Summary of P3 Health Partners Conference Call Company Overview - **Company**: P3 Health Partners (NasdaqCM: PIII) - **Industry**: Healthcare, specifically focused on Medicare and value-based care for seniors - **Market Presence**: Operating in four states with 120,000 full-risk lives and 2,800 primary care providers (PCPs) [2][3] Core Insights and Arguments - **Market Size**: The Medicare market is valued at $1.1 trillion, with a significant portion transitioning to Medicare Advantage (MA) [3][5] - **Growth Potential**: P3 Health Partners has the potential to care for approximately 2 million seniors without expanding into new geographies, indicating substantial growth opportunities within existing markets [4] - **Business Model**: The company operates on a full-risk model across Medicare Advantage and ACO REACH, aiming for profitability through strategic growth and operational efficiencies [5][6] - **Medicare Advantage Trends**: Enrollment in Medicare Advantage has increased from 35% in 2017 to 54% in 2025, with total enrollment growing from 18 million to 34 million [7][8] - **Cost Management**: The average cost per Medicare beneficiary has decreased from projected $22,000 to $12,000, indicating the effectiveness of value-based care models [9][10] Industry Dynamics - **Consolidation Trends**: The healthcare industry is experiencing consolidation, which may create new partnership opportunities for P3 Health Partners [6] - **Physician Challenges**: There is a noted lack of resources and expertise for physicians transitioning to value-based care, with 50% of physicians experiencing burnout [12][13] - **Patient Access**: Up to 25% of Americans lack access to primary care, highlighting the need for improved healthcare delivery systems [12] Operational Strategies - **Value-Based Care Platform**: P3 Health Partners utilizes a value-based care platform to enhance patient outcomes and streamline operations for providers [14][17] - **Data Utilization**: The company leverages data analytics to improve care management and optimize risk stratification for high-risk patients [15][16] - **Community Integration**: P3 focuses on creating unified care networks that connect patients with community resources and support services [13][23] Financial Performance and Projections - **EBITDA Improvement Plan**: The company has outlined a $130 million EBITDA improvement plan, with $70 million still in progress for 2025 [24][25] - **Future Opportunities**: An additional $120 to $170 million in EBITDA improvement opportunities have been identified for 2026, focusing on operational performance and quality management [25][26] - **Revenue Guidance**: Expected total revenue for 2025 is projected between $1.35 billion and $1.5 billion, with an adjusted EBITDA range of -$69 million to -$39 million [27] Market Challenges - **Oregon Market**: Oregon is currently the only market experiencing losses, with efforts underway to achieve breakeven by 2026 [30][31] - **Membership Trends**: The company anticipates a decline in membership in 2025 but expects growth to resume in 2026 and 2027 [30] Conclusion - P3 Health Partners is positioned to capitalize on the growing demand for value-based care in the Medicare sector, with a clear strategy for operational improvements and market expansion. The company is focused on enhancing patient outcomes while navigating industry challenges and optimizing financial performance.

Core Insights - Catalyst Solutions successfully launched the Professional Health Partners Services (P3) Implementation in May 2025, marking a significant achievement in supporting P3 Health Partners in delivering high-quality services to Medicare members across multiple states [1][2]. Company Overview - Catalyst Solutions specializes in health plan operations, IT, and outsourcing, with over 26 years of experience. The company aims to drive measurable improvements in health outcomes, member and provider experience, and cost efficiency [5]. - P3 Health Partners is a leading population health management organization with a network of over 2,800 affiliated primary care providers across the United States, focusing on value-based care coordination and administrative services [7]. Implementation Details - The P3 implementation involves support across Configurations, Claims, and the Provider Call Center, covering eleven active health plans and serving nearly 68,000 members, with a new Medicare plan set to launch soon [2]. - The implementation was completed in just 60 days, showcasing Catalyst's ability to manage complex projects under tight deadlines through meticulous planning and the use of AI and process improvements [4]. Partnership and Commitment - The partnership between Catalyst and P3 is characterized by a strong commitment to ensuring accurate and timely payments, reflecting a shared goal of enhancing service quality [3][4]. - Catalyst employs a hybrid onshore/offshore model to provide scalable, flexible, and cost-efficient services while aligning with client business hours [3].

Company Performance - P3 Health Partners Inc. reported a quarterly loss of $6.23 per share, significantly worse than the Zacks Consensus Estimate of a loss of $3.29, representing an earnings surprise of -89.36% [1] - The company's revenues for the quarter ended June 2025 were $355.79 million, missing the Zacks Consensus Estimate by 2.03%, and down from $379.16 million in the same quarter last year [2] - Over the last four quarters, P3 Health Partners has not surpassed consensus EPS estimates and has topped revenue estimates only once [2] Stock Movement and Outlook - P3 Health Partners shares have declined approximately 36.9% since the beginning of the year, contrasting with a 10% gain in the S&P 500 [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current consensus EPS estimate for the upcoming quarter is -$5.04 on revenues of $342.9 million, and for the current fiscal year, it is -$16.60 on revenues of $1.43 billion [7] Industry Context - The Medical Info Systems industry, to which P3 Health Partners belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact P3 Health Partners' stock performance [5][6]

Financial Data and Key Metrics Changes - The company reported a membership of 115,000 members, which is a 9% year-over-year decline, primarily due to intentional rationalization of payer and provider partnerships [20][22] - Total revenue for Q2 was $356 million, down 6% year-over-year, driven by the decline in membership [20] - Adjusted EBITDA for the quarter was a loss of $17 million, but when adjusted for prior period items, the loss improves to $8 million, reflecting a $5 million improvement from normalized Q1 results [7][22] - The year-to-date adjusted EBITDA loss was $39 million, which improves to $22 million when excluding prior period adjustments [8][24] Business Line Data and Key Metrics Changes - The company is nearing full execution on a $130 million EBITDA improvement plan, with three of four markets breakeven or better through the first half of the year [5][6] - Medical margin for Q2, excluding prior period adjustments, was $39 million or $114 per member per month (PMPM) [20] - Significant improvements in hospice and palliative care programs resulted in approximately a $10 million reduction in medical expenses [21] Market Data and Key Metrics Changes - Funding has improved by 10% across membership on a normalized per member basis, reflecting gains in operational execution [6] - The company has renegotiated contracts with payers, resulting in $20 million in contractual improvements expected [6][11] Company Strategy and Development Direction - The company is focused on smart growth, expanding its business model with prudence and thorough underwriting, with a growth pipeline exceeding 35,000 members [12] - The Care Enablement model launched last year is delivering accelerated results in clinical quality metrics, with significant improvements in care gap closures [9][10] - The company anticipates driving additional EBITDA improvements in the range of $120 million