P3 Health Partners (NASDAQ: PIII) adds $70M preferred units and warrants
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
P3 Health Partners Inc. entered a major restructuring with its largest investor, Chicago Pacific Founders, to help regain compliance with Nasdaq’s stockholders’ equity requirement. About $252.48 million of promissory note debt will be exchanged into several series of non‑convertible, non‑voting cumulative preferred stock with a $100 stated value per share.
The company also agreed to sell up to $70 million of additional preferred-stock-and-warrant units, of which $10 million closed initially. The new preferred ranks senior to all common stock, carries dividend rates up to 19.5%, and is paired with long-dated warrants for Class A common shares.
Positive
- Large debt-for-equity exchange of about $252.48 million of promissory note obligations into preferred stock is designed to improve stockholders’ equity and support continued Nasdaq listing compliance.
- Additional capital capacity through up to $70 million of Series D preferred and warrant units, with $10 million already funded, provides a structured source of financing from the company’s largest investor.
Negative
- High-cost preferred securities featuring cumulative dividend rates of 13.5%, 17.5%, and 19.5% that rank senior to common stock may pressure future cash flows when dividends are declared or paid in kind.
- Governance and concentration as Chicago Pacific Founders maintains significant influence, including board designation rights and a standstill up to 49.99% ownership, which may shape future control dynamics.
Insights
P3 converts $252M debt to high‑coupon preferred and adds up to $70M new capital.
P3 Health Partners is exchanging about $252.48 million of promissory note debt into several series of non‑convertible cumulative preferred stock with a $100 stated value. This reduces balance-sheet debt and is intended to raise stockholders’ equity above Nasdaq’s $2.5 million minimum under Listing Rule 5550(b)(1).
The preferred carries sizeable dividend rates of 13.5%, 17.5%, and 19.5%, payable in cash or in kind when declared. A separate Securities Purchase Agreement adds up to $70 million of Series D preferred plus seven‑year warrants, with $10 million funded at the initial closing. Actual dilution will depend on future warrant exercises and additional tranches.
8-K Event Classification
4 items: 1.01, 3.02, 5.03, 9.01
4 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 3.02
Unregistered Sales of Equity Securities
Securities
The company sold equity securities in a private placement or other unregistered transaction.
Item 5.03
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
Governance
The company amended its charter documents, bylaws, or changed its fiscal year.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Debt exchanged: $252,479,967 promissory notes
Series A preferred issuance: 497,843 shares at 13.5%
Series B preferred issuance: 395,503 shares at 17.5%
+5 more
8 metrics
Debt exchanged
$252,479,967 promissory notes
Outstanding debt (principal, interest, back-end fees) to be converted into preferred stock
Series A preferred issuance
497,843 shares at 13.5%
Series A 13.5% Cumulative Preferred Stock issued in exchange for $49,784,252.30 of debt
Series B preferred issuance
395,503 shares at 17.5%
Series B 17.5% Cumulative Preferred Stock issued for $39,550,272.32 of debt
Series C preferred issuance
1,631,456 shares at 19.5%
Series C 19.5% Cumulative Preferred Stock issued for $163,145,442.42 of debt
Unit financing capacity
Up to $70 million units
Series D 19.5% Cumulative Preferred Stock plus warrants under Securities Purchase Agreement
Initial unit closing
$10 million units sold
First tranche under Securities Purchase Agreement, with $60 million remaining available
Warrant coverage
0.66333% per $1,000,000
Warrants for Class A common stock as a percentage of outstanding Class A and Class V per $1M funded
Nasdaq equity requirement
$2.5 million stockholders’ equity
Minimum equity under Nasdaq Listing Rule 5550(b)(1) the company aims to satisfy
Key Terms
Debt Exchange Agreement, Cumulative Preferred Stock, Securities Purchase Agreement, Registration Rights Agreement, +2 more
6 terms
Debt Exchange Agreement financial
"entered into a Debt Exchange Agreement (the “Exchange Agreement”) with various affiliates"
Cumulative Preferred Stock financial
"Series A 13.5% Cumulative Preferred Stock; $39,550,272.32 of the Debt will be exchanged"
Cumulative preferred stock is a type of share that pays fixed dividends and creates an obligation for the company to repay any missed dividend payments later; if the firm skips a dividend, those unpaid amounts build up like an IOU and must be paid to these shareholders before common shareholders receive dividends. Investors care because it offers steadier income and higher priority in the payout order, making it less risky than common stock but still subject to company solvency and interest-rate shifts.
Securities Purchase Agreement financial
"the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”)"
A securities purchase agreement is a written contract between a buyer and a seller outlining the terms for buying or selling financial assets such as stocks or bonds. It specifies details like the price, quantity, and conditions of the transaction, similar to a shopping list with agreed-upon terms. For investors, it provides clarity and legal protection when transferring ownership of these financial instruments.
