PIII 10-K & 10-Q changes, risk factors and insider trading

As of December 31, 2024,2025, we had $38.8$25.0 million of unrestricted cash and cash equivalents available to fund future operations, $154.8$336.7 million of outstanding indebtedness, of which $65.0$45.0 million is classified as current on our balance sheet, $31.5 million of paid in-kind interest, and $255.1$287.8 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$18.0 million we received from a related party financing transaction in FebruaryJanuary and MarchFebruary 2025,2026, and assuming no other financing transactions, we believe we will require additional funding in 2025.2026. 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 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 P3 Health Partners Inc. | 2024 Form 10-K | 17 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.

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, sincefrom December 2022,2022 through December 2025, in various private placement transactions and in connection with the issuance of unsecured promissory notes (see Note 1011 “Debt” to the consolidated financial statements included elsewhere in this Form 10-K), we have issued an aggregate of 110.814.7 million shares of Class A common stock and warrants and pre-funded warrants to purchase an aggregate of 307.18.2 million shares of Class A common stock. See Part II, Item 7A. “Management’s Discussion and Analysis of Financial Condition P3 Health Partners Inc. | 2025 Form 10-K | 21 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.

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.outbreak, including federal designation as a public health emergency (“PHE”) and the federal regulatory and legislative response to addressing that PHE. We may be unable to properly anticipate or prepare for these events and, as a result, our business may be materially adversely impacted.

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 P3 Health Partners Inc. | 2024 Form 10-K | 20 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 2024.2025. Additionally, the trend towards eliminating or significantly reducing the enforceability of restrictive covenants and non-compete provisions in states where we operate or may operate in the future, may impair our ability to attract or retain talent, and may have unforeseen consequences on wages and benefits for physicians and other healthcare providers. 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.

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, the characteristics of the populations eligible for or covered by MA, 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.operations that may delay, impede, or even preclude successful expansion into those markets. 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.

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,members and manner in which those rates are changed or updated, 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.

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,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, the ratings of the MA patients within the target market’s population, 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.

•an increase in the cost of healthcare services and supplies, whether as a result of inflationinflation, labor competition, or otherwise;

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 P3 Health Partners Inc. | 2024 Form 10-K | 23 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 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. ItAlthough istelehealth unclearflexibilities which,have ifbeen any,durable since the end of the COVID-19 pandemic, the availability of these changesflexibilities and extent to which Medicare will remainpay infor placeremote permanentlycare is the subject of annual legislation to fund Medicare and whichthe annual publication of the Physician Fee Schedule. While Telehealth has generally remained intact during 2025 and Medicare will bepermit rolled-back.many telehealth services through December 31, 2027, the lack of permanent P3 Health Partners Inc. | 2025 Form 10-K | 25 legislation assuring its funding as covered services will create periodic uncertainty regarding the long-term future of telehealth as an avenue of providing services to patients, and makes the availability of this service subject to periodic political or fiscal debates. If laws or 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.

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%75% of our capitatedtotal revenue for the yearsyear ended December 31, 2024 and 2023, respectively.2025. 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. Increased attention to the costs of the MA program in the media and within HHS may result in smaller-than-expected increases in MA reimbursement and make participation in MA less desirable in comparison to other plans, such as traditional FFS Medicare. On January 26, 2026, CMS issued its Advance Notice identifying proposed methodological changes to risk calculation and capitation beginning in calendar year 2027, soliciting public comments in response to these proposals before finalizing MA’s payment rules for calendar year 2027. This public comment period ended on February 25, 2026, with more than 46,500 comments received by CMS. Although the Advance Notice identifies an effective growth rate of 4.97%, CMS’s own calculations estimate that the average increase in MA reimbursement will be 0.09% compared to calendar year 2026. This Advance Notice also proposes changes in risk adjustment methodology and star ratings for MA plans under HHS’s mandatory five-star rating system. 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 HealthcareHealthcare, Humana 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.

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 P3 Health Partners Inc. | 2024 Form 10-K | 24 management of healthcare costs, which could produce results that are inconsistent with our estimates and financial models and negatively impact our growth.

As a result of the Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (the “ACA”),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.organization, with such ratings subject to CMS’s regulation and oversight through periodic recalibration of ratings criteria and data relied upon for such calculations. 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. On January 26, 2026, CMS issued its Advance Notice identifying proposed methodological changes to risk calculation and capitation beginning in calendar year 2027, which proposes changes to this star rating system for MA plans that may be more stringent and result in reduced average reimbursement for MA organizations and their providers if finalized. 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.

