024 Private Placement and March 2023 Private Placement during the years ended December 31, 2024 and 2023, respectively.

 Note 18: Segment Reporting
 The Company's operations are organized under one reportable segment. The Chief Executive Officer, who is the Company's chief operating decision maker, is responsible for the general supervision, direction, and control of the business and officers of the Company and manages the Company's operations, reviews financial information on a consolidated basis, and uses net income or loss to assess performance and allocate resources. Decisions regarding resource allocation and assessment of profitability are based on the Company's responsibility to deliver value-based care coordination and health management to its patient population. The Company's segment assets relate to health plan receivables.
 The Company's segment generates revenue by providing population health management services on an at-risk basis to insurance plans offering medical coverage to Medicare beneficiaries under Medicare Advantage programs. For the periods presented, all of the Company's revenue was earned in the United States. Likewise, all the Company's long-lived assets were located in the United States.
 P3 Health Partners Inc. | 2024 Form 10-K | 116

 The following tables present information about the Company's reportable segment:

 2024
 2023

 Operating revenue
 $
 $

 Less:

 Medical claims expense
 ( 1,398,143)
 ( 1,117,258)

 Other medical expense(1)

 ( 161,229)
 ( 117,482)

 ( 86,058)
 ( 86,675)

 Other segment items(2)

 ( 140,532)
 ( 114,069)

 ( 22,173)
 ( 15,985)

 Interest income
 1,689
 1,363

 Loss before income taxes
 ( 305,991)
 ( 183,731)

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

 $
 ( 310,378)
 $
 ( 186,426)

 2024
 2023

 Segment assets
 $
 121,266
 $
 118,497

 Other assets(3)

 662,154
 742,470

 Total assets
 $
 783,420
 $
 860,967

 __________________
 (1)Other medical expense includes subcapitation expense, affiliate provider compensation expense, and other non-claim costs.
 (2)Other segment items include premium deficiency reserve, corporate, general and administrative expense, sales and marketing expense, impairment of asset held for sale, and miscellaneous income and expense.
 (3)Other assets consists of cash, restricted cash, prepaid expenses and other current assets, other receivables, assets held for sale, and other long-term assets not allocated to the reportable segment.

 Note 19: Related Parties
 Atrio Health Plans
 CPF, a principal equity holder of the Company, has an equity investment in Atrio Health Plans ("Atrio"). The Company has a full-risk capitation agreement in place with Atrio whereby the Company is delegated to perform services on behalf of Atrio's members assigned to the Company. These delegated services include but are not limited to provider
 P3 Health Partners Inc. | 2024 Form 10-K | 117

 network credentialing, patient authorizations, and medical management (care management, quality management and utilization management). The following tables summarize the Company's transactions with Atrio:

 2024
 2023

 $
 303,606
 $
 192,577

 $
 4,340
 $
 2,737

 Medical expense
 $
 345,566
 $
 197,641

 2024
 2023

 Health plan receivable
 $
 23,872
 $
 5,290

 Claims payable
 $
 61,090
 $
 41,348

 Health plan settlements payable
 $
 1,386
 $
 4,176

 Deferred revenue (1)

 $
 —
 $
 12,700

 __________________
 (1)Amount is included within accrued expenses and other current liabilities on the Company's consolidated balance sheet.
 VGS Promissory Notes
 As described in Note 10, in December 2023, the Company issued an unsecured promissory note to VGS, an entity managed by CPF and whose equity holders consist of three members of the Company's Board of Directors and the Company's Chief Medical Officer, among others. In March 2024 and December 2024, the Company issued unsecured promissory notes to VGS 2 and VGS 3, respectively, both of which are also managed by CPF. The following tables summarize the Company's transactions with VGS, VGS 2, and VGS 3:

 2024
 2023

 $
 9,025
 $
 3,905

 2024
 2023

 Long-term debt, net
 $
 74,823
 $
 28,319

 Accrued interest
 $
 3,992
 $
 4,010

 Accrued expenses
 $
 $

 Florida Asset Sale
 As described in Note 6, on November 30, 2024, the Company sold its Florida Assets to Buyers which are affiliated with the Company's principal stockholder.

 Note 20: Variable Interest Entities
 P3 LLC has Management Services Agreements ("MSAs") and deficit funding agreements with the Network VIEs. The MSAs provide that the P3 LLC will furnish administrative personnel, office supplies and equipment, general business services, contract negotiation, and billing and collection services to the Network VIEs. Fees for these services are the excess of the Network VIEs' revenue over expenses. Per the deficit funding agreements, P3 LLC is obligated to advance funds, as needed, to support the Network VIE's working capital needs to the extent operating expenses exceed gross revenue. These advances accrue interest at a rate of prime plus 2 %. Net advances made to the Network VIEs and accrued
 P3 Health Partners Inc. | 2024 Form 10-K | 118

 interest on those advances are presented within due to consolidated entities of P3 in the table below. Additionally, P3 LLC entered into stock transfer restriction agreements with the practice shareholders of the Network VIEs, which, by way of a call option, unequivocally permit P3 LLC to appoint successor physicians if a practice shareholder vacates their ownership position. Accordingly, P3 LLC identifies itself as the primary beneficiary of the Network VIEs. Practice shareholders, who are employees of P3 LLC, retain equity ownership in the Network VIEs, which represents nominal non-controlling interests; however, the non-controlling interests do not participate in the profit or loss of the Network VIEs.
 P3 LLC, directly or indirectly via its wholly owned subsidiaries, may not use or access any net assets of the Network VIEs to settle its obligations or the obligations of its wholly owned subsidiaries. Additionally, the creditors of the Network VIEs do not have recourse to the net assets of P3 LLC.
 Since P3 LLC represents substantially all the assets and liabilities of the Company, the following tables provide a summary of the assets, liabilities, and operating performance of only VIEs held at the P3 LLC level.

