Company: PIII
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001628280-25-015305
Chunk: 98

Company: P3 Health Partners Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 7
Chunk 98
---
— $12,700 __________________(1)Amount is included within accrued expenses and other current liabilities on the Company’s consolidated balance sheet.VGS Promissory NotesAs described in Note 10, in December 2023, the Company issued an unsecured promissory note to VGS, an entity managed by CPF and whose equity holders consist of three members of the Company’s Board of Directors and the Company’s Chief Medical Officer, among others. In March 2024 and December 2024, the Company issued unsecured promissory notes to VGS 2 and VGS 3, respectively, both of which are also managed by CPF. The following tables summarize the Company’s transactions with VGS, VGS 2, and VGS 3:Year Ended December 31,20242023(in thousands)Interest expense, net$9,025 $3,905 December 31,20242023(in thousands)Long-term debt, net$74,823 $28,319 Accrued interest$3,992 $4,010 Accrued expenses$437 $331 Florida Asset SaleAs described in Note 6, on November 30, 2024, the Company sold its Florida Assets to Buyers which are affiliated with the Company’s principal stockholder.

Note 20: Variable Interest Entities

P3 LLC has Management Services Agreements (“MSAs”) and deficit funding agreements with the Network VIEs. The MSAs provide that the P3 LLC will furnish administrative personnel, office supplies and equipment, general business services, contract negotiation, and billing and collection services to the Network VIEs. Fees for these services are the excess of the Network VIEs’ revenue over expenses. Per the deficit funding agreements, P3 LLC is obligated to advance funds, as needed, to support the Network VIE’s working capital needs to the extent operating expenses exceed gross revenue. These advances accrue interest at a rate of prime plus 2%. Net advances made to the Network VIEs and accrued 

P3 Health Partners Inc. | 2024 Form 10-K | 118

interest on those advances are presented within due to consolidated entities of P3 in the table below. Additionally, P3 LLC entered into stock transfer restriction agreements with the practice shareholders of the Network VIEs, which, by way of a call option, unequivocally permit P3 LLC to appoint successor physicians if a practice shareholder vacates their ownership position. Accordingly, P