Our primary competitors include Oak Street Health, Inc.,Aledade, 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 P3 Health Partners Inc. | 2024 Form 10-K | 25 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 P3 Health Partners Inc. | 2025 Form 10-K | 27 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.

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 of the recent change incurrent U.S. Presidential administration. Future changes are expected as a result of the upcoming midterm Congressional elections in 2026. General reductions in expenditures by healthcare industry participants could result from, among other things:

•reductions in government funding for healthcarehealthcare, whether for providers, beneficiaries, or otherwise; and P3 Health Partners Inc. | 2025 Form 10-K | 28

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. Legislative changes in California and Nevada have resulted in increased damages that can be recovered in medical liability claims. Relatedly, legislative changes in Nevada have resulted in changes to the coverage requirements for medical liability insurance policies when defending and paying claims, resulting in upward pressure on premiums, and may result in increased deductibles or self-insurance requirements for such policies. 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.

The 21st Century Cures Act (theincluded “Cures Act”), which was passed and signed into law in December 2016, includesmany 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, andknown include,as the Information Blocking Rule, which took effect in 2022. This rule includes, 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 companionInformation rulesBlocking willRule transformaffected the wayinformation insharing whichand accessibility practices of healthcare providers, health IT developers, health information exchanges/health information networks (“HIEs/HINs”), and health plansplans, shareincluding patient information, and create significant new requirements for healthcare industry participants.us. For example, thethis ASTP/ONC rule, which went into effect on April 5, 2021,rule 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”) publishedfinalized its final ruleregulations implementing the statutory penalties for information blocking, which are up to $1 million per violation. Enforcement of information blocking penalties began on September 1, 2023.2023; Further,subsequent rulemaking in December 2023, ASTP/ONC finalized its rule titled Health Data, Technology,2023 and Interoperability:December Certification2024 Program Updates, Algorithm Transparency, and Information Sharing (“HTI-1 Final Rule”). Among other things, the HTI-1 Final Rule narrowsnarrowed the scope of entities that qualify as certified health IT developers, makes updates to itsupdated Health IT Certification Program requirements, a voluntary program for certifying health IT, and modifies themodified information blocking exceptions.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 P3 Health Partners Inc. | 2024 Form 10-K | 27 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 ofadded a definition of “reproductive health care,” createscreated a new Protecting Care Access Exception and finalizesfinalized 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 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 have been and 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.

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 a 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.

IfPast aand cyberattackfuture cyberattacks or security incident were to occur and cause interruptions in our operations, itincidents could result in legal claims or administrative or civil 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 individualsindividuals, HHS, or other state or federal regulators, andregulators; 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.

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.media and disclosed on the internet. Business associatesassociates, as defined in the HIPAA regulations, 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 (including refusal of access to PHI) or an audit by HHS may be subject to significant civil, criminalcivil and administrative fines and penaltiespenalties, and/or may even face criminal penalties, in addition to potential 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 Attorneysattorneys Generalgeneral 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.Act, including for healthcare-related information that is beyond the scope of HIPAA. Even when HIPAA does not apply, according to the FTC,FTC violatingtreats violations of consumers’ privacy rights or failing to take appropriate steps P3 Health Partners Inc. | 2024 Form 10-K | 29 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.Act and, where applicable, its related Health Breach Notification Rule, which imposes HIPAA-like reporting obligations on companies that maintain individuals’ healthcare information that is not subject to HIPAA’s protections. 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 P3 Health Partners Inc. | 2025 Form 10-K | 31 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.

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 FactorsFactors.” “Item 3. Legal Proceedings.” and elsewhere in this Form 10-K. Our historical results are not necessarily indicative of the results that may be expected for any periods in the future.

We have leveraged the expertise of our management team’s more than 20 years ofsubstantial 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$1,118 billion Medicare market, which covers approximately 68 million eligible lives as of NovemberJuly 2024.2025. Our core focus is the MA market, which makes upcovers approximately 54% of the overall Medicare market, or nearly 3334 million Medicare eligible lives in 2024.2025. Medicare beneficiaries may enroll in an MA plan, under which payors contract with the CMS to provide a defined range of healthcare services that are comparable to Medicare FFS (which is also referred to as “traditional Medicare”).

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,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 managementmanagement, 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 3,1002,400 physicians, in 2723 markets (counties) across fivefour states in over sixeight full years of operations as of December 31, 2024.2025. Our platform has enabled us to grow our revenue by an average of 74%26% annually from December 31, 2020 to December 31, 2024.2025. As of December 31, 2024,2025, our PCP network served approximately 123,800115,100 at-risk members. We believe we have significant growth opportunities available to us across existing and new markets, with less than 1% of the 535,000544,000 PCPs in the U.S. currently included in our physician network.