 2024
 2023

 ASSETS

 Cash
 $
 5,216
 $
 6,491

 Clinic fees, insurance and other receivable
 2,440

 Health plan receivable
 —

 Prepaid expenses and other current assets
 1,261

 1,116

 TOTAL ASSETS
 $
 9,256
 $
 8,637

 LIABILITIES AND MEMBERS' DEFICIT

 Accounts payable
 $
 4,521
 $
 5,073

 Accrued expenses and other current liabilities

 Accrued payroll
 3,795
 3,141

 Claims payable
 5,004
 3,973

 Other long-term liabilities

 Due to consolidated entities of P3
 40,264
 44,200

 TOTAL LIABILITIES
 55,180
 57,848

 MEMBERS' DEFICIT
 ( 45,924)
 ( 49,211)

 TOTAL LIABILITIES AND MEMBERS' DEFICIT
 $
 9,256
 $
 8,637

 2024
 2023

 Revenue
 $
 36,187
 $
 39,551

 Expense
 39,520
 45,999

 $
 ( 3,333)
 $
 ( 6,448)

 Note 21: Subsequent Events
 VGS 4 Promissory Note
 On February 13, 2025, P3 LLC entered into a related party financing transaction with VBC Growth SPV 4, LLC ("VGS 4"), consisting of the issuance by P3 LLC of (i) an unsecured promissory note (the "VGS 4 Promissory Note") to VGS 4 and (ii) a warrant to purchase 71.4 million shares of the Company's Class A stock at an exercise price of $ 0.21 per share to VGS 4. The VGS 4 Promissory Note provides for funding of up to $ 30.0 million, available for draw by P3 LLC in two tranches, as follows: (i) a first tranche of $ 15.0 million which was drawn on February 18, 2025, and (ii) a second
 P3 Health Partners Inc. | 2024 Form 10-K | 119

 tranche of $ 15.0 million which was drawn on March 14, 2025. The VGS 4 Promissory Note matures on August 13, 2028. Interest is payable at 19.5 % per annum on a quarterly cycle (in arrears) beginning March 31, 2025. P3 LLC may elect to pay either (1) 8.0 % cash interest and 11.5 % PIK interest, or (2) 19.5 % PIK interest, provided that payment of cash interest will be permitted only to the extent permitted by the Term Loan Agreement and the VGS 4 Subordination Agreement (defined below), and if not so permitted, such interest shall accrue as PIK interest. 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 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. P3 LLC paid VGS 4 an up-front fee of 1.5 % of the aggregate principal amount of the loan in-kind. In addition, P3 LLC will pay VGS 4 a back-end fee at the time the VGS 4 Promissory Note is redeemed as follows: (i) if paid prior to March 31, 2025, 2.25 %; (ii) if paid after March 31, 2025 and on or before June 30, 2025, 4.50 %; (iii) if paid after June 30, 2025 and on or before September 30, 2025, 6.75 % and (iv) if paid after December 31, 2025, 9.00 %.
 VGS 4 Subordination Agreement
 In connection with the transactions described above, P3 LLC entered into a subordination agreement, dated as of February 13, 2025 (the "VGS 4 Subordination Agreement"), by and among the Company, CRG Servicing LLC ("CRG"), as administrative agent under the Term Loan Facility and VGS 4. Pursuant to the VGS 4 Subordination Agreement, VGS 4 agreed to subordinate its 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. The terms of the VGS 4 Subordination Agreement will effectively require P3 LLC to pay all interest under the VGS 4 Promissory Note in-kind.
 Amendment to Term Loan Agreement and Consent
 In connection with the transactions described above, P3 LLC entered into that certain (1) Seventh Amendment to Term Loan Agreement (the "Term Loan Amendment"), dated as of the February 13, 2025, 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 and (2) Consent (the "Consent"), dated as of the February 13, 2025, by and between P3 LLC, as borrower, and VGS, as holder. The Term Loan Amendment and Consent collectively permit the issuance of the VGS 4 Promissory Note and the entry into the VGS 4 Subordination Agreement.
 P3 Health Partners Inc. | 2024 Form 10-K | 120

 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
 None.

