P3 Health Partners (NASDAQ: PIII) cuts debt, adds 19.5% preferred to meet Nasdaq equity rule
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
P3 Health Partners Inc. reports actions taken to regain compliance with Nasdaq’s stockholders’ equity requirement under Listing Rule 5550(b)(1), which sets a minimum of $2.5 million in equity. The company undertook a major balance sheet recapitalization.
On April 27, 2026, about $252,479,967 of outstanding promissory notes, including principal, accrued interest and back-end fees, were exchanged into non-convertible, non-voting, non-listed preferred stock. In addition, affiliates of Chicago Pacific Founders agreed to purchase up to $70.0 million of units consisting of Series D 19.5% Cumulative Preferred Stock and warrants, of which $30.0 million of units had been sold.
The unaudited pro forma balance sheet shows long-term debt falling from $259,569 thousand to $63,907 thousand and total stockholders’ equity shifting from a deficit of $(143,548) thousand to positive equity of $82,114 thousand. The company believes it now satisfies Nasdaq’s stockholders’ equity requirement, though Nasdaq will continue to monitor ongoing compliance.
Positive
- Long-term debt falls from $259,569 thousand to $63,907 thousand and stockholders’ equity rises from a $(143,548) thousand deficit to positive $82,114 thousand, materially improving the balance sheet and supporting continued Nasdaq listing compliance.
Negative
- The financing relies on Series D 19.5% Cumulative Preferred Stock and warrants, adding high-cost preferred obligations that may weigh on future earnings and dilute common shareholders as warrants are exercised.
Insights
P3 Health swaps debt for preferred equity, boosting Nasdaq compliance.
P3 Health Partners completed a large recapitalization, exchanging about $252,479,967 of promissory notes into preferred stock and raising $30.0 million via Series D 19.5% Cumulative Preferred units with warrants. This sharply reduces reported leverage and adds cash.
Pro forma figures show long-term debt dropping from $259,569 thousand to $63,907 thousand, while stockholders’ equity moves from a deficit of $(143,548) thousand to positive equity of $82,114 thousand as of March 31, 2026.
These changes support compliance with Nasdaq Listing Rule 5550(b)(1) on minimum equity, but introduce sizable preferred obligations at a 19.5% cumulative rate. Future filings will clarify how this higher-cost capital and warrants affect earnings and common shareholders.
8-K Event Classification
3 items: 3.01, 8.01, 9.01
3 items
Item 3.01
Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing
Securities
The company received a delisting notice or transferred its listing to a different exchange.
Item 8.01
Other Events
Other
Voluntary disclosure of events the company deems important to shareholders but not covered by other items.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Nasdaq equity minimum: $2.5 million stockholders’ equity
Debt exchanged: $252,479,967 promissory notes
Preferred units commitment: $70.0 million units
+5 more
8 metrics
Nasdaq equity minimum
$2.5 million stockholders’ equity
Requirement under Listing Rule 5550(b)(1)
Debt exchanged
$252,479,967 promissory notes
Converted to preferred stock under Debt Exchange Agreement
Preferred units commitment
$70.0 million units
Maximum Series D preferred and warrants under Purchase Agreement
Preferred units issued
$30,000 thousand
Series D issuance as of filing date, added to cash
Pro forma long-term debt
$63,907 thousand
After $195,662 thousand reduction from debt conversion
Equity before recap
$(143,548) thousand
Total stockholders’ (deficit) equity as of March 31, 2026
Pro forma equity
$82,114 thousand
Stockholders’ equity after debt conversion and Series D issuance
Series D dividend rate
19.5% cumulative
Coupon on new preferred stock issued in units
Key Terms
Nasdaq Listing Rule 5550(b)(1), Debt Exchange Agreement, Series D 19.5% Cumulative Preferred Stock, unaudited pro forma condensed consolidated balance sheet, +2 more
6 terms
Nasdaq Listing Rule 5550(b)(1) regulatory
"it did not comply with Nasdaq’s Listing Rule 5550(b)(1) (the “Listing Rule”), which requires that the Company maintain a minimum of $2.5 million in stockholders’ equity"
Debt Exchange Agreement financial
"entered into a Debt Exchange Agreement (the “Exchange Agreement”) with various affiliates of Chicago Pacific Founders"
Series D 19.5% Cumulative Preferred Stock financial
"units (the “Units”) consisting of (i) shares of the Company’s Series D 19.5% Cumulative Preferred Stock, and (ii) warrants"
unaudited pro forma condensed consolidated balance sheet financial
"The unaudited pro forma condensed consolidated balance sheet attached as Exhibit 99.1 hereto (the “Pro Forma Balance Sheet”)"
warrant liabilities financial
"Warrant liabilities | 2,132"
Warrant liabilities are the financial obligations a company records when it grants warrants—special rights allowing someone to buy shares at a set price in the future. If the warrants are expected to be exercised, they are treated as a liability because the company might need to deliver shares or cash later. This matters to investors because it affects the company’s reported financial health and the potential dilution of existing shares.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 14, 2026
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
| (Address of principal executive offices) | (Zip Code) | ||||
(702 ) 910-3950
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
Item 8.01 Other Events.