to $170 million in 2026, with the majority of the impact occurring in that year [13][31] Management's Comments on Operating Environment and Future Outlook - Management views 2025 as a transitional year, marking a shift from structural reset to real momentum, with ongoing efforts in medical cost management expected to drive margin recovery [19][24] - The company is confident in its ability to achieve significant profitability in 2026 and beyond, supported by improved operational performance and favorable market conditions [15][31] Other Important Information - The company ended the quarter with $39 million of liquidity, maintaining discipline in cash management to support operational priorities [25] - The company has retooled its utilization management and care management teams to capture opportunities for improving financial performance [11] Q&A Session Summary Question: Causes of prior period adjustments - Management indicated that the prior period adjustments were primarily due to claims migration issues with a payer and late data from a larger national payer [35][36] Question: Confidence in plan partners' MA bids for 2026 - Management expressed confidence based on discussions with plans regarding their intent and direction for bids, although final bid information is not yet available [40][41] Question: Impact of renegotiation efforts on Part B exposure - Management stated that they are about 75% complete with renegotiations, which will have both 2025 and 2026 impacts [62] Question: Breakdown of EBITDA opportunities for next year - Management outlined that the EBITDA opportunities are categorized into base rate changes, benefit design adjustments, operational improvements, and contractual enhancements, with specific percentages allocated to each [66][68]

[Cautionary Statement Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section outlines the inherent risks and uncertainties that may cause actual results to differ from forward-looking statements - The report contains forward-looking statements subject to known and unknown risks, uncertainties, and assumptions that may cause actual results to differ materially[9](index=9&type=chunk)[10](index=10&type=chunk)[12](index=12&type=chunk) - Key risks include the Company's ability to continue as a going concern, the need to raise additional capital, a history of net losses, potential inability to maintain debt covenant compliance, and the relatively limited operating history[10](index=10&type=chunk) - Other significant risks involve reliance on management and key employees, ability to execute growth strategies, dependence on capitation payments, potential termination of Medicare Advantage contracts, and compliance with a heavily regulated industry[10](index=10&type=chunk)[11](index=11&type=chunk) [PART I—FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This part presents the Company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with detailed notes explaining the Company's organization, going concern status, accounting policies, fair value measurements, debt, and other financial details for the periods ended June 30, 2025 and December 31, 2024 [Condensed Consolidated Balance Sheets (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) This section presents the Company's unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :--------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Cash | $38,581 | $38,816 | $(235) | -0.6% | | Restricted cash | $746 | $5,286 | $(4,540) | -85.9% | | Health plan receivable, net | $93,463 | $121,266 | $(27,803) | -22.9% | | Total Current Assets | $156,531 | $184,140 | $(27,609) | -15.0% | | Total Assets | $731,585 | $783,420 | $(51,835) | -6.6% | | Total Current Liabilities | $504,998 | $496,415 | $8,583 | 1.7% | | Total Liabilities | $644,407 | $633,891 | $10,516 | 1.7% | | Redeemable non-controlling interest| $42,719 | $73,593 | $(30,874) | -42.0% | | Total Stockholders' Equity | $44,459 | $75,936 | $(31,477) | -41.5% | - The Company had a working capital deficit of **$348.5 million** as of June 30, 2025[40](index=40&type=chunk) [Condensed Consolidated Statements of Operations (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(Unaudited)) This section presents the Company's unaudited condensed consolidated statements of operations for the periods ended June 30, 2025, and 2024 Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (3M) | % Change (3M) | | :-------------------- | :------------------------------- | :------------------------------- | :---------- | :------------ | | Capitated revenue | $351,724 | $374,306 | $(22,582) | -6.0% | | Total Operating Revenue | $355,788 | $379,157 | $(23,369) | -6.2% | | Medical expense | $351,350 | $365,171 | $(13,821) | -3.8% | | Operating Loss | $(34,124) | $(31,334) | $(2,790) | 8.9% | | Net Loss | $(43,665) | $(28,774) | $(14,891) | 51.8% | | Net Loss Attributable to Controlling Interest | $(20,362) | $(12,020) | $(8,342) | 69.4% | | Basic EPS | $(6.23) | $(4.40) | $(1.83) | 41.6% | | Diluted EPS | $(6.23) | $(7.37) | $1.14 | -15.5% | Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (6M) | % Change (6M) | | :-------------------- | :----------------------------- | :----------------------------- | :---------- | :------------ | | Capitated revenue | $721,241 | $758,440 | $(37,199) | -4.9% | | Total Operating Revenue | $729,013 | $767,645 | $(38,632) | -5.0% | | Medical expense | $723,393 | $747,228 | $(23,835) | -3.2% | | Operating Loss | $(72,212) | $(75,165) | $2,953 | -3.9% | | Net Loss | $(87,911) | $(78,380) | $(9,531) | 12.2% | | Net Loss Attributable to Controlling Interest | $(40,842) | $(30,720) | $(10,122) | 32.9% | | Basic EPS | $(12.52) | $(12.02) | $(0.50) | 4.2% | | Diluted EPS | $(12.52) | $(15.19) | $2.67 | -17.6% | [Condensed Consolidated Statements of Stockholders' Equity and Mezzanine Equity (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity%20and%20Mezzanine%20Equity%20(Unaudited)) This section presents the Company's unaudited condensed consolidated statements of stockholders' equity and mezzanine equity Condensed Consolidated Statements of Stockholders' Equity and Mezzanine Equity (in thousands) | Metric (in thousands) | December 31, 2024 | March 31, 2025 | June 30, 2025 | | :-------------------- | :---------------- | :------------- | :------------ | | Redeemable Non-controlling Interest | $73,593 | $57,829 | $42,719 | | Additional Paid in Capital | $579,129 | $586,923 | $588,494 | | Accumulated Deficit | $(503,193) | $(523,673) | $(544,035) | | Total Stockholders' Equity | $75,936 | $63,250 | $44,459 | - Total stockholders' equity decreased by **$31.477 million** from December 31, 2024, to June 30, 2025, primarily due to net losses and adjustments to redeemable non-controlling interest[19](index=19&type=chunk)[28](index=28&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This section presents the Company's unaudited condensed consolidated statements of cash flows for the periods ended June 30, 2025, and 2024 Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(50,099) | $(30,272) | | Net cash provided by investing activities | $50 | $0 | | Net cash provided by financing activities | $45,274 | $67,540 | | Net change in cash and restricted cash | $(4,775) | $37,268 | | Cash and restricted cash, end of period | $39,327 | $78,202 | - Net cash used in operating activities increased by **$19.827 million** year-over-year, primarily due to changes in working capital and an increase in net loss[210](index=210&type=chunk) - Net cash provided by financing activities decreased by **$22.266 million**, driven by lower proceeds from debt and equity issuances compared to the prior year[212](index=212&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed notes to the unaudited condensed consolidated financial statements [Note 1: Organization](index=12&type=section&id=Note%201%3A%20Organization) This note describes the Company's organizational structure and primary business activities - P3 Health Partners Inc. is a patient-centered, physician-led population health