 Item 9A. Controls and Procedures
 Limitations on effectiveness of controls and procedures
 In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
 Evaluation of disclosure controls and procedures
 Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this Form 10-K, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2024, the Company's disclosure control and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosures.
 Management's annual report on internal control over financial reporting
 Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with GAAP.
 Our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in "Internal Control – Integrated Framework (2013)" issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, our management concluded that our internal control over financial reporting was effective as of December 31, 2024.
 This Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. As we are a non-accelerated filer, management's report was not subject to attestation by our independent registered public accounting firm pursuant to applicable SEC rules.
 Description of material weaknesses as of December 31, 2023

 As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, management previously identified material weaknesses in our internal control over financial reporting, which are summarized below. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses were previously reported:
 • We did not have adequate policies and procedures or sufficient qualified resources with appropriate technical knowledge to maintain effective internal controls over the accounting related to significant accounts and related financial statement disclosures;
 • We did not design and implement a sufficient risk assessment process to identify and assess risks impacting internal control over financial reporting;
 • We had ineffective evaluation and determination as to whether the components of internal control were present and functioning;
 P3 Health Partners Inc. | 2024 Form 10-K | 121

 • We did not design and implement effective information technology general controls in the areas of user access related to certain information technology systems that support our financial reporting process;
 • We did not maintain sufficient segregation of duties over the performance of control activities for financial close and reporting, including over the review of account reconciliations and journal entries;
 • We did not design and maintain effective management review controls at a sufficient level of precision over all financial statement areas; and
 • We did not design and maintain effective controls at a sufficient level of precision over the estimation of claims expense and payable including controls over the review of historical claims data, including the completeness and accuracy of data used to determine the financial statement amounts.
 Remediation activities
 In response to these material weaknesses, with oversight from the Audit Committee of the Board of Directors, we implemented a comprehensive remediation plan that addressed the material weaknesses identified above. Specifically, we have:
 • enhanced the design of existing controls, implemented newly designed controls, and performed walkthroughs of the newly designed processes to evaluate the appropriateness of their design and implementation with the assistance of an external advisor engaged by us;
 • formalized enhanced policies, procedures, and documentation for significant areas of accounting, including each area where a material weakness was identified;
 • designed and implemented a risk assessment and internal controls monitoring program including hiring personnel with extensive experience in SOX compliance;
 • implemented a revised information technology general controls framework that is customized to our application landscape and information risks inherent in the financial reporting process;
 • implemented user access reviews across all in-scope information technology applications, standardized and improved the change management process to mitigate execution risks, and provided training to control owners; and
 • designed a segregation of duties risk framework in order to establish a technology-enabled process to identify and evaluate user roles to mitigate segregation of duties conflicts.
 Management's remediation plan has resulted in an improved internal control environment with enhanced internal controls being implemented for a sufficient length of time for management to conclude, through testing the design and operating effectiveness of these controls, that the material weaknesses in internal controls over financial reporting were remediated as of December 31, 2024.
 Changes in internal control over financial reporting
 Other than the actions taken to remediate our material weaknesses, described above, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 Item 9B. Other Information.
 (a) None.
 P3 Health Partners Inc. | 2024 Form 10-K | 122

 (b) Insider Trading Arrangements and Policies.
 During the quarter ended December 31, 2024, no director or "officer" (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
 None.
 P3 Health Partners Inc. | 2024 Form 10-K | 123

 Item 10. Directors, Executive Officers and Corporate Governance.
 The following table provides information regarding our executive officers and members of our board of directors (ages as of the date of this Form 10-K):

 Name
 Age
 Position at P3

 Principal Employment

 Executive Officers

 Aric Coffman, M.D.

 Chief Executive Officer and President

 Same

 Amir Bacchus, M.D.
 Chief Medical Officer, Director and Co-Founder
 Same

 Leif Pedersen

 Chief Financial Officer
 Same

 Non-Employee Directors

 Mark Thierer
 Chairman of the Board
 Managing Partner of AssetBlue Investment Group, an investment firm

 Sherif W. Abdou, M.D.

 Director and Co-Founder

 Former Chief Executive Officer, Director and Co-Founder of P3

 Greg Wasson
 Co-President and Founder of Wasson Enterprise, a family-based investment office

 Lawrence B. Leisure
 Co-Founder and a Managing Partner of Chicago Pacific Founders, a private equity fund focused on healthcare services, technology and healthcare real estate

 Mary Tolan
 Co-Founder and a Managing Partner of Chicago Pacific Founders, a private equity fund focused on healthcare services, technology and healthcare real estate

 Greg Kazarian
 Operating Partner of Chicago Pacific Founders, a private equity fund focused on healthcare services, technology and healthcare real estate

 Thomas E. Price, M.D.
 Director of: Triumph Orthopedics, LLC; HealthWiseFirst, LLC; Association Health Plans of America, LLC; Transformation Care Network; Botanicals Sciences, LLC; and Capital Ministries (non-profit)

 Jeffrey G. Park
 President of Waltz Health, a digital health company

 The remaining information required by this item will be included in our definitive Proxy Statement for the 2025 Annual Meeting of Stockholders and such information is incorporated herein by reference.