Registration Rights Agreement financial
"the Company entered into a Registration Rights Agreement pursuant to which the Company agreed"
A registration rights agreement is a contract that gives investors the option to have their ownership stakes officially registered with the government, making it easier to sell their shares later. This agreement matters because it provides investors with a clearer path to cash out their investments if they choose, offering more liquidity and confidence in their ability to sell their holdings when desired.
Nasdaq’s Listing Rule 5550(b)(1) regulatory
"In order to regain compliance with Nasdaq’s Listing Rule 5550(b)(1)"
standstill restriction financial
"the CPF Parties agreed to extend the standstill restriction from January 1, 2026 to January 1, 2027"
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): April 27, 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 1.01 Entry into a Material Definitive Agreement
Item 3.02 Unregistered Sales of Equity Securities
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
In order to regain compliance with Nasdaq’s Listing Rule 5550(b)(1) (the “Listing Rule”), which requires that issuers maintain a minimum of $2.5 million in stockholders’ equity, on April 27, 2026, P3 Health Partners Inc. (the “Company”), and P3 Health Group, LLC, a wholly owned subsidiary of the Company (“P3HG”), 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,” and such affiliates, the “Holders”). Pursuant to the Exchange Agreement, approximately $252,479,967 of outstanding promissory notes, including principal, accrued interest, and back-end fees (collectively, the “Debt”), will be 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 Company may redeem the preferred stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $100.00 per share, plus any accumulated and unpaid dividends. Following the consummation of the Exchange Agreement, the Company believes it will have sufficient stockholders’ equity to comply with the Listing Rule.
The Debt will be converted into several series of preferred stock having identical terms, other than the dividend rate, with dividends payable only when, as and if declared by the Company’s board or on the occurrence of certain specified liquidity events. At the sole election of the Company, such dividends may be paid in cash legally available for the payment of dividends or in-kind in the form of the issuance of additional shares of preferred stock. $49,784,252.30 of the Debt will be exchanged for 497,843 shares of Series A 13.5% Cumulative Preferred Stock; $39,550,272.32 of the Debt will be exchanged for 395,503 shares of Series B 17.5% Cumulative Preferred Stock; and $163,145,442.42 of the Debt will be exchanged for 1,631,456 shares of Series C 19.5% Cumulative Preferred Stock.
In addition to the Exchange Agreement, on the same date, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with affiliates of CPF pursuant to which the Company agreed to issue up to $70 million of units (the “Units”) in multiple tranches. The Units consist of (i) shares of the Company’s Series D 19.5% Cumulative Preferred Stock (the “Series D Preferred Stock”), and (ii) warrants to purchase Class A Common Stock (the “Common Stock”), exercisable for a number of shares of Common Stock equal to 0.66333% of the outstanding Class A and Class V Common Stock of the Company per $1,000,000 of amount funded, with an exercise price equal to the Nasdaq Minimum Price on the date of issuance of the applicable warrant and a term of seven (7) years from the date of issuance. The Company sold $10 million of Units in the initial closing of the Purchase Agreement and $60 million of Units remain available for purchase in future tranches, provided that the conditions to closing such additional purchases are satisfied as of the time of any future closing. The Series D Preferred Stock has terms that are identical to the other series of preferred stock, other than the dividend rate.
The series of preferred stock described above are on parity with each other, and rank, with respect to rights to payment of dividends and distribution of assets in connection with the Company’s liquidation, dissolution or winding up, senior to all classes or series of the Company’s Common Stock and to all other equity securities issued by the Company.
The Company issued the securities described herein in reliance on exemptions from securities registration requirements, including the exemption afforded by Section 4(a)(2) of the Securities Act of 1933, as amended. The preferred stock issued in connection with the transactions described above is not convertible, does not have voting or preemptive rights, and is not registered or listed. The acquirors represented that each is an “accredited investor” as defined in Rule 501(a) of Regulation D and that the securities are being acquired for investment purposes only and not with a view to, or for resale in connection with, any distribution thereof. Neither the Company nor any person acting on its behalf engaged in any form of general solicitation or general advertising in connection with the issuance of securities described above.
In connection with the Purchase Agreement, the Company entered into a Registration Rights Agreement pursuant to which the Company agreed to file a registration statement with the Commission covering the resale of the shares of Common Stock issuable on exercise of the Warrants, subject to any approval of stockholders required by Nasdaq.