management company, operating as the sole manager of P3 LLC[34](index=34&type=chunk) - The Company provides population health management services on an at-risk basis to insurance plans offering medical coverage to Medicare beneficiaries under Medicare Advantage programs, receiving fixed monthly 'capitation' payments[35](index=35&type=chunk)[36](index=36&type=chunk) [Note 2: Going Concern and Liquidity](index=12&type=section&id=Note%202%3A%20Going%20Concern%20and%20Liquidity) This note discusses the Company's going concern status and liquidity challenges - The Company has experienced net losses of **$43.7 million** and **$87.9 million** for the three and six months ended June 30, 2025, respectively, primarily due to adverse claims experience[39](index=39&type=chunk) - As of June 30, 2025, the Company had **$38.6 million** in unrestricted cash and a working capital deficit of **$348.5 million**, leading to substantial doubt about its ability to continue as a going concern within one year[40](index=40&type=chunk) [Note 3: Significant Accounting Policies](index=12&type=section&id=Note%203%3A%20Significant%20Accounting%20Policies) This note outlines the significant accounting policies used in preparing the financial statements - The financial statements are prepared in accordance with GAAP for interim information, with certain disclosures condensed or omitted[41](index=41&type=chunk)[42](index=42&type=chunk) - The Company consolidates Variable Interest Entities (VIEs) where it is the primary beneficiary, including P3 LLC and several Network VIEs (physician practices)[45](index=45&type=chunk)[46](index=46&type=chunk) Revenue Type (in thousands) | Revenue Type (in thousands) | Three Months Ended June 30, 2025 | % of Total (2025) | Three Months Ended June 30, 2024 | % of Total (2024) | | :-------------------------- | :------------------------------- | :---------------- | :------------------------------- | :---------------- | | Capitated revenue | $351,724 | 98.9% | $374,306 | 98.7% | | Other patient service revenue | $4,064 | 1.1% | $4,851 | 1.3% | | Total revenue | $355,788 | 100.0% | $379,157 | 100.0% | - On April 11, 2025, the Company effected a **1-for-50 reverse stock split** for Class A and Class V common stock, retroactively adjusting all common stock amounts[52](index=52&type=chunk) [Note 4: Recent Accounting Pronouncements](index=15&type=section&id=Note%204%3A%20Recent%20Accounting%20Pronouncements) This note details recent accounting pronouncements and their potential impact on the Company - The Company is evaluating the effects of new accounting pronouncements, including ASU 2024-03 (Expense Disaggregation Disclosures), ASU 2023-09 (Income Tax Disclosures), and ASU 2023-06 (Disclosure Improvements)[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) [Note 5: Fair Value Measurements and Hierarchy](index=15&type=section&id=Note%205%3A%20Fair%20Value%20Measurements%20and%20Hierarchy) This note provides information on fair value measurements and their classification within the fair value hierarchy Warrant liability (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Warrant liability | $4,988 | $10,312 | Key Level 3 Input | Key Level 3 Input | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Volatility | 94.9% | 91.7% | | Risk-free interest rate | 3.8% | 4.4% | | Exercise price | $25.45 | $25.00 | | Expected term | 5.8 Years | 6.2 years | - The Company recorded gains of **$2.0 million** and **$5.3 million** from mark-to-market adjustments of stock warrants for the three and six months ended June 30, 2025, respectively[59](index=59&type=chunk) [Note 6: Property and Equipment](index=16&type=section&id=Note%206%3A%20Property%20and%20Equipment) This note details the Company's property and equipment, including changes during the period Property and Equipment (in thousands) | Property and Equipment (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Property and equipment, net | $4,687 | $5,734 | - The Company sold its remaining Florida assets for approximately **$0.1 million** on May 1, 2025, recognizing an immaterial loss on disposal[62](index=62&type=chunk) [Note 7: Intangible Assets](index=17&type=section&id=Note%207%3A%20Intangible%20Assets) This note provides information on the Company's intangible assets and their amortization Intangible Assets (in thousands) | Intangible Assets (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------- | :------------ | :---------------- | | Medical licenses | $700 | $700 | | Customer relationships | $431,663 | $464,868 | | Trademarks | $94,932 | $102,208 | | Payor contracts | $3,055 | $3,290 | | Provider network | $3,050 | $3,284 | | Total Intangible Assets, net | $533,400 | $574,350 | - Amortization of intangible assets was **$20.5 million** and **$40.9 million** for the three and six months ended June 30, 2025, respectively[64](index=64&type=chunk) [Note 8: Debt](index=18&type=section&id=Note%208%3A%20Debt) This note details the Company's debt obligations, including new promissory notes and their terms Long-term Debt (in thousands) | Long-term Debt (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | Long-term debt, gross | $215,307 | $168,807 | | Less: unamortized debt issuance costs and original issue discount | $(33,351) | $(13,983) | | Less: current portion of long-term debt | $(80,000) | $(65,000) | | Long-term debt, net | $101,956 | $89,824 | - P3 LLC entered into a VGS 4 Promissory Note for up to **$30.0 million** in February 2025, maturing August 2028, with interest at **19.5% per annum** (8.0% cash, 11.5% PIK, or 19.5% PIK)[66](index=66&type=chunk) - P3 LLC also entered into a VGS 5 Promissory Note for up to **$70.0 million** in May 2025, maturing August 2028, with interest at **19.5% per annum** (8.0% cash, 11.5% PIK, or 19.5% PIK)[71](index=71&type=chunk) [Note 9: Net Loss per Share](index=20&type=section&id=Note%209%3A%20Net%20Loss%20per%20Share) This note presents the calculation of basic and diluted net loss per share Net Loss per Share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | | Basic Net Loss per Share | $(6.23) | $(4.40) | | Diluted Net Loss per Share | $(6.23) | $(7.37) | Net Loss per Share | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :----------------------------- | :----------------------------- | | Basic Net Loss per Share | $(12.52) | $(12.02) | | Diluted Net Loss per Share | $(12.52) | $(15.19) | - Potentially dilutive securities, including stock warrants, stock options, restricted stock units, and Class V common stock, were excluded from diluted EPS computation as their effect would have been anti-dilutive[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk) [Note 10: Redeemable Non-controlling Interest](index=21&type=section&id=Note%2010%3A%20Redeemable%20Non-controlling%20Interest) This note describes the Company's redeemable non-controlling interest and ownership structure Ownership (in thousands of units) | Ownership (in thousands of units) | June 30, 2025 | Ownership % (2025) | December 31, 2024 | Ownership % (2024) | | :-------------------------------- | :------------ | :----------------- | :---------------- | :----------------- | | P3 Health Partners Inc.'s ownership | 3,268 | 45.5% | 3,257 | 45.4% | | Non-controlling interest holders' | 3,919 | 54.5% | 3,919 | 54.6% | | Total Common Units | 7,187 | 100.0% | 7,176 | 100.0% | - No exchanges of redeemable non-controlling interest for Class A common stock occurred during the six months ended June 30, 2025, unlike the prior year[84](index=84&type=chunk) [Note 11: Segment Reporting](index=22&type=section&id=Note%2011%3A%20Segment%20Reporting) This note provides information on the Company's operating segments - The Company operates under one reportable segment[87](index=87&type=chunk) Segment Metric (in thousands) | Segment Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :---------------------------- | :------------------------------- | :------------------------------- | | Operating revenue | $355,788 | $379,157 | | Medical claims expense | $(321,109) | $(333,217) | | Loss