Warrants |
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| Warrants | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warrants |
As of December 31, 2025 and 2024, there were an aggregate of 8.4 million and 4.9 million warrants outstanding, respectively, which include the 2021 Public Warrants, 2021 Private Placement Warrants, VGS Warrants, VGS 3 Warrants, VGS 4 Warrants, VGS 5 Warrants, March 2023 Warrants, May 2024 Common Warrants, and May 2024 Pre-Funded Warrants (each as defined below). No warrants were exercised during the years ended December 31, 2025 and 2024.
Liability-classified
Public Offering and Private Placement
The 2021 Public Warrants and 2021 Private Placement Warrants entitle the holders to purchase an aggregate of 0.2 million shares of Class A common stock, as adjusted for the reverse stock split, at a price of $575.00 per share. The 2021 Public Warrants will expire five years after the completion of the Business Combinations. The Company has the right to redeem the 2021 Public Warrants when the price per share of Class A common stock equals or exceeds $900.00 for 20 days within a 30-day trading period. The 2021 Private Placement Warrants are identical to the 2021 Public Warrants, except that the 2021 Private Placement Warrants are subject to certain transfer restrictions, are not redeemable by the Company if they are held by sponsors, and are exercisable on a cashless basis.
May 2024 Common Warrants
In connection with the May 2024 Private Placement (see Note 15 “Capitalization”), the Company issued warrants to purchase an aggregate of 1.3 million shares of Class A common stock, as adjusted for the reverse stock split, at a price of $25.10 per share (the “May 2024 Common Warrants”). Pursuant to the warrant agreements, the May 2024 Common Warrants and the right to purchase securities upon the exercise of the May 2024 Warrants will terminate upon the earliest to occur of the following: (a) May 22, 2031; and (b) the consummation of (i) a sale, conveyance, disposal, or encumbrance
of all or substantially all of the Company’s property or business or the Company’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 50% of the voting power of which the Company is disposed and the proceeds thereof are paid to the then-existing stockholders of the Company. The May 2024 Common Warrants were recorded as liability-classified financial instruments for an initial amount of $31.3 million.
The key Level 3 inputs into the option pricing model related to the May 2024 Warrants at inception, as adjusted for the reverse stock split, were as follows:
The 2021 Public Warrants, 2021 Private Placement Warrants, and May 2024 Warrants are recorded as liabilities on the consolidated balance sheets with a balance of $2.5 million and $10.3 million as of December 31, 2025 and 2024, respectively.
Equity-classified
VGS Warrants
In connection with the VGS Promissory Note issued in December 2022 (see Note 11 “Debt”), the Company and VGS entered into a warrant agreement (the “VGS Warrant Agreement”) pursuant to which the Company issued warrants to purchase 8.6 thousand shares of Class A common stock, as adjusted for the reverse stock split, at an exercise price of $213.00 per share to VGS (the “VGS Warrants”). The number of shares of common stock for which the VGS Warrants is exercisable and the exercise price may be adjusted upon any event involving subdivisions, combinations, distributions, recapitalizations, and similar transactions. Pursuant to the VGS 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 13, 2027; and (b) the consummation of (i) a sale, conveyance, 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 50% of the voting power of which the Company or P3 LLC is disposed.
VGS 3 Warrants
In connection with the VGS 3 Promissory Note issued in December 2024 (see Note 11 “Debt”), the Company and VGS 3 entered into a warrant agreement (the “VGS 3 Warrant Agreement”) pursuant to which the Company issued warrants to purchase 1.4 million shares of Class A common stock, as adjusted for the reverse stock split, at an exercise price of $10.69 per share to VGS 3 (the “VGS 3 Warrants”). The number of shares of common stock for which the VGS 3 Warrants is exercisable and the exercise price may be adjusted upon any event involving subdivisions, combinations, distributions, recapitalizations, and similar transactions. Pursuant to the VGS 3 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, 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 50% of the voting power of which the Company or P3 LLC is disposed. The Company recorded the fair value of the VGS 3 Warrants of $12.1 million as an increase to additional paid in capital during the year ended December 31, 2024.