 Item 11. Executive Compensation.
 The information required by this item will be included in our definitive Proxy Statement for the 2025 Annual Meeting of Stockholders and such information is incorporated herein by reference.
 P3 Health Partners Inc. | 2024 Form 10-K | 124

 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
 Securities Authorized for Issuance Under Equity Compensation Plans (as of December 31, 2024)

 Plan category:

 Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights
 Weighted Average Exercise Price of Outstanding Options, Warrants, and Rights (3)

 Number of Securities Available for Future Issuance Under Equity Compensation Plans (excludes securities reflected in first column) (4)

 Equity compensation plans approved by security holders (1)

 7,416,743
 $
 2.64
 6,996,501

 Equity compensation plans not approved by security holders (2)

 12,100,000
 $
 0.73
 —

 Total

 19,516,743
 6,996,501

 (1)Consists of the 2021 Plan.
 (2)Consists of the P3 Health Partners Inc. 2024 Employment Inducement Incentive Award Plan (the "2024 Plan").
 (3)The weighted average exercise price does not include restricted stock units granted under each of the 2021 Plan and the 2024 Plan.
 (4)The number of shares of common stock reserved for issuance under the 2021 Plan will increase on the first day of each calendar year from January 1, 2022 and ending on and including January 1, 2031, by a number equal to the lesser of (i) 1% of the aggregate number of shares of Class A common stock and Class V common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of Shares (as defined in the 2021 Plan) as is determined by the board of directors.
 2024 Plan
 On May 7, 2024, the Board of Directors adopted the 2024 Plan, effective on its adoption date. Pursuant to applicable stock exchange rules, stockholder approval of the 2024 Plan is not required as a condition of the effectiveness of the 2024 Plan. A description of the principal features of the 2024 Plan is set forth below.
 Eligibility and Administration
 Only certain prospective employees of the Company and its affiliates are eligible to participate in the 2024 Plan. The 2024 Plan is administered by our Compensation and Nominating Committee. The plan administrator will have the authority to make all determinations and interpretations under, prescribe all forms for use with, and adopt rules for the administration of the 2024 Plan, subject to its express terms and conditions. The plan administrator will also set the terms and conditions of all awards under the 2024 Plan, including any vesting and vesting acceleration conditions. Awards must be approved by the Compensation and Nominating Committee or a majority of our independent directors and the authority to grant awards under the 2024 Plan may not be delegated.
 Limitation on Awards and Shares Available
 The maximum number of shares of Class A common stock authorized for issuance under the 2024 Plan is 16.5 million shares (the "2024 Plan Share Limit").
 If an award under the 2024 Plan expires, lapses, or is terminated, exchanged for or settled for cash, surrendered, repurchased, canceled without having been fully exercised/settled or forfeited, any shares subject to such award may, to the extent of such forfeiture, expiration or cash settlement, be used again for new grants under the 2024 Plan. Further, shares delivered to us to satisfy the applicable exercise or purchase price of an award under the 2024 Plan and/or to satisfy any applicable tax withholding obligations (including shares retained by us from the award under the 2024 Plan being exercised or purchased, and/or creating the tax obligation) will become or again be available for award grants under the 2024 Plan. The payment of dividend equivalents in cash in conjunction with any awards under the 2024 Plan will not reduce the shares available for grant under the 2024 Plan. However, the following shares may not be used again for grant under the 2024 Plan: (i) shares subject to stock appreciation rights, or SARs, that are not issued in connection with the stock settlement of the SAR on exercise, and (ii) shares purchased on the open market with the cash proceeds from the exercise of options.
 P3 Health Partners Inc. | 2024 Form 10-K | 125

 Awards
 The 2024 Plan provides for the grant of non-qualified stock options, restricted stock, dividend equivalents, RSUs, performance shares, other incentive awards, SARs, and cash awards. Certain awards under the 2024 Plan may provide for a deferral of compensation, subject to Section 409A of the Code, which may impose additional requirements on the terms and conditions of such awards. All awards under the 2024 Plan will be set forth in award agreements, which will detail all terms and conditions of the awards, including any applicable vesting and payment terms and post-termination exercise limitations. Awards other than cash awards generally will be settled in shares of our Class A common stock, but the plan administrator may provide for cash settlement of any award. A brief description of each award type follows.
 • Stock Options and SARs. Stock options provide for the purchase of shares of our Class A common stock in the future at an exercise price set on the grant date. SARs entitle their holder, upon exercise, to receive from us an amount equal to the appreciation of the shares subject to the award between the grant date and the exercise date. The exercise price of a stock option or SAR may not be less than 100% of the fair market value of the underlying share on the grant date. The term of a stock option or SAR may not be longer than 10 years.
 • Restricted Stock. Restricted stock is an award of nontransferable shares of our Class A common stock that are subject to certain vesting conditions and other restrictions. Dividends with respect to restricted stock will only be paid to the extent that the vesting conditions of the underlying award are satisfied.
 • RSUs. RSUs are contractual promises to deliver shares of our Class A common stock in the future, which may also remain forfeitable unless and until specified conditions are met and may be accompanied by the right to receive the equivalent value of dividends paid on shares of our Class A common stock prior to the delivery of the underlying shares (i.e., dividend equivalent rights). The plan administrator may provide that the delivery of the shares underlying RSUs will be deferred on a mandatory basis or at the election of the participant. The terms and conditions applicable to RSUs will be determined by the plan administrator, subject to the conditions and limitations contained in the 2024 Plan.
 • Other Stock or Cash Based Awards. Other stock or cash based awards are awards of cash, fully vested shares of our Class A common stock and other awards valued wholly or partially by referring to, or otherwise based on, shares of our Class A common stock. Other stock or cash-based awards may be granted to participants and may also be available as a payment form in the settlement of other awards, as standalone payments and as payment in lieu of compensation to which a participant is otherwise entitled.
 • Dividend Equivalents. Dividend equivalents represent the right to receive the equivalent value of dividends paid on shares of our Class A common stock and may be granted alone or in tandem with awards other than stock options or SARs. Dividend equivalents are credited as of the dividend record dates during the period between the date an award is granted and the date such award vests, is exercised, is distributed or expires, as determined by the plan administrator. Dividend equivalents will only be paid to the extent that the vesting conditions of the underlying award are satisfied.
 Performance Awards
 Performance awards include any of the foregoing awards that are granted subject to vesting and/or payment based on the attainment of specified performance goals or other criteria the plan administrator may determine, which may or may not be objectively determinable. Performance criteria upon which performance goals are established by the plan administrator may include but are not limited to: (1) net earnings (either before or after one or more of the following: (a) interest, (b) taxes, (c) depreciation, (d) amortization and (e) non-cash equity-based compensation expense); (2) gross or net sales or revenue; (3) net income (either before or after taxes); (4) adjusted net income; (5) operating earnings or profit; (6) cash flow (including, but not limited to, operating cash flow, and free cash flow); (7) return on assets; (8) return on capital; (9) return on stockholders' equity; (10) total stockholder return; (11) return on sales; (12) gross or net profit or operating margin; (13) costs; (14) funds from operations; (15) expenses; (16) working capital; (17) earnings per share; (18) adjusted earnings per share; (19) price per share of Class A common stock; (20) regulatory achievements or compliance; (21)
 P3 Health Partners Inc. | 2024 Form 10-K | 126