before income taxes | $(41,684) | $(27,806) | | Net loss | $(43,665) | $(28,774) | [Note 12: Capitalization](index=22&type=section&id=Note%2012%3A%20Capitalization) This note details changes in the Company's capitalization, including the reverse stock split - On April 11, 2025, the Company effected a **1-for-50 reverse stock split** to meet Nasdaq Capital Market bid price requirements, converting **163.2 million Class A shares to 3.26 million** and **196.0 million Class V shares to 3.92 million**[89](index=89&type=chunk)[90](index=90&type=chunk) [Note 13: Variable Interest Entities](index=23&type=section&id=Note%2013%3A%20Variable%20Interest%20Entities) This note describes the Company's involvement with Variable Interest Entities (VIEs) - P3 LLC is the primary beneficiary of Network VIEs (physician practices) through Management Services Agreements and deficit funding agreements, consolidating their financial results[94](index=94&type=chunk) VIE Financials (in thousands) | VIE Financials (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | Total Assets | $9,981 | $9,256 | | Total Liabilities | $54,740 | $55,180 | | Members' Deficit | $(44,759) | $(45,924) | VIE Operating Performance (in thousands) | VIE Operating Performance (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | | Revenue | $5,395 | $9,354 | | Expense | $4,525 | $9,803 | | Net income (loss) | $870 | $(449) | [Note 14: Related Parties](index=24&type=section&id=Note%2014%3A%20Related%20Parties) This note discloses transactions and balances with related parties - The Company incurred Allymar service expenses of **$0.7 million** and **$1.4 million** for the three and six months ended June 30, 2025, respectively, included in medical expenses[100](index=100&type=chunk) - An immaterial amount of service expense was recorded for Nevada Behavioral Health Systems (NBHS) for the three and six months ended June 30, 2025, compared to **$0.1 million** and **$0.3 million** in 2024[101](index=101&type=chunk) [Note 15: Income Taxes](index=24&type=section&id=Note%2015%3A%20Income%20Taxes) This note provides information on the Company's income tax position - The Company's tax rate is primarily affected by the recognition of a valuation allowance and the portion of income/expense allocated to the non-controlling interest[102](index=102&type=chunk) [Note 16: Subsequent Events](index=24&type=section&id=Note%2016%3A%20Subsequent%20Events) This note describes significant events that occurred after the reporting period - The second tranche of the VGS 5 Promissory Note, totaling **$15.0 million**, was fully funded as of August 14, 2025, with **$8.5 million** funded in July 2025 and **$6.5 million** on August 12, 2025[72](index=72&type=chunk)[103](index=103&type=chunk)[193](index=193&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of the Company's business, key factors affecting performance, non-GAAP financial measures, detailed results of operations for the three and six months ended June 30, 2025 and 2024, and a discussion of liquidity and capital resources, including significant debt financing and going concern considerations [Overview](index=25&type=section&id=Overview) This section provides an overview of the Company's business model and market focus - P3 is a patient-centered, physician-led population health management company focused on the Medicare Advantage (MA) market, which covers approximately **33 million lives**[107](index=107&type=chunk)[109](index=109&type=chunk) - The Company primarily uses capitated contracts with health plans, receiving per member per month (PMPM) fees to manage healthcare needs, aligning incentives for quality care and cost reduction[110](index=110&type=chunk) - As of June 30, 2025, P3's PCP network served approximately **114,100 at-risk members** across **24 markets** in four states, with a network of approximately **2,800 physicians**[112](index=112&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk) [Reverse Stock Split](index=26&type=section&id=Reverse%20Stock%20Split) This section details the reverse stock split effected by the Company - On April 11, 2025, a **1-for-50 reverse stock split** was effected for Class A and Class V common stock to meet Nasdaq listing requirements[113](index=113&type=chunk)[114](index=114&type=chunk) - The split resulted in **3,263,093 Class A shares** and **3,919,124 Class V shares** outstanding, with proportional adjustments to equity awards and warrants[114](index=114&type=chunk)[115](index=115&type=chunk) [Key Factors Affecting our Performance](index=26&type=section&id=Key%20Factors%20Affecting%20our%20Performance) This section outlines the primary factors influencing the Company's financial and operational performance - Performance is driven by growing Medicare Advantage membership through existing contracts (age-ins, FFS to MA conversions), adding new contracts in existing markets, and expanding into adjacent and new markets[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) - The Company aims to grow capitated revenue per member by improving documentation of patient acuity, which leads to higher risk-adjusted payments from Medicare[126](index=126&type=chunk) - Effective management of medical expenses, which represent **90% of total operating expense**, is crucial, focusing on primary care to avoid costly downstream services[127](index=127&type=chunk) - Operating efficiencies are sought at both market and enterprise levels, with local G&A expected to decrease as a percentage of revenue with membership growth, despite absolute increases in corporate G&A due to public company costs[128](index=128&type=chunk)[129](index=129&type=chunk) [Impact of Seasonality](index=28&type=section&id=Impact%20of%20Seasonality) This section describes how seasonal factors influence the Company's operations and financial results - At-risk member growth is highest in the first quarter due to new contracts and annual enrollment period selections[130](index=130&type=chunk) - Revenue per member generally declines over the year as new patients with less complete documentation join and higher-acuity patients expire, following an initial increase in January due to CMS risk adjustment factor revisions[131](index=131&type=chunk) - Medical expenses vary seasonally, with higher levels expected in the first and fourth quarters due to factors like prevalent illnesses (e.g., influenza) during colder months[132](index=132&type=chunk) [Non-GAAP Financial Measures and Key Performance Metrics](index=28&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Key%20Performance%20Metrics) This section presents and defines the non-GAAP financial measures and key performance metrics used by management [Adjusted EBITDA](index=28&type=section&id=Adjusted%20EBITDA) This section defines and presents Adjusted EBITDA, a non-GAAP measure of profitability - Adjusted EBITDA is a non-GAAP metric used to measure profitability and performance, excluding interest, income taxes, depreciation, amortization, mark-to-market warrant gain/loss, premium deficiency reserves, equity-based compensation, and other non-core items[135](index=135&type=chunk)[136](index=136&type=chunk) Adjusted EBITDA (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Adjusted EBITDA loss | $(17,110) | $(8,847) | Adjusted EBITDA (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Adjusted EBITDA loss | $(39,300) | $(28,617) | [Medical Margin](index=29&type=section&id=Medical%20Margin) This section defines and presents Medical Margin, a non-GAAP measure of revenue less medical claims expenses - Medical margin is a non-GAAP metric representing capitated revenue less medical claims expenses, expected to increase in absolute dollars as the platform grows[140](index=140&type=chunk)[141](index=141&type=chunk) Medical Margin (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Medical margin | $30,615 | $41,089 | Medical Margin (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Medical margin | $47,815 | $77,641 | [Gross Profit](index=30&type=section&id=Gross%20Profit) This