The key Level 3 inputs into the option pricing model related to the VGS 3 Warrants were as follows:
VGS 4 Warrants
In connection with the VGS 4 Promissory Note issued in February 2025 (see Note 11 “Debt”), the Company and VGS 4 entered into a warrant agreement (the “VGS 4 Warrant Agreement”) pursuant to which the Company issued warrants to purchase 1.4 million shares of the Company’s Class A common stock at an exercise price of $10.34 per share to VGS 4 (the “VGS 4 Warrants”), as adjusted for the reverse stock split. The number of shares of common stock for which the VGS 4 Warrants are exercisable and the exercise price may be adjusted upon any event involving subdivisions, combinations, distributions, recapitalizations, and similar transactions. Pursuant to the VGS 4 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) February 13, 2032; and (b) the consummation of (i) a sale, conveyance, 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 50% of the voting power of which the Company or P3 LLC is disposed. The Company recorded the fair value of the VGS 4 Warrants of $14.0 million as an increase to additional paid in capital during the year ended December 31, 2025.
The key Level 3 inputs into the option pricing model related to the VGS 4 Warrants were as follows:
VGS 5 Warrants
In connection with the VGS 5 Promissory Note issued in May 2025 (see Note 11 “Debt”), the Company and VGS 5 entered into a warrant agreement (the “VGS 5 Warrant Agreement”) pursuant to which the Company issued warrants to purchase 1.4 million shares of the Company’s Class A common stock at an exercise price of $7.39 per share to VGS 5. The number of shares of common stock for which the VGS 5 Warrants are exercisable and the exercise price may be adjusted upon any event involving subdivisions, combinations, distributions, recapitalizations, and similar transactions. Pursuant to the VGS 5 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) May 29, 2032; and (b) the consummation of (i) a sale, conveyance, 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 50% of the voting power of which the Company or P3 LLC is disposed. The Company recorded the fair value of the VGS 5 Warrants of $8.3 million as an increase to additional paid in capital during the year ended December 31, 2025.
The key Level 3 inputs into the option pricing model related to the VGS 5 Warrants were as follows:
VGS 5 Tranche 3a Warrants
In connection with the third tranche of the VGS 5 Promissory Note which was funded on October 7, 2025 (see Note 11 “Debt”), the Company and VGS 5 entered into a warrant agreement (the “VGS 5 Tranche 3a Warrant Agreement”) pursuant to which the Company issued warrants to purchase 0.6 million shares of the Company’s Class A common stock at an exercise price of $8.88 per share to VGS 5. The number of shares of common stock for which the VGS 5 Warrants are exercisable and the exercise price may be adjusted upon any event involving subdivisions, combinations, distributions, recapitalizations, and similar transactions. Pursuant to the VGS 5 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) October 7, 2032; and (b) the consummation of (i) a sale, conveyance, 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 50% of the voting power of which the Company or P3 LLC is disposed. The Company recorded the fair value of the VGS 5 Warrants of $4.5 million as an increase to additional paid in capital during the year ended December 31, 2025.
The key Level 3 inputs into the option pricing model related to the VGS 5 Tranche 3a Warrants were as follows:
May 2024 Pre-Funded Warrants
In connection with the May 2024 Private Placement (see Note 15 “Capitalization”), the Company issued pre-funded warrants to purchase an aggregate of 0.5 million shares of Class A common stock, as adjusted for the reverse stock split, at a price of $0.005 per share (the “May 2024 Pre-Funded Warrants”). Pursuant to the warrant agreements, the May 2024 Pre-Funded Warrants and the right to purchase securities upon the exercise of the May 2024 Pre-Funded Warrants will terminate upon the consummation of (i) a sale, conveyance, disposal, or encumbrance of all or substantially all of the Company’s property or business or the Company’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 50% of the voting power of which the Company is disposed and the proceeds thereof are paid to the then-existing stockholders of the Company. The May 2024 Pre-Funded Warrants were recorded as equity-classified financial instruments totaling $6.6 million.
March 2023 Warrants
In connection with the March 2023 Private Placement (see Note 15 “Capitalization”), the Company issued warrants to purchase an aggregate of 1.2 million shares of Class A common stock, as adjusted for the reverse stock split, at a price of $56.50 per share (the “March 2023 Common Warrants”), and pre-funded warrants to purchase an aggregate of 0.2 million shares of Class A common stock, as adjusted for the reverse stock split, at a price of $0.005 per share (the “March 2023 Pre-Funded Warrants” and, together with the March 2023 Common Warrants, the “March 2023 Warrants”). Pursuant to the warrant agreements, the March 2023 Warrants and the right to purchase securities upon the exercise of the March 2023 Warrants will terminate upon the earliest to occur of the following: (a) April 5, 2028, with respect to the March 2023 Common Warrants only; and (b) the consummation of (i) a sale, conveyance, disposal, or encumbrance of all or substantially all of the Company’s property or business or the Company’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 50% of the voting power of which the Company is disposed and the proceeds thereof are paid to the then-existing stockholders of the Company.
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