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 ofsubstantial 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.

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. FromFor 2018the throughyear ended December 31, 2024,2025, we experienced a 95% physician retention rate of over 88% in our affiliate provider network. By expanding our affiliate provider network and adding new physicians to the P3 network, we can quickly increase the number of contracted at-risk members under our existing health plan arrangements.

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 adjustmentsadjustments, 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.

Our medical expense is our largest expense category, representing 86%88% of our total operating expense for the year ended December 31, 2024.2025. We manage our medical costs by improving our membersmembers’ 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.

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, areis 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.

(1)Other during the year ended December 31, 2025 consisted of (i) interest income, (ii) loss on disposal of certain property and equipment, (iii) severance expense in connection with reorganization of workforce and (iv) legal settlements and valuation allowance on our notes receivable. Other during the year ended December 31, 2024 consisted of (i) interest income, (ii) gain recognized upon the settlement and write-off of contingent consideration related to an acquisition completed in a prior year and (iii) gain recognized on asset sale partially offset by (iv) severance and related expense in connection with our chief executive officer transitiontransition, (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.

The following table presents our gross profit (loss):

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 123,800116,100 and 108,900126,000 average at-risk members asfor ofthe years ended December 31, 20242025 and 2023,2024, respectively.

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 P3 Health Partners Inc. | 2025 Form 10-K | 62 contracting, clinical program development, quality, data management, finance, and legal functions. We exclude costs related to the operations of our owned medical clinics and wellness centers.

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

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.

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.

Depreciation and amortization expense. Depreciation expense is associated with our property and equipment, including leasehold improvements, computer equipment and software, furniture and fixtures, medical equipment, and internally developed software. Amortization expense is associated with definite lived intangible assets, including trademarks and tradenames, customer contracts, provider network agreements, and payor contracts.

Non-controlling InterestInterests

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.interests. The weighted average ownership percentages during the period are used to calculate the net income or loss attributable to P3 Health Partners Inc. and the non-controlling interest.interests.

CapitatedThe decrease in 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%(7)% increasedecrease in the total average number of at-risk members from 108,900126,000 at December 31, 20232024 to 123,800116,100 at December 31, 2024,2025, which was primarily due to an increasedriven by ninethe countiesstrategic undertermination contractof withunderperforming ourpayor healthcontracts plans,and effectiveaffiliate Januaryproviders 1,in 2024.the current year. Capitated revenue was approximately 98% and 99% of total operating revenue for each of the years ended December 31, 20242025 and 2023.2024, respectively.

MedicalThe decrease in 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 ana increasedecrease in the total number of at-risk members year-over-year, as described above, resultingdriven fromby the additionstrategic termination of nineunderperforming countiespayor under contract with our health plans, effective January 1, 2024,contracts and elevatedaffiliate costs from increased demand for medical careproviders in the current period.year.

Premium deficiency reserve was an expense of $18.7 million for the year ended December 31, 2025, compared to $53.7 million for the year ended December 31, 2024 compared to a benefit of $12.7 million for the year ended December 31, 2023.2024. The change was due to management’s assessment of the profitability of contracts, wherein increased medical expense is expected to increase our future losses.

Corporate,The decrease in 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$10.6 million in salary and related expense resulting primarily from a reduction in head countheadcount of 10%,11% and a decrease of $1.4 million in non-income based taxes. The decrease was partially offset by a $6.2 million gain recognized in the year ended December 31, 2024 upon the settlement and write-off of contingent consideration related to an acquisition completed in a prior year, partially offset by an increase of $1.9 million in non-income based taxes.year.

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

We have experienced losses since our inception and net losses of $310.4$323.1 million and $186.4$310.4 million for the years ended December 31, 20242025 and 2023,2024, respectively. We expect to continue to incur operating losses and generate negative cash flows from operations for the foreseeable future due to the strong growth we have experienced over the last seven years and the investments we are making in expanding our business, which require up-front expenses. Our future capital requirements will depend on many factors, including the pace of our growth, ability to manage medical costs, the maturity of our members, our ability to complete the sale of our remaining Florida operations, and our ability to raise capital and refinance our indebtedness as it matures. We may need to raise additional capital through a combination of debt and/or 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.

ThereExcept as set forth below, there have been no material changes to the risk factors previously disclosed in Part I, Item 1A., “Risk Factors” of our 2025 Form 10-K. You should carefully consider the risk factors discussed in our 2025 Form 10-K,10-K and the risk factor set forth below, which could materially affect our business, financial condition or future results.