section defines and presents Gross Profit, a key indicator of the P3 Care Model's economics - Gross profit is total operating revenue less medical claims expenses and other medical expenses, providing insight into the economics of the P3 Care Model[146](index=146&type=chunk) Gross Profit (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Gross profit | $4,438 | $13,986 | Gross Profit (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Gross profit | $5,620 | $20,417 | [At-Risk Membership](index=30&type=section&id=At-Risk%20Membership) This section provides key metrics on the Company's at-risk membership At-Risk Membership | Metric | June 30, 2025 | June 30, 2024 | | :--------------- | :------------ | :------------ | | At-risk members | 114,100 | 128,100 | - At-risk membership decreased by **11%** year-over-year[148](index=148&type=chunk) [Affiliate Primary Care Physicians](index=31&type=section&id=Affiliate%20Primary%20Care%20Physicians) This section provides key metrics on the Company's network of affiliate primary care physicians Affiliate Primary Care Physicians | Metric | June 30, 2025 | June 30, 2024 | | :------------------------- | :------------ | :------------ | | Affiliate PCPs | 2,800 | 2,900 | - The number of affiliate primary care physicians decreased by **100** year-over-year[149](index=149&type=chunk) [Platform Support Costs](index=31&type=section&id=Platform%20Support%20Costs) This section details the Company's platform support costs and their relation to operating revenue Platform Support Costs (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Platform support costs | $18,034 | $20,188 | | % of total operating revenue | 5.1% | 5.3% | Platform Support Costs (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Platform support costs | $37,055 | $41,460 | | % of total operating revenue | 5.1% | 5.4% | [Key Components of Results of Operations](index=31&type=section&id=Key%20Components%20of%20Results%20of%20Operations) This section explains the key components influencing the Company's financial results - Capitated revenue is derived from at-risk contracts with health plans, based on a fixed PMPM payment that fluctuates with patient acuity and performance incentives/penalties[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - Medical expense includes costs for services provided by non-P3 employed providers and an estimate for incurred but not reported (IBNR) claims[157](index=157&type=chunk) - Premium deficiency reserves (PDR) are recognized when future healthcare and maintenance costs are expected to exceed anticipated premiums[158](index=158&type=chunk) - Other income (expense) includes interest expense, mark-to-market adjustments of stock warrants, and other gains/losses[162](index=162&type=chunk)[163](index=163&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of the Company's financial results for the reported periods [Comparison of the Three Months Ended June 30, 2025 and 2024](index=34&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section compares the Company's financial performance for the three months ended June 30, 2025, and 2024 - Capitated revenue decreased by **$22.6 million (6%)** to **$351.7 million**, primarily due to an **11% decrease** in at-risk members from strategic termination of underperforming contracts[172](index=172&type=chunk) - Medical expense decreased by **$13.8 million (4%)** to **$351.4 million**, driven by the reduction in at-risk members[174](index=174&type=chunk) - Premium deficiency reserve was a benefit of **$6.0 million**, an increase of **$2.6 million (76%)**, reflecting management's assessment of increased future losses from contracts[175](index=175&type=chunk) - Corporate, general and administrative expense decreased by **$3.3 million (12%)** to **$23.3 million**, mainly due to reduced headcount and the sale of Florida operations[176](index=176&type=chunk) [Comparison of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024](index=36&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20to%20the%20Six%20Months%20Ended%20June%2030%2C%202024) This section compares the Company's financial performance for the six months ended June 30, 2025, and 2024 - Capitated revenue decreased by **$37.2 million (5%)** to **$721.2 million**, primarily due to an **11% decrease** in at-risk members from strategic contract terminations[177](index=177&type=chunk) - Medical expense decreased by **$23.8 million (3%)** to **$723.4 million**, driven by the decrease in at-risk members[179](index=179&type=chunk) - Premium deficiency reserve was a benefit of **$12.9 million**, an increase of **$10.5 million (439%)**, reflecting increased expected future losses[180](index=180&type=chunk) - Corporate, general and administrative expense decreased by **$5.7 million (11%)** to **$48.3 million**, due to headcount reduction and the sale of Florida operations[181](index=181&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the Company's liquidity position, capital sources, uses, and going concern considerations [Cash Sources](index=37&type=section&id=Cash%20Sources) This section details the Company's sources of cash and financing activities - Operations are financed through Business Combinations proceeds, equity private placements, payor payments, and promissory notes[184](index=184&type=chunk)[185](index=185&type=chunk) - As of June 30, 2025, the Company had **$38.6 million** in unrestricted cash and cash equivalents[185](index=185&type=chunk) - The Company has experienced net losses and requires additional capital through debt or equity financing; failure to secure funding may necessitate curtailing activities or asset sales[186](index=186&type=chunk) [VGS 4 Promissory Note](index=38&type=section&id=VGS%204%20Promissory%20Note) This section describes the terms and conditions of the VGS 4 Promissory Note - P3 LLC secured a VGS 4 Promissory Note for up to **$30.0 million** in February 2025, fully drawn in two tranches, maturing August 2028, with **19.5% annual interest** (primarily PIK)[187](index=187&type=chunk)[191](index=191&type=chunk) - The note includes mandatory prepayments from asset sales and VGS 4's right to demand full payment upon change of control or qualified financings, and restricts P3 LLC's ability to incur indebtedness and make investments[188](index=188&type=chunk)[189](index=189&type=chunk) [VGS 5 Promissory Note](index=38&type=section&id=VGS%205%20Promissory%20Note) This section describes the terms and conditions of the VGS 5 Promissory Note - P3 LLC secured a VGS 5 Promissory Note for up to **$70.0 million** in May 2025, with a first tranche of **$15.0 million** drawn, maturing August 2028, with **19.5% annual interest** (primarily PIK)[192](index=192&type=chunk)[197](index=197&type=chunk) - The note includes mandatory prepayments from asset sales and VGS 5's right to demand full payment upon change of control or qualified financings, and restricts P3 LLC's ability to incur indebtedness and make investments[194](index=194&type=chunk)[195](index=195&type=chunk) [Asset sale](index=39&type=section&id=Asset%20sale) This section details the Company's asset sale activities during the period - On May 1, 2025, P3 Florida sold its remaining MA-related assets in Apollo Beach and Clearwater, Florida, for approximately **$0.1 million**[199](index=199&type=chunk) [Cash Uses](index=39&type=section&id=Cash%20Uses) This section outlines the Company's primary uses of cash - Primary cash uses include payments for medical expenses, administrative expenses, care model costs, and debt service[200](index=200&type=chunk) - The estimated Tax Receivable Agreement (TRA) liability is **$11.5 million** as of June 30, 2025, but no TRA liability has been recorded due to the Company's history of losses making payments not probable[203](index=203&type=chunk) [Liquidity and Going Concern](index=40&type=section&id=Liquidity%20and%20Going%20Concern) This section addresses the Company's liquidity challenges and going concern assessment - Existing cash resources are not sufficient to support planned