Company: PIII
Filing Date: 2025-04-18
Form Type: PRE 14A
Source: 0001140361-25-014596
Chunk: 67

Company: P3 Health Partners Inc.
Filing Date: 2025-04-18
Form: PRE 14A
Chunk 67
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. As non-controlling interest holders exercise their right to exchange their units in P3 LLC, a TRA liability may be recorded based on 85% of the estimated future tax benefits that the Company may realize as a result of increases in the tax basis of P3 LLC. The amount of the increase in the tax basis, the related estimated tax benefits, and the related TRA liability to be recorded will depend on the price of the Company’s Class A common stock at the time of the relevant redemption or exchange. The actual Basis Adjustments, as well as any amounts paid to the P3 Equityholders under the TRA, varies depending on a number of factors, including:

| ● | the price of shares of Class A common stock in connection at the time of                                                                                             
 redemptions or exchanges—the Basis Adjustments, as well as any related increase in any tax deductions, are directly related to the price of shares of Class A common 
 stock at the time of each redemption or exchange;                                                                                                                    |

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| ● | the timing of any subsequent redemptions or exchanges—for instance, the increase in any tax deductions will vary depending on the fair market value, which may fluctuate over time, of the depreciable or amortizable assets of P3 LLC 
 at the time of each redemption or exchange or distribution (or deemed distribution);                                                                                                                                                   |

| ● | the extent to which such redemptions or exchanges are taxable—if a redemption or exchange is not taxable for any reason, the Basis Adjustments, as well as any related increase in tax deductions, relating to such redemption or exchange will 
 not be available; and                                                                                                                                                                                                                           |

| ● | the amount and timing of our income—the TRA generally requires us to pay 85% of the tax benefits as and when those benefits are treated as realized under the terms of the TRA. If we do not have taxable income, we generally will not be required 
 (absent a change of control or other circumstances requiring an early termination payment) to make payments under the TRA for that taxable year because no tax benefits will have been actually realized. However, any tax benefits that do         
 not result in realized tax benefits in a given taxable year will likely generate tax attributes that may be utilized to generate tax benefits in previous or future taxable years. The utilization of any such tax attributes generally will        
 result in payments under the TRA.                                                                                                                                                                                                                   |

Decisions made by us in the course of running our business, such as with respect to mergers, asset