 implementation or completion of critical projects; (22) market share; (23) economic value; (24) debt levels or reduction; (25) sales-related goals; (26) comparisons with other stock market indices; (27) operating efficiency; (28) employee satisfaction; (29) financing and other capital raising transactions; (30) recruiting and maintaining personnel; and (31) year-end cash, any of which may be measured either in absolute terms for us or any operating unit of our Company or as compared to any incremental increase or decrease or as compared to results of a peer group, or to market performance indicators or indices.
 No Repricing
 The 2024 Plan prohibits the repricing or other exchange of underwater stock options and stock appreciation rights for new awards or cash without prior stockholder approval.
 Certain Transactions
 The plan administrator has broad discretion to take action under the 2024 Plan, as well as make adjustments to the terms and conditions of existing and future awards, to prevent the dilution or enlargement of intended benefits, and facilitate necessary or desirable changes in the event of certain transactions and events affecting our Class A common stock, such as stock dividends, stock splits, mergers, acquisitions, consolidations, and other corporate transactions. In addition, in the event of certain non-reciprocal transactions with our stockholders known as "equity restructurings," the plan administrator will make equitable adjustments to the 2024 Plan and outstanding awards. In the event of a "change in control" (as defined in the 2024 Plan), to the extent that the surviving entity declines to continue, convert, assume, or replace outstanding awards, then all awards will become fully vested and exercisable in connection with the transaction. Upon or in anticipation of a change of control, the plan administrator may cause any outstanding awards to terminate at a specified time in the future and give the participant the right to exercise such awards during a period of time determined by the plan administrator in its sole discretion. Individual award agreements may provide for additional accelerated vesting and payment provisions.
 Foreign Participants, Claw-Back Provisions, Transferability, and Participant Payments
 The plan administrator may modify award terms, establish subplans, and/or adjust other terms and conditions of awards, subject to the share limits described above, in order to facilitate grants of awards subject to the laws and/or stock exchange rules of countries outside of the United States. All awards will be subject to the provisions of any claw-back policy implemented by our Company (including the Company's Policy for the Recovery of Erroneously Awarded Compensation). With limited exceptions for estate planning, domestic relations orders, certain beneficiary designations and the laws of descent and distribution, awards under the 2024 Plan are generally non-transferable prior to vesting, and are exercisable only by the participant. With regard to tax withholding, exercise price, and purchase price obligations arising in connection with awards under the 2024 Plan, the plan administrator may, in its discretion, accept cash or check, shares of our Class A common stock that meet specified conditions, a "market sell order," or such other consideration as it deems suitable.
 Stockholder Approval; Plan Amendment and Termination
 Pursuant to applicable stock exchange rules, stockholder approval of the 2024 Plan was not required as a condition of the effectiveness of the 2024 Plan. The plan administrator may amend or terminate the 2024 Plan at any time.

 Item 13. Certain Relationships and Related Transactions, and Director Independence.
 The information required by this item will be included in our definitive Proxy Statement for the 2025 Annual Meeting of Stockholders and such information is incorporated herein by reference.

 Item 14. Principal Accountant Fees and Services.
 The information required by this item will be included in our definitive Proxy Statement for the 2025 Annual Meeting of Stockholders and such information is incorporated herein by reference.
 P3 Health Partners Inc. | 2024 Form 10-K | 127

 Item 15. Exhibit and Financial Statement Schedules.
 (a)(1) Financial Statements.