We operate in the $1,118 billion Medicare market, which covers more than 70 million eligible lives as of AprilJuly 2026. Our core focus is the Medicare Advantage (“MA”) market, which covers approximately 36 million Medicare eligible lives as of AprilJuly 2026. 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”).

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 2,3002,100 physicians, in 26 markets (counties) across five states in over eightnine full years of operations as of MarchJune 31,30, 2026. As of MarchJune 31,30, 2026, our PCP network served approximately 105,700104,400 at-risk members.

Our medical expense is our largest expense category, representing 88% of our total operating expense for the threesix months ended MarchJune 31,30, 2026. 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.

_____________________________________________ (1)Other during the three and six months ended MarchJune 31,30, 2026 consisted of interest income partially offset by valuation allowance on our notes receivable. Other during the three and six months ended MarchJune 31,30, 2025 consisted of interest income partially offset by legalseverance settlementsexpense andin valuationconnection allowancewith onreorganization ourof notes receivable.workforce.

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 106,400104,800 and 117,700115,900 average at-risk members for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

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 2,3002,100 and 2,800 primary care physicians as of MarchJune 31,30, 2026 and 2025, respectively.

Other revenue. Other revenue is comprised primarily ofincludes encounter-related fees to treat patients outside of our at-risk arrangements at Company-owned or affiliated clinics. Other revenue also includes ancillary fees earned under contracts with certain payors for the provision of certain care coordination and other care management services. These services are provided to patients covered by these payors regardless of whether those patients receive their care from our directly employed or affiliated medical groups. Other revenue also includes incentive‑sharing arrangements related to Part D program incentive initiatives under which a third‑party administrator facilitates the collection and distribution of incentive proceeds, and the Company receives a portion of those proceeds based on covered utilization activity.

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. | Q1 2026 Form 10-Q | 29 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.

Mark-to-market of stock warrants.warrants and purchased put option. 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. Mark-to-market of purchased put option consists of the change in the fair value on the revaluation of unissued Units consisting of (i) shares of the Company’s Series D Preferred Stock, and (ii) warrants to purchase Class A Common Stock, pursuant to the Purchase Agreement described in Note 12 “Preferred Stock and Stockholders' Equity”.

We consolidate the financial results of P3 LLC and report a redeemable non-controlling interest on our condensed consolidated statements of operations, representing the portion of net income or loss attributable to the non-controlling interests. The weighted average ownership percentages during the period are used to calculate the net income or loss attributable to P3 Health Partners Inc. and the non-controlling interests.

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

This increase in capitated revenue was primarily driven by an increase in the average rate resulting from ongoing strategic contractual restructuring, as well as from rate progression and burden of illness performance. The increase was partially offset by aan 10% decrease in the average number of at-risk members from 117,700115,900 for the three months ended MarchJune 31,30, 2025 to 106,400104,800 for the three months ended MarchJune 31,30, 2026, resulting from previously disclosed intentional network and payer rationalization. Capitated revenue was approximately 98%95% and 99% of total operating revenue for each of the three months ended MarchJune 31,30, 2026 and 2025, respectively.

Other revenue was approximately 2%5% of total operating revenue for the three months ended MarchJune 31,30, 2026 and approximately 1% of total operating revenue for the three months ended MarchJune 31,30, 2025. The increase was attributable to P3 Health Partners Inc. | Q2 2026 Form 10-Q | 36 management fees for new delegated service contracts and an increase in revenue from incentive‑sharing arrangements related to Part D program incentive initiatives.

The decrease in medical expense was driven primarily by a decrease in the total number of at-risk members year-over-year as well as favorable reserve development and claims true-up activity. Additionally, medical expense for the three months ended MarchJune 31,30, 2026 included a $13.5$36.2 million reduction of prior period medical claims expense from a related party.expense.

The increase in corporate, general and administrative expense was primarily driven by an increase in professional fees, primarily driven by higher consulting expenses.expenses, Theas well as an increase wasin partiallyaccrued offsetperformance by the reversal of $2.0 million of expense related to certain indirect tax returns for which the Company filed amended returns during the quarter.bonuses.

To date, we have financed our operations principally through the cash we obtained upon the consummation of a series of business combinations in December 2021 with Foresight Acquisition Corp. (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 MarchJune 31,30, 2026, we had $25.5$21.3 million of unrestricted cash available to fund future operations.

