P3 Health Partners Inc.

Previous wording

We operate in the $1,030 billion Medicare market, which covers more than 69 million eligible lives as of April 2025. 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 Centers for Medicare and Medicaid Services (“CMS”) to provide a defined range of healthcare services that are comparable to Medicare FFS (which is also referred to as “traditional Medicare”).

Current wording

We operate in the $1,030 billion Medicare market, which covers more than 69 million eligible lives as of April 2025. Our core focus is the MA market, which makes up approximately 51% of the overall Medicare market, or nearly 35 million Medicare eligible lives in 2025. Medicare beneficiaries may enroll in an MA plan, under which payors contract with the Centers for Medicare and Medicaid Services (“CMS”) to provide a defined range of healthcare services that are comparable to Medicare FFS (which is also referred to as “traditional Medicare”).

Previous wording

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 2,800 physicians, in 24 markets (counties) across four states in over eight full years of operations as of June 30, 2025. As of June 30, 2025, our PCP network served approximately 114,100 at-risk members.

Current wording

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 2,700 physicians, in 24 markets (counties) across four states in over eight full years of operations as of September 30, 2025. As of September 30, 2025, our PCP network served approximately 116,000 at-risk members.

Previous wording

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 June 30, 2025, we experienced a 92% 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.

Current wording

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 September 30, 2025, we experienced a 93% 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.

Previous wording

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.

Current wording

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, which may increase or decrease revenue, for performance incentives or penalties based on the achievement of certain clinical quality metrics as contracted with payors. Given the prevalence of FFS arrangements, our patients often have historically not participated in a VBC model, and therefore their health conditions are poorly documented. 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.

Previous wording

Our medical expense is our largest expense category, representing 90% of our total operating expense for the six months ended June 30, 2025. 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.

Current wording

Our medical expense is our largest expense category, representing 92% of our total operating expense for the nine months ended September 30, 2025. 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.

Previous wording

(1)Other during the three and six months ended June 30, 2025 consisted of (i) interest income partially offset by (ii) severance expense in connection with reorganization of workforce and (iii) legal settlements and valuation allowance on our notes receivable. Other during the three and six months ended June 30, 2024 consisted of (i) interest income partially offset by (ii) severance and related expense in connection with our chief executive officer transition and (iii) legal settlements and valuation allowance on our notes receivable.

Current wording

(1)Other during the three and nine months ended September 30, 2025 consisted of (i) interest income partially offset by (ii) severance expense in connection with reorganization of workforce and (iii) legal settlements and valuation allowance on our notes receivable. Other during the three and nine months ended September 30, 2024 consisted of (i) interest income partially offset by (ii) severance and related expense in connection with our chief executive officer transition and (iii) legal settlements and valuation allowance on our notes receivable.

Previous wording

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 114,100 and 128,100 at-risk members as of June 30, 2025 and 2024, respectively.

Current wording

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 115,900 and 128,400 average at-risk members for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

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 2,800 and 2,900 primary care physicians as of June 30, 2025 and 2024, respectively.

Current wording

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 2,700 and 3,100 primary care physicians as of September 30, 2025 and 2024, respectively.

Previous wording

Capitated revenue was $351.7 million for the three months ended June 30, 2025, a decrease of $22.6 million, or 6%, compared to $374.3 million for the three months ended June 30, 2024. This decrease was primarily driven by a 11% decrease in the total number of at-risk members from 128,100 at June 30, 2024 to 114,100 at June 30, 2025 driven by the strategic termination of underperforming payor contracts and affiliate providers in the current year. Capitated revenue was approximately 99% of total operating revenue for each of the three months ended June 30, 2025 and 2024.

Current wording

Capitated revenue was $341.6 million for the three months ended September 30, 2025, a decrease of $16.2 million, or 5%, compared to $357.7 million for the three months ended September 30, 2024. This decrease was primarily driven by a 10% decrease in the average number of at-risk members from 128,400 for the three months ended September 30, 2024 to 115,900 for the three months ended September 30, 2025 driven by the strategic termination of underperforming payor contracts and affiliate providers in the current year. Capitated revenue was approximately 99% of total operating revenue for each of the three months ended September 30, 2025 and 2024.

Previous wording

Other patient service revenue was $4.1 million for the three months ended June 30, 2025, a decrease of $0.8 million, or 16%, compared to $4.9 million for the three months ended June 30, 2024. Other patient service revenue was approximately 1% of total operating revenue for each of the three months ended June 30, 2025 and 2024.

Current wording

Other patient service revenue was $3.7 million for the three months ended September 30, 2025, a decrease of $0.7 million, or 16%, compared to $4.4 million for the three months ended September 30, 2024. Other patient service revenue was approximately 1% of total operating revenue for each of the three months ended September 30, 2025 and 2024.

Previous wording

Medical expense was $351.4 million for the three months ended June 30, 2025, a decrease of $13.8 million, or 4%, compared to $365.2 million for the three months ended June 30, 2024. The decrease was driven primarily by a decrease in the total number of at-risk members year-over-year resulting in part from termination of two health plans.