operations for at least the next year, leading to substantial doubt about the Company's ability to continue as a going concern[206](index=206&type=chunk) - The Company is exploring additional debt and equity financing, but there is no assurance such funding will be available on favorable terms, potentially requiring curtailment of activities or asset divestment[206](index=206&type=chunk) [Cash Flows](index=41&type=section&id=Cash%20Flows) This section provides an analysis of the Company's cash flows from operating, investing, and financing activities [Operating Activities](index=41&type=section&id=Operating%20Activities) This section details cash flows from the Company's operating activities - Net cash used in operating activities was **$50.1 million** for the six months ended June 30, 2025, an increase from **$30.3 million** in the prior year, primarily due to changes in working capital and increased net loss[210](index=210&type=chunk) [Investing Activities](index=41&type=section&id=Investing%20Activities) This section details cash flows from the Company's investing activities - Net cash provided by investing activities was **$0.1 million** for the six months ended June 30, 2025, from the sale of remaining Florida assets[211](index=211&type=chunk) [Financing Activities](index=41&type=section&id=Financing%20Activities) This section details cash flows from the Company's financing activities - Net cash provided by financing activities was **$45.3 million** for the six months ended June 30, 2025, primarily from VGS 4 and VGS 5 Promissory Notes and short-term financing[212](index=212&type=chunk) - This represents a decrease from **$67.5 million** in the prior year, which included proceeds from a private placement of Class A common stock and warrants[212](index=212&type=chunk) [Critical Accounting Estimates](index=41&type=section&id=Critical%20Accounting%20Estimates) This section discusses management's critical accounting estimates and judgments - Management uses judgment in applying accounting policies and making estimates, with no significant changes to critical accounting estimates since the 2024 Form 10-K[214](index=214&type=chunk) [Recent Accounting Pronouncements](index=41&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to disclosures on recent accounting standards and their anticipated effects - Refer to Note 4 for a description of recent accounting standards and their anticipated effects[216](index=216&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not required for Smaller Reporting Companies, and therefore, no disclosures are provided - Quantitative and Qualitative Disclosures About Market Risk are not required for Smaller Reporting Companies[217](index=217&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the effectiveness of the Company's disclosure controls and procedures as of June 30, 2025, concluding they were effective. No material changes in internal control over financial reporting occurred during the quarter - Management concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025, providing reasonable assurance for timely and accurate reporting[219](index=219&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[220](index=220&type=chunk) [PART II—OTHER INFORMATION](index=43&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) This part provides additional information including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The Company is involved in various legal and regulatory proceedings in the ordinary course of business. Notably, it received a Civil Investigative Demand (CID) from the DOJ in June 2024 concerning arrangements with insurance agents and brokers, with the Company cooperating with the investigation - The Company is a party to various claims, legal, and regulatory proceedings arising in the ordinary course of business[223](index=223&type=chunk) - In June 2024, the Company received a Civil Investigative Demand (CID) from the U.S. Department of Justice (DOJ) regarding its arrangements with insurance agents and brokers, and is cooperating with the investigation[224](index=224&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) This section updates previously disclosed risk factors, highlighting potential issues with California regulations regarding financial solvency for affiliated physician groups and the ongoing risk of delisting from The Nasdaq Capital Market despite regaining compliance with the bid price rule after a reverse stock split - Failure of affiliated physician groups to satisfy California Department of Managed Health Care (DMHC) regulations related to financial solvency and operational performance could lead to sanctions or limitations on business in California[225](index=225&type=chunk)[228](index=228&type=chunk) - The Company faces a risk of delisting from The Nasdaq Capital Market if it fails to meet continued listing requirements, despite regaining compliance with the bid price rule after a **1-for-50 reverse stock split** on April 11, 2025[227](index=227&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the quarter ended June 30, 2025, that were not previously disclosed - No unregistered sales of equity securities occurred during the quarter ended June 30, 2025, that were not otherwise disclosed in a Current Report on Form 8-K[232](index=232&type=chunk) [Item 3. Defaults Upon Senior Securities](index=44&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the Company - This item is not applicable[233](index=233&type=chunk) [Item 4. Mine Safety Disclosures](index=44&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - This item is not applicable[234](index=234&type=chunk) [Item 5. Other Information](index=44&type=section&id=Item%205.%20Other%20Information) No other material information is reported, and there were no new insider trading arrangements adopted or terminated by directors or officers during the quarter - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[237](index=237&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including merger agreements, certificate of incorporation amendments, debt agreements (VGS 5 Promissory Note, Warrant Agreement, Subordination Agreement, Ninth Amendment to Term Loan Agreement), and certifications - Key exhibits include the Unsecured Promissory Note, Warrant Agreement, Subordination Agreement, and Ninth Amendment to Term Loan Agreement related to VBC Growth SPV 5, LLC[238](index=238&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer are filed/furnished as exhibits[238](index=238&type=chunk)[239](index=239&type=chunk)

[Executive Summary & Business Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Highlights) P3's Q2 2025 saw revenue decline and revised full-year guidance, despite core business strengthening and improved per-member funding [Second Quarter 2025 Performance Overview](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Overview) P3's Q2 2025 saw a 9% membership and 6% revenue decrease, yet per-member funding improved by 10% and medical margin reached $30.6 million - Core business continues to strengthen, executing on a **$130 million EBITDA improvement plan**[2](index=2&type=chunk) - Successfully managed medical cost trends to remain flat while improving funding across membership on a per-member basis[2](index=2&type=chunk) - Identified an additional **$120 to $170 million** in EBITDA opportunities for 2026[2](index=2&type=chunk) - Three of four markets are already EBITDA positive or breakeven, positioning P3 for sustained profitability in 2026 and beyond[2](index=2&type=chunk) Q2 2025 Performance Highlights (in thousands, except membership and PMPM) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------------- | :-------- | :-------- | :----------- | | Average at-risk membership (members) | 115,000 | 126,374 | -9% | | Total Revenue (Thousands USD) | $355,800 | $379,157 | -6% | | Medical Margin (Thousands USD) | $30,600 | $41,089 | -25.49% | | Medical Margin PMPM (USD) | $89 | $107 | -16.82% | | Adjusted EBITDA Loss (Thousands USD) | $(17,100) | $(8,847) | +93.40% | | Adjusted