Sec Form 4 Filing - Knighthead Capital Management, LLC @ ATI Physical Therapy, Inc. - 2024-01-30

FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person Knighthead Capital Management, LLC 2. Issuer Name and Ticker or Trading Symbol ATI Physical Therapy, Inc. [ ATIP] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) X __ Director X __ 10% Owner _____ Officer (give title below) _____ Other (specify below) (Last) (First) (Middle) 280 PARK AVENUE, 22ND FLOOR 3. Date of Earliest Transaction (MM/DD/YY) 01/30/2024 (Street) NEW YORK, NY10017 4. If Amendment, Date Original Filed (MM/DD/YY) 6. Individual or Joint/Group Filing (Check Applicable Line) _____ Form filed by One Reporting Person __ X __ Form filed by More than One Reporting Person (City) (State) (Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned 1.Title of Security (Instr. 3) 2. Transaction Date (MM/DD/YY) 2A. Deemed Execution Date, if any (MM/DD/YY) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Series B Preferred Stock 01/30/2024 A( 1 ) 12,000 ( 1 ) A $ 0 ( 1 ) 64,383 I See Footnote ( 6 ) Series A Preferred Stock 75,580 I See Footnote ( 6 ) Class A Common Stock 258,600 I See Footnote ( 6 )

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities) 1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (MM/DD/YY) 3A. Deemed Execution Date, if any (MM/DD/YY) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5) 6. Date Exercisable and Expiration Date (MM/DD/YY) 7. Title and Amount of Underlying Securities (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4) Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares Convertible PIK Notes (Delayed Draw) ( 3 ) ( 4 ) 01/30/2024 A( 2 ) 960,000 ( 2 ) ( 5 ) ( 3 )( 4 ) ( 3 )( 4 ) Class A Common Stock 960,000 ( 2 ) ( 5 ) ( 2 ) 960,000 ( 5 ) I See Footnote ( 6 )

Reporting Owners Reporting Owner Name / Address Relationships Director 10% Owner Officer Other Knighthead Capital Management, LLC 280 PARK AVENUE 22ND FLOOR NEW YORK, NY10017 X X KNIGHTHEAD MASTER FUND LP 280 PARK AVENUE 22ND FLOOR NEW YORK, NY10017 X X Knighthead (NY) Fund, LP 280 PARK AVENUE 22ND FLOOR NEW YORK, NY10017 X X Knighthead Annuity & Life Assurance Co 280 PARK AVENUE 22ND FLOOR NEW YORK, NY10017 X X Knighthead Distressed Opportunities Fund, LP 280 PARK AVENUE 22ND FLOOR NEW YORK, NY10017 X X KHSU SPV LP LLC 280 PARK AVENUE 22ND FLOOR NEW YORK, NY10017 X X KH Ankle LLC 280 PARK AVENUE 22ND FLOOR NEW YORK, NY10017 X X Signatures Knighthead Capital Management, LLC, by: /s/ Laura L. Torrado, General Counsel 02/08/2024 Signature of Reporting Person Date Knighthead Master Fund, L.P., by: /s/ Knighthead Capital Management, LLC as investment manager, by: /s/ Laura L. Torrado, General Counsel 02/08/2024 Signature of Reporting Person Date Knighthead (NY) Fund, L.P., by: /s/ Knighthead Capital Management, LLC as investment advisor, by: /s/ Laura L. Torrado, General Counsel 02/08/2024 Signature of Reporting Person Date Knighthead Annuity & Life Assurance Company by: /s/ Knighthead Capital Management, LLC as investment advisor, by: /s/ Laura L. Torrado, General Counsel 02/08/2024 Signature of Reporting Person Date Knighthead Distressed Opportunities Fund, L.P., by: /s/ Knighthead Capital Management, LLC as investment manager, by: /s/ Laura L. Torrado, General Counsel 02/08/2024 Signature of Reporting Person Date KHSU SPV LP LLC, by: /s/ Laura L. Torrado, Authorized Signatory 02/08/2024 Signature of Reporting Person Date KH Ankle LLC, by: /s/ Laura L. Torrado, Authorized Signatory 02/08/2024 Signature of Reporting Person Date

Explanation of Responses:

( 1 )Reflects the issuance of shares of Series B Preferred Stock by the Issuer to the Knighthead Funds (as defined below) on January 30, 2024 in connection with the issuance of the Delayed Draw Notes (as described below) in accordance with the terms of that certain Note Purchase Agreement, dated as of April 17, 2023 (as subsequently amended (the "NPA"). ( 2 )Reflects the issuance of senior second lien convertible PIK delayed draw notes (the "Delayed Draw Notes") by the Issuer to the Knighthead Funds on January 30, 2024. The aggregate principal amount of the Delayed Draw Notes is $12,000,000, and the Delayed Draw Notes accrue interest at a rate of 8.00% per annum. ( 3 )Subject to earlier conversion in accordance with their terms, the Delayed Draw Notes will become due and payable on August 24, 2028 (the "Maturity Date") in an amount equal to the principal amount of the Delayed Draw Notes outstanding on such date (plus any accrued but unpaid interest thereon). ( 4 )All or any portion of the Delayed Draw Notes may be converted at the election of the Reporting Persons at any time prior to the close of business on the business day immediately preceding the Maturity Date into a number of shares of Common Stock of the Issuer, determined by dividing (a) the outstanding balance of the principal amount of the Notes being converted (together with the accrued but unpaid interest thereon) as of the applicable conversion date, by (b) a conversion price of $12.50, which such conversion price is subject to certain anti-dilution adjustments in accordance with the terms of the NPA. ( 5 )This number represents the number of shares of Common Stock issuable upon conversion of the Delayed Draw Notes if the Reporting Persons elect to convert the Delayed Draw Notes based on the principal amount of the Delayed Draw Notes (as described in footnote 2 above) and the conversion price (as described in footnote 4 above). ( 6 )Knighthead Capital Management, LLC ("Knighthead"), pursuant to certain investment management agreements, serves as the investment manager of Knighthead Master Fund, L.P. ("KHMF"), Knighthead Distressed Opportunities Fund, L.P. ("KHDOF") , KHSU SPV LP LLC, a wholly-owned subsidiary of KHAL ("KHSU"), and pursuant to certain investment advisory agreements, serves as the investment advisor to Knighthead (NY) Fund L.P. ("KHNY") and Knighthead Annuity & Life Assurance Company ("KHAL"), and KHMF, KHAL and KHDOF are members of KH Ankle LLC ("KHA", and together with KHMF, KHDOF, KHSU, KHNY and KHAL, collectively, the "Knighthead Funds"). Accordingly, investment decisions with respect to the reported securities held by the Knighthead Funds are made by Knighthead in its sole discretion. Each Reporting Person disclaims beneficial ownership of the reported securities except to the extent of its pecuniary interest therein.

Remarks: For purposes of Section 16 of the Securities Exchange Act of 1934, as amended, the Reporting Persons may be deemed to be "directors by deputization" of the Issuer by virtue of their representative(s) on the Issuer's board of directors.Exhibit 99 - Joint Filer Statement

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

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