Current wording

Medical expense was $369.8 million for the three months ended September 30, 2025, a decrease of $32.1 million, or 8%, compared to $401.9 million for the three months ended September 30, 2024. The decrease was driven primarily by a decrease in the total number of at-risk members year-over-year resulting in part from termination of two health plans.

Previous wording

Premium deficiency reserve was a benefit of $6.0 million for the three months ended June 30, 2025, an increase of $2.6 million, or 76%, compared to a benefit of $3.4 million for the three months ended June 30, 2024. The change was due to management’s assessment of the profitability of contracts, wherein increased medical expense is expected to increase our future losses.

Current wording

Premium deficiency reserve was a benefit of $23.7 million for the three months ended September 30, 2025, an increase of $41.9 million, or 231%, compared to an expense of $18.2 million for the three months ended September 30, 2024. The change was due to management’s assessment of the profitability of contracts, wherein maturation of our overall contractual arrangements are expected to reduce our future losses.

Previous wording

Corporate, general and administrative expense was $23.3 million for the three months ended June 30, 2025, a decrease of $3.3 million, or 12%, compared to $26.6 million for the three months ended June 30, 2024. The decrease was primarily driven by a decrease in salary and related expense resulting from a reduction in head count and sale of the Company’s Florida operations.

Current wording

Corporate, general and administrative expense was $22.1 million for the three months ended September 30, 2025, a decrease of $5.1 million, or 19%, compared to $27.2 million for the three months ended September 30, 2024. The decrease was primarily driven by a decrease in salary and related expense resulting from a reduction in head count and sale of the Company’s Florida operations.

Previous wording

Comparison of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024

Current wording

Comparison of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024

Previous wording

Capitated revenue was $721.2 million for the six months ended June 30, 2025, a decrease of $37.2 million, or 5%, compared to $758.4 million for the six months ended June 30, 2024. This decrease was primarily driven by an 11% decrease in the total number of at-risk members from 128,100 at June 30, 2024 to 114,100 at June 30, 2025, which was primarily due to the strategic termination of underperforming payor contracts and affiliate providers in the current year. Capitated revenue was approximately 99% of total operating revenue for each of the six months ended June 30, 2025 and 2024.

Current wording

Capitated revenue was $1.1 billion for the nine months ended September 30, 2025, a decrease of $53.4 million, or 5%, compared to $1.1 billion for the nine months ended September 30, 2024. This decrease was primarily driven by an 9% decrease in the average number of at-risk members of 115,700 for the nine months ended September 30, 2025 to 126,500 for the nine months ended September 30, 2024, which was primarily due to the strategic termination of underperforming payor contracts and affiliate providers in the current year. Capitated revenue was approximately 99% of total operating revenue for each of the nine months ended September 30, 2025 and 2024.

Previous wording

Other patient service revenue was $7.8 million for the six months ended June 30, 2025, a decrease of $1.4 million, or 16%, compared to $9.2 million for the six months ended June 30, 2024. Other patient service revenue was approximately 1% of total operating revenue for each of the six months ended June 30, 2025 and 2024.

Current wording

Other patient service revenue was $11.5 million for the nine months ended September 30, 2025, a decrease of $2.2 million, or 16%, compared to $13.6 million for the nine months ended September 30, 2024. Other patient service revenue was approximately 1% of total operating revenue for each of the nine months ended September 30, 2025 and 2024.

Previous wording

Medical expense was $723.4 million for the six months ended June 30, 2025, a decrease of $23.8 million, or 3%, compared to $747.2 million for the six months ended June 30, 2024. The decrease was driven by a decrease in the total number of at-risk members year-over-year resulting in part from termination of two health plans.

Current wording

Medical expense was $1.1 billion for the nine months ended September 30, 2025, a decrease of $56.0 million, or 5%, compared to $1.1 billion for the nine months ended September 30, 2024. The decrease was driven by a decrease in the total number of at-risk members year-over-year resulting in part from termination of two health plans.

Previous wording

Premium deficiency reserve was a benefit of $12.9 million for the six months ended June 30, 2025, an increase of $10.5 million, or 439%, compared to a benefit of $2.4 million for the six months ended June 30, 2024. The change was due to management’s assessment of the profitability of contracts, wherein increased medical expense is expected to increase our future losses.

Current wording

Premium deficiency reserve was a benefit of $36.7 million for the nine months ended September 30, 2025, an increase of $52.4 million, or 332%, compared to an expense of $15.8 million for the nine months ended September 30, 2024. The change was due to management’s assessment of the profitability of contracts, wherein maturation of our overall contractual arrangements are expected to reduce our future losses.

Previous wording

Corporate, general and administrative expense was $48.3 million for the six months ended June 30, 2025, a decrease of $5.7 million, or 11%, compared to $54.0 million for the six months ended June 30, 2024. The decrease was primarily driven by a decrease in salary and related expense resulting from a reduction in head count and sale of the Company’s Florida operations.

Current wording

Corporate, general and administrative expense was $70.4 million for the nine months ended September 30, 2025, a decrease of $10.8 million, or 13%, compared to $81.2 million for the nine months ended September 30, 2024. The decrease was primarily driven by a decrease in salary and related expense resulting from a reduction in head count and sale of the Company’s Florida operations.