As previously disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on November 28, 2025, P3 Health Partners Inc. (the “Company”) received a letter from the staff of the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”), which notified the Company that it did not comply with Nasdaq’s Listing Rule 5550(b)(1) (the “Listing Rule”), which requires that the Company maintain a minimum of $2.5 million in stockholders’ equity, and that the Company also did not meet the alternatives of market value of listed securities or net income from continuing operations set forth in the Listing Rule.
Nasdaq provided the Company until January 5, 2026 to submit to Nasdaq a plan to regain compliance. The Company submitted the plan to regain compliance in a timely manner, and on January 20, 2026, Nasdaq advised the Company that it had determined to grant the Company an extension through May 20, 2026 to regain compliance with the Listing Rule.
On April 27, 2026, the Company and P3 Health Group, LLC, a wholly owned subsidiary of the Company , entered into a Debt Exchange Agreement (the “Exchange Agreement”) with various affiliates of Chicago Pacific Founders, the largest stockholder and debtholder, directly or through affiliates, of the Company (“CPF”). Pursuant to the Exchange Agreement, approximately $252,479,967 of outstanding promissory notes, including principal, accrued interest, and back-end fees, was exchanged for preferred stock that is not convertible, does not have voting or preemptive rights, is not registered or listed, and has a stated value of $100 per share (the “Debt Exchange”). The Company also entered into a Securities Purchase Agreement (the “Purchase Agreement”) with affiliates of CPF pursuant to which the Company agreed to issue in multiple tranches up to $70.0 million of units (the “Units”) consisting of (i) shares of the Company’s Series D 19.5% Cumulative Preferred Stock, and (ii) warrants to purchase Class A Common Stock. The Company sold $30.0 million of Units as of the filing of this Current Report.
As a result of completing the Debt Exchange and the initial issuances of Units, the Company believes that it has regained compliance with the Listing Rule. The unaudited pro forma condensed consolidated balance sheet attached as Exhibit 99.1 hereto (the “Pro Forma Balance Sheet”) has been prepared to illustrate the impact of the Debt Exchange and initial issuances of Units on the Company’s stockholders’ equity and evidence the Company’s current compliance with the Listing Rule.
The Pro Forma Balance Sheet is based on the Company’s unaudited balance sheet as of March 31, 2026, as contained in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, filed with the SEC on May 14, 2026, adjusted to reflect the Debt Exchange and initial issuances of Units after the balance sheet date of March 31, 2026 through the date of filing of this Current Report, as if such events occurred on March 31, 2026. The Pro Forma Balance Sheet is being provided for informational purposes only, and should be read in conjunction with the more detailed unaudited condensed consolidated financial statements and related notes thereto included in the Company’s Form 10-Q for the quarter ended March 31, 2026 and the Company’s subsequent filings with the SEC.
The Company believes it satisfies the stockholders’ equity requirement as of the date of this Current Report on Form 8-K. Nasdaq will continue to monitor the Company’s ongoing compliance with the stockholders’ equity requirement and, if at the time of its next periodic report the Company does not evidence compliance, the Company may be subject to delisting.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Description | |||||||
| 99.1 | Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2026. | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| P3 Health Partners Inc. | |||||||||||
| Date: | May 15, 2026 | By: | /s/ Leif Pedersen | ||||||||
| Leif Pedersen | |||||||||||
| Chief Financial Officer | |||||||||||
EX 99.1
P3 HEALTH PARTNERS INC. and SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands, except per share amounts)
(unaudited)
| AS REPORTED | PRO FORMA | |||||||||||||||||||
| March 31, 2026 | Debt Conversion | Series D Issuance | March 31, 2026 | |||||||||||||||||
| ASSETS | ||||||||||||||||||||
| CURRENT ASSETS: | ||||||||||||||||||||
| Cash | $ | 25,497 | $ | — | $ | 30,000 | $ | 55,497 | ||||||||||||
| Restricted cash | 605 | — | — | 605 | ||||||||||||||||
Health plan receivable, net of allowance for credit losses of $281 | 124,894 | — | — | 124,894 | ||||||||||||||||
| Clinic fees, insurance and other receivable | 9,060 | — | — | 9,060 | ||||||||||||||||
| Prepaid expenses and other current assets | 12,154 | — | — | 12,154 | ||||||||||||||||
| TOTAL CURRENT ASSETS | 172,210 | — | 30,000 | 202,210 | ||||||||||||||||
