Item 4 — Purpose of Transaction
Item 4 of the Schedule 13D is hereby amended by adding the following: On December 12, 2024 (the "Effective Date"), P3 Health Group, LLC ("P3 LLC"), a subsidiary of P3 Health Partners Inc. (the "Company"), entered into a financing transaction with VBC Growth SPV 3, LLC, a Delaware limited liability company ("VBC 3"), consisting of an unsecured promissory note (the "Promissory Note") and warrants (the "Warrants") to purchase shares of Class A Common Stock, par value $0.0001 per share, of the Company (the "Class A Common Stock"). The manager of VBC 3 is Founders GP III, an affiliate of the principal stockholder of the Company. The members of VBC 3 (the "VBC 3 Investors") are: CPF III PT SPV, LLC 70.75% CPF III-A PT SPV, LLC 21.85% Leavitt Equity Partners III, L.P. 7.40% Founders UGP III, by virtue of its indirect ownership of (1) the manager of VBC 3 and (2) each of CPF III PT SPV, LLC and CPF III-A PT SPV, LLC, entities holding an aggregate of 92.6% of the membership interests in VBC 3, controls the voting and dispositive decisions with respect to the Warrants and the underlying 92.6% of such shares of Class A Common Stock. Warrants In connection with the Promissory Note, on December 12, 2024, P3 LLC and VBC 3 entered into a Warrant (the "Warrant Agreement"). Pursuant to the Warrant Agreement, P3 LLC issued warrants to purchase 71,406,480 shares of Common Stock, at an exercise price of $0.2137 per share (the "Warrants") to VBC 3. The number of shares of Common Stock for which the Warrant is exercisable and the exercise price may be adjusted upon any event involving subdivisions, combinations, distributions, recapitalizations and like transactions. Pursuant to the Warrant Agreement, the Warrants and the right to purchase securities upon the exercise of the Warrants will terminate upon the earliest to occur of the following: (a) December 12, 2031; and (b) the consummation of (i) a sale, conveyance, disposal, or encumbrance of all or substantially all of the Company's or P3 LLC's property or business or the Company's or P3 LLC's merger into or consolidation with any other corporation (other than a wholly owned subsidiary corporation) or (ii) any other transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company or P3 LLC is disposed of. Promissory Note The Promissory Note was issued by P3 LLC to VBC 3 on December 12, 2024, and provides for funding of up to $25.0 million (the "Promissory Note"), available for draw by P3 LLC in two tranches, as follows: (i) a first tranche of $15.0 million available to P3 LLC upon the Effective Date, and (ii) a second tranche of up to $10.0 million available at the Company's sole option in a single draw, on or prior to December 31, 2024. The maturity date of the Promissory Note is June 30, 2028. Interest is payable at 19.5 % per annum on a quarterly cycle (in arrears) beginning March 31, 2025. P3 LLC may elect to pay interest 11.5% in kind and 8.0% in cash, but if the terms of the Subordination Agreement (as defined below) do not permit P3 LLC to pay interest in cash, interest will be paid entirely in-kind. The Promissory Note may be prepaid, at the Company's 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 described below; provided that prepayments must be in increments of at least $1.25 million. The Promissory Note provides for mandatory prepayments with the proceeds of certain asset sales, and VBC 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 Promissory Note). The 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. Pursuant to the Promissory Note, P3 LLC will pay VBC 3 an up-front fee of 1.5% of the maximum draw amount. In addition, P3 LLC will pay VBC 3 a back-end fee at the time the Promissory Note is prepaid as follows: (i) if paid prior to January 31, 2025, 2.25%; (ii) if paid from February 1, 2025 through April 20, 2025, 4.5%; (iii) if paid from May 1, 2025 through July 31, 2025, 6.75% and (iv) if paid on August 1, 2025 or later, 9.0%. P3 LLC intends to use the proceeds of the Promissory Note to fund the Company's ongoing working capital requirements.