In connection with the Purchase Agreement, the Company entered into a third amended and restated letter agreement (the “Third Amended and Restated Letter Agreement”) with Chicago Pacific Founders GP, L.P., a Delaware limited partnership (“CPF GP I”), Chicago Pacific Founders GP III, L.P., a Delaware limited partnership (“CPF GP III”), and Chicago Pacific Founders GP IV, L.P., a Delaware limited partnership (“CPF GP IV”) (on behalf of the funds of which CPF GP I is the general partner, certain funds of which CPF GP III is the general partner, certain funds of which CPF GP IV is the general partner and/or certain of their affiliated entities and funds (collectively, the “CPF Parties”)). Pursuant to the Third Amended and Restated Letter Agreement, (i) for as long as the CPF Parties own 40% of the Company’s outstanding common stock, CPF will be entitled to designate one additional independent member of the Company’s board of directors, who must be independent and satisfy all applicable requirements regarding service as a director of the Company under
applicable law and SEC and stock exchange rules, (ii) for as long as the CPF Parties own 40% of the Company’s outstanding common stock, CPF will be entitled to certain information rights and protective provisions, and (iii) the CPF Parties agreed to extend the standstill restriction from January 1, 2026 to January 1, 2027 that limits the ownership of the CPF Parties to 49.99% of the Company’s issued and outstanding shares of Common Stock.
Because the CPF affiliates involved in the transactions described above may be deemed to be related parties, a special committee of the Company’s board negotiated, approved, and authorized the transactions described herein.
The foregoing descriptions of the Exchange Agreement, Purchase Agreement, preferred stock terms, Registration Rights Agreement, and Third Amended and Restated Letter Agreement are only summaries and are qualified in their entirety by reference to the full text of each such document, which will be filed with the Commission.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Description | |||||||
| 3.1 | Form of Certificate of Designation of Series A, B, C, and D Cumulative Preferred Stock | |||||||
| 10.1 | Debt Exchange Agreement, dated April 27, 2026, by and between P3 Health Partners, Inc. and the Purchasers named therein | |||||||
| 10.2 | Series D Purchase Agreement, dated April 27, 2026, by and between P3 Health Partners, Inc. and the Purchasers named therein | |||||||
| 10.3 | Form of Registration Rights Agreement by and between P3 Health Partners, Inc. and the Purchasers named therein | |||||||
| 10.4 | Form of Warrant | |||||||
| 10.5 | Third Amended and Restated Letter Agreement, dated April 27, 2026, by and among P3 Health Partners Inc., Chicago Pacific Founders GP, L.P., Chicago Pacific Founders GP III, L.P., and Chicago Pacific Founders GP IV, L.P. | |||||||
| 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: | April 28, 2026 | By: | /s/ Leif Pedersen | ||||||||
| Leif Pedersen | |||||||||||
| Chief Financial Officer | |||||||||||
FAQ
What major transaction did P3 Health Partners (PIII) announce in this 8-K?
P3 Health Partners agreed to exchange about $252.48 million of outstanding promissory note debt into several series of non-convertible, non-voting cumulative preferred stock with a $100 stated value per share, aiming to increase stockholders’ equity and support Nasdaq listing compliance.
How much debt is P3 Health Partners (PIII) exchanging into preferred stock?
The company plans to exchange approximately $252,479,967 of outstanding promissory notes, including principal, accrued interest, and back-end fees, into multiple series of cumulative preferred stock with differing dividend rates but identical core terms and a $100 stated value per share.
What are the dividend rates on P3 Health Partners’ new preferred stock series?
The transaction creates three main preferred series: Series A 13.5% Cumulative Preferred Stock, Series B 17.5% Cumulative Preferred Stock, and Series C 19.5% Cumulative Preferred Stock, with dividends payable when, as and if declared or upon specified liquidity events, in cash or additional preferred shares.
What additional financing did P3 Health Partners (PIII) arrange with Chicago Pacific Founders?
P3 Health Partners entered a Securities Purchase Agreement to issue up to $70 million of units, each combining Series D 19.5% Cumulative Preferred Stock and seven-year warrants for Class A common stock. An initial $10 million of units was sold, with $60 million available in future tranches if conditions are met.
How do the new warrants in P3 Health Partners’ financing work?
Each $1,000,000 funded under the unit purchase agreement includes warrants exercisable for Class A common stock equal to 0.66333% of outstanding Class A and Class V shares. The warrants have a seven-year term and an exercise price equal to the Nasdaq Minimum Price on the issuance date.
How does this transaction affect P3 Health Partners’ Nasdaq listing status?
The company states that, after completing the debt exchange into preferred stock, it believes stockholders’ equity will be sufficient to comply with Nasdaq Listing Rule 5550(b)(1), which requires at least $2.5 million in stockholders’ equity for continued listing on The Nasdaq Capital Market.
What governance and ownership provisions involve Chicago Pacific Founders and P3 Health Partners?
Under a Third Amended and Restated Letter Agreement, if Chicago Pacific Founders’ affiliated parties hold 40% of P3’s common stock, they may designate an additional independent director and receive information and protective rights, while a standstill limits their ownership to 49.99% of outstanding common shares through January 1, 2027.