Company: PIII
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001628280-25-015305
Chunk: 145

Company: P3 Health Partners Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 7
Chunk 145
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. The VGS 3 Promissory Note matures on June 30, 2028. As of December 31, 2024, we had $25.4 million of borrowing outstanding under the VGS 3 Promissory Note, $0.4 million of which consists of an up-front fee of 1.5% of the aggregate principal amount of the loan paid to VGS 3 in-kind. Interest is payable at 19.5% per annum on a quarterly cycle (in arrears) beginning March 31, 2025. We may elect to pay either (1) 8.0% cash interest and 11.5% PIK interest, or (2) 19.5% PIK interest, provided that payment of cash interest will be permitted only to the extent permitted by the Term Loan Agreement and the VGS 3 Subordination Agreement, and if not so permitted, such interest shall accrue as PIK interest.

The VGS 3 Promissory Note may be prepaid, at our option, either in whole or in part, without penalty or premium, at any time and from time to time, subject to the payment of the back-end fee; provided that prepayments must be in increments of at least $1.25 million. The VGS 3 Promissory Note provides for mandatory prepayments with the proceeds of certain asset sales, and VGS 3 has the right to demand payment in full upon (i) a change of control of the Company and (ii) certain qualified financings (as defined in the VGS 3 Promissory Note). 

The VGS 3 Promissory Note restricts P3 LLC’s ability and the ability of its subsidiaries to, among other things, incur indebtedness and liens, and make investments and restricted payments. The maturity date may be accelerated as a remedy under the certain default provisions in the agreement, or in the event a mandatory prepayment event occurs. 

In connection with the issuance of the VGS 3 Promissory Note, we also entered into a subordination agreement, dated as of December 12, 2024 (the “VGS 3 Subordination Agreement”) with VGS 3 which subordinates VGS 3’s right of payment under the VGS 3 Promissory Note to the right of payment and security interests of the lenders under the Term Loan Facility. Under the terms of the VGS 3 Subordination Agreement, we will