 Page

 Consolidated Balance Sheets

 Consolidated Statements of Operations

 Consolidated Statements of Stockholders' Equity and Mezzanine Equity

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 (a)(2) Financial Statement Schedules.
 Financial statement schedules are omitted because they are not applicable, not required, or because the required information is included in the consolidated financial statements or notes thereto.
 (a)(3) Exhibits.
 The following is a list of exhibits filed as part of this Form 10-K.

 Form

 2.1
 Agreement and Plan of Merger, dated as of May 25, 2021, by and between Foresight Acquisition Corp., P3 Health Group Holdings, LLC and FAC Merger Sub LLC.

 2.1
 6/1/2021

 2.2
 Transaction and Combination Agreement, dated as of May 25, 2021, by and among Foresight Acquisition Corp., the Merger Corps, the Blockers, Splitter and the Blocker Sellers.

 2.2
 6/1/2021

 2.3
 First Amendment to Merger Agreement, dated as of November 21, 2021, by and among Foresight Acquisition Corp., FAC Merger Sub LLC and P3 Health Group Holdings, LLC.

 2.1
 11/22/2021

 2.4
 Second Amendment, dated as of December 3, 2021, to the Agreement and Plan of Merger, dated as of May 25, 2021, by and among Foresight Acquisition Corp., FAC Merger Sub LLC and P3 Health Group Holdings, LLC.

 2.4

 2.5
 The First Amendment to the Transaction and Combination Agreement between Foresight Acquisition Corp., the Merger Corps, the Blockers, Splitter and the Blocker Sellers.

 2.5

 3.1
 Amended and Restated Certificate of Incorporation of the Company.

 3.1

 3.2
 Amended and Restated Bylaws of the Company.

 3.1
 3/12/2024

 4.1
 Form of Common Stock Certificate of the Company.

 S-1
 333-251978
 4.2
 1/19/2021

 4.2
 Warrant Agreement, dated February 9, 2021, between the Company and Continental Stock Transfer & Trust Company.

 4.1
 2/16/2021

 4.3
 Form of Warrant Certificate of the Company.

 4.1
 2/16/2021

 4.4
 Description of Registered Securities.

 4.4

 P3 Health Partners Inc. | 2024 Form 10-K | 128

 Form

 4.5
 Warrant Agreement, dated December 13, 2022, by and between P3 Health Partners LLC and VBC Growth SPV LLC.

 10.2
 2/13/2022

 4.6
 Form of Common Stock Purchase Warrant, dated April 6, 2023.

 4.1

 4.7
 Form of Pre-Funded Common Stock Purchase Warrant, dated April 6, 2023.

 4.2

 4.8
 Form of Common Stock Purchase Warrant, dated May 24, 2024.

 4.1

 4.9
 Form of Pre-Funded Common Stock Purchase Warrant, dated May 24, 2024.

 4.2

 4.10
 Warrant Agreement, dated December 12, 2024, by and among P3 Health Group, LLC, P3 Health Partners Inc. and VBC Growth SPV 3, LLC.

 10.2

 4.11
 Warrant Agreement, dated February 13, 2025, by and among P3 Health Group, LLC, P3 Health Partners Inc. and VBC Growth SPV 4, LLC.

 10.2
 2/18/2025

 10.1
 First Amendment to Term Loan Agreement, Termination of Management Rights Letter and Consent, dated as of December 3, 2021, by among P3 Health Group Holdings, 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.

 10.1

 10.2
 Form of Subscription Agreement.

 10.2
 6/1/2021

 10.3
 Form of Consent and Amendment to Subscription Agreement.

 10.1
 11/22/2021

 10.4
 Registration Rights and Lock-up Agreement, dated December 3, 2021, by and among the registrant, Foresight Sponsor Group, LLC, FA Co-Investment LLC and the P3 Sellers party thereto.

 10.4

 10.5
 P3 Health Group, LLC Amended and Restated Limited Liability Agreement, dated as of December 3, 2021, by and among P3 Health Group, LLC, the registrant and each of the other members party thereto.

 10.5

 10.6
 Tax Receivable Agreement, dated as of December 3, 2021, by and among P3 Health Group, LLC and the members of P3 Health Group, LLC from time to time party thereto.

 10.6

 10.7
 Form of Indemnification Agreement for directors and executive officers.

 10.7

 10.8
 Form of Indemnification Agreement for sponsor affiliated directors.

 10.8

 10.9
 Letter Agreement, dated November 27, 2022, by and between P3 Health Partners Inc. and Atul Kavthekar.

 10.2
 12/1/2022

 10.10
 P3 Health Partners Inc. 2021 Incentive Award Plan.

 10.1

 10.11
 First Amendment to the P3 Health Partners Inc. 2021 Incentive Award Plan.

 10.1

 10.12
 Form of Restricted Stock Unit Award Agreement under the P3 Health Partners Inc. 2021 Incentive Award Plan.

 10.1

 10.13
 Form of Stock Option Award Agreement under the P3 Health Partners Inc. 2021 Incentive Award Plan.

 10.1

 P3 Health Partners Inc. | 2024 Form 10-K | 129

 Form

 10.14
 Form of Joinder and Waiver Agreement.

 10.2

 10.15
 Escrow Agreement, dated as of December 3, 2021, by and among the Company, P3 Health Group Holdings, LLC, P3 Health Group, LLC, Hudson Vegas Investment SPV, LLC, Mary Tolan and Sherif Abdou, as unitholder representatives and PNC Bank, N.A.