| Property and equipment, net | 2,964 | — | — | 2,964 | ||||||||||||||||
| Intangible assets, net | 472,989 | — | — | 472,989 | ||||||||||||||||
| Other long-term assets | 25,994 | — | — | 25,994 | ||||||||||||||||
| TOTAL ASSETS | $ | 674,157 | $ | — | $ | 30,000 | $ | 704,157 | ||||||||||||
LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ (DEFICIT) EQUITY | ||||||||||||||||||||
| CURRENT LIABILITIES: | ||||||||||||||||||||
| Accounts payable | $ | 11,672 | $ | — | $ | — | $ | 11,672 | ||||||||||||
| Accrued expenses and other current liabilities | 43,224 | — | — | 43,224 | ||||||||||||||||
| Accrued payroll | 2,773 | — | — | 2,773 | ||||||||||||||||
| Health plan settlements payable | 48,245 | — | — | 48,245 | ||||||||||||||||
| Claims payable | 285,898 | — | — | 285,898 | ||||||||||||||||
| Premium deficiency reserve | 81,402 | — | — | 81,402 | ||||||||||||||||
| Current portion of long-term debt | 51,436 | — | — | 51,436 | ||||||||||||||||
| Short-term debt | 835 | — | — | 835 | ||||||||||||||||
| TOTAL CURRENT LIABILITIES | 525,485 | — | — | 525,485 | ||||||||||||||||
Operating lease liability, net | 10,830 | — | — | 10,830 | ||||||||||||||||
| Warrant liabilities | 2,132 | — | — | 2,132 | ||||||||||||||||
| Long-term debt, net | 259,569 | (195,662) | — | 63,907 | ||||||||||||||||
Other long-term liabilities | 9,308 | — | — | 9,308 | ||||||||||||||||
| TOTAL LIABILITIES | 807,324 | (195,662) | — | 611,662 | ||||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||||||||
| MEZZANINE EQUITY: | ||||||||||||||||||||
| Redeemable non-controlling interest | 10,381 | — | — | 10,381 | ||||||||||||||||
STOCKHOLDERS’ (DEFICIT) EQUITY: | ||||||||||||||||||||
| Class A common stock, $0.0001 par value; 800,000 shares authorized; 3,294 shares issued and outstanding as of March 31, 2026 | — | — | — | — | ||||||||||||||||
| Class V common stock, $0.0001 par value; 205,000 shares authorized; 3,919 shares issued and outstanding as of March 31, 2026 | — | — | — | — | ||||||||||||||||
| Series A Preferred Stock | — | 21,293 | — | 21,293 | ||||||||||||||||
| Series B Preferred Stock | — | 18,802 | — | 18,802 | ||||||||||||||||
| Series C Preferred Stock | — | 81,669 | — | 81,669 | ||||||||||||||||
| Series D Preferred Stock | — | — | 30,000 | 30,000 | ||||||||||||||||
| Additional paid in capital | 505,010 | 73,898 | — | 578,908 | ||||||||||||||||
| Accumulated deficit | (649,918) | — | — | (649,918) | ||||||||||||||||
Non-controlling interest | 1,360 | — | — | 1,360 | ||||||||||||||||
TOTAL STOCKHOLDERS’ (DEFICIT) EQUITY | (143,548) | 195,662 | 30,000 | 82,114 | ||||||||||||||||
TOTAL LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ (DEFICIT) EQUITY | $ | 674,157 | $ | — | $ | 30,000 | $ | 704,157 | ||||||||||||
FAQ
What Nasdaq listing issue did P3 Health Partners (PIII) address?
P3 Health Partners addressed non-compliance with Nasdaq Listing Rule 5550(b)(1), which requires at least $2.5 million in stockholders’ equity. The company implemented a large debt-for-preferred exchange and new preferred financing to restore positive equity and support its continued listing.
How much debt did P3 Health Partners convert to preferred equity?
The company exchanged about $252,479,967 of outstanding promissory notes, including principal, accrued interest, and back-end fees, into preferred stock. This non-convertible, non-voting preferred stock replaces a substantial portion of its long-term debt obligations on the balance sheet.
What new capital did P3 Health Partners raise from Chicago Pacific Founders?
Affiliates of Chicago Pacific Founders agreed to purchase up to $70.0 million of units consisting of Series D 19.5% Cumulative Preferred Stock and warrants. As of the report date, P3 Health Partners had sold $30.0 million of these units, increasing its cash balance accordingly.
How did the recapitalization affect P3 Health Partners’ pro forma equity?
Pro forma stockholders’ equity improved from a deficit of $(143,548) thousand to positive $82,114 thousand as of March 31, 2026. This shift reflects the large debt conversion and $30.0 million preferred unit issuance, helping the company meet Nasdaq’s equity requirement.
What is the impact on P3 Health Partners’ long-term debt levels?
Long-term debt, net, decreased from $259,569 thousand to $63,907 thousand on a pro forma basis as of March 31, 2026. This reduction comes from exchanging over $252 million of promissory notes into preferred stock, significantly lowering financial leverage on the balance sheet.
What is notable about P3 Health Partners’ new Series D preferred stock?
The Series D preferred stock carries a 19.5% cumulative dividend rate and comes with warrants to purchase Class A common stock. While it strengthens equity and liquidity, the high coupon and warrants introduce meaningful preferred obligations and potential future dilution for common shareholders.