EBITDA Loss PMPM (USD) | $(50) | $(23) | +117.39% | - Decrease in membership reflects previously disclosed network and payer rationalization[6](index=6&type=chunk) - On a per-member basis, funding improved **10%** from prior year, when adjusted for prior-period items[6](index=6&type=chunk) [Revised Fiscal 2025 Guidance](index=1&type=section&id=Revised%20Fiscal%202025%20Guidance) P3 revised its full-year 2025 guidance, projecting 109,000-119,000 at-risk members and $1.35-$1.5 billion in revenue Revised Fiscal 2025 Guidance (in millions, except members and PMPM) | Metric | Low | High | | :---------------------- | :-------- | :-------- | | At-risk Members (members) | 109,000 | 119,000 | | Total Revenues (Millions USD) | $1,350 | $1,500 | | Medical Margin (Millions USD) | $124 | $154 | | Medical Margin PMPM (USD) | $90 | $111 | | Adjusted EBITDA (Millions USD) | $(69) | $(39) | - Adjusted full year guidance reflects impact from prior-period adjustments and underperformance of a single payer[6](index=6&type=chunk) [Company Overview](index=2&type=section&id=About%20P3%20Health%20Partners) P3 Health Partners is a patient-centered, physician-led population health management company focused on value-based care [Company Description](index=2&type=section&id=Company%20Description) P3 Health Partners is a patient-centered, physician-led population health management company with over 2,800 affiliated primary care providers - P3 Health Partners Inc. is a patient-centered and physician-led population health management company[9](index=9&type=chunk) - Has an expansive network of more than **2,800** affiliated primary care providers across **24 counties in four states**[9](index=9&type=chunk) - Supports primary care providers with value-based care coordination and administrative services to improve patient outcomes and lower costs[9](index=9&type=chunk) [Financial Results](index=4&type=section&id=Financial%20Results) P3's Q2 2025 financial results show decreased assets, increased liabilities, and widened operating and net losses [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, P3's total assets decreased to $731.6 million, liabilities increased, and stockholders' equity declined Condensed Consolidated Balance Sheets (Selected Items, in thousands) | Metric | June 30, 2025 (Thousands USD) | December 31, 2024 (Thousands USD) | Change (Thousands USD) | | :-------------------------------- | :------------ | :---------------- | :------- | | **ASSETS** | | | | | Total Current Assets | $156,531 | $184,140 | $(27,609) | | Health plan receivable, net | $93,463 | $121,266 | $(27,803) | | Restricted cash | $746 | $5,286 | $(4,540) | | Total Assets | $731,585 | $783,420 | $(51,835) | | **LIABILITIES** | | | | | Total Current Liabilities | $504,998 | $496,415 | $8,583 | | Accrued interest | $26,923 | $12,460 | $14,463 | | Current portion of long-term debt | $80,000 | $65,000 | $15,000 | | Claims payable | $256,037 | $255,089 | $948 | | Total Liabilities | $644,407 | $633,891 | $10,516 | | **EQUITY** | | | | | Total Stockholders' Equity | $44,459 | $75,936 | $(31,477) | - All periods presented have been retroactively adjusted to reflect the **1-for-50 reverse stock split** effected on April 11, 2025[19](index=19&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) P3's Q2 2025 operating revenue decreased by 6.16% to $355.8 million, with operating and net losses significantly widening Condensed Consolidated Statements of Operations (Selected Items, in thousands) | Metric | Q2 2025 (Thousands USD) | Q2 2024 (Thousands USD) | Change (YoY) | YTD 2025 (Thousands USD) | YTD 2024 (Thousands USD) | Change (YoY) | | :-------------------------------- | :-------- | :-------- | :----------- | :--------- | :--------- | :----------- | | Total Operating Revenue | $355,788 | $379,157 | -6.16% | $729,013 | $767,645 | -4.90% | | Medical expense | $351,350 | $365,171 | -3.78% | $723,393 | $747,228 | -3.19% | | Total Operating Expense | $389,912 | $410,491 | -5.01% | $801,225 | $842,810 | -4.93% | | Operating Loss | $(34,124) | $(31,334) | +8.91% | $(72,212) | $(75,165) | -3.93% | | Net Loss | $(43,665) | $(28,774) | +51.75% | $(87,911) | $(78,380) | +12.16% | | Basic Net Loss Per Share | $(6.23) | $(4.40) | +41.59% | $(12.52) | $(12.02) | +4.16% | - Capitated revenue decreased by **6.03% YoY** for Q2 2025 and **4.90% YoY** for YTD 2025[21](index=21&type=chunk) - Interest expense, net, significantly increased to **$(10.1) million** in Q2 2025 from **$(5.4) million** in Q2 2024[21](index=21&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased to $(50.1) million for YTD 2025, while financing cash flow decreased Condensed Consolidated Statements of Cash Flows (Selected Items, in thousands) | Metric | YTD 2025 (Thousands USD) | YTD 2024 (Thousands USD) | Change (Thousands USD) | | :-------------------------------- | :--------- | :--------- | :------- | | Net cash used in operating activities | $(50,099) | $(30,272) | $(19,827) | | Net cash provided by investing activities | $50 | $0 | $50 | | Net cash provided by financing activities | $45,274 | $67,540 | $(22,266) | | Net change in cash and restricted cash | $(4,775) | $37,268 | $(42,043) | | Cash and restricted cash, end of period | $39,327 | $78,202 | $(38,875) | - Health plan receivable change was a **$27.8 million inflow** in YTD 2025, compared to a **$(34.8) million outflow** in YTD 2024[23](index=23&type=chunk) - Proceeds from long-term debt, net of original issue discount, were **$45.0 million** in YTD 2025, up from **$25.0 million** in YTD 2024[23](index=23&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=2&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section defines and reconciles key non-GAAP measures, including Adjusted EBITDA and medical margin, for evaluating P3's performance [Non-GAAP Definitions and Use](index=2&type=section&id=Non-GAAP%20Definitions%20and%20Use) This section defines and reconciles non-GAAP financial measures, such as Adjusted EBITDA and medical margin, for evaluating P3's operating results - Non-GAAP financial measures include Adjusted EBITDA, Adjusted EBITDA PMPM, medical margin, medical margin PMPM, and adjusted operating expense[10](index=10&type=chunk) - Adjusted EBITDA is defined as GAAP net income (loss) before interest, income taxes, depreciation and amortization, further adjusted for items like mark-to-market warrant gain/loss, premium deficiency reserves, and equity-based compensation[10](index=10&type=chunk) - Medical margin represents the amount earned from capitation revenue after medical claims expenses are deducted[10](index=10&type=chunk) - These non-GAAP measures provide an additional tool for investors to evaluate ongoing operating results and trends and compare with similar companies, but are not alternatives to GAAP measures and are subject to inherent limitations[10](index=10&type=chunk)[12](index=12&type=chunk) [Adjusted EBITDA Reconciliation](index=7&type=section&id=Adjusted%20EBITDA%20Reconciliation) P3's Adjusted EBITDA loss significantly increased to $(17.1) million in Q2 2025 and to $(39.3) million for YTD 2025 Adjusted EBITDA Loss (in thousands, except PMPM) | Metric | Q2 2025 (Thousands USD) | Q2 2024 (Thousands USD) | Change (YoY) | YTD 2025 (Thousands USD) | YTD 2024 (Thousands USD) | Change (YoY) | | :-------------------- | :-------- | :-------- | :----------- | :--------- | :--------- | :----------- | | Net loss | $(43,665) | $(28,774) | +51.75% | $(87,911) | $(78,380) | +12.16% | | Adjusted EBITDA loss | $(17,110) | $(8,847) | +93.40% | $(39,300) | $(28,617) | +37.33% | | Adjusted EBITDA loss PMPM (USD) | $(50) | $(23) | +117.39% | $(57) | $(38) | +50.00% | - Reconciliation from net loss to Adjusted EBITDA includes adjustments for interest expense, depreciation and amortization, income tax provision, mark-to-market of stock warrants, premium deficiency reserve, and equity-based compensation[25](index=25&type=chunk) [Medical Margin Reconciliation](index=7&type=section&id=Medical%20Margin%20Reconciliation) Medical margin decreased by 