Previous wording

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, and borrowings under the Term Loan Facility. We generate cash from our operations, generally from our contracts with payors. As of June 30, 2025, we had $38.6 million of unrestricted cash and cash equivalents available to fund future operations.

Current wording

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, and borrowings under the Term Loan Facility. We generate cash from our operations, generally from our contracts with payors. As of September 30, 2025, we had $37.7 million of unrestricted cash and cash equivalents available to fund future operations.

Previous wording

We have experienced losses since our inception, and net losses of $43.7 million and $87.9 million for the three and six months ended June 30, 2025, respectively. Our future capital requirements will depend on many factors, including the pace of our growth, ability to manage medical costs, the maturity of our members, and our ability to raise capital and refinance our indebtedness as it matures. We may need to raise additional capital through a combination of debt and/or equity financing and to the extent we are unsuccessful at doing so, we may need to curtail planned activities, discontinue certain operations, or sell certain assets, which could materially and adversely affect our business, financial condition, results of operations, and prospects.

Current wording

We have experienced losses since our inception, and net losses of $69.5 million and $157.4 million for the three and nine months ended September 30, 2025, respectively. Our future capital requirements will depend on many factors, including the pace of our growth, ability to manage medical costs, the maturity of our members, and our ability to raise capital and refinance our indebtedness as it matures. We may need to raise additional capital through a combination of debt and/or equity financing and to the extent we are unsuccessful at doing so, we may need to curtail planned activities, discontinue certain operations, or sell certain assets, which could materially and adversely affect our business, financial condition, results of operations, and prospects.

Previous wording

As of June 30, 2025, we were in material compliance with the covenants under our Term Loan Facility, VBC Growth SPV LLC promissory note (“VGS Promissory Note”), VBC Growth SPV 2, LLC unsecured promissory note (“VGS 2 Promissory Note”), VBC Growth SPV 3 LLC unsecured promissory note (“VGS 3 Promissory Note”), VGS 4 Promissory Note, and VGS 5 Promissory Note; 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 and unsecured promissory notes or the lenders of any future indebtedness we may incur will grant any waiver or forbearance with respect to such covenants that we may request in the future.

Current wording

As of September 30, 2025, we were in compliance with the covenants under our Term Loan Facility, VBC Growth SPV LLC promissory note (“VGS Promissory Note”), VBC Growth SPV 2, LLC unsecured promissory note (“VGS 2 Promissory Note”), VBC Growth SPV 3 LLC unsecured promissory note (“VGS 3 Promissory Note”), VGS 4 Promissory Note, and VGS 5 Promissory Note; 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 and unsecured promissory notes or the lenders of any future indebtedness we may incur will grant any waiver or forbearance with respect to such covenants that we may request in the future.

Previous wording

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. 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.

Current wording

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

Previous wording

Net cash used in operating activities was $50.1 million for the six months ended June 30, 2025, compared to net cash used in operating activities of $30.3 million for the six months ended June 30, 2024. Significant changes impacting net cash used in operating activities during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 were primarily due to changes in working capital and an increase in net loss.

Current wording

Net cash used in operating activities was $65.5 million for the nine months ended September 30, 2025, compared to net cash used in operating activities of $52.9 million for the nine months ended September 30, 2024. Significant changes impacting net cash used in operating activities during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 were primarily due to changes in working capital and an increase in net loss.

Previous wording

Net cash provided by investing activities was $0.1 million for the six months ended June 30, 2025, consisting of proceeds from the sale of the remaining Florida assets. Net cash used in investing activities was zero for the six months ended June 30, 2024.

Current wording

Net cash used in investing activities was $0.1 million for the nine months ended September 30, 2025 compared to net cash provided by investing activities of $15.0 million for the nine months ended September 30, 2024, consisting of purchase price received in advance of the sale of our Florida operations.

Previous wording

Net cash provided by financing activities was $45.3 million for the six months ended June 30, 2025, primarily consisting of proceeds from the borrowings on the VGS 4 Promissory Note, VGS 5 Promissory Note, and short-term financing agreements for the funding of certain insurance policies. Net cash provided by financing activities was $67.5 million for the six months ended June 30, 2024, consisting of proceeds from the sale of Class A common stock and warrants in May 2024 (the “May 2024 Private Placement”) with aggregate proceeds of $39.8 million, net of $2.4 million in offering costs, borrowings on the VGS 2 Promissory Note and short-term financing agreements for the funding of certain insurance policies.

Current wording

Net cash provided by financing activities was $59.9 million for the nine months ended September 30, 2025, primarily consisting of proceeds from the borrowings on the VGS 4 Promissory Note, VGS 5 Promissory Note, and short-term financing agreements for the funding of certain insurance policies. Net cash provided by financing activities was $65.1 million for the nine months ended September 30, 2024, consisting of proceeds from the sale of Class A common stock and warrants in May 2024 with aggregate proceeds of $39.8 million, net of $2.4 million in offering costs, borrowings on the VGS 2 Promissory Note and short-term financing agreements for the funding of certain insurance policies.