 10.2

 10.16
 Repurchase Promissory Note between P3 Health Group Holdings, LLC and IHC Health Services, Inc., dated June 28, 2019.

 10.2

 10.17
 First Amendment to Repurchase Promissory Note between P3 Health Group Holdings, LLC and IHC Health Services, Inc., dated November 19, 2020.

 10.2

 10.18
 Second Amendment to Term Loan Agreement and First Amendment to Security Agreement, dated as of December 21, 2021, by and among P3 Health Group, LLC, as borrower, the Subsidiary Guarantors party thereto and CRG Servicing LLC, as administrative agent and collateral agent.

 10.2

 10.19

 Employment Agreement, by and among P3 Health Partners Inc., P3 Health Group Management, LLC and Dr. Sherif Abdou.

 10.1
 5/18/2022

 10.20

 Employment Agreement, by and among P3 Health Partners Inc., P3 Health Group Management, LLC and Dr. Amir Bacchus.

 10.2
 5/18/2022

 10.21

 Transaction Bonus Agreement, by and among P3 Health Partners Inc., P3 Health Group Management, LLC and Dr. Sherif Abdou.

 10.3
 5/18/2022

 10.22

 Transaction Bonus Agreement, by and among P3 Health Partners Inc., P3 Health Group Management, LLC and Dr. Amir Bacchus.

 10.4
 5/18/2022

 10.23

 Non-Employee Director Compensation Program.

 10.3

 10.24
 Unsecured Promissory Note, dated December 12, 2024, by and between P3 Health Group, LLC and VBC Growth SPV, LLC.

 10.5

 10.25
 Subordination Agreement, dated December 12, 2024, by and among P3 Health Group, LLC, CRG Servicing LLC and VBC Growth SPV, LLC.

 10.6

 10.26
 Third Amendment to Term Loan Agreement, dated as of December 13, 2022, by and among P3 Health Group, LLC, as borrower, the Subsidiary Guarantors party thereto, the Lenders party thereto and CRG Servicing LLC, as administrative agent and collateral agent.

 10.4
 12/13/2022

 10.27
 Securities Purchase Agreement, dated March 30, 2023, by and among P3 Health Partners Inc. and the Purchasers named therein.

 10.1

 10.28
 Registration Rights Agreement, dated April 6, 2023, by and among P3 Health Partners Inc. and the Purchasers named therein.

 10.2

 10.29
 Amendment No. 1 to Registration Rights Agreement and Waiver, dated November 8, 2023, by and among P3 Health Partners Inc. and certain stockholders party thereto.

 10.3

 P3 Health Partners Inc. | 2024 Form 10-K | 130

 Form

 10.30
 Letter Agreement, dated April 6, 2023, by and among P3 Health Partners Inc., Chicago Pacific Founders GP, L.P. and Chicago Pacific Founders GP III, L.P.

 10.3

 10.31

 Transaction Bonus Restricted Stock Unit Agreement by and between Sherif Abdou, M.D. and P3 Health Partners Inc., dated August 4, 2023.

 10.1
 11/8/2023

 10.32

 Transaction Bonus Restricted Stock Unit Agreement by and between Amir Bacchus, M.D. and P3 Health Partners Inc., dated August 4, 2023.

 10.2
 11/8/2023

 10.33
 Unsecured Promissory Note, dated March 22, 2024, by and between P3 Health Group, LLC and VBC Growth SPV 2, LLC.

 10.1

 10.34
 *

 First Amendment to Unsecured Promissory Note, dated November 30, 2024, by and between P3 Health Group, LLC and VBC Growth SPV 2, LLC.

 10.35
 Subordination Agreement, by and among P3 Health Group, LLC, CRG Servicing LLC and VBC Growth SPV 2, LLC.

 10.2

 10.36
 Fourth Amendment to Term Loan Agreement, by and among P3 Health Group, LLC, the subsidiary guarantors party thereto, the lenders party thereto and CRG Servicing LLC.

 10.3

 10.37
 Consent, by and between P3 Health Group, LLC and VBC Growth SPV LLC.

 10.4

 10.38
 Executive Employment Agreement, dated as of May 8, 2024, by and between P3 Health Partners Inc., P3 Health Group Management, LLC and Aric Coffman, M.D.

 10.1

 10.39

 P3 Health Partners Inc. 2024 Employment Inducement Incentive Award Plan.

 10.2

 10.40

 2024 Employment Inducement Incentive Award Plan Form of Restricted Stock Unit Agreement.

 S-8

 333-279254

 99.2

 10.41

 2024 Employment Inducement Incentive Award Plan Form of Option Agreement.

 S-8

 333-279254

 99.3

 10.42

 Stock Option Agreement under the 2024 Employment Inducement Incentive Award Plan, by and between P3 Health Partners Inc. and Aric Coffman, M.D.

 10.3

 10.43

 Restricted Stock Unit Agreement under the 2024 Employment Inducement Incentive Award Plan, by and between P3 Health Partners Inc. and Aric Coffman, M.D.

 10.4

 10.44
 Securities Purchase Agreement, dated May 22, 2024, by and among P3 Health Partners Inc. and the Purchasers named therein.