25.5% to $30.6 million in Q2 2025 and by 38.5% to $47.8 million for YTD 2025 Medical Margin (in thousands, except PMPM) | Metric | Q2 2025 (Thousands USD) | Q2 2024 (Thousands USD) | Change (YoY) | YTD 2025 (Thousands USD) | YTD 2024 (Thousands USD) | Change (YoY) | | :-------------------- | :-------- | :-------- | :----------- | :--------- | :--------- | :----------- | | Capitated revenue | $351,724 | $374,306 | -6.03% | $721,241 | $758,440 | -4.90% | | Medical claims expense | $(321,109) | $(333,217) | -3.63% | $(673,426) | $(680,799) | -1.08% | | Medical margin | $30,615 | $41,089 | -25.49% | $47,815 | $77,641 | -38.44% | | Medical margin PMPM (USD) | $89 | $107 | -16.82% | $69 | $102 | -32.35% | - Medical margin is derived from capitated revenue less medical claims expense[27](index=27&type=chunk) - Reconciliation from gross profit (loss) includes adjustments for other patient service revenue and other medical expense[29](index=29&type=chunk) [Adjusted Operating Expense Reconciliation](index=8&type=section&id=Adjusted%20Operating%20Expense%20Reconciliation) Adjusted operating expense decreased by 5% to $21.7 million in Q2 2025 and by 8% to $45.2 million for YTD 2025 Adjusted Operating Expense (in thousands) | Metric | Q2 2025 (Thousands USD) | Q2 2024 (Thousands USD) | Change (YoY) | YTD 2025 (Thousands USD) | YTD 2024 (Thousands USD) | Change (YoY) | | :------------------------ | :-------- | :-------- | :----------- | :--------- | :--------- | :----------- | | Total operating expense | $389,912 | $410,491 | -5.01% | $801,225 | $842,810 | -4.93% | | Adjusted operating expense | $21,739 | $22,859 | -4.90% | $45,173 | $49,081 | -7.96% | - Adjustments include subtracting medical expense, depreciation and amortization, and equity-based compensation, and adding back premium deficiency reserve[31](index=31&type=chunk) [Key Performance Metrics](index=3&type=section&id=Key%20Performance%20Metrics) "At-risk members" is a crucial metric for evaluating P3's business performance and informing strategic decisions [At-Risk Members](index=3&type=section&id=At-Risk%20Members) "At-risk members" is a key metric representing Medicare members under capitation, used for business evaluation and strategic decisions - "**At-risk members**" is a key metric used to evaluate the business, identify trends, formulate business plans, and make strategic decisions[13](index=13&type=chunk) - Represents the approximate number of Medicare members for whom P3 receives a fixed percentage of premium under capitation arrangements[13](index=13&type=chunk) [Additional Information](index=2&type=section&id=Additional%20Information) This section provides Q2 2025 earnings conference call details and a cautionary note on forward-looking statements [Conference Call and Webcast Details](index=2&type=section&id=Conference%20Call%20and%20Webcast%20Details) P3 Health Partners will host a conference call and webcast on August 14, 2025, to discuss its Second Quarter 2025 earnings Conference Call Details | Event | P3 Health Second Quarter 2025 Earnings Conference Call | | :---- | :----------------------------------------------------- | | Date & Time | August 14, 2025, 4:30 PM Eastern Time | | Toll-Free (US) | 1-833-316-0546 | | International | 1-412-317-0692 | | Webcast | Live and archived on ir.p3hp.org (Events & Presentations section) | [Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from projections - The press release contains forward-looking statements subject to risks, uncertainties, assumptions, and other important factors[14](index=14&type=chunk) - Actual results may differ materially from those projected or estimated, and investors are cautioned not to place undue reliance on these statements[14](index=14&type=chunk)[16](index=16&type=chunk) - Important risks include the ability to continue as a going concern, raise additional capital, achieve or maintain profitability, maintain debt covenants, identify new geographies/partners, changes in market/regulatory conditions, and increased labor/medical costs[15](index=15&type=chunk)

PLEASE CLICK HERE TO PROVIDE YOUR CONTACT INFORMATION NEW YORK, July 22, 2025 (GLOBE NEWSWIRE) -- Wolf Haldenstein Adler Freeman & Herz LLP ("Wolf Haldenstein"), a distinguished law firm with over 125 years of history, announces it is investigating claims on behalf of investors of P3 Health Partners, Inc. (NASDAQ: PIII) (“P3” or the “Company”). (NASDAQ: PIII) Allegations and Investigation Focus: The investigation seeks to determine whether P3 Health Partners, and certain officers and directors, made false a ...

Core Viewpoint - P3 Health Partners Inc. (PIII) has experienced a bearish trend with a 13.1% stock price decline over the past two weeks, but the formation of a hammer chart pattern suggests a potential trend reversal as buying interest may be increasing [1][2]. Technical Analysis - The hammer chart pattern indicates a potential bottom in the stock price, suggesting that selling pressure may be exhausting and that bulls could be gaining control [2][5]. - A hammer pattern forms when there is a small candle body with a long lower wick, typically occurring during a downtrend, signaling a possible reversal if it appears at the bottom of the trend [4][5]. - The effectiveness of the hammer pattern is enhanced when used alongside other bullish indicators, as its strength is dependent on its placement on the chart [6]. Fundamental Analysis - There has been a positive trend in earnings estimate revisions for PIII, with a 7.8% increase in the consensus EPS estimate for the current year over the last 30 days, indicating that analysts expect better earnings than previously predicted [7][8]. - PIII holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [9][10]. - The Zacks Rank serves as a timing indicator, suggesting that the company's prospects are improving, further supporting the potential for a turnaround in PIII's stock performance [10].

Core Viewpoint - P3 Health Partners Inc. (PIII) is experiencing significant selling pressure, having declined 18.4% over the past four weeks, but is now positioned for a potential trend reversal as it is in oversold territory and analysts expect better earnings than previously predicted [1]. Group 1: Technical Analysis - The Relative Strength Index (RSI) is a key indicator used to determine if a stock is oversold, with a reading below 30 typically indicating this condition [2]. - PIII's current RSI reading is 23.11, suggesting that the heavy selling pressure may be exhausting itself, indicating a potential trend reversal [5]. Group 2: Fundamental Analysis - There is strong consensus among sell-side analysts that earnings estimates for PIII have increased by 7.8% over the last 30 days, which often correlates with price appreciation [7]. - PIII holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a turnaround [8].

Company Performance - P3 Health Partners Inc. reported a quarterly loss of $6.28 per share, which was worse than the Zacks Consensus Estimate of a loss of $5, and an improvement from a loss of $8 per share a year ago, indicating a surprise of -25.60% [1] - The company posted revenues of $373.23 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.61%, but down from $388.49 million in the same quarter last year [2] - P3 Health Partners has not surpassed consensus EPS estimates over the last four quarters, and its shares have lost about 27.3% since the beginning of the year [3][4] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$4 on revenues of $349.3 million, and for the current fiscal year, it is -$18 on revenues of $1.41 billion [7] - The estimate revisions trend for P3 Health Partners is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, suggesting it is expected to outperform the market in the near future [6] Industry Context - The Medical Info Systems industry, to which P3 Health Partners belongs, is currently in the top 20% of over 250 Zacks industries, indicating a positive outlook for stocks within this sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor decisions [5]