As of MarchJune 31,30, 2026, 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 NoteFacility; however, there can be no assurance that we will be able to maintain compliance with these covenants in the future or that the lenderslender 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.

On April 27, 2026, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with affiliates of Chicago Pacific Founders, the largest stockholder and debtholder, directly or through affiliates, of the Company (“CPF”)CPF, pursuant to which the Company agreed to issue up to $70.0 million of units (the “Units”) in multiple tranches. The Units consist of (i) shares of the Company’s Series D 19.5% Cumulative Preferred Stock (the “Series D Preferred Stock”), and (ii) warrants to purchase Class A Common Stock (the “Common Stock”), exercisable for a number of shares of Common Stock equal to 0.66333% of the outstanding Class A and Class V Common Stock of the Company per $1.0 million of amount funded, with an exercise price equal to the Nasdaq Minimum Price on the date of issuance of the applicable warrant and a term of seven years from the date of issuance. The Company sold $10.0 million of Units in the initial closing of the Purchase Agreement and an additionalAgreement, $20.0 million of Units on April 30, 2026.2026, $40.0and $21.3 million of Units remainon May 28, 2026. As of June 30, 2026, $18.7 million of Units remained available for purchaseissuance in future tranches, provided thatunder the conditionsPurchase toAgreement. closingOn suchJuly 1, 2026, the Company sold an additional purchases$16 are satisfied asmillion of the time of any future closing.Units. The Series D Preferred Stock has terms that are identical to the other series of preferred stock, other than the dividend rate.

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 $12.4$29.7 million as of MarchJune 31,30, 2026. 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 MarchJune 31,30, 2026.

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 P3 Health Partners Inc. | Q1 2026 Form 10-Q | 34 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.

As of the date of this Form 10-Q, we believe that our existing cash resources are not sufficient to support planned operations for at least the next year from the issuance of the unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q. As a result, we have concluded that there is substantial doubt about our ability to continue as a going concern within one year after the date the unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q 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-Q. This evaluation of our cash resources available over the next year from the date of issuance of the unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q does not take into consideration the potential mitigating effect of our ongoing efforts to raise capital or our plans that have not been fully implemented or the many factors that determine our capital requirements, including the pace of our growth, ability to manage medical costs and the maturity of our members. We continue to explore raising additional capital through a combination of debt financing and equity issuances. 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. 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. The availability and the terms under which we may be able to raise additional capital could be disadvantageous, and the terms of debt financing or other non-dilutive financing may involve restrictive covenants and dilutive financing instruments, which could place significant restrictions on our operations. Macroeconomic conditions and P3 Health Partners Inc. | Q2 2026 Form 10-Q | 41 credit markets could also impact the availability and cost of potential future debt financing. There can be no assurances that any additional debt, other non-dilutive and/or equity financing would be available to us on favorable terms, or potentially at all. We expect to continue to incur net losses, comprehensive losses, and negative cash flows from operating activities in accordance with our operating plan. If we are unable to obtain additional funding when needed, we will need to curtail planned activities, divest certain operations, sell certain assets or reduce our costs, which will likely have an unfavorable effect on our ability to execute on our business plan, and have an adverse effect on our business, results of operations, and future prospects.

Net cash used in operating activities was $27.5$89.4 million for the threesix months ended MarchJune 31,30, 2026, compared to net cash used in operating activities of $33.5$50.1 million for the threesix months ended MarchJune 31,30, 2025. Significant changes P3 Health Partners Inc. | Q1 2026 Form 10-Q | 35 impacting net cash used in operating activities during the threesix months ended MarchJune 31,30, 2026 as compared to the threesix months ended MarchJune 31,30, 2025 were primarily due to changesdecreases in workingclaims capitalpayable and nethealth incomeplan assettlements comparedpayable toand netan loss.increase in health plan receivables.

Net cash used in investing activities was $0.0$0.3 million for the threesix months ended MarchJune 31,30, 2026 compared to $0.0net cash provided by investing activities of $0.1 million for the threesix months ended MarchJune 31,30, 2025.

Net cash provided by financing activities was $27.8$86.0 million for the threesix months ended MarchJune 31,30, 2026, primarily consisting of proceeds from the borrowings on the VGS 5 Promissory Note and issuance of Series D Preferred Stock and related warrants, and short-term financing agreements for the funding of certain insurance policies. Net cash provided by financing activities was $30.7$45.3 million for the threesix months ended MarchJune 31,30, 2025, consisting of proceeds from the borrowings on the VGS 4 Promissory NoteNote, VGS 5 Promissory Note, and short-term financing agreements for the funding of certain insurance policies.