 10.1

 10.45
 Registration Rights Agreement, dated May 24, 2024, by and among P3 Health Partners Inc. and the Purchasers named therein.

 10.2

 10.46
 Amended and Restated Letter Agreement, dated May 24, 2024, by and among P3 Health Partners Inc., Chicago Pacific Founders GP, L.P. and Chicago Pacific Founders GP III, L.P.

 10.3

 10.47

 Consulting Agreement, dated as of May 8, 2024, by and between P3 Health Partners Inc., P3 Health Group Management, LLC and Sherif Abdou, M.D.

 10.5

 P3 Health Partners Inc. | 2024 Form 10-K | 131

 Form

 10.48

 Offer Letter Agreement, dated as of July 23, 2024, by and between P3 Health Partners Inc. and Leif Pedersen.

 10.1
 11/12/2024

 10.49
 Stock Option Agreement under the 2021 Incentive Award Plan, by and between P3 Health Partners Inc. and Leif Pedersen.

 10.2
 11/12/2024

 10.50

 Restricted Stock Unit Agreement under the 2021 Incentive Award Plan, by and between P3 Health Partners Inc. and Leif Pedersen.

 10.3
 11/12/2024

 10.51
 *

 Fifth Amendment to Term Loan Agreement, dated as of November 30, 2024, by and among P3 Health Group, LLC, as borrower, the Subsidiary Guarantors party thereto, the Lenders party thereto and CRG Servicing LLC, as administrative agent and collateral agent.

 10.52
 Second Amended and Restated Letter Agreement, dated December 12, 2024, by and among P3 Health Partners Inc., Chicago Pacific Founders GP, L.P. and Chicago Pacific Founders GP III, L.P.

 10.7

 10.53
 Unsecured Promissory Note, dated December 12, 2024, by and between P3 Health Group, LLC and VBC Growth SPV 3, LLC.

 10.1

 10.54
 Subordination Agreement, dated December 12, 2024, by and among P3 Health Group, LLC, CRG Servicing LLC and VBC Growth SPV 3, LLC.

 10.3

 10.55
 Sixth Amendment to Term Loan Agreement, dated as of December 12, 2024, by and among P3 Health Group, LLC, as borrower, the Subsidiary Guarantors party thereto, the Lenders party thereto and CRG Servicing LLC, as administrative agent and collateral agent.

 10.4

 10.56
 Unsecured Promissory Note, dated February 13, 2025, by and between P3 Health Group, LLC and VBC Growth SPV 4, LLC.

 10.1
 2/18/2025

 10.57
 Subordination Agreement, dated February 13, 2025, by and among P3 Health Group, LLC, CRG Servicing LLC and VBC Growth SPV 4, LLC.

 10.3
 2/18/2025

 10.58
 Seventh Amendment to Term Loan Agreement, dated as of February 13, 2025, by and among P3 Health Group, LLC, as borrower, the Subsidiary Guarantors party thereto, the Lenders party thereto and CRG Servicing LLC, as administrative agent and collateral agent.

 10.4
 2/18/2025

 *

 P3 Health Partners, Inc. Insider Trading Compliance Policy.

 21.1
 List of Subsidiaries.

 21.1

 23.1
 *
 Consent of Independent Registered Public Accounting Firm.

 31.1
 *
 Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 31.2
 *
 Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 P3 Health Partners Inc. | 2024 Form 10-K | 132

 Form

 32.1
 **
 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 32.2
 **
 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 97.1
 Policy for Recovery of Erroneously Awarded Compensation.

 97.1

 101.INS
 *

 101.SCH
 *

 101.CAL
 *

 101.DEF
 *

 101.LAB
 *

 101.PRE
 *

 *

 ____________________

 *

 Filed herewith

 **

 Furnished herewith

 Indicates management contract or compensatory plan

 Item 16. Form 10-K Summary.
 None.
 P3 Health Partners Inc. | 2024 Form 10-K | 133

 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 thereunto duly authorized.

 P3 Health Partners Inc.

 By:
 /s/ Leif Pedersen

 Name:
 Leif Pedersen

 Date: March 27, 2025

 Title:
 Chief Financial Officer

 (Principal Financial Officer and Principal Accounting Officer)

 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 Signature
 Title
 Date

 /s/ Aric Coffman, M.D.

 Chief Executive Officer

 Aric Coffman, M.D.

 (Principal Executive Officer)

 /s/ Leif Pedersen

 Chief Financial Officer

 Leif Pedersen

 (Principal Financial Officer and Principal Accounting Officer)

 /s/ Mark Thierer
 Chairman of the Board of Directors

 Mark Thierer

 /s/ Sherif W. Abdou, M.D.

 Sherif W. Abdou, M.D.

 /s/ Amir S. Bacchus, M.D.

 Chief Medical Officer and Director

 Amir S. Bacchus, M.D.

 /s/ Gregory N. Kazarian

 Gregory N. Kazarian

 /s/ Lawrence B. Leisure

 Lawrence B. Leisure

 /s/ Jeffrey G. Park

 Jeffrey G. Park

 /s/ Thomas E. Price, M.D.

 Thomas E. Price, M.D.

 /s/ Mary A. Tolan

 Mary A. Tolan

 /s/ Greg